1
EXHIBIT 10.12
EXECUTION COPY
================================================================================
ASSET USE AGREEMENT
dated as of March 31, 1999
between
AUTOMOTIVE BUSINESS
TRUST 1999-A
as the Obligee
and
OXFORD AUTOMOTRIZ
DE MEXICO S.A. DE C.V.
as the Obligor
---------------------------------------
================================================================================
THIS IS COUNTERPART NO. _____ OF SIX (6) SERIALLY NUMBERED MANUALLY EXECUTED
COUNTERPARTS. TO THE EXTENT, IF ANY, THAT THIS DOCUMENT CONSTITUTES CHATTEL
PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT
MAY BE CREATED THROUGH THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN
COUNTERPART NO. 1.
2
TABLE OF CONTENTS
Page
----
SECTION 1. Definitions; Construction.......................................................................1
(a) Definitions.....................................................................................1
SECTION 2. Agreement for Purchases and Construction Advances...............................................1
(a) Purchases.......................................................................................1
(b) Construction Advances...........................................................................2
(c) Funding Dates...................................................................................2
(d) Agreement.......................................................................................2
(e) Capitalized Interest and Yield during Construction Period.......................................3
SECTION 3. Conditions......................................................................................3
SECTION 3.1 Conditions Precedent to Acquisition Dates..............................................3
(a) Operative Documents....................................................................3
(b) Corporate Documents, Incumbency Certificate, etc.......................................4
(c) Acquisition Date Notice................................................................4
(d) Asset Use Supplement...................................................................4
(e) Intentionally omitted..................................................................4
(f) Liens..................................................................................4
(g) Plans and Specifications...............................................................5
(h) Authorized Officer's Certificate.......................................................5
(i) Recordation of Instruments.............................................................5
(j) Opinions...............................................................................5
(k) Intentionally omitted..................................................................5
(l) Appraisal..............................................................................5
(m) Certified Copy of Prime Construction Contract..........................................6
(n) Architect's Certificate................................................................6
(o) Insurance Certificates.................................................................6
(p) No Material Adverse Change.............................................................6
(q) Absence of Liens, etc..................................................................6
(r) Material Consents, etc.................................................................6
(s) Maximum Cost...........................................................................7
(t) Available Commitment...................................................................7
(u) Payment of Fees........................................................................7
(v) No Default.............................................................................7
(w) Other Documents........................................................................7
SECTION 3.2 Conditions Precedent to Construction Advances..........................................7
(a) Construction Advance Notice............................................................7
(b) Construction Documents Assignment......................................................7
-i-
3
Page
----
(c) Absence of Liens, etc..................................................................8
(d) Material Consents, etc.................................................................8
(e) Maximum Cost...........................................................................8
(f) Payment of Fees........................................................................8
(g) No Default.............................................................................8
(h) Other Documents........................................................................8
SECTION 3.3 Conditions Precedent to Completion Date................................................8
SECTION 4. Delivery, Acceptance and Use of Assets; Characterization........................................9
(a) Delivery, Acceptance and Use....................................................................9
(b) Characterization................................................................................9
SECTION 5. Term............................................................................................9
SECTION 6. Return of Assets................................................................................9
(a) Location of Redelivery..........................................................................9
(b) Return Conditions..............................................................................10
(c) Delivery of Maintenance Records, etc.; Inspection..............................................11
(d) Inspection by Independent Architect or Surveyor................................................11
(e) Revocation of Return Option....................................................................11
(f) Rights in Equity...............................................................................11
SECTION 7. Basic Hire and Other Payments..................................................................12
(a) Basic Hire.....................................................................................12
(b) Supplemental Hire..............................................................................12
(c) Method of Payment..............................................................................12
(d) Calculation of Basic Hire......................................................................13
(e) Choice of Basic Assumptions....................................................................13
SECTION 8. Net Agreement..................................................................................13
SECTION 9. Certain Covenants of Obligor...................................................................14
(a) Financial Information and Reports; Further Assurances..........................................14
SECTION 10. Use of Assets; Compliance with Laws............................................................15
(a) Use of Assets..................................................................................15
(b) Compliance with Laws...........................................................................15
(c) Exclusive Possession; ▇▇▇▇▇▇▇, etc., of Assets.................................................16
(d) Maintenance of Asset Documentation.............................................................16
(e) Quiet Enjoyment................................................................................17
-ii-
4
Page
----
SECTION 11. Maintenance and Repair of Assets...............................................................17
SECTION 12. Replacements; Alterations; Modifications.......................................................18
SECTION 13. Marking of Assets; Inspection..................................................................19
(a) Notice of Security Interest....................................................................19
(b) Inspection.....................................................................................19
SECTION 14. Assignment and Subleasing......................................................................20
(a) By the Obligor.................................................................................20
(b) By the Obligee.................................................................................20
SECTION 15. Liens..........................................................................................20
SECTION 16. Loss, Damage or Destruction....................................................................21
(a) Risk of Loss, Damage or Destruction............................................................21
(b) Occurrence of Event of Loss....................................................................21
(c) Payment of Casualty Loss Value.................................................................21
(d) Partial Event of Loss..........................................................................22
SECTION 17. Insurance......................................................................................23
(a) Coverage.......................................................................................23
(b) Adjustment of Losses...........................................................................23
(c) Application of Insurance Proceeds..............................................................23
(d) Policy Requirements............................................................................23
(e) Delivery of Insurance Certificates.............................................................24
SECTION 18. General Tax Indemnity..........................................................................24
SECTION 19. Indemnification................................................................................28
SECTION 20. No Warranties..................................................................................29
SECTION 21. Obligor's Representations and Warranties.......................................................30
SECTION 22. Events of Default..............................................................................32
(a) Non-Payment....................................................................................33
(b) Specific Defaults..............................................................................33
(c) Other Defaults.................................................................................33
(d) Cross-Default..................................................................................33
(e) Representation or Warranty.....................................................................34
-iii-
5
Page
----
(f) Insolvency.....................................................................................34
(g) Voluntary Proceedings..........................................................................34
(h) Involuntary Proceedings........................................................................34
(i) Failure of Enforceability......................................................................35
(j) Change of Control..............................................................................35
SECTION 23. Remedies Upon Default..........................................................................35
SECTION 24. Obligee's Right to Perform for the Obligor.....................................................37
SECTION 25. Covenant of the Obligee With Respect to Obligee Liens..........................................38
SECTION 26. Further Assurances.............................................................................38
SECTION 27. Notices........................................................................................38
SECTION 28. Obligor's Purchase Options and Obligations, Return Option, Extension
Option and Reversion Right.....................................................................38
(a) Obligor's Purchase Options.....................................................................38
(b) Return Option..................................................................................40
(c) Extension of Agreement Term....................................................................43
(d) Reversion Right................................................................................43
SECTION 29. Payment of Transaction Expenses and Other Costs and Expenses...................................44
(a) Transaction Expenses...........................................................................44
(b) Other Costs and Expenses.......................................................................44
SECTION 30. Owner for Income Tax Purposes..................................................................44
SECTION 31. LIBOR Provisions...............................................................................44
(a) Funding Loss...................................................................................44
(b) Basis for Determining Variable Hire Inadequate or Unfair.......................................44
(c) Illegality.....................................................................................45
(d) Increased Cost and Reduced Return..............................................................45
SECTION 32. Governing Law and Jurisdiction.................................................................47
SECTION 33. Waiver of Jury Trial...........................................................................49
SECTION 34. Currency of Account and Payment................................................................49
-iv-
6
Page
----
SECTION 35. Judgment Currency.....................................................................49
SECTION 36. Waivers, Amendments, etc..............................................................50
SECTION 37. Translation of Agreement into Spanish.................................................51
SECTION 38. Miscellaneous.........................................................................52
SCHEDULES
Schedule I Notice Information
Schedule II Disclosure Documents
Schedule III Commitments
EXHIBITS
Exhibit A Form of Asset Use Supplement
Exhibit B-1 Form of Acquisition Date Notice
Exhibit B-2 Form of Construction Advance Notice
Exhibit C Form of Purchase Order
Exhibit D Form of Pledge Agreement
Exhibit D-1 Form of Mortgage
Exhibit E Form of Completion Certificate
Exhibit F Form of Continuation Notice
-v-
7
ASSET USE AGREEMENT
ASSET USE AGREEMENT dated as of March 31, 1999, (herein, as amended and
supplemented from time to time, called this "Agreement") between AUTOMOTIVE
BUSINESS TRUST 1999-A, a Delaware business trust (herein, together with its
successors and assigns, called the "Obligee" or "Owner"), and OXFORD AUTOMOTRIZ
DE MEXICO S.A. DE C.V., a corporation organized and existing under the laws of
Mexico (herein called the "Obligor").
W I T N E S S E T H:
WHEREAS, the Obligor desires to obtain the use of the Assets of the
Obligee and the Obligee desires to provide the Obligor with such use in each
case on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the prompt payment of all amounts
of Basic Hire and all other amounts owing hereunder by the Obligor and the
performance and the observance by the Obligor of all the agreements, covenants
and provisions contained herein for the benefit of the Owner, the Depositor, and
the Participants and in consideration of the premises and mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Owner agrees to grant to the
Obligor the use of, and the Obligor agrees to use the Assets on the terms and
conditions hereinafter set forth herein.
SECTION 1. Definitions; Construction.
(a) Definitions. All capitalized terms used herein shall,
unless defined herein, have the respective meanings set forth in
Appendix A to this Agreement, and the rules of interpretation set forth
in Appendix A shall apply to this Agreement.
SECTION 2. Agreement for Purchases and Construction Advances.
(a) Purchases. Subject to the terms and conditions of this
Agreement (including without limitation, the conditions set forth in
Section 3.1), (i) on the First Acquisition Date the Obligee shall (x)
purchase and accept title to the Land and any Improvements
(collectively, the "Property") existing thereon for the Acquisition
Cost specified in the Asset Use Supplement and (y) demise and grant use
of the Property together with any improvements which thereafter may be
constructed on the Land pursuant to the Construction Agency Agreement
to the Obligor and (ii) on each subsequent Acquisition Date the Obligee
shall purchase the Equipment listed in the Asset Use Supplement
delivered on the First Acquisition Date for the Acquisition Cost
therefor as specified in the Asset Use Supplement; provided, however,
that the Obligee shall have no obligation to pay any such Acquisition
Cost referred to above unless it shall have received an Acquisition
Date Notice from the
1
8
Asset Use Agreement
Obligor and funds from the Participants in an aggregate amount equal to
such Acquisition Cost. Upon receipt of such funds from the Participants
and satisfaction of the conditions set forth herein, the Obligee will
deliver the Acquisition Cost of the Assets to the Obligor and the other
Persons to be paid that portion of Acquisition Cost constituting
Transaction Expenses (to the extent invoiced) on such Acquisition Date
by wire transfer of immediately available funds to such account as
designated in writing by the Obligor in its Acquisition Date Notice.
(b) Construction Advances. Subject to the terms and conditions
of this Agreement (including without limitation, the conditions set
forth in Section 3.2), on each date specified by the Obligor in a
Construction Advance Notice, the Obligee shall fund an aggregate amount
equal to the amount specified in such Construction Advance Notice, for
the purpose of (x) paying to the Builder(s) specified in such
Construction Advance Notice the progress payments and other amounts
then due and payable with respect to the Property on such date, (y)
paying Transaction Expenses (to the extent invoiced) to the Persons
entitled thereto and (z) subject to clause (e) below, paying that
portion of the Construction Advance constituting interest and Yield
accrued and payable with respect to the Loans and Class I Certificates,
to the extent such Loans and Class I Certificates represent interest
and Yield payable during the Interim Term with respect to any Asset;
provided, however, that the Obligee shall have no obligation to make
any such Construction Advance unless it shall have received funds from
the Participants in an aggregate amount equal to such Construction
Advance. Upon receipt of such funds from the Participants and
satisfaction of the conditions set forth herein, the Obligee will make
the Construction Advance by wire transfer of immediately available
funds to such account(s) as designated in writing by the Obligor in its
Construction Advance Notice.
(c) Funding Dates. Each Acquisition Date and Construction
Advance Date shall occur on notice from the Obligor to the Obligee, in
the form of a properly completed Acquisition Date Notice or
Construction Advance Notice, as the case may be, received by the
Obligee not later than five (5) Business Days prior to the proposed
Funding Date; provided, however, that the aggregate of all Acquisition
Costs and Construction Advances paid for by the Obligee, after giving
effect to the applicable Funding, shall not exceed the Maximum Cost.
Notwithstanding any other provision hereof, no Funding shall be made on
any date after the Commitment Termination Date.
(d) Agreement. Subject to, and upon all of the terms and
conditions of this Agreement, the Obligee hereby agrees to allow the
Obligor to use the Assets and the Obligor hereby agrees to use the
Assets listed on Schedule I to the Asset Use Supplement referred to in
Section 2(a) for the Term. Provided that no Event of Default has
occurred and is continuing hereunder, neither the Obligee nor anyone
claiming through or under the Obligee,
2
9
Asset Use Agreement
shall interfere with the Obligor's quiet enjoyment and use of any Asset
hereunder during the Term hereof. The Assets are hereby demised for use
to the Obligor without any representation or warranty, express or
implied, by the Obligee and subject to the rights of the parties in
possession, the existing state of title (including, without limitation,
Permitted Liens) and all Applicable Law. The execution by the Obligor
of each Acquisition Date Notice and each Asset Use Supplement shall be
deemed to be a representation by the Obligor that it has independently
ascertained, and is fully satisfied with, the physical and legal status
of the Assets referred to therein. The Obligor shall in no event have
any recourse against the Obligee for any defect in or exception to
title to any Asset, except to the extent that said exception to title
is created or caused directly by the Obligee.
(e) Capitalized Interest and Yield during Construction Period.
During the Interim Term interest and Yield with respect to the Assets
shall accrue and be added to the Asset Use Balance. Such capitalized
interest and Yield shall constitute part of each Construction Advance
made with respect to the Assets.
SECTION 3. Conditions.
SECTION 3.1 Conditions Precedent to Acquisition Dates. The
Obligee shall have no obligation to purchase any Asset on an Acquisition Date
nor to demise for use the same to the Obligor unless, in each case, each of the
following conditions are either fulfilled to the satisfaction of the Obligee and
applicable Participants or waived by the Obligee and applicable Participants:
(a) Operative Documents. On or prior to the
Closing Date, (i) this Agreement shall have been executed and
delivered by the parties hereto, (ii) the Guaranty shall have
been executed and delivered by the Guarantor, (iii) the Trust
Agreement shall have been executed and delivered by the
parties thereto, (iv) the Loan Agreement shall have been
executed and delivered by the Obligee and the Lenders, (v) the
Pledge Agreement shall have been executed and delivered by the
parties thereto, (vi) the Construction Agency Agreement shall
have been executed and delivered by the parties thereto, (vii)
Real Estate Purchase and Sale Contract shall have been
executed and delivered by the parties thereto, (viii) the
Assignment Agreement shall have been entered into by the
parties thereto, (ix) the Mortgages shall have been filed in
proper legal form for registration in favor of the Tranche B
Lenders, Class I Certificateholders and Tranche A Lenders at
the Public Registry of Property, respectively in first and
second priority, together with the corresponding aviso
preventive, (x) [Intentionally Omitted], and (xi) the
Intercreditor Agreement shall have been entered into by the
parties thereto.
3
10
Asset Use Agreement
(b) Corporate Documents, Incumbency Certificate,
etc. On or prior to the Closing Date, the Obligee shall have
received from each of the Obligor and the Guarantor, (1) a
certified copy of its articles or certificate of incorporation
and by-laws as in effect on the First Acquisition Date,
certified by its Secretary or Assistant Secretary as of the
initial Acquisition Date, which certificate shall state that
such articles or certificate of incorporation and by-laws are
in full force and effect in the form attached to such
certificate, (2) a certificate of existence with respect to
it, dated no earlier than the twentieth (20th) day prior to
the Closing Date, (3) a certificate of its Secretary or
Assistant Secretary certifying as to the incumbency of its
officers who are authorized to execute and deliver on its
behalf the Operative Documents and other documents,
instruments and agreements to be executed by it pursuant to
this Agreement and the other Operative Documents (4) certified
copies of the powers-of-attorney pursuant to which the Obligor
shall execute the relevant agreements and (5) a notarized
power-of-attorney (together with an acceptance letter) granted
to the process agent in New York for each of the Obligor and
the Guarantor.
(c) Acquisition Date Notice. The Obligee shall
have received a fully executed Acquisition Date Notice
substantially in the form of Exhibit B-1 (each an "Acquisition
Date Notice"), which notice shall specify the date of the
proposed acquisition, the aggregate Acquisition Cost for the
Assets, covered by the Asset Use Supplement, (including
approved Transaction Expenses) to be funded on such date, and
shall be accompanied by a Purchase Order covering all of the
Assets to be funded on such date.
(d) Asset Use Supplement. The Obligee shall have
received an Asset Use Supplement for the Assets, duly executed
by the Obligor, and dated the First Acquisition Date.
(e) Intentionally omitted.
(f) Liens. The Obligee and Lenders shall have
received reports acceptable to Obligee and counsel to each
Participant from each appropriate filing or recording offices,
in respect of a search of the applicable files and any indices
of Liens maintained by such offices (including, if applicable,
indices of judgement, revenue and tax liens), which reports
shall evidence that the Assets are free and clear of all Liens
other than Permitted Liens and are owned by the Person from
whom the Obligee is required to purchase same pursuant to the
relevant Acquisition Date Notice.
4
11
Asset Use Agreement
(g) Plans and Specifications. Prior to the First
Acquisition Date, the Obligee shall have received a full set
of general and detailed plans and specifications of the Land
and the Improvements to be constructed thereon.
(h) Authorized Officer's Certificate. The Obligee
shall have received a certificate from an Authorized Officer
of the Obligor to the effect that the representations and
warranties of the Obligor contained herein and in any
certificate of the Obligor delivered pursuant hereto shall be
true and correct on and as of such Acquisition Date with the
same effect as though made on and as of such Acquisition Date.
(i) Recordation of Instruments. The Obligee shall
have received evidence satisfactory to it that appropriate
instruments have been filed in all jurisdictions necessary to
perfect properly the first priority security interest in the
Assets and other collateral, subject to no recorded Liens
other than Permitted Liens of the type described in clauses
(a), (b) and (c) of the definition thereof.
(j) Opinions. (i) With respect to the initial
Acquisition Date, the Obligee and each Participant shall have
received written opinions of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ PLLC counsel to the Obligor and the Guarantor, dated
the Acquisition Date and in form and substance satisfactory to
the Obligee and (ii) with respect to each Acquisition Date,
each Participant shall have received a written opinion of
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ or other counsel reasonably satisfactory to
the Obligee and the Participants, with respect to the
perfection of the first priority security interest relating to
the Assets created by Obligee in favor of the Participants and
the validity, enforceability and perfection of the Obligee's
Lien on the Assets purported to be created thereby, which
opinions shall be in form and substance satisfactory to the
Obligee and the Participants.
(k) Intentionally omitted.
(l) Appraisal. The Obligee, and the Class I
Certificateholders shall have received, no later than five (5)
Business Days prior to the First Acquisition Date, an
Appraisal of the Land, Improvements as if constructed in
accordance with the Plans and Specifications, and Equipment to
be placed or installed thereon, which Appraisal shall be dated
as of a date that is satisfactory to the Obligee, and the
Class I Certificateholders, and shall show that upon
Completion of the Property and as of the Expiration Date, the
Fair Market Sales Value of the Improvements to be constructed
shall not be less than the Estimated Improvement Costs.
5
12
Asset Use Agreement
(m) Certified Copy of Prime Construction Contract.
The Obligee and the Class I Certificateholders shall have
received a copy of the Prime Construction Contract, certified
by the Guarantor and Obligor to be a true, correct and
complete copy of the Prime Construction Contract.
(n) Architect's Certificate. The Obligee shall
have received a certificate from the Prime Architect or as to
individual matters, other qualified professionals, in form and
scope satisfactory to the Obligee, certifying that in the
opinion of such Architect, based on the prevailing standard of
care (i) the Property as improved in accordance with the Plans
and Specifications and the contemplated use thereof by the
Obligor will comply in all material respects with all
Applicable Law (including, without limitation, all zoning and
land use laws) and (ii) the Plans and Specifications have been
prepared in accordance with all Applicable Law (including,
without limitation, building, planning, zoning and fire codes)
and upon completion of the Improvements in accordance with the
Plans and Specifications, such Improvements on the Property
will not encroach in any manner onto any adjoining land
(except as permitted by express written easements or as
insured by appropriate title insurance) and will consist of
all Improvements on such Property.
(o) Insurance Certificates. The Obligee and each
Participant shall have received certificates of insurance,
loss payable endorsements and other evidence that the Obligor
has complied with the provisions of Section 17.
(p) No Material Adverse Change. With respect to
each Acquisition Date, there shall have occurred no material
adverse change in the business, assets, operations, properties
or financial condition of Obligor or the Guarantor and any of
their respective Subsidiaries taken as a whole, since March
31, 1998.
(q) Absence of Liens, etc. No Event of Loss shall
have occurred with respect to the Assets, and the Assets shall
be free from any destruction or damage. The Assets shall be
free and clear of all Liens, other than any Permitted Lien of
the type described in clause (a), (b) or (c) of the definition
of Permitted Liens.
(r) Material Consents, etc. All material licenses,
registrations, permits, consents and approvals required by
Federal, state or local laws or by any governmental body,
agency or authority in connection with the Obligee's ownership
of, and the delivery, acquisition, installation, use and
operation of, the Assets shall have been obtained to the
satisfaction of the Obligee;
6
13
Asset Use Agreement
(s) Maximum Cost. After giving effect to such
purchase, (i) the Acquisition Cost of the Assets shall not
exceed the Fair Market Sales Value of such Assets as set forth
in the Appraisal thereof delivered pursuant to clause (l), and
(ii) the aggregate Asset Costs of all Assets subject to this
Agreement shall not exceed the Maximum Cost.
(t) Available Commitment. Notwithstanding any
other provision hereof, the Owner shall not be obligated to
make any Advance to the extent that such Advance shall exceed
the commitment available for the Assets, as set forth in
Schedule III.
(u) Payment of Fees. The Obligor shall have paid
all fees then due and payable pursuant to the Fee Letter
(which fees may, subject to clause (s), be included in the
Acquisition Cost).
(v) No Default. No Default or Event of Default
shall have occurred and be continuing.
(w) Other Documents. The Obligee shall have
received such other documents, appraisals, opinions,
certificates and waivers, in form and substance satisfactory
to the Obligee, as the Obligee may require in the exercise of
its reasonable discretion.
SECTION 3.2 Conditions Precedent to Construction Advances.
The Obligee shall have no obligation to fund any Construction Advance unless
each of the following conditions are either fulfilled to the satisfaction of the
Obligee and applicable Participants or waived by the Obligee and applicable
Participants:
(a) Construction Advance Notice. The Obligee shall
have received a fully executed Construction Advance Notice
substantially in the form of Exhibit B-2 (each a "Construction
Advance Notice"), which notice shall specify the date of the
proposed advance and the amount of the Construction Advance to
be funded on such date with respect to the Assets (including
approved Transaction Expenses and Construction Advances to be
paid with respect to interest on the Loans and Yield on the
Class I Certificates).
(b) Construction Documents Assignment. The
Construction Documents Assignment shall have been duly
authorized, executed and delivered by the Construction Agent,
and the Consent and Agreement thereof shall have been duly
executed by the Prime Contractor and Prime Architect.
7
14
Asset Use Agreement
(c) Absence of Liens, etc. No Event of Loss shall
have occurred with respect to the Assets, and the Assets shall
be free from any destruction or damage. The Assets shall be
free and clear of all Liens, other than any Permitted Lien of
the type described in clause (a), (b) or (c) of the definition
of Permitted Liens.
(d) Material Consents, etc. With respect to the
construction for which Funding has been requested, all
material licenses, registrations, permits, consents and
approvals required by Federal, state or local laws or by any
governmental body, agency or authority in connection with the
construction of the applicable Assets shall have been obtained
to the satisfaction of the Obligee.
(e) Maximum Cost. After giving effect to the
making of such Construction Advance, (i) the Asset Cost of the
Assets shall not exceed the Fair Market Sales Value of such
Assets as set forth in the Appraisal thereof delivered
pursuant to Section 3.1(l), and (ii) the aggregate Asset Costs
of all Assets subject to this Agreement shall not exceed the
Maximum Cost.
(f) Payment of Fees. The Obligor shall have paid
all fees then due and payable pursuant to the Fee Letter
(which fees may, subject to clause (e), be included in the
Construction Advance).
(g) No Default. No Default or Event of Default
shall have occurred and be continuing.
(h) Other Documents. The Obligee shall have
received such other documents, appraisals, opinions,
certificates and waivers, in form and substance satisfactory
to the Obligee, as the Obligee may require in the exercise of
its reasonable discretion.
SECTION 3.3 Conditions Precedent to Completion Date. The
Completion Date with respect to the Property shall occur on the earliest date on
which the conditions set forth in this Section 3.3 shall have been satisfied or
waived by the Required Participants:
(a) the construction with respect to the Property
shall have been substantially completed in accordance with the
applicable Plans and Specifications and all Applicable Law;
(b) the Assets shall be ready for operation in
accordance with the Plans and Specifications therefor, and all
appropriate Governmental Action shall have been taken for the
operation of the Assets; and
8
15
Asset Use Agreement
(c) the Trustee, each Lender and each Class I
Certificateholder shall have received a Completion Certificate
from the Obligor in form and substance reasonably acceptable
to the Obligee.
SECTION 4. Delivery, Acceptance and Use of Assets;
Characterization.
(a) Delivery, Acceptance and Use. The Obligee shall not
be liable to the Obligor for any failure or delay in obtaining any of
the Assets or making delivery thereof. THE EXECUTION BY THE OBLIGEE AND
THE OBLIGOR OF THE ASSET USE SUPPLEMENT FOR THE ASSETS SHALL (A)
EVIDENCE THAT THE ASSETS MAY BE UTILIZED UNDER, AND IS SUBJECT TO ALL
OF THE TERMS, PROVISIONS AND CONDITIONS OF, THIS AGREEMENT, AND (B)
CONSTITUTE THE OBLIGOR'S UNCONDITIONAL AND IRREVOCABLE ACCEPTANCE OF
THE ASSETS FOR ALL PURPOSES OF THIS AGREEMENT.
(b) Characterization. As further described herein, the
Obligor and the Obligee hereby agree to treat the arrangement created
pursuant to this Agreement as a financing or conditional sale for
Mexico Federal income tax purposes.
SECTION 5. Term. Unless otherwise specified in the Asset Use
Supplement the Basic Term for the Assets shall commence on (and include) the
Basic Term Commencement Date and, unless this Agreement is sooner terminated
with respect to all the Assets pursuant to the provisions hereof, shall end on
the last day of the Basic Term thereof, as specified in the Asset Use
Supplement, or if this Agreement is extended with respect to the Assets pursuant
to Section 28(c) hereof, on the last day of the Additional Term thereof.
SECTION 6. Return of Assets. Upon the expiration or earlier
termination of the Term with respect to the Assets (unless the Obligor has
exercised its purchase option pursuant to Section 28(a) or its Reversion Right
in accordance with the Trust Agreement), the Obligor will, at its expense, cause
the Assets to be redelivered to the Obligee by surrendering and delivering
possession of the Assets to the Obligee or the Obligee's agent (or, if one or
more third party sales have been consummated in accordance with Section 28(b),
to the applicable purchaser(s) thereof) in compliance with all of the provisions
of this Section 6.
(a) Location of Redelivery. The Obligor will, at its
expense, cause the Assets to be redelivered to the Obligee by
surrendering and delivering possession of the Assets to the Obligee or
the Obligee's agent (or, if one or more third party sales have been
consummated in accordance with Section 28(b), to the applicable
purchaser(s) thereof) as shall be designated by the Obligee in writing;
9
16
Asset Use Agreement
(b) Return Conditions. At the time of such return to the
Obligee, each of the following provisions shall have been satisfied:
(i) the Assets (and each part or component
thereof) shall be in good operating order, repair and
condition, ordinary wear and tear excepted, and not in need of
any further repair or reconditioning to permit the Assets to
be fully operational and fit for use as an Asset of the type
specified in the Asset Use Supplement (the condition specified
in this clause (i) being referred to herein as the "Redelivery
Condition");
(ii) the Assets (and each part or component
thereof) shall be in full compliance with Section 10(b),
Section 10(d) and Section 11 without any Permitted
Noncompliance thereunder;
(iii) the Assets (and each part or component
thereof) shall conform to and comply with all Applicable Laws;
(iv) the Assets shall have attached or affixed
thereto (x) all Required Alterations and (y) all Optional
Alterations to the extent such Optional Alterations are
subject to the terms of this Agreement as provided in Section
12;
(v) each Asset (and each part or component
thereof) shall be free and clear of all Liens, other than
Liens of the type described in clause (a) or (b) of the
definition of Permitted Liens;
(vi) the Assets shall be free of all advertising,
insignia and distinctive markings placed thereon by the
Obligor or any sub-obligor except as expressly provided
herein;
(vii) each Asset shall be free of sub-use
agreements;
(viii) all (x) Required Alterations and (y) to the
extent commenced prior to the Termination Date, Optional
Alterations and other modifications, restorations and
rebuilding with respect to the Assets, shall have been
completed in a good and workmanlike manner and in compliance
with all Applicable Laws and Insurance Requirements, and the
Obligor shall have paid the cost of all such Required
Alterations, Optional Alterations and other modifications,
restorations and rebuilding prior to the redelivery of the
Assets under this Section 6; and
10
17
Asset Use Agreement
(ix) any damaged equipment, outfit, tools, spare
parts or replacement parts that constitute part of the Assets
shall have been repaired or replaced as required by the
Operative Documents.
The Obligor shall pay for any repairs necessary to restore the Asset to
the condition required by this Section 6.
(c) Delivery of Maintenance Records, etc.; Inspection.
For the purpose of surrendering possession of the Assets required under
this Section 6, the Obligor shall at its own cost, expense and risk,
deliver to the Obligee all manuals and inspection, modification,
overhaul and maintenance records applicable to the Assets (which
records may exclude the cost of repairs, maintenance, modifications and
overhauls) in its possession or to which is has reasonable access and
permit the Obligee or its representatives access to the Assets during
normal business hours for the purposes of inspecting the Assets and
verifying that the return conditions set forth in this Section 6 have
been complied with.
(d) Inspection by Independent Architect or Surveyor. Not
later than one (1) month and not earlier than three (3) months prior to
the Assets' redelivery, the Assets shall, at the sole cost and expense
of the Obligor, be inspected by an independent architect or independent
surveyor appointed by the Obligor and approved by the Obligee, the
Tranche B Lenders and the Class I Certificate holders to determine the
Assets' compliance with the Redelivery Condition. The Obligee, each
Tranche B Lender and each Class I Certificateholder shall have received
a report from such independent architect with respect to the Assets not
later than one (1) month prior to the Assets' redelivery hereunder,
certifying that the Assets are in compliance with the Redelivery
Condition.
(e) Revocation of Return Option. If one or more of the
provisions of this Section 6 or any provision of Section 28(b) shall
not be fulfilled as of the date set forth herein or therein with
respect to the Assets, then the Obligee shall declare by written notice
to the Obligor its Return Option to be null and void (whether or not
theretofore exercised by the Obligor), in which event the Obligor shall
be obligated to purchase all Assets pursuant to Section 28(a) hereof on
the Termination Date therefor.
(f) Rights in Equity. The provisions of this Section 6
and the provisions of Section 28(b) are of the essence of this
Agreement, and upon application to any court of equity having
Jurisdiction in the premises, the Obligee shall be entitled to a decree
against the Obligor requiring specific performance of the covenants of
tile Obligor set forth in this Section 6 and Section 28(b).
11
18
Asset Use Agreement
SECTION 7. Basic Hire and Other Payments.
(a) Basic Hire. The Obligor hereby agrees to pay Basic
Hire with respect to the Assets during the Term thereof as set forth in
this Section 7(a).
(i) With respect to the Assets during the
Construction Period therefor, Basic Hire shall accrue on each
day and be payable (with the proceeds of a Construction
Advance as described in Section 2(e)) on each Hire Payment
Date during the Interim Term of the Assets.
(ii) The Obligor hereby agrees to pay to the
Obligee, Basic Hire for the Assets for the Basic Term with
respect to all Hire Payment Dates. Such Basic Hire shall be
payable in installments falling due on each Hire Payment Date
in an amount equal to the Variable Hire payable with respect
to the Variable Hire Periods ending on such Hire Payment Date;
provided, that any amounts of Variable Hire due and payable
with respect to the Assets during the Construction Period
therefor may, subject to Section 2(e), be paid with the
proceeds of a Construction Advance; provided, further, that
notwithstanding that a Variable Hire Period may be for six (6)
months, Basic Hire, including the Variable Hire payable with
respect to such six-month Variable Hire Period, shall be due
and payable no less frequently than each Hire Payment Date
occurring three (3) months following the last day of the
initial Variable Hire Period after the Base Term Commencement
Date.
(b) Supplemental Hire. The Obligor also agrees to pay to
the Obligee, or to whomsoever shall be entitled thereto as expressly
provided herein, all Supplemental Hire, promptly as the same shall
become due and owing, and in the event of any failure on the part of
the Obligor so to pay any such Supplemental Hire hereunder the Obligee
shall have all rights, powers and remedies provided for herein or by
law or equity or otherwise in the case of nonpayment of Basic Hire.
(c) Method of Payment. All payments of Basic Hire and
Supplemental Hire required to be made by the Obligor to the Obligee
shall be paid in immediately available funds to the account outside
Mexican territory designated by the Obligee. If the date that any
payment of Basic Hire is due is other than a Business Day the payment
of Basic Hire otherwise payable on such date shall be payable on the
next succeeding Business Day. All payments of Basic Hire required to be
made by the Obligor to the Obligee hereunder shall be paid to the
Obligee at its address specified at the beginning of this Agreement or
at such other address as the Obligee may hereafter designate in writing
to the Obligor. All such payments shall be received by the Obligee not
later than 1:30 P.M., New York time on the date due; funds received
after such time shall for all purposes be deemed to have been
12
19
Asset Use Agreement
received by the Obligee on the next succeeding Business Day. If any
Basic Hire shall not be paid when due, the Obligor shall pay to the
Obligee, or if any Supplemental Hire payable to or on behalf or for the
account of the Obligee or other Person thereunto entitled is not paid
when due, the Obligor shall pay to whomever shall be entitled thereto,
in each case as a Supplemental Hire, interest at the Overdue Rate (to
the maximum extent permitted by law) on such overdue amount from and
including the due date thereof (not including any applicable grace
period) to but excluding the Business Day of payment thereof.
(d) Calculation of Basic Hire.
(i) The Funding Agent shall three (3) Business
Days prior to each Hire Payment Date calculate the amount of
Basic Hire and Supplemental Hire due and payable by the
Obligor on the applicable Hire Payment Date. The Funding
Agent's calculation of Basic Hire and Supplemental Hire due
and payable shall be binding upon the Obligor in the absence
of demonstrable error.
(ii) The Trustee shall: (i) not later than five (5)
Business Days prior to any Hire Payment Date request the
Funding Agent to confirm the amount of Basic Hire and
Supplemental Hire due and payable on such Hire Payment Date;
and (ii) not later than three (3) Business Days prior to any
Hire Payment Date request the Funding Agent to calculate the
amount of Basic Hire and Supplemental Hire due and payable on
the next succeeding Hire Payment Date. The Trustee or Funding
Agent on behalf of the Trustee will cause to be delivered,
three (3) Business Days prior to each Hire Payment Date,
notice of the occurrence of such Hire Payment Date and the
amount due thereon; provided however, that in the event such
notice is not delivered to the Obligor, the Obligor shall
remain responsible for all amounts due and payable on such
Hire Payment Date.
(e) Choice of Basic Assumptions. It is the intent of the
parties hereto, acknowledging that Bank of Montreal, as Lender and
Funding Agent, may solicit other lenders for the purpose of syndicating
the Loans. In the event the Bank of Montreal is unsuccessful in its
efforts to fully syndicate the Loans, the Obligee agrees that the
pricing terms of the transaction contemplated hereunder shall be
changed to ensure that the Bank of Montreal is able to fully syndicate
the Loans.
SECTION 8. Net Agreement. THIS AGREEMENT IS A NET ASSET USE
AGREEMENT. THE OBLIGOR ACKNOWLEDGES AND AGREES THAT ITS OBLIGATIONS HEREUNDER,
INCLUDING, WITHOUT LIMITATION, ITS OBLIGATIONS TO PAY BASIC HIRE FOR THE ASSETS
COVERED HEREBY AND TO PAY ALL SUPPLEMENTAL HIRE PAYABLE HEREUNDER, SHALL BE
UNCONDITIONAL AND IRREVOCABLE UNDER ANY AND ALL CIRCUMSTANCES, SHALL NOT BE
SUBJECT TO CANCELLATION, TERMINATION, MODIFICATION OR REPUDIATION
13
20
Asset Use Agreement
BY THE OBLIGOR, AND SHALL BE PAID AND PERFORMED BY THE OBLIGOR WITHOUT NOTICE OR
DEMAND AND WITHOUT ANY ABATEMENT, REDUCTION, DIMINUTION, SET OFF, DEFENSE,
COUNTERCLAIM OR RECOUPMENT WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ANY
ABATEMENT, REDUCTION, DIMINUTION, SET OFF, DEFENSE, COUNTERCLAIM OR RECOUPMENT
DUE OR ALLEGED TO BE DUE TO, OR BY REASON OF, ANY PAST, PRESENT OR FUTURE CLAIMS
WHICH THE OBLIGOR MAY HAVE AGAINST THE OBLIGEE, ANY PARTICIPANT, THE DEPOSITOR,
ANY BUILDER, MANUFACTURER OR SUPPLIER, OR ANY, OTHER PERSON FOR ANY REASON
WHATSOEVER, OR ANY DEFECT IN ANY ASSET, OR THE CONDITION, DESIGN, OPERATION OR
FITNESS FOR USE THEREOF, ANY DAMAGE TO, OR ANY LOSS OR DESTRUCTION OF, ANY
ASSET, OR ANY LIENS OR RIGHTS OF OTHERS WITH RESPECT TO ANY ASSET, OR ANY
PROHIBITION OR INTERRUPTION OF OR OTHER RESTRICTION AGAINST THE OBLIGOR'S USE,
OPERATION OR POSSESSION OF ANY ASSET, FOR ANY REASON WHATSOEVER, OR ANY
INTERFERENCE WITH SUCH USE, OPERATION OR POSSESSION BY ANY PERSON OR ENTITY, OR
ANY DEFAULT BY THE OBLIGEE IN THE PERFORMANCE OF ANY OF ITS OBLIGATIONS HEREIN
CONTAINED, OR ANY OTHER INDEBTEDNESS OR LIABILITY, HOWSOEVER AND WHENEVER
ARISING, OF THE OBLIGEE, OR OF ANY PARTICIPANT OR THE DEPOSITOR, OR OF THE
OBLIGOR TO ANY OTHER PERSON, OR BY REASON OF INSOLVENCY, BANKRUPTCY OR SIMILAR
PROCEEDINGS BY OR AGAINST THE OBLIGEE, TRUST COMPANY, ANY PARTICIPANT, THE
DEPOSITOR, THE OBLIGOR OR THE GUARANTOR, OR FOR ANY OTHER REASON WHATSOEVER,
WHETHER SIMILAR OR DISSIMILAR TO ANY OF THE FOREGOING, ANY PRESENT OR FUTURE LAW
TO THE CONTRARY NOTWITHSTANDING; IT BEING THE INTENTION OF THE PARTIES HERETO
THAT ALL BASIC HIRE AND SUPPLEMENTAL HIRE PAYABLE BY THE OBLIGOR HEREUNDER SHALL
CONTINUE TO BE PAYABLE IN ALL EVENTS AND IN THE MANNER AND AT THE TIMES HEREIN
PROVIDED, WITHOUT NOTICE OR DEMAND, UNLESS THE OBLIGATION TO PAY THE SAME SHALL
BE TERMINATED PURSUANT TO THE EXPRESS PROVISIONS OF THIS AGREEMENT. NOTHING IN
THIS SECTION 8 SHALL PROHIBIT THE OBLIGOR FROM PURSUING ANY RIGHT IT MAY HAVE
UNDER THIS AGREEMENT OR OTHERWISE BY A SEPARATE PROCEEDING AGAINST THE OBLIGEE,
ANY PARTICIPANT, THE DEPOSITOR OR ANY OTHER PERSON.
SECTION 9. Certain Covenants of Obligor. The Obligor hereby
covenants to the Obligee and each Participant that the Obligor shall, at all
times until payment in full of all Obligations and the termination of all
commitments of the Participants under the Operative Documents, comply with the
covenants set forth in this Section 9.
(a) Financial Information and Reports; Further
Assurances. The Obligor will deliver to the Obligee, the Depositor and
each Participant:
(i) an English translation of the unaudited
consolidated financial statements of the Obligor, within
ninety (90) business days of the close of its fiscal year, or
such later time as is then permitted under Mexican law;
(ii) an English translation of the audited
consolidated financial statements of the Obligor, within one
hundred twenty (120) days of the close of its fiscal year, or
such later time as is then permitted under Mexican law;
14
21
Asset Use Agreement
(iii) an English translation of the audited
consolidated financial statements of the Obligor, together
with a reconciliation (in the form required by the Commission)
to United States generally accepted accounting principles, in
each case within one hundred eighty (180) days of the close of
the fiscal year;
(iv) an English translation of the unaudited
quarterly consolidated financial statements of the Obligor for
each of the first three fiscal quarters, in each case within
sixty (60) business days of the close of the relevant quarter;
(v) simultaneously with the delivery of each set
of consolidated financial statements referred to in clauses
(ii), (iii) and (iv) above, an Authorized Officers'
Certificate stating whether any Event of Default or Event of
Loss exists on the date of such certificate and, if any Event
of Default or Event of Loss then exists, setting forth the
details thereof and the action which the Obligor is taking or
proposes to take with respect thereto;
(vi) upon any officer of the Obligor becoming aware
of the existence of an Event of Default or Event of Loss, an
Authorized Officers' Certificate setting forth the details
thereof and the action which the Obligor is taking or proposes
to take with respect thereto.
SECTION 10. Use of Assets; Compliance with Laws.
(a) Use of Assets. The Obligor agrees that the Assets may
be used only in a manner consistent with the Construction Agency
Agreement and, after the Basic Term Commencement Date, the Assets shall
be used solely as an automotive stamping and component assembly plant
(including all incidental and supporting services) and in a manner
consistent with the standards applicable to similar manufacturing
facilities and in any event not less than the highest standards applied
by Guarantor at similar manufacturing facilities owned by Guarantor or
any of its Subsidiaries; provided, however that in no event shall the
Assets be used for the storage of any Hazardous Material, except to the
extent such storage relates to the operation, maintenance, repair and
use of the Assets as permitted under this Section 10(a) and such
storage does not violate any Environmental Law in any material respect.
The Obligor shall pay, or cause to be paid, all charges and costs
required in connection with the use of the Assets as contemplated by
this Asset Use Agreement and the Construction Agency Agreement. The
Obligor shall not commit or permit any waste of the Assets or any part
thereof.
(b) Compliance with Laws. The Obligor agrees that the
Assets will be used, operated and maintained (x) in compliance in all
material respects and with all statutes, laws,
15
22
Asset Use Agreement
ordinances, rules and regulations of any United States or Mexican
Federal, state or local governmental body, agency or authority
applicable to the use and operation of the Assets, including, without
limitation, all Applicable Laws and environmental, noise and pollution
laws (including notifications and reports) and (y) in compliance with
all Insurance Requirements; provided, however, that the Obligor shall
not be obligated to so comply with laws, rules or regulations to the
extent that (i) the application or validity of any such law, rule or
regulation is being contested diligently and in good faith by
appropriate proceedings or compliance with such law, rule or regulation
shall have been excused or exempted by a nonconforming use permit,
waiver, extension or forbearance exempting it from such law, rule or
regulation and (ii) failure to comply with such law, rule or regulation
shall impose no risk of criminal or material civil liability on the
Obligee and shall impose no material risk of the sale, forfeiture or
loss of any Asset during the pendency of such noncompliance (any
noncompliance satisfying both of the foregoing clauses (i) and (ii)
being referred to herein as "Permitted Noncompliance"). Subject to the
foregoing provisions, the Obligor shall procure and maintain in effect
all licenses, registrations, certificates, permits, approvals and
consents required by Federal, state or local laws or by any
governmental body, agency or authority in connection with the
ownership, use and operation of the Assets, including, without
limitation, those required by environmental, noise and pollution laws
(including notifications and reports) unless the failure to procure or
maintain any such licenses, registrations, certificates, permits,
appeals or consents would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Obligor
shall not use any Asset, or knowingly permit any Asset to be used, for
the transportation of any nuclear fuels, radioactive products,
asbestos, PCB's, nuclear wastes, poisons or explosive materials, nor
will the Obligor knowingly permit the Assets to engage in any unlawful
trade or violate any law or carry any unlawful cargo that will expose
the Assets to penalty, forfeiture or capture.
(c) Exclusive Possession; ▇▇▇▇▇▇▇, etc., of Assets.
Subject to the terms and conditions of this Agreement, the Obligor and
any permitted sub-user shall have exclusive possession and control of
the Assets, and shall man, victual, equip, supply, furnish, outfit,
maintain and repair, and operate the Assets at its own expense or by
its own procurement throughout the Term. The Manager of the Assets
shall be engaged and employed by the Obligor and shall remain the
Obligor's servants, working the Assets on behalf of and at the risk of
the Obligor. The Obligee shall not be required to pay any charges, or
any other costs, charges and expenses whatsoever incident to the use,
operation and maintenance of the Assets during the Term.
(d) Maintenance of Asset Documentation. The Obligor
shall, without expense to the Obligee, throughout the Term maintain, or
cause to be maintained the documentation of the Assets in the name of
the Obligee under the laws of Mexico and the Obligee shall
16
23
Asset Use Agreement
upon the request of the Obligor execute such documents and furnish such
information as the Obligor may reasonably require to enable the Obligor
to maintain, or cause to be maintained, such documentation.
Notwithstanding anything to the contrary herein, no action or inaction
by the Participants or the Obligee, or any of their respective
Affiliates, that results in the loss (whether temporary or permanent)
or other termination of the eligibility of the Assets for documentation
under the laws of Mexico shall result in the Obligor having
responsibility for costs, expenses or other Claims arising from such
termination of eligibility or qualification.
(e) Quiet Enjoyment. The Obligee warrants and covenants
that, unless an Asset Use Event of Default shall have occurred and be
continuing and this Agreement shall have been declared to be in default
pursuant to Section 23(a), the Obligor shall be entitled to the quiet
use and enjoyment of the benefits of the Assets including the right to
uninterrupted possession, use and operation of the Assets, and the
Obligee shall not take or permit any Person claiming by, through or
under it to take any action inconsistent with the Obligor's rights
hereunder or under any of the other Operative Documents or otherwise,
through its own actions or inactions, interfere or permit any such
Person to interfere with such quiet use or enjoyment or such
possession, use or operation or the rights of the Obligor or any other
permitted sub-user or assignee to such quiet use or enjoyment or such
possession, use or operation under any sub-use agreement or assignment
permitted hereunder.
SECTION 11. Maintenance and Repair of Assets. The Obligor agrees,
at its own cost and expense, to maintain the Assets in good order and operating
condition and in accordance with the terms of all manufacturer's warranties and
in as good an operating condition, repair and appearance as when originally
delivered, ordinary wear and tear excepted, and in compliance in all material
respects with such maintenance and repair standards, ordinary wear and tear
excepted, promulgated by the manufacturer for such Assets and, unless such
noncompliance constitutes a Permitted Noncompliance, in compliance in all
material respects with all Applicable Laws applicable to the maintenance and
condition of the Assets, including, without limitation, Applicable Laws,
environmental, noise and pollution laws and regulations (including notifications
and reports), and Mexican law and any other legislative, executive,
administrative or judicial body exercising any power or jurisdiction over the
Assets, to the extent that such laws and rules affect the title, operation,
maintenance or use of the Assets. The Obligor agrees to prepare and deliver to
the Obligee and each Participant within a reasonable time prior to the required
date of filing (or, to the extent permissible, file on behalf of the Obligee and
each Participant) any and all reports (other than income tax returns) of which
it has knowledge to be filed by the Obligee or any Participant with any Federal,
state or other regulatory authority by reason of the ownership by the Obligee of
the Assets or the leasing thereof to the Obligor. The Obligor hereby waives any
right now or hereafter conferred by law to make repairs on the Assets at the
expense of the Obligee.
17
24
Asset Use Agreement
SECTION 12. Replacements; Alterations; Modifications. In case the
Assets (or any equipment, part or appliance therein) are required to be altered,
added to, replaced or modified in order to comply with any laws, regulations,
requirements or rules ("Required Alteration") pursuant to Section 10 or 11
hereof, the Obligor agrees to make such Required Alteration at its own expense,
unless a failure to make such Required Alteration constitutes a Permitted
Noncompliance (in which case the Obligor shall not be required to make such
Required Alteration so long as such failure constitutes a Permitted
Noncompliance), and the same shall immediately be and become the property of the
Obligee and subject to the terms of this Agreement. The Obligor may make any
optional alteration to any Asset ("Optional Alteration"); provided, that such
Optional Alteration does not adversely affect the value, utility or remaining
useful life of such Asset or cause such Asset to become suitable for use only by
Obligor. In the event such Optional Alteration is removable without causing
irreparable damage to the Asset, and is not a part, item of equipment or
appliance which replaces any part, item of equipment or appliance originally
incorporated or installed in or attached to such Asset on the Acquisition Date
therefor, or any part, item of equipment or appliance in replacement of or
substitution for any such original part, item of equipment or appliance, any
such Optional Alteration shall be and remain the property of the Obligor. To the
extent such Optional Alteration is not readily removable without causing damage
to the Asset to which such Optional Alteration has been made, or is a part, item
of equipment or appliance which replaces any part, item of equipment or
appliance originally incorporated or installed in or attached to such Asset on
the Acquisition Date therefor or any part, item of equipment or appliance in
replacement of or substitution for any such original part, item of equipment or
appliance, the same shall immediately be and become part of the Asset for all
purposes of this Agreement and shall be subject to the terms of this Agreement.
All Required Alterations and all parts installed or replacements made by the
Obligor upon any Asset pursuant to its obligation to maintain and keep the
Assets in good order, operating condition and repair under Section 11 hereof
shall be considered accessions to such Asset and title thereto or security
interest therein shall be immediately vested in the Obligee. Except as required
or permitted by the provisions of this Section 12, the Obligor shall not modify
an Asset without the prior written authority and approval of the Obligee. Any
Required Alterations, and any parts installed or replacements made by Obligor
upon any Asset pursuant to its obligation to maintain and keep the Assets in
good order, operating condition and repair under Section 11 (collectively,
"Replacement Parts") and all other parts which become the property of Obligee
pursuant to this Agreement shall be free and clear of all Liens (other than
Permitted Liens) and shall be, accessions to such Asset and title thereto or
security interest therein shall be immediately and automatically vested in
Obligee, for the benefit of the Participants. All Replacement Parts shall be in
an operating condition that is as good as, and shall have a value and utility
substantially equal to, or better than the replaced parts. Any part (other than
a removable part) at any time removed from any Asset shall remain subject to the
interests of Obligee and the Participants under the Agreement, no matter where
located, until such time as such part shall be replaced by a part which has been
incorporated or installed in or attached to such Asset and which meets the
requirements for a Replacement Part specified above. No later than 45 days after
the end of each fiscal quarter of
18
25
Asset Use Agreement
Obligor, Obligor shall deliver to Obligee, for the benefit of the Participants a
Purchase Order evidencing the conveyance by Obligor to Obligee of all
Replacement Parts not previously evidenced by a Purchase Order and such other
documents in respect of such part or parts as the Required Class I
Certificateholders may reasonably request in order to confirm that title to such
part or parts has passed to Obligee, as hereinabove provided. All replacements
pursuant to this Section 12 shall be purchased by Obligor with its own funds.
There shall be no obligation on the part of the Obligee or any Participant to
pay for or otherwise finance any such replacement.
SECTION 13. Marking of Assets; Inspection.
(a) Notice of Security Interest. On each Asset with an
Acquisition Cost greater than or equal to $250,000 a notice in both the
English and Spanish languages, reading as follows (or containing such
other information as may be approved by the Obligee), printed in plain
type of such size that the paragraph of reading matter shall cover a
space not less than six inches wide by nine inches high, shall be
placed and kept prominently displayed on such Asset:
"PROPERTY OF WILMINGTON TRUST COMPANY AS TRUSTEE UNDER AN
ASSET USE AGREEMENT DATED AS OF MARCH 31, 1999."
This Asset is owned by Automotive Business Trust 1999-A ("Obligee"), a
Delaware business trust, and (i) is covered by a first priority security
interest in favor of Bank of Montreal, as Funding Agent for the Lenders and
Class I Certificateholders under the Loan Agreement dated March 31, 1999 and
Trust Agreement dated as of March 19, 1999 and (ii) is and may be in the
possession of and used by Oxford Automotriz de Mexico S.A. de C.V. ("Obligor").
Under the terms of said Agreement, neither the Obligee, the Obligor, any
sub-obligor, the master or agent of this Asset nor any other person has any
right. power or authority to create, incur or permit to be placed or imposed
upon this Asset any lien whatsoever other than Permitted Liens under the
Agreement.
(b) Inspection. Subject to any Applicable Laws, the
Obligee, each Participant and any engineers accompanying the Obligee or
any Participant or Person designated by the Obligee or any Participant
to visit and inspect each of the Assets on such Person's behalf. shall
have the right, at such Person's risk and expense (including, without
limitation, as to personal injury and death) and under conditions
reasonably acceptable to the Obligor (including, without limitation,
with respect to time and place of inspection, the execution of waivers
of liability reasonably acceptable to the Obligor, maintaining
confidentiality, and the provision of proof of insurance reasonably
acceptable to Obligor), to visit and inspect the Assets, and the
Obligor will use reasonable efforts to make available its books and
records related thereto and, pay the reasonable fees and expenses of no
more than one (1) architect or surveyor with respect to each inspection
of the Assets, all upon reasonable notice and at
19
26
Asset Use Agreement
such reasonable times during normal business hours and as may be
reasonably requested; provided, however, that unless there is an
existing Event of Default, (x) the Obligee and Participants may not
make more than one (1) inspection in any calendar year without the
Obligor's prior written consent and (y) such inspection rights must be
exercised subject to the supervision of the Obligor or its designee.
Unless an Asset Use Event of Default shall have occurred and be
continuing, the Obligor shall not be required to disclose any
confidential information or allow anyone to inspect confidential
materials. For the purposes of this Section 13(b), the Assets' records
shall not be deemed to be confidential materials.
SECTION 14. Assignment and Subleasing.
(a) By the Obligor. THE OBLIGOR SHALL NOT, WITHOUT THE
PRIOR WRITTEN CONSENT OF THE OBLIGEE AND THE REQUIRED PARTICIPANTS,
LEASE OR SUB-LEASE ANY ASSET, THE OBLIGOR SHALL NOT, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE OBLIGEE AND ALL OF THE PARTICIPANTS, RELINQUISH,
ASSIGN, TRANSFER OR ENCUMBER ITS RIGHTS, INTERESTS OR OBLIGATIONS
HEREUNDER; PROVIDED HOWEVER THAT THE OBLIGOR SHALL BE PERMITTED TO
SUBLEASE A PORTION OF THE ASSETS, FOR A TERM NOT TO EXTEND BEYOND THE
TERMINATION DATE HEREOF, TO PERSONS ENGAGED IN THE LASER WELDING
PROCESS AND OTHER RELATED MANUFACTURING PROCESSES. ANY ATTEMPTED LEASE
OR SUB-LEASE, RELINQUISHMENT, ASSIGNMENT, TRANSFER OR ENCUMBRANCE BY
THE OBLIGOR IN CONTRAVENTION OF THIS SECTION 14(a) SHALL BE NULL AND
VOID.
(b) By the Obligee. The Obligee shall not sell, assign,
transfer or grant a security interest in all or any part of the
Obligee's rights, obligations, title or interest in, to and under the
Assets, this Agreement, any Asset Use Supplement and/or any Basic Hire
and Supplemental Hire payable under this Agreement or any Asset Use
Supplement except as contemplated by the Operative Documents.
SECTION 15. Liens. The Obligor will not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to (i) any
Asset, the Obligee's title thereto or any interest therein, or (ii) this
Agreement or any of the Obligee's interests hereunder, except in the case of
either clause (i) or (ii), Permitted Liens. The Obligor, at its own expense,
will promptly pay, satisfy and otherwise take such actions as may be necessary
to keep this Agreement and all Assets free and clear of, and to duly discharge
or eliminate or bond in a manner satisfactory to the Obligee and each
Participant, any such Lien not excepted above if the same shall arise at any
time. The Obligor will notify the Obligee and each Participant in writing
promptly upon becoming aware of any tax or other
20
27
Asset Use Agreement
Lien (other than any Permitted Lien excepted above) that shall attach to any
Asset, and of the full particulars thereof.
SECTION 16. Loss, Damage or Destruction.
(a) Risk of Loss, Damage or Destruction. The Obligor
hereby assumes all risk of loss, damage, theft, taking, destruction,
confiscation, condemnation, requisition or commandeering, partial or
complete, of or to the Assets, however caused or occasioned, such risk
to be borne by the Obligor with respect to the Assets from the date of
this Agreement, and continuing until such Asset has been returned to
the Obligee or its designee in accordance with the provisions of
Section 6 or has been purchased by the Obligor in accordance with the
provisions of Section 28(a). The Obligor agrees that no occurrence
specified in the preceding sentence shall impair, in whole or in part,
any obligation of the Obligor under this Agreement, including, without
limitation, the obligation to pay Basic Hire.
(b) Occurrence of Event of Loss. If an Event of Loss
occurs with respect to the Assets during the Term, the Obligor shall
give to the Obligee prompt written notice thereof (an "Event of Loss
Notice") and the Obligor shall pay to the Obligee the Casualty Loss
Value of the Asset suffering such Event of Loss in accordance with
clause (c).
(c) Payment of Casualty Loss Value. If an Event of Loss
shall have occurred with respect to the Assets, then the Obligor shall
pay to the Obligee on the earlier of (x) the next succeeding Hire
Payment Date that is no earlier than one hundred eighty (180) days
following the date of such Event of Loss and (y) the last day of the
Term (such earlier date, the "Casualty Loss Value Payment Date") an
amount equal to the sum of (i) all unpaid Basic Hire payable for such
Asset for any Variable Hire Period in which the Event of Loss has
occurred, plus (ii) the Casualty Loss Value of such Asset determined as
of such Casualty Loss Value Payment Date, plus (iii) all other
Supplemental Hire due for such Asset as of the date of payment of the
amounts specified in the foregoing clauses (i) and (ii). Any payments
received at any time by the Obligee or by, the Obligor from any
insurer, any Government Authority, or other party (except the Obligor)
as a result of the occurrence of such Event of Loss will be applied in
reduction of the Obligor's obligation to pay the foregoing amounts, if
not already paid by the Obligor, or, if already paid by the Obligor,
will be applied to reimburse the Obligor for its payment of such
amount, unless an Event of Default shall have occurred and be
continuing. Upon payment in full of such Casualty Loss Value, Basic
Hire and Supplemental Hire, (A) the obligation of the Obligor to pay
Basic Hire hereunder with respect to such Asset shall terminate and the
Term of such Asset shall terminate, and (B) the Obligee shall transfer
to the Obligor, "as is where is" without recourse or warranty, (except
21
28
Asset Use Agreement
as to the absence of Liens attributable to the Obligee described in
clause (b) of the definition of Permitted Liens), all of the Obligee's
right, title and interest in and to the Assets.
(d) Partial Event of Loss.
(i) If an Event of Loss occurs with respect to
less than all of the Assets and the cost of refurbishment,
reconstruction, repair or replacement of such Assets is
$2,000,000 or greater, the Obligee, upon demonstration by the
Obligor to the reasonable satisfaction of the Obligee that
such refurbishment, reconstruction, repair or replacement may
be effected prior to the end of the Term, shall pay over to
the Obligor those insurance proceeds it received with respect
to such Event of Loss for the purpose of reimbursing the
Obligor for expenses incurred in connection with such
refurbishment, reconstruction, repair or replacement and the
Obligor shall refurbish, reconstruct, repair or replace the
Assets suffering such Event of Loss to the conditions required
by Section 11 hereof as soon as reasonably practicable after
such loss but in no event later than the last day of the Term.
If in the Obligee's reasonable judgment such Assets may not be
restored prior to the end of the Term it shall retain all
insurance proceeds received in respect of such Event of Loss
and may apply the same to the satisfaction of the payment of
the Casualty Loss Value due and the Obligor shall pay to the
Obligee the balance of the Casualty Loss Value in accordance
with clause (c).
(ii) If an Event of Loss occurs with respect to
less than all of the Assets and the cost of refurbishment,
reconstruction, repair or replacement of such Assets is less
than $2,000,000, the Obligor shall, as soon as reasonably
practicable but in no event later than the last day of the
Term, refurbish, reconstruct, repair or replace the Assets
suffering such Event of Loss to the conditions required by
Section 11 hereof, and, to the extent the Obligee receives
payment of insurance proceeds with respect to such Event of
Loss, such proceeds shall be paid over to the Obligor for the
purpose of reimbursing it for expenses incurred in connection
with such refurbishment, reconstruction, or otherwise paying
repair or replacement.
(iii) Notwithstanding anything in this clause (d) to
the contrary, if an Event of Default has occurred and is
continuing, all insurance proceeds paid to the Obligee with
respect to an Event of Loss shall be retained by the Obligee
until such Event of Default is cured or such proceeds are
applied, in whole or in part, to the satisfaction of the
Casualty Loss Value due.
22
29
Asset Use Agreement
SECTION 17. Insurance.
(a) Coverage. The Obligor, at its own cost and expense,
shall carry and maintain or cause to be carried and maintained at all
times during the Term insurance, on or with respect to the Assets and
the operation thereof in an amount described on the Asset Use
Supplement; provided, that, in all events such insurance shall be in
such amounts and for such risks consistent with prudent industry
practice and at least comparable in amounts and against risks
customarily insured against by the Obligor, the Guarantor and their
respective Affiliates in respect of Assets owned or Agreement by them
similar in type to the Assets. All insurance required under this
Section 17 shall be provided by financially sound and reputable
insurers that are rated in Best's Insurance Guide or any successor
thereto (or if there be none, an organization having a similar national
reputation) at least as good as insurers of similar Assets owned by the
Guarantor on the First Acquisition Date.
(b) Adjustment of Losses. Losses, if any, with respect to
the Assets under all insurances or entries in protection and indemnity
associations, whether or not required to be carried under Section
17(a), shall be adjusted with the insurance companies, including the
filing of appropriate proceedings, by the Obligee, except in those
cases where the Obligee has elected or is required to turn proceeds
over to the Obligor, in which case the Obligor shall perform the
adjustments; provided, however, that if an Event of Default shall have
occurred and be continuing, such losses shall be adjusted solely by the
Obligee.
(c) Application of Insurance Proceeds. So long as no
Event of Default shall exist and be continuing hereunder, the entire
proceeds of: (x) any property or casualty insurance or third party
payments with respect to any damage to the Assets or (y) any payments
made by any Governmental Authority in respect of any taking,
confiscation, requisition or commandeering, or condemnation
("Confiscation Payments") with respect to the Assets shall be paid to
the Obligee and the Obligee shall be named loss payee on the insurance
described in clause (x). All proceeds of insurance in respect of loss
or damage to the Assets shall be paid to the Obligee or its assigns if
an Event of Default shall have occurred and be continuing at the time
such proceeds are payable, and such proceeds shall, at the option of
the Obligee, be held by the Obligee as security for the Obligor's
obligations hereunder or applied against any payment obligations of the
Obligor under this Agreement.
(d) Policy Requirements. Each policy required hereunder
shall provide thirty (30) days' prior notice to the Obligee of
cancellation or material change, and the Obligor shall obtain a waiver
by such insurance company of any right to claim any premiums or
commissions against the Obligee, any Participant or the Depositor. In
addition, each liability policy required hereunder shall (i) be primary
without right of contribution of any other insurance carried by or on
behalf of the Obligee, the Participants and the Depositor and (ii)
23
30
Asset Use Agreement
include the Obligee, the Depositor and each Participant as additional
insureds as their respective interests may appear.
(e) Delivery of Insurance Certificates. Prior to the
First Acquisition Date and thereafter at the request of the Obligee,
the Obligor shall deliver to the Obligee, the Depositor and each
Participant certificates of insurance issued by the insurer(s) for the
insurance required to be maintained hereunder. If the Obligor shall
fail to cause the insurance required under this Section to be carried
and maintained, the Obligee, the Depositor or any Participant may
provide such insurance and the Obligor shall reimburse the Obligee, the
Depositor or such Participant, as the case may be, upon demand for the
cost thereof as a Supplemental Hire hereunder.
SECTION 18. General Tax Indemnity.
(a) The Obligor agrees to pay, defend and indemnify and
hold the Obligee, the Depositor, each Participant and their respective
successors and assigns (each, a "Tax Indemnitee") harmless on an
After-Tax Basis from any and all Mexican and United States Federal,
state, local and foreign taxes, including, without limitation, sales
and use taxes, fees, withholdings (other than with respect to Basic
Hire), levies, imposts, duties, ad valorem or property taxes, import
taxes, value added taxes, asset taxes, all license, franchise or
registration fees, fines, tariffs, assessments and charges of any kind
and nature whatsoever, together with any penalties, fines or interest
thereon (herein called "taxes or other impositions") howsoever imposed,
whether levied or imposed upon or asserted against any Tax Indemnitee,
the Obligor, any Asset or any part thereof, by any Federal, state or
local government or taxing authority in Mexico or the United States, or
by any taxing authority or governmental subdivision of a foreign
country, upon or with respect to (i) any Asset or any part thereof,
(ii) the manufacture, construction, ordering, purchase, ownership,
delivery, leasing, subleasing, re-leasing, possession, use,
maintenance, registration, re-registration, titling, re-titling,
licensing, documentation, return, repossession, sale or other
application or disposition of any Asset or any part thereof, (iii) the
rentals, receipts or earnings arising from any Asset or any part
thereof, or (iv) this Agreement, each Asset Use Supplement, the Basic
Hire and/or Supplemental Hire payable by the Obligor hereunder;
provided, however, that the foregoing indemnity shall not apply to:
(1) any Mexico or United States Federal, state,
local or foreign tax or other imposition based on or measured
by net income (including any capital gains taxes, excess
profits taxes, minimum taxes, alternative minimum taxes.
branch profits taxes, accumulated earnings taxes and personal
holding company taxes) or in the nature of a net income tax or
imposed in lieu of a net income tax, and any franchise tax and
other tax based on capital, receipts, net worth, surplus or
comparable basis
24
31
Asset Use Agreement
of measurement (provided, that, notwithstanding this clause
(1), the Obligor shall pay, defend and indemnify each Tax
Indemnitee as provided in clause (a) above for any taxes
imposed by Mexican tax authorities on income from Mexican
sources including but not limited to withholding taxes);
(2) any tax or other impositions in respect of
this Agreement of any Asset that results from any act, event
or omission (other than any act, event or omission expressly
provided in Section 28(b)(v)) that occurs, or is imposed with
respect to any period after, the earliest of (i) the return of
possession of the Asset in compliance with this Agreement,
(ii) the expiration or earlier termination of this Agreement
or (iii) the termination of this Agreement as the result of an
Event of Loss;
(3) any tax or other impositions that are imposed
on any Tax Indemnitee as a result of the gross negligence or
willful misconduct of such Tax Indemnitee or its Affiliate or
the willful breach by such Tax Indemnitee or such Affiliate of
its obligations hereunder;
(4) any tax or other impositions that have not
been paid and that are being contested in accordance with
clause (b) below;
(5) any tax or other impositions that result from
any voluntary transfer by any Tax Indemnitee of any interest
in any Asset or any interest arising under this Agreement, or
from any voluntary transfer of any interest in any Tax
Indemnitee, or from any involuntary transfer of any of the
foregoing interests in connection with any bankruptcy or other
proceeding for the relief of debtors in which such Tax
Indemnitee is the debtor or any foreclosure by a creditor of
any Tax Indemnitee (other than, in any case, any transfer in
connection with the exercise by the Obligor of its purchase
option pursuant to Section 28(a) or a sale of any Asset
pursuant to Section 28(b), in connection with the occurrence
of an Event of Default, or an Event of Loss, or otherwise
pursuant to this Agreement);
(6) any tax that is enacted or adopted as a
substitute for or in lieu of any tax that would not have been
indemnified against pursuant to Section 18(a);
(7) any tax or other impositions imposed on any
Tax Indemnitee that would not have been imposed upon such Tax
Indemnitee but for any failure of such Tax Indemnitee to
comply with any information, documentation, reporting or other
similar requirements concerning the nationality, residence,
identity or connection with the jurisdiction imposing such tax
or other impositions, if such compliance is required, under
Applicable Law or treaty, to obtain or establish relief or
exemption
25
32
Asset Use Agreement
from or reduction in such tax or other impositions and the
Obligor has provided such Tax Indemnitee with a timely notice
of such information, documentation, reporting or similar
requirement;
(8) any tax or other impositions imposed as a
result of any amendment or supplement to any Operative
Document unless such amendment is requested or consented to by
Obligor in writing; and
(9) any tax or other impositions imposed on, or
with respect to, a transferee (or a subsequent transferee) of
an original Tax Indemnitee to the extent of the excess of such
tax or other impositions over the amount of such tax or other
impositions that would have been imposed on, or with respect
to, such original Tax Indemnitee had there not been a transfer
by such original Tax Indemnitee of (A) the Assets or any
interest therein or (B) any interest in, or arising under, any
or all of the Operative Documents.
Notwithstanding the foregoing provisos (1) through (9), Obligor shall indemnify
each Tax Indemnitee for any taxes identified in provisos 1, 4 or 6 (or any
increase in such taxes) imposed on such Tax Indemnitee net of any decrease in
such taxes realized by such Tax Indemnitee, to the extent that such tax or tax
increase would not have occurred if on each Funding Date the Obligee had
advanced funds to the Obligor in the form of a loan secured by the Assets in an
amount equal to the amount funded on such Funding Date, with debt service for
such loan equal to the Basic Hire payable on each Hire Payment Date and a
principal balance at the maturity of such loan in an amount equal to the
aggregate amount of the Asset Costs then outstanding at the end of the term of
this Agreement. Notwithstanding the provisos (1) through (8), but subject to
proviso (9), the Obligor shall pay or reimburse, and indemnify and hold
harmless, any Tax Indemnitee which is not incorporated under the laws of the
United States, or a state thereof, from any deduction or withholding of any
United States Federal income tax to the extent such deduction or withholding
results from a change of treaty, law or regulation. The Obligor will prepare and
file any reports or returns required to be made with respect to any tax or other
imposition for which the Obligor is responsible, directly or indirectly, if
permitted by applicable law to file the same, and if not so permitted, the
Obligor shall prepare such reports or returns for signature by the Obligee or,
upon request of the Obligee, will promptly provide the Obligee with all
information necessary for the making and timely filing of such reports or
returns by the Obligee, and shall forward the same, together with immediately
available funds for payment of any tax or other imposition due, to the Obligee,
at least five (5) Business Days in advance of the date such payment is to be
made. Upon written request, the Obligor shall furnish the Obligee with copies of
all paid receipts or other appropriate evidence of payment for all taxes or
other impositions paid by the Obligor pursuant to this Section 18. All of the
indemnities contained in this Section 18 in respect of (i) any act, event or
omission that occurs on or prior to termination of this Agreement and (ii) any
sale described in
26
33
Asset Use Agreement
Section 28(b)(v) shall continue in full force and effect notwithstanding the
expiration or earlier termination of this Agreement in whole or in part,
including the expiration or termination of the Term with respect to any Asset
(or all) of the Assets, and are expressly made for the benefit of, and shall be
enforceable by, the Obligee, the Depositor and each Participant.
(b) In the event any claim, action, proceeding or suit is
brought against any Tax Indemnitee with respect to which the Obligor
would be required to indemnify such Tax Indemnitee, such Tax Indemnitee
shall promptly give written notice of any such claim, action,
proceeding or suit to the Obligor, provided, further, that the failure
of any Tax Indemnitee to give such notice to the Obligor shall not
relieve the Obligor from any of its obligations to provide
indemnification to any Tax Indemnitee under this Section 18, except to
the extent that such failure prejudices the Obligor's ability to
contest such claim, action, proceeding or suit or to the extent that
any amount for which indemnity of such Tax Indemnitee is required
hereunder is otherwise a result of such Tax Indemnitee's failure to
give notice. The Obligor may, at the Obligor's expense, in its own name
or in the name and on behalf of the Tax Indemnitee resist and defend
such action, suit or proceeding, or cause the same to be resisted or
defended by counsel selected by the Obligor and reasonably satisfactory
to such Tax Indemnitee and in the event of any failure by the Obligor
to do so, the Obligor shall pay all costs and expenses (including,
without limitation, attorney's fees and expenses) incurred by such Tax
Indemnitee in connection with such action, suit or proceeding;
provided, that, if, in the good faith judgement of the relevant Tax
Indemnitee, the settlement of any action, suit or proceeding could
materially and adversely affect such Tax Indemnitee's income tax
liabilities (other than with respect to the transactions contemplated
by this Agreement) then the Obligor shall not settle any such actions
for which it has assumed the responsibility of defense without the
consent of such Tax Indemnitee.
(c) If any Tax Indemnitee shall actually recognize (as
determined in good faith by the relevant Tax Indemnitee) a tax benefit
by reason of any tax paid or indemnified by Obligor pursuant to this
Section 18 (whether such tax benefit shall be by means of a foreign tax
credit, depreciation or cost recovery deduction, other credit or
deduction, or otherwise) not otherwise taken into account in computing
such payment or indemnity, such Tax Indemnitee shall pay to Obligor an
amount equal to the amount of such tax benefit plus any tax benefit
recognized as the result of any payment made pursuant to this sentence,
when, as, if, and to the extent, recognized; provided, that such Tax
Indemnitee shall not be required to make any payment pursuant to this
sentence if and so as long as an Event of Default has occurred and is
continuing. Each such Tax Indemnitee shall in good faith use reasonable
efforts in filing its tax returns and in dealing with taxing
authorities to seek and claim any such tax benefits.
27
34
Asset Use Agreement
(d) Obligor also agrees that (i) any and all payments by
Obligor under this Agreement or any other Operative Document and (ii)
any and all payments by the Obligee under this Agreement or any other
Operative Document (including, without limitation, all payments to the
holders of Notes or Class I Certificates (a "Holder") shall be made
free and clear of, and without deduction or withholding for, any and
all taxes or other impositions that are subject to indemnification
under this Section 18, and that if Obligor or the Obligee shall be
required under Applicable Law to deduct or withhold any such
indemnifiable taxes or other impositions from or in respect of any
payment hereunder or under any other Operative Document, then at the
time such payment is made: (A) Obligor shall pay an additional amount
such that the net amount actually received by the Person entitled to
such payment (the "Payee") (including, without limitation, in the case
of payments of Basic Hire by Obligor to the Obligee to be used for
payments to a Holder) will, after making all required deductions and
withholdings for all such indemnifiable taxes or other impositions
(including deductions and withholdings applicable to additional amounts
payable under this paragraph) and after taking into account all
indemnifiable taxes or other impositions imposed on or with respect to
the receipt or accrual of such additional amounts, equal the full
amount of the payment due hereunder or under any other Operative
Document, (B) Obligor shall make all deductions as are required under
Applicable Law and (C) Obligor shall pay the full amount deducted or
withheld to the relevant taxing authority or other Governmental
Authority in accordance with Applicable Law and shall pay the balance
of such additional amount directly to the Payee, in the case of any
payment described in clause (i) of this sentence, and to the Obligee,
in the case of any payment described in clause (ii) of this sentence.
SECTION 19. Indemnification. The Obligor hereby assumes liability
for, and does hereby agree to indemnify, protect, save, defend, and hold
harmless the Obligee, Trust Company, the Depositor, each Participant and their
respective officers, directors, stockholders, successors, assigns, agents and
servants (each such party being herein, for purposes of this Section 19, called
an "Indemnified Person") on an After-Tax Basis from and against any and all
obligations, fees (including switching fees), charges (including demurrage
charges), liabilities, losses, damages, penalties, claims, demands, actions,
suits, judgments, costs and expenses, including legal expenses, of every kind
and nature whatsoever, imposed on, incurred by, or asserted against any
Indemnified Party, in any way relating to or arising out of (a) the manufacture,
construction, ordering, purchase, acceptance or rejection, ownership, titling or
retitling, registration or re-registration, delivery, leasing, subleasing,
releasing, possession, use, operation, storage, removal, return, repossession,
sale or other disposition of the Assets or any Asset, or any part thereof,
including, without limitation, any of such as may arise from (i) the
transactions contemplated by this Agreement or the other Operative Documents,
(ii) the loss or damage to any property or death or injury to any persons, (iii)
patent or latent defects in any Asset (whether or not discoverable by the
Obligor or any Indemnified Party), (iv) any claims based on strict liability in
tort, (v) any claims based on patent, trademark, tradename or copyright
infringement, (vi) any claims based upon any non-compliance with or violation of
any
28
35
Asset Use Agreement
environmental control, noise or pollution laws or requirements, including
without limitation, fines and penalties arising from violations of or
noncompliance with such requirements or failure to report discharges, and costs
of clean-up of any discharge and (vii) any loss or damage to any commodities
loaded or unloaded by the Assets; or (b) any failure on the part of the Obligor
to perform or comply with any of the terms of this Agreement; or (c) any power
of attorney issued to the Obligor. The Obligor shall give each Indemnified Party
prompt notice of any occurrence, event or condition known to the Obligor as a
consequence of which any Indemnified Party may be entitled to indemnification
hereunder. The Obligor shall forthwith upon demand of any such Indemnified Party
reimburse such Indemnified Party for amounts reasonably expended by it in
connection with any of the foregoing or pay such amounts directly; provided,
however, that the Obligor shall not be liable to such Indemnified Party for any
of the foregoing to the extent they arise from the gross negligence or willful
misconduct of such Indemnified Party. The Obligor shall be subrogated to an
Indemnified Party's rights in any matter with respect to which the Obligor has
actually reimbursed such Indemnified Party for amounts expended by it or has
actually paid such amounts directly pursuant to this Section 19. In case any
action, suit or proceeding is brought or, to such Indemnified Party's knowledge,
threatened, against any Indemnified Party in connection with any claim
indemnified against hereunder, such Indemnified Party will, promptly after
receipt of notice of the commencement or threat of such action, suit or
proceeding, notify the Obligor thereof in writing, enclosing a copy of all
papers served upon such Indemnified Party. The Obligor may at the Obligor's
expense, resist and defend such action, suit or proceeding, or cause the same to
be resisted or defended by counsel selected by the Obligor and reasonably
satisfactory to such Indemnified Party and in the event of any failure by the
Obligor to do so, the Obligor shall pay all costs and expenses (including,
without limitation, attorney's fees and expenses) incurred by such Indemnified
Party in connection with such action, suit or proceeding; provided, however,
that the failure of any Indemnified Party to give such notice to the Obligor
shall not relieve the Obligor from any of its obligations to provide
indemnification under this Section 19, except to the extent that any amount for
which indemnity is required hereunder is a result of such failure to give
notice; provided further that the Obligor shall be relieved of its obligations
to provide indemnification to an Indemnified Party under this Section 19 to the
extent that such Indemnified Party shall deliver to the Obligor a written notice
waiving the benefits of the indemnification of such Indemnified Party provided
by this Section 19 in connection with such claim, action, proceeding or suit.
The provisions of this Section 19, and the obligations of the Obligor under this
Section 19, shall apply from the date of the execution of this Agreement
notwithstanding that the Term may not have commenced with respect to the Assets,
and shall survive and continue in full force and effect notwithstanding the
expiration or earlier termination of this Agreement in whole or in part,
including the expiration or termination of the Term with respect to any Asset or
all Assets, and are expressly made for the benefit of, and shall be enforceable
by, each Indemnified Party.
SECTION 20. No Warranties. IT IS AGREED THAT NONE OF THE
OBLIGEE, TRUST COMPANY, THE DEPOSITOR OR ANY PARTICIPANT SHALL BE DEEMED TO HAVE
29
36
Asset Use Agreement
MADE, AND EACH IS DEEMED TO HEREBY DISCLAIM ANY WARRANTY OR REPRESENTATION,
EITHER EXPRESS OR IMPLIED, AS TO TITLE TO, AS TO THE DESIGN, CONDITION OR
MERCHANTABILITY OF, AS TO THE QUALITY OF THE MATERIAL, EQUIPMENT OR WORKMANSHIP
IN OR THE CONFORMITY THEREOF TO THE PLANS AND SPECIFICATIONS, OR AS TO THE
FITNESS OF THE ASSETS FOR ANY PARTICULAR PURPOSE OR AS TO ELIGIBILITY OF THE
ASSETS FOR ANY PARTICULAR TRADE, OR THE PRESENCE OR ABSENCE OF ANY LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR ANY OTHER WARRANTY OR
REPRESENTATION WHATSOEVER. THE OBLIGOR HEREBY WAIVES ANY CLAIM (INCLUDING ANY
CLAIM BASED ON STRICT OR ABSOLUTE LIABILITY IN TORT OR INFRINGEMENT) IT MIGHT
HAVE AGAINST THE OBLIGEE, TRUST COMPANY, THE DEPOSITOR, ANY PARTICIPANT OR ANY
OTHER INDEMNIFIED PERSON FOR ANY LOSS, DAMAGE (INCLUDING INCIDENTAL OR
CONSEQUENTIAL DAMAGE) OR EXPENSE CAUSED BY THE ASSETS OR BY THE OBLIGOR'S LOSS
OF USE THEREOF FOR ANY REASON WHATSOEVER, INCLUDING COMPLIANCE WITH
ENVIRONMENTAL LAWS. So long and only so long as an Event of Default shall not
have occurred and be continuing, and so long and only so long as the Assets
shall be subject to this Agreement and the Obligor shall be entitled to
possession of the Assets hereunder, the Obligee authorizes the Obligor, at the
Obligor's expense, to .assert for the Obligee's account, all rights and powers
of the Obligee under any Builder's, manufacturer's, vendor's or dealer's
warranty with respect to the Assets and the Obligee agrees to cooperate with the
Obligor to the extent reasonably necessary to permit the Obligor to realize the
benefits of such warranties; provided, however, that the Obligor shall
indemnify, protect, save, defend and hold harmless the Obligee, Trust Company,
the Depositor, the Participants and the other Indemnified Persons from and
against any and all claims, and all costs, expenses, damages, losses and
liabilities incurred or suffered by the Obligee in connection therewith, as a
result of, or incident to, any action by the Obligor pursuant to the foregoing
authorization. Nothing in this Section 20 shall be construed as a waiver of any
right that either the Obligee or the Obligor may have against any person other
than the Obligee, the Trustee, the Depositor, the Participants and the other
Indemnified Persons.
SECTION 21. Obligor's Representations and Warranties. The
Obligor hereby represents and warrants that:
(a) the Obligor is a corporation duly organized and
validly existing under the laws of Mexico, and is qualified to do
business in, and is in good standing in, each state or other
jurisdiction in which the nature of its business makes such
qualification necessary;
(b) the Obligor has the corporate power and authority to
execute and perform this Agreement and to demise the Assets hereunder,
and has duly authorized the execution, delivery and performance of this
Agreement;
30
37
Asset Use Agreement
(c) the demise of the Assets from the Obligee by the
Obligor, the execution and delivery of this Agreement, the Asset Use
Supplement and other related instruments, documents and agreements, the
compliance by the Obligor with the terms hereof and thereof, and the
payments and performance by the Obligor of all of its obligations
hereunder and thereunder (i) have been duly and legally authorized by
appropriate corporate action taken by the Obligor, (ii) are not in
contravention of, and will not result in a violation or breach of, any
of the terms of the Obligor's Certificate of Incorporation (or
equivalent document), its By-Laws, or of any provisions relating to
shares of the capital stock of the Obligor, and (iii) except where such
violation or breach could not reasonably be expected to have a Material
Adverse Effect, (x) not violate or constitute a breach of any provision
of law, any order of any court or other agency of government, or any
indenture, agreement or other instrument to which the Obligor is a
party, or by or under which the Obligor or any of the Obligor's
property is bound, or (y) be in conflict with, result in a breach of,
or constitute (with due notice and/or lapse of time) a default under
any such indenture, agreement or instrument, or result in the creation
or imposition of any Lien upon any of the Obligor's property or assets
other than Permitted Liens;
(d) this Agreement has been executed by the duly
authorized officer or officers of the Obligor and delivered to the
Obligee and constitutes, and when executed by the duly authorized
officer or officers of the Obligor and delivered to the Obligee the
Asset Use Supplement and related instruments, documents and agreements
with respect to the Assets will constitute, the legal, valid and
binding obligations of the Obligor, enforceable in accordance with
their terms;
(e) neither the execution and delivery of this Agreement
or any Asset Use Supplement by the Obligor, nor the payment and
performance by the Obligor of all of its obligations hereunder and
thereunder, requires the consent or approval of, the giving of notice
to, or the registration, filing or recording with, or the taking of any
other action in respect of, any Federal, state, local or foreign
government or governmental authority or agency or any other Person;
(f) no mortgage, deed of trust, or other Lien (other than
a Permitted Lien) which now covers or affects any property or interest
therein of the Obligor, now attaches to any Asset, the proceeds thereof
or this Agreement, or in any manner affects or will affect adversely
the Obligee's rights and security interest therein;
(g) with respect to any Assets for which an Acquisition
Date Notice has been made, the Obligor holds (or, upon Completion of
the Improvements, will hold) all licenses, certificates and permits
from governmental authorities necessary to use and operate the Assets
in accordance with the provisions of this Agreement;
31
38
Asset Use Agreement
(h) there is no litigation or other proceeding now
pending or, to the best of the Obligor's knowledge, threatened against
or affecting the Obligor, in any court or before any regulatory
commission, board or other administrative governmental agency (i) which
would directly or indirectly adversely affect or impair the title of
the Obligee to the Assets or (ii) which could reasonably be expected to
have a Material Adverse Effect;
(i) all balance sheets, statements of profit and loss and
other financial statements set forth in the Disclosure Documents fairly
present the financial condition of the Obligor on the dates for which,
and the results of its operations for the periods for which, the same
have been furnished, and have been prepared in accordance with
generally accepted accounting principles consistently followed
throughout the periods covered thereby (except as noted therein); and
there has been no material adverse change in the financial condition of
the Obligor, since the date of the Disclosure Documents, except as may
be contemplated and disclosed under the Disclosure Documents;
(j) no approval that has not been obtained by the Obligor
as of the date of this representation and warranty is required from any
regulatory body, board, authority or commission, nor from any other
administrative or governmental agency, nor from any other Person, with
respect to the execution, delivery and performance of this Agreement,
other than such approvals the failure to obtain could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect;
(k) except for the filings required pursuant to Section
3.1(i), no further action, including any filing or recording of any
document (including any other financing statement) is necessary or
advisable in order to establish and perfect the Obligee's title to and
interest in the Assets as against the Obligor and any third parties in
any applicable jurisdictions in the United States, or Mexico;
(l) the Disclosure Documents are true and correct in all
material respects and do not omit any information necessary to make the
information provided, in light of the circumstances under which such
information was provided, not materially misleading; and
(m) the Obligor is not an "investment company" or a
company "controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
SECTION 22. Events of Default. Any of the following events shall
constitute an Event of Default:
32
39
Asset Use Agreement
(a) Non-Payment. The Obligor shall fail to make (i) any
payment of Basic Hire within five (5) Business Days of the date due,
(ii) any payment of Casualty Loss Value, EBO Purchase Option Amount,
End of Term Purchase Option Amount or Deficiency on the date due or
(iii) any other Supplemental Hire within ten (10) days after notice
thereof; or
(b) Specific Defaults.
(i) The Obligor shall fail to observe or perform
any of the covenants, agreements or obligations of the Obligor
set forth in Sections 6, 14(a), 28(a) and 28(b); or
(ii) the Obligor shall fail to maintain in effect
the insurance required under Section 17 or (iii) the Guarantor
shall fall to observe any of its covenants, agreements or
obligations set forth in the Guaranty; or
(c) Other Defaults. The Obligor shall fail to perform or
observe any other covenant, condition, or agreement to be performed or
observed by it under this Agreement, or in any Operative Document or
other agreement or certificate furnished to the Obligee or any
Participant in connection with this Agreement, and such failure shall
continue unremedied for thirty (30) days after the earlier of (i)
written notice to the Obligor specifying such failure and demanding the
same to be remedied and (ii) the date on which a responsible officer of
the Obligor shall have actual knowledge thereof; or
(d) Cross-Default. The Guarantor or any of its
Subsidiaries shall (i) fail to make any payment in respect of any
Indebtedness having an aggregate principal amount (including amounts
owing to all creditors under any combined or syndicated credit
arrangement) of more than $3,000,000 when due (whether by scheduled
maturity, required prepayment acceleration, demand, or otherwise) and
such failure continues after the applicable grace or notice period, if
any, specified in the relevant document on the date of such failure
(ii) fail to perform or observe any other condition or covenant, or any
other event shall occur or condition exist, under any agreement or
instrument relating to any Indebtedness having an aggregate principal
amount (including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $3,000,000 and such failure
continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure if the
effect of such failure, event or condition is to cause, or to permit
the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its stated
maturity or (iii) any Guaranty Event of Default shall have occurred and
be continuing; or
33
40
Asset Use Agreement
(e) Representation or Warranty. Any representation or
warranty made by (i) the Obligor under this Agreement or in any Asset
Use Supplement, (ii) the Guarantor in the Guaranty, or (iii) the
Obligor or the Guarantor in any document or certificate furnished by
the Obligor or the Guarantor, as the case may be, to the Obligee or any
Participant in connection herewith or pursuant hereto, shall prove to
be untrue or incorrect in any material respect when made; or
(f) Insolvency. The Obligor or the Guarantor shall become
insolvent or make an assignment for the benefit of creditors or consent
to the appointment of a trustee, sindico, liquidator or receiver; or a
trustee, sindico, liquidator or a receiver shall be appointed for the
Obligor or the Guarantor or for a substantial part of its property
without its consent and shall not be dismissed for a period of ninety
(90) consecutive days; or any execution or writ or process shall be
issued under any action or proceeding against the Obligor or the
Guarantor whereby any of the Assets may be taken or restrained; or
(g) Voluntary Proceedings. The Obligor or the Guarantor
shall (i) generally fail to pay, or admit in writing its inability to
pay, its debts as they become due, or shall voluntarily commence any
case or proceeding or file any petition under the Ley de Quiebras y de
Suspension de Pagos or any bankruptcy, suspension of payments,
insolvency or similar law or seeking dissolution, liquidation or
reorganization or the appointment of a receiver, trustee, sindico,
liquidator, custodian or liquidator for itself or a substantial portion
of its property, assets or business or to effect a plan or other
arrangement with its creditors, or shall file any answer admitting the
jurisdiction of the court and the material allegations of any
involuntary petition filed against it in any bankruptcy, suspension of
payments, insolvency or similar case or proceeding, or shall be
adjudicated bankrupt, or shall make a general assignment for the
benefit of creditors, or shall consent to, or acquiesce in the
appointment of, a receiver, trustee, sindico, liquidator, custodian or
liquidator for itself or a substantial portion of its property, assets
or business, or (ii) take corporate action for the purpose of
effectuating any of the foregoing; or
(h) Involuntary Proceedings. Involuntary proceedings or
an involuntary petition shall be commenced or filed against the Obligor
or the Guarantor under the Ley de Quiebras y de Suspension de Pagos or
any bankruptcy, suspension of payments, insolvency or similar law or
seeking the dissolution, liquidation or reorganization of the Obligor
or the Guarantor or the appointment of a receiver, trustee, custodian
or liquidator for the Obligor or the Guarantor or of a substantial part
of the property, assets or business of the Obligor or the Guarantor, or
any writ, judgment, warrant of attachment, execution or similar process
shall be issued or levied against a substantial part of the property,
assets or business of the Obligor or the Guarantor, and such
proceedings or petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be
stayed, release,
34
41
Asset Use Agreement
vacated or fully bonded, within ninety (90) consecutive days after
commencement, filing or levy, as the case may be; or
(i) Failure of Enforceability. This Agreement or the
Guaranty shall cease to be the legally valid, binding and enforceable
obligation of the Obligor and the Guaranty, respectively; or the
Obligor or the Guarantor shall, directly or indirectly, contest in any
manner such effectiveness, validity, binding nature or enforceability;
or
(j) Change of Control. Any Change of Control shall occur.
SECTION 23. Remedies Upon Default.
(a) Upon the occurrence of any Event of Default and at
any time thereafter so long as the same shall be continuing, the
Obligee shall, at the request of the Required Participants, or may,
with the consent of the Required Participants, declare this Agreement
to be in default (provided that, upon the occurrence of any event
specified in clause (f), (g) or (h) of Section 22, the commitments of
the Obligee hereunder and all Loan Commitments shall automatically
terminate and the unpaid Asset Costs of the Assets and all accrued and
unpaid Basic Hire and other amounts due hereunder shall automatically
become due and payable without further act of or notice by the Obligee
or any Participant), and the Obligee may exercise one or more of the
following remedies as the Obligee in its sole discretion may elect:
(i) The Obligee may terminate or cancel this
Agreement, without prejudice to any other remedies of the
Obligee hereunder and under applicable law, with respect to
all or any Assets, and whether or not this Agreement has been
so terminated, may enter the premises of the Obligor or any
other party to take immediate possession of the Assets and
remove all or any Assets by summary proceedings or otherwise,
or may cause the Obligor, at the Obligor's expense, to store,
maintain, surrender and deliver possession of the Assets in
the same manner as provided in Section 6 hereof, all without
liability to the Obligee for or by reason of such entry or
taking of possession, whether for the restoration of damage to
property caused by such taking or otherwise;
(ii) The Obligee may hold or keep idle the Assets,
as the Obligee in its sole discretion may determine, provided
that the Obligee shall have a duty to use commercially
reasonable efforts to mitigate its damages and the amounts
owed to the Obligee, free and clear of any rights of the
Obligor and without any duty to account to the Obligor with
respect to such action or inaction or for any proceeds with
respect thereto, except that the Obligor's obligation to pay
Basic Hire for any Variable Hire
35
42
Asset Use Agreement
Periods commencing after the Obligor shall have been deprived
of possession pursuant to this Section 23 shall be reduced by
the net proceeds, if any, received by the Obligee from leasing
the Assets to any Person other than the Obligor for the same
Variable Hire Periods or any portion thereof;
(iii) The Obligee may sell all or any of the Assets
at public or private sale as the Obligee may determine, free
and clear of any rights of the Obligor, and the Obligor shall
pay to the Obligee, as liquidated damages for loss of a
bargain and not as a penalty (in lieu of the Basic Hire due
for the Asset(s) so sold for any Variable Hire Period
commencing after the date on which such sale occurs), the sum
of (x) all unpaid Basic Hire payable for each Asset for all
Variable Hire Periods, plus (y) an amount equal to the excess,
if any, of (A) the Casualty Loss Value of the Asset(s) so
sold, computed as of the Hire Payment Date coincident with or
next preceding the date of such sale, over (B) the net
proceeds of such sale, plus interest at the Overdue Rate on
the amount of such excess from the Hire Payment Date as of
which such Casualty Loss Value is computed until the date of
actual payment, plus (z) all unpaid Supplemental Hire due with
respect to each Asset so sold;
(iv) Whether or not the Obligee shall have
exercised, or shall thereafter at any time exercise, any of
its rights under clause (i) or (ii) above with respect to any
Assets, the Obligee, by written notice to the Obligor
specifying a payment date, may demand that the Obligor pay to
the Obligee, and the Obligor shall pay to the Obligee, on the
payment date specified in such notice, as liquidated damages
for loss of a bargain and not as a penalty (in lieu of the
Basic Hire due for any Assets for any Variable Hire Period
commencing after the payment date specified in such notice and
in lieu of the exercise by the Obligee of its remedies under
clause (ii) above in the case of a re-lease of such Assets or
under clause (iii) above with respect to a sale of such
Assets), the sum of (i) all unpaid Basic Hire payable for such
Assets for all Variable Hire Periods, plus (ii) all unpaid
Supplemental Hire due with respect to such Assets as of the
payment date specified in such notice, plus (iii) an amount,
with respect to each such Asset, equal to the Casualty Loss
Value of such Asset computed as of the Hire Payment Date
coincident with or next preceding the payment date specified
in such notice; provided, however, that with respect to any
such Asset returned to or repossessed by the Obligee, the
amount recoverable by the Obligee pursuant to the foregoing
shall be reduced (but not below zero) by an amount equal to
the fair market sales value of such Asset as of the date on
which the Obligee has obtained possession of such Asset;
(v) Unless all of the Assets have been sold in
their entirety, the Obligee may, whether or not the Obligee
shall have exercised or shall thereafter at any time
36
43
Asset Use Agreement
exercise any of its rights under clause (ii), (iii) or (iv) of
this Section 23 with respect to the Assets or portions
thereof, demand, by written notice to the Obligor specifying a
date not earlier than ten (10) days after the date of such
notice, that the Obligor purchase, on such date, the Assets
(or the remaining portion thereto in accordance with the
provisions of Section 28(a) for a purchase price equal to the
End of Term Purchase Option Amount for such Assets; provided,
however that no such written notice shall be required upon the
occurrence of any Event of Default described in clause (f),
(g) or (h) of Section 22; and
(vi) The Obligee may exercise any other right or
remedy which may be available to it under applicable law or
proceed by appropriate court action to enforce the terms
hereof or to recover damages for the breach hereof or to
rescind this Agreement.
In addition, the Obligor shall be liable for all costs and expenses, including
reasonable attorney's fees, incurred by the Obligee, Trust Company, the
Depositor or any Participant by reason of the occurrence of any Event of Default
or the exercise of the Obligee's remedies with respect thereto, including all
costs and expenses incurred in connection with the return of the Assets in
accordance with Section 6 hereof or in placing the Assets in the condition
required by said Section. For the purpose of clause (iv) above, the "fair market
sales value" of any Asset shall mean such value as has been determined by an
independent qualified appraiser selected by the Obligee. Except as otherwise
expressly provided above, no remedy referred to in this Section 23 is intended
to be exclusive, but each shall be cumulative and in addition to any other
remedy referred to above or otherwise available to the Obligee at law or in
equity; and the exercise or beginning of exercise by the Obligee of any one or
more of such remedies shall not constitute the exclusive election of such
remedies and shall not preclude the simultaneous or later exercise by the
Obligee of any or all of such other remedies. No express or implied waiver by
the Obligee of any Event of Default shall in any way be, or be construed to be,
a waiver of any future or subsequent Event of Default.
(b) After the sale of all of the Assets pursuant to the
exercise of the Obligee's remedies under this Agreement, any amounts
collected by the Obligee in such sale or sales which exceed the sum of
(i) the applicable Casualty Loss Values for all Assets subject to this
Agreement, plus (ii) any amounts owed by the Obligor to the Obligee
under this Agreement, plus (iii) the costs incurred by the Obligee in
consummating such sale, shall be paid to the Obligor by the Obligee.
SECTION 24. Obligee's Right to Perform for the Obligor. If the
Obligor fails to make any payment of Supplemental Hire required to be made by it
hereunder or fails to perform or comply with any of its agreements contained
herein, the Obligee may itself, after notice to the Obligor, make such payment
or perform or comply with such agreement, and the amount of such payment and the
37
44
Asset Use Agreement
amount of the reasonable expenses of the Obligee incurred in connection with
such payment or the performance of or compliance with such agreement, as the
case may be, together with interest thereon at the Overdue Rate shall, if not
paid by the Obligor to the Obligee on demand, be deemed a Supplemental Hire
hereunder; provided, however that no such payment, performance or compliance by
the Obligee shall be deemed to cure any Event of Default hereunder.
SECTION 25. Covenant of the Obligee With Respect to Obligee
Liens. The Obligee hereby agrees that so long as this Agreement is in effect and
the Obligor shall not have elected the Return Option, the Obligee will, at the
request of the Obligor and at the Obligee's own cost and expense, promptly take
such action as may be necessary to discharge, or to cause to be discharged, all
Liens attributable to the Obligee of the type described in clause (b) of the
definition of "Permitted Liens" on the Assets.
SECTION 26. Further Assurances. The Obligor will promptly and
duly execute and deliver to the Obligee and the Participants such other
documents and assurances, including, without limitation, such amendments to this
Agreement as may be reasonably required by the Obligee or any Participant, and
will take such further action as the Obligee or any Participant may from time to
time reasonably request in order to carry out more effectively the intent and
purposes of this Agreement and to establish and protect the rights and remedies
created or intended to be created in favor of the Obligee and its rights, title
and interests in and to the Assets.
SECTION 27. Notices. All notices provided for or required under
the terms and provisions hereof shall be in writing or by facsimile and
addressed, delivered or transmitted to the appropriate Person at its address or
facsimile number as set forth on Schedule I hereto, or at such other address or
facsimile number as may from time to time be designated by such Person in
writing to the respective parties. Any notice, if mailed and properly addressed
with postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when delivered; any notice, if transmitted by
facsimile, shall be deemed given when transmitted and electronically confirmed
if transmitted and confirmed prior to 2:00 p.m. on a Business Day (and if
transmitted and confirmed after 2:00 p.m. on a Business Day or if transmitted
and confirmed on a day other than a Business Day, will be deemed received on the
next succeeding Business Day).
SECTION 28. Obligor's Purchase Options and Obligations,
Return Option, Extension Option and Reversion Right.
(a) Obligor's Purchase Options.
(i) End of Term Purchase Option. With respect to
the Asset Use Supplements, the Obligor shall be entitled, at
its option, upon written notice to the Obligee as hereinafter
provided, to purchase all, but not less than all, Assets then
38
45
Asset Use Agreement
subject to this Agreement; provided that (i) no Event of
Default shall have occurred and be continuing, (ii) the
Obligee shall not have commenced its exercise of remedies
under Section 23(a)(iii) and the Obligee shall not have
commenced leasing the Assets to others under Section 23(a)(ii)
and (iii) such purchase shall be consummated, and the Obligor
shall pay the purchase price therefor to the Obligee in
immediately available funds, on the Termination Date for the
Assets covered by such Agreement Schedule. The purchase price
for each such Asset shall be an amount (the "End of Term
Purchase Option Amount"), payable in immediately available
funds, equal to the sum of (w) the Casualty Loss Value of such
Asset as of the Termination Date, plus (x) the Basic Hire due
and payable for such Asset on the Termination Date, plus (y)
any applicable sales, transfer or other similar taxes imposed
as a result of such sale (other than gross or net income taxes
attributable to such sale), plus (z) any Supplemental Hire
then due and owing to the Obligee hereunder. The Obligee's
sale of the Assets shall be on an as-is, where-is basis,
without any representation or warranty by, or recourse to, the
Obligee except that the Obligee shall warrant that each such
Asset shall be returned free and clear of all Liens of the
sort described in clause (d) of the definition of Permitted
Liens. Upon receipt of the End of Term Purchase Option Amount
therefor and satisfaction of the other conditions herein, the
Owner shall deliver to the Obligor, or its designee, such
instruments of transfer as reasonably requested by the
Obligor. If the Obligor intends to exercise said purchase
option in respect of the Termination Date, the Obligor shall
give written notice to the Obligee to such effect not less
than ninety (90) days prior to the expiration of the Term of
said Assets. If the Obligor shall have given such written
notice to the Obligee, or if the Obligor shall have failed to
give notice to the Obligee of its election of the Return
Option under Section 28(b) at least ninety (90) days prior to
the end of the Term, such notice or omission shall constitute
the irrevocable and binding obligation of the Obligor to
purchase all Assets and to pay the Obligee the End of Term
Purchase Option Amount on the Termination Date thereof (unless
the Obligor, the Obligee and all of the Participants shall
have agreed to extend the Term pursuant to Section 28(c)).
(ii) Early Buyout Option. With respect to the Asset
Use Supplements, the Obligor shall be entitled, at its option,
upon written notice to the Obligee as hereinafter provided, to
purchase all, but not less than all, Assets then subject to
this Agreement on any Hire Payment Date occurring after the
initial Acquisition Date; provided, however, that (i) no Event
of Default shall have occurred and be continuing, (ii) the
Obligee shall not have commenced its exercise of remedies
under Section 23(a)(iii) and the Obligee shall not have
commenced leasing the Assets to others under Section 23(a)(ii)
and (iii) such purchase shall be consummated, and the Obligor
shall pay the purchase price therefor to the Obligee in
immediately available
39
46
Asset Use Agreement
funds, on the Hire Payment Date specified in the Obligor's
notice to the Obligee. The purchase price for the Assets shall
be an amount (the "EBO Purchase Option Amount") equal to the
sum of (w) the Casualty Loss Value of such Asset as of the
immediately preceding Hire Payment Date, plus (x) all accrued
and unpaid interest on Loans and Yield on Certificate Amounts,
to the extent such Loans and Certificate Amounts are allocable
to the Assets, plus (y) any applicable sales, transfer or
other similar taxes imposed as a result of such sale (other
than gross or net income taxes attributable to such sale),
plus (z) any Supplemental Hire then due and owing to the
Obligee hereunder (including without limitation, any amounts
payable pursuant to Section 31(a) as a result of such
purchase). The Obligee's sale of the Assets shall be on an
as-is, where-is basis, without any representation or warranty
by, or recourse to, the Obligee except that the Obligee shall
warrant that the Assets shall be returned free and clear of
all Liens of the sort described in clause (d) of the
definition of Permitted Liens. If the Obligor intends to
exercise said purchase option, the Obligor shall provide the
Obligee with not less than sixty (60) days prior written
notice thereof specifying the proposed purchase date (which
date shall be a Hire Payment Date).
(b) Return Option. With respect to all Asset Use
Supplements, in the event the Obligor has not exercised its option to
purchase all of the Assets then subject to this Agreement pursuant to
Section 28(a) or, exercised its Reversion Right granted to it under
Section 5.10 of the Trust Agreement or with the Obligee and all of the
Participants extended the Term pursuant to Section 28(c), then the
Obligor shall have the option (the "Return Option") to return all (but
not less than all) of the Assets; provided, however, that (x) the
Obligor shall have given irrevocable written notice of its election of
the Return Option not less than ninety (90) days prior to the
expiration of the Term and (y) the Obligor shall comply with all terms
and provisions of this Section 28(b). In the event that the Obligor has
exercised its Return Option pursuant to this Section 28(b) and fails to
return all of the Assets then being returned on or prior to the then
scheduled Termination Date, then the Obligor shall be deemed to have
elected to purchase all such Assets and to pay the Obligee the End of
Term Purchase Option Amount.
(i) Marketing of Assets. The Obligor shall, during
the period commencing on the date of its notice of its
election of the Return Option and ending on the final
Termination Date for the Assets (such period, the "Marketing
Period"), use its best efforts to obtain bona fide bids for
the Assets then subject to this Agreement from prospective
purchasers who are not the Obligor, the Guarantor or any
Affiliate thereof and who are financially capable of
purchasing such Assets for cash on an as-is, where-is basis,
without recourse to the Obligee or warranty from the Obligee
(except that the Obligee shall warrant that each such Asset
shall be returned
40
47
Asset Use Agreement
free and clear of all Liens attributable to the Obligee of the
sort described in clause (b) of the definition of Permitted
Liens). All bids received by the Obligor prior to the end of
the Term of such Assets shall be immediately certified to the
Obligee in writing, setting forth the amount of such bid and
the name and address of the person or entity submitting such
bid. Notwithstanding the foregoing, the Obligee, each Tranche
B Lender and each Class I Certificateholder shall have the
fight, but not the obligation, to seek bids for the Assets
during the Marketing Period.
(ii) Sale of Assets to Third Party Buyer(s). On the
Termination Date, provided that all the conditions hereof have
been met, the Obligee shall sell (or cause to be sold) all
Assets then subject to the Asset Use Supplement, for cash to
the bidder or bidders, if any, selected by the Obligor, on an
as-is, where-is basis and without recourse to the Obligee or
warranty from the Obligee (except that the Obligee shall
warrant that each such Asset shall be returned free and clear
of all Liens attributable to the Obligee of the sort described
in clause (a) or (b) of the definition of Permitted Liens),
and upon receipt by the Obligee of the sales price the Obligee
shall instruct the Obligor to deliver and the Obligor shall
deliver such Assets to such bidder in accordance with Section
6; provided, that (x) any such sale to a third party shall be
consummated, and the sales price for such Assets shall be paid
to the Obligee in immediately available funds, on or before
the Termination Date, and (y) the Obligee shall not be
obligated to sell such Assets if (I) the Net Proceeds of Sale
of such Assets are less than the aggregate Maximum Obligee
Risk Amount applicable to such Assets as of the Termination
Date, or (II) the Obligee has not received the amounts, if
any, payable by the Obligor pursuant to clauses (iii) and
(iv). Except as expressly set forth herein, the Obligor shall
have no right, power or authority to bind the Obligee in
connection with any proposed sale of the Assets.
(iii) End of the Term Report and Indemnity. The
Obligor shall, prior to the date occurring forty-five (45)
days before the Termination Date, deliver to the Obligee an
Appraisal in form and substance satisfactory to the Obligee,
the Tranche B Lenders and the Class I Certificateholders (the
"End of the Term Report"), which End of the Term Report shall
state the appraiser's conclusions as to the reason for any
decline in the Fair Market Sales Value of the Assets from that
anticipated for the Termination Date in the Appraisal
delivered on the Acquisition Date therefor. The Obligor shall
pay to the Obligee on or prior to the Termination Date, as
Supplemental Hire, an amount (not to exceed the Maximum
Obligee Risk Amount) equal to the diminution in Fair Market
Sales Value of the Assets that the End of the Tenn Report
demonstrates was the result of a decline in the Fair Market
Sales Value of the Assets due to: (A) extraordinary use,
failure to maintain, to repair, to restore, to rebuild or to
replace, failure to comply with all applicable laws, failure
to use, workmanship,
41
48
Asset Use Agreement
method of removal or maintenance, repair, rebuilding or
replacement (excepting in each case ordinary wear and tear),
(B) any modification made to, or any rebuilding of, any Asset
or any part thereof, (C) the existence or presence of any
hazardous substance on any Asset, (D) any taking, confiscation
or deprivation of use of any Asset by any Governmental
Authority, (E) any use of any Asset other than as contemplated
by the Appraisal delivered on the Acquisition Date for such
Asset, (F) the failure of the Obligee to have good and
marketable title to any Asset free and clear of all Liens
(other than Liens of the type described in clause (a) or (b)
of the definition of Permitted Liens), (G) the existence of
any sub-Agreement relating to any Asset, (H) the existence of
any Liens on any Asset (other than Liens of the type described
in clause (a) or (b) of the definition of Permitted Liens), or
(I) the existence of any actions, suits or proceedings pending
or threatened with respect to any Asset (other than any such
actions, suits or proceedings that are caused by acts or
omissions of the Obligee or the Participants in violation of
the terms of the Operative Documents).
(iv) Deficiency Payment. If the aggregate proceeds
of sale of all Assets received by the Obligee from sales to
third parties pursuant to clause (ii), after deducting
therefrom the aggregate amount of all costs incurred by the
Obligee in connection with such sales (such net amount being
hereinafter referred to as "Net Proceeds of Sale") are less
than the aggregate Estimated Residual Value of all of the
Assets as of the Termination Date, the Obligor shall, on the
Termination Date, pay to the Obligee as an end of term Hire
adjustment, in immediately available funds, (x) an amount
equal to such deficiency (a "Deficiency") as an adjustment to
the Basic Hire payable under this Agreement for such Assets,
plus (y) the Basic Hire due and payable for such Assets on the
Termination Date, plus (z) any Supplemental Hire then due and
owing to the Obligee or any other Indemnified Person hereunder
(including all amounts due pursuant to Section 28(b)(iii));
provided, however, that if no Default or Event of Default
shall have occurred and be continuing hereunder, the amount of
the Deficiency payable by the Obligor with respect to the
Assets covered by such Asset Use Supplement shall not exceed
the Maximum Obligor Risk Amount as set forth in such Asset Use
Supplement for such Termination Date.
(v) Obligor Payment if No Sale. If a sale of all
Assets then covered by this Agreement either to the Obligor
pursuant to Section 28(a) hereof or to a third party pursuant
to Section 28(b) hereof has not been consummated on the
Termination Date with respect thereto for any reason, then the
Obligor shall, on the Termination Date of such Assets, pay to
the Obligee as an end of term Variable Hire adjustment, in
immediately available funds, as an adjustment to the Basic
Hire payable under this Agreement for such Assets, an amount
equal to (i) the Maximum Obligor Risk
42
49
Asset Use Agreement
Amount as set forth in the Asset Use Supplement for such
Termination Date, if on the Termination Date no Default or
Event of Default shall have occurred and be continuing
hereunder or (ii) the Estimated Residual Value of all of such
Assets, if on the Termination Date a Default or Event of
Default shall have occurred and be continuing hereunder, plus,
in either case, the Basic Hire due and payable for such Assets
on the Termination Date plus all Supplemental Hire then due
and owing with respect to such Assets. The Obligor shall
remain liable for the payment of, and upon the consummation by
the Obligee of the sale of any Assets after the Termination
Date thereof, the Obligor shall pay, or reimburse the Obligee
for the payment of, all applicable sales or other taxes
imposed as a result of such sale, other than gross or net
income taxes attributable to such sale, and such obligation
shall survive the termination of this Agreement.
(vi) Conveyance of Assets to Obligee or Third Party
Buyer. If the Obligor exercises its Return Option, then the
Obligor shall, on the Termination Date for each Asset and at
the Obligor's sole cost and expense, (x) deliver all of the
Assets to the Obligee or the purchaser(s) thereof in
accordance with the provisions of Section 6, (y) execute and
deliver to the Obligee or such purchaser(s), as applicable,
appropriate instruments conveying to such Person(s) all of the
Obligor's right, title and interest in and to the Assets being
conveyed and all warranties relating to such Assets and (z)
cause an opinion of counsel to be delivered to the Obligee or
such purchaser(s) as to the validity and effectiveness of the
conveyance contemplated by such conveyance instruments, which
opinion shall be in form and substance satisfactory to the
Obligee.
(c) Extension of Agreement Term. The Obligee, the Obligor
and the Participants may, upon the written request of the Obligor and
at the sole discretion of the Obligee and the Participant, agree to
extend the Basic Tenn for all, but not less than all, Assets subject to
this Agreement for an additional period or additional periods on terms
(including without limitation, with respect to amounts of Basic Hire
payable by the Obligor during such period or periods) mutually agreed
to by the Obligor and the Obligee, and upon the effectiveness of any
such extension, the Termination Date shall automatically be extended to
the last day of the Term for all purposes of the Operative Documents.
(d) Reversion Right. The Obligor shall be entitled to
exercise the Reversion Right granted to it under Section 5.10 of the
Trust Agreement, subject to the conditions set forth therein; provided,
that the Reversion Right may not be exercised by the Obligor after the
date occurring ninety (90) days prior to the expiration of the Term.
43
50
Asset Use Agreement
SECTION 29. Payment of Transaction Expenses and Other Costs and
Expenses.
(a) Transaction Expenses. The Obligor agrees, whether or
not the transactions contemplated by this Agreement are consummated, to
pay (or reimburse the Obligee for the payment of) all Transaction
Expenses.
(b) Other Costs and Expenses. The Obligor further agrees
to pay (or reimburse for the payment of), upon demand, (i) the
reasonable fees, out-of-pocket expenses and disbursements of any law
firm or other external counsel in connection with any amendment,
supplement, waiver or consent with respect to any Operative Documents
requested or approved by the Obligor and (ii) all reasonable
out-of-pocket expenses (including the reasonable fees, out-of-pocket
expenses and disbursements of counsel) incurred by the Obligee, Trust
Company, the Depositor or the Participants in connection with (x) the
enforcement of any rights or remedies against the Obligor or the
Guarantor in connection with the Operative Documents and (y) the
negotiation of any restructuring or "work-out" with the Obligor or the
Guarantor, whether or not consummated, of any Obligations.
SECTION 30. Owner for Income Tax Purposes. The Obligee agrees
that the Obligor shall be deemed the owner of the Assets for Mexico federal,
state and local income tax purposes and that, so long as no Event of Default
shall have occurred and be continuing, the Obligee shall take no action
inconsistent with such ownership for income tax purposes.
SECTION 31. LIBOR Provisions.
(a) Funding Loss. If any payment of Variable Hire with
respect to Loans or Certificate Amounts based on the LIBOR is made on
any day other than the Hire Payment Date applicable thereto, the
Obligor shall reimburse the Obligee within fifteen (15) days after
demand for any resulting loss or expense incurred by the Obligee or any
Participant, including (without limitation) any loss incurred in
obtaining, liquidating or employing funding from third parties,
provided that the Obligee or any such Participant shall have delivered
to the Obligor a certificate as to the amount of such loss or expense,
which certificate shall take effect for all purposes hereof as
determined in such certificate in the absence of manifest error unless
and until otherwise judicially ordered. The Obligee or such Participant
will, at the request of the Obligor, furnish such additional
information concerning the determination of such loss as the Obligor
may reasonably request.
(b) Basis for Determining Variable Hire Inadequate or
Unfair. If on or prior to the first day of any Variable Hire Period,
deposits in dollars (in the applicable amounts) are not being offered
to the Obligee or any Participant (or any Affiliates of any thereof) in
the relevant market for such Variable Hire Period, then the Obligee
shall forthwith give notice
44
51
Asset Use Agreement
thereof to the Obligor, whereupon until the Obligee notifies the
Obligor that the circumstances giving rise to such suspension no longer
exist, (i) the obligation of the Obligee to fund Acquisition Costs
and/or Construction Advances based on LIBOR shall be suspended and (ii)
all interest and Yield comprising Variable Hire shall be determined on
the basis of the Alternate Base Rate plus the applicable Loan Margin or
Certificate Margin, as the case may be.
(c) Illegality. If, on or after the date hereof, the
adoption of any Applicable Law, 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 the Obligee
or any Participant (or any Funding Office thereof) with any request or
directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall in the opinion of
counsel to the Obligee make it unlawful or impossible for the Obligee
or any Participant (or any Funding Office thereof) to make, maintain or
fund its portion of the Funding for Assets subject to this Agreement,
and the Obligee shall so notify the Obligor, whereupon until the
Obligee notifies the Obligor that the circumstances giving rise to such
suspension no longer exist, the obligation to fund based on LIBOR shall
be suspended and all Fundings (including all Loans and Certificate
Amounts comprising such Fundings) shall accrue interest or Yield, as
the case may be, on the basis of the Alternate Base Rate plus the
applicable Loan Margin or Certificate Margin, as the case may be. The
Obligee with the consent of the Obligor (which consent shall not
unreasonably be withheld), will designate a hire funding office if such
designation will avoid the need for giving such notice and will not, in
the judgment of the Obligee, be otherwise disadvantageous to the
Obligee. If such notice is given (i) the Obligor shall be entitled upon
its request to a reasonable explanation of the factors underlying such
notice and (ii) Variable Hire shall begin to be at the Alternate Base
Rate either (a) on the last day of the then Variable Hire Period
applicable thereto, if the Obligee or the applicable Participant may
lawfully continue to maintain and fund LIBOR to such day or (b)
immediately, if the Obligee or any Participant shall determine that it
may not lawfully continue to maintain and fund LIBOR to such day.
(d) Increased Cost and Reduced Return.
(A) In the event that the adoption of any
Applicable Law, or any change therein or in the interpretation
or application thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or
administration thereof or compliance by the Obligee or any
Participant with any request or directive after the date
hereof (whether or not having the force of law) of any such
authority, central bank or comparable agency, other than such
changes with respect to taxes which are governed by Section
18:
45
52
Asset Use Agreement
(i) does or shall subject the Obligee or any
Participant to any additional tax of any kind
whatsoever with respect to this Agreement or any
amounts hereunder or thereunder, or change the basis
or the applicable rate of taxation of payments to the
Obligee or any Participant of Variable Hire or any
other amount payable hereunder (except for the
imposition of or change in any tax on or measured by
the overall net income of the Obligee or any
Participant (other than any such tax imposed by means
of withholding)); provided, however, that such
amounts payable hereunder shall be without
duplication of amounts paid or payable under Section
18 hereof and which would otherwise be covered under
this clause (i);
(ii) does or shall impose, modify or hold
applicable any reserve, special deposit, insurance
assessment, compulsory loan or similar requirement
against assets held by, or deposits or other
liabilities in or for the account of, advances or
loans by, or other credit extended by, or any other
acquisition of funds by, any office of the Obligee or
any Participant which are not otherwise included in
determination of the Variable Hire hereunder; or
(iii) does or shall impose on the Obligee or
any Participant any other condition;
and the result of any of the foregoing is to increase the cost
to the Obligee of making any Funding, or the cost to any
Participant of funding or refunding the Loans or Certificate
Amounts comprising such Funding, or to reduce any amount
receivable hereunder, then in any such case, the Obligor shall
promptly pay to the Obligee, upon demand, any additional
amounts necessary to compensate the Obligee for such increased
cost or reduced amount receivable and such amounts will be
deemed to be for all purposes hereof as determined by the
Obligee, unless and until otherwise revised by court order
with respect to funding or refunding the Loans and Certificate
Amounts allocable to such Funding; provided, however, that the
Obligor shall not be obligated to pay any amount pursuant to
this Section 31(d)(A) to the extent that such increase in cost
or reduction in amount receivable occurred more than ninety
(90) days prior to the Obligee's or such Participant's notice
thereof to the Obligor.
(B) If the Obligee or any Participant shall have
determined that, after the date hereof, the adoption of any
Applicable Law 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 any request or directive regarding
capital adequacy (whether or not having the force of law) of
any such authority, central bank
46
53
Asset Use Agreement
or comparable agency, has or would have the effect of reducing
the rate of return on capital of the Obligee or any
Participant (or any entity directly or indirectly controlling
the Obligee or any Participant) as a consequence of the
Obligee's obligations hereunder to a level below that which
the Obligee or any Participant (or any entity directly or
indirectly controlling the Obligee or any other Participant)
could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect
to capital adequacy) within fifteen (15) days after demand by
the Obligee, the Obligor shall pay to the Obligee such
additional amount or amounts as will compensate the Obligee or
any Participant or such controlling receiver for such
reduction; provided, however, that the Obligor shall not be
obligated to pay any amount pursuant to this Section 31(d)(B)
to the extent that such reduction in rate of return occurred
more than ninety (90) days prior to the Obligee's or such
Participant's notice thereof to the Obligor.
(C) the Obligee will promptly notify the Obligor
of any event of which it has knowledge, occurring after the
date hereof, which will entitle the Obligee or any Participant
to compensation pursuant to this Section and will, if
practicable, with the consent of the Obligor (which consent
shall not unreasonably be withheld), designate a Hire Funding
Office or take any other reasonable action if such designation
or action will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of the
Obligee, be otherwise disadvantageous to the Obligee or any
Participant. A certificate of the Obligee claiming
compensation under this Section and setting forth in
reasonable detail its computation of the additional amount or
amounts to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, any
reasonable averaging and attribution methods may be used.
SECTION 32. Governing Law and Jurisdiction.
(a) THIS AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS
(OTHER THAN THE PLEDGE AGREEMENT) SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(b) ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER OPERATIVE
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE OBLIGOR, THE OBLIGEE,
TRUST COMPANY, THE DEPOSITOR, ANY PARTICIPANT OR THE GUARANTOR SHALL BE
BROUGHT AND MAINTAINED
47
54
Asset Use Agreement
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR IN THE
COURT OF SUCH OTHER JURISDICTION IN WHICH THE DEFENDANT SHALL HAVE ITS
CORPORATE DOMICILE. EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK AND TO THE COURTS OF THEIR RESPECTIVE CORPORATE DOMICILES FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH
SUCH LITIGATION AND WAIVES ANY RIGHT TO WHICH IT MAY BE ENTITLED ON
ACCOUNT OF PLACE OF ITS RESIDENCE OR DOMICILE.
(c) THE OBLIGOR HEREBY IRREVOCABLY APPOINTS CT
CORPORATION (THE "PROCESS AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ATTENTION: PROCESS
SERVICE DEPARTMENT, AS ITS PROCESS AGENT TO RECEIVE, ON ITS BEHALF AND
ON BEHALF OF ITS PROPERTY, AND DESIGNATES SUCH ADDRESS AS ITS ADDRESS
FOR, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER
PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH
SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO
THE OBLIGOR IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE
ADDRESS, AND THE OBLIGOR HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE
PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. AS AN ALTERNATIVE
METHOD OF SERVICE, THE OBLIGOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE OBLIGOR HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE OBLIGOR HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF
FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, THE OBLIGOR HEREBY IRREVOCABLY
WAIVES
48
55
Asset Use Agreement
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND
THE OTHER OPERATIVE DOCUMENTS.
SECTION 33. Waiver of Jury Trial. THE OBLIGOR, THE OBLIGEE AND
TRUST COMPANY EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT,
THE OTHER OPERATIVE DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE OBLIGOR,
THE OBLIGEE AND TRUST COMPANY EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION
SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING,
THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER OPERATIVE DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER OPERATIVE DOCUMENTS.
SECTION 34. Currency of Account and Payment. The Dollar is the
currency of account and payment for each and every sum at any time due from the
Obligor or the Guarantor under this Agreement or any other Operative Document or
in connection with the Obligations.
SECTION 35. Judgment Currency. The Obligations of the Obligor
and/or the Guarantor in respect of any sum due to the Obligee, Trust Company,
the Depositor, any Participant or any other Indemnified Person under this
Agreement, under the Guaranty or under or in respect of any other Operative
Document shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than the currency in which such sum was originally denominated
(the "Original Currency"), be discharged only to the extent that on the Business
Day following receipt by the Obligee, Trust Company, the Depositor, such
Participant or such other Indemnified Person of any sum adjudged to be so due in
the Judgment Currency, the Obligee, Trust Company, the Depositor, such
Participant or such other Indemnified Person in accordance with normal banking
procedures, purchases the Original Currency with the Judgment Currency. If the
amount of Original Currency so purchased is less than the sum originally due to
the Obligee, Trust Company, the Depositor, such Participant or such other
Indemnified Person, the Obligor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Obligee, Trust Company, the
Depositor, such Participant or
49
56
Asset Use Agreement
such other Indemnified Person, as the case may be, against such loss, and if the
amount of Original Currency so purchased exceeds the sum originally due to the
Obligee, Trust Company, the Depositor, such Participant or such other
Indemnified Person, as the case may be, the Obligee, Trust Company, the
Depositor, such Participant or such other Indemnified Person, as the case may
be, agrees to remit such excess to the Obligor.
SECTION 36. Waivers, Amendments, etc. The provisions of this
Agreement may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and signed by a duly authorized
officer of the Obligor and a duly authorized officer of the Obligee, and the
provisions of the other Operative Documents may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
signed by a duly authorized officer of the party against which the enforcement
of the amendment, modification or waiver is sought; provided, however, that no
such amendment, modification or waiver of this Agreement or any other Operative
Document shall be effective to:
(1) modify any requirement hereunder that any particular
action be taken by all the Lenders, all the Class I Certificateholders
or all the Participants without the written consent of all the Lenders,
all the Class I Certificateholders or all the Participants, as the case
may be;
(2) modify this Section 36 or clause (a) of Section 14,
change the definition of "Required Class I Certificateholders",
"Required Lenders" or "Required Participants" amend or otherwise modify
Part V of the Trust Agreement, release the Guarantor from its
obligations under the Guaranty or release all or substantially all of
the collateral security (except as otherwise specifically provided in
any Operative Document), without the written consent of each
Participant;
(3) increase the Loan Commitment of any Lender or
increase the Maximum Cost without the written consent of each
Participant adversely affected thereby;
(4) extend the Term with respect to the Assets without
the written consent of the Obligor, the Obligee and each Participant;
(5) extend the due date for, or reduce the amount of, any
scheduled payment of Basic Hire or Supplemental Hire (including without
limitation, any payment due under Section 28(a) or 28(b)) without the
written consent of the Obligee and each affected Participant;
(6) extend the due date for, or reduce the amount of, any
scheduled repayment of principal of or interest or fees (including
commitment fees) payable in respect of any Loan
50
57
Asset Use Agreement
without the written consent of the holder of that Note evidencing such
Loan, or extend the due date for, or reduce the amount of, any
scheduled repayment of Certificate Amounts of or Yield or fees
(including commitment fees) payable in respect of any Class I
Certificate without the written consent of the holder of the Class I
Certificate evidencing such Certificate Amount;
(7) affect adversely the interests, rights or obligations
of the Trustee or the Depositor (in its capacity as Trustee or
Depositor), without the written consent of the Trustee or the
Depositor, as the case may be;
(8) reduce any fees described in the Fee Letter without
the written consent of the Bank of Montreal;
(9) amend, modify or waive the provisions of Part V of
the Trust Agreement without the written consent of each affected
Participant; or
(10) effect any amendment, modification or waiver that by
its terms adversely affects the rights of any Person participating in
any Tranche different from those of any other Person participating in
the other Tranche, without the written consent of the holders of the
Notes or Class I Certificates, as the case may be, evidencing at least
51% of the aggregate amount of Loans or Certificate Amounts outstanding
under the Tranche or Tranches affected by such modification.
No failure or delay on the part of the Obligee, the Trustee or any Participant
in exercising any power or right under this Agreement or any other Operative
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Obligor or the Guarantor in any case shall entitle it to any notice or
demand in similar or other circumstances. No waiver or approval by the Obligee,
the Trustee or any Participant under this Agreement or any other Operative
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval under this
Agreement or any other Operative Document shall require any similar or
dissimilar waiver or approval thereafter to be granted hereunder or thereunder.
SECTION 37. Translation of Agreement into Spanish. This
Agreement and the Asset Use Supplements are executed in the English language.
The parties hereto agree that this Agreement and the Asset Use Supplement shall
be translated into Spanish at any time upon direction of the Obligor, by any of
the following Mexican court-approved translators, at the election of the
Obligor: (1) ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ y Asociados, S.C., ▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇ #▇▇▇-▇▇▇. piso, Col. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, D.F., Telephone:
▇-▇▇▇-▇▇▇▇/▇▇▇-▇▇▇▇/▇▇▇-▇▇▇▇, Facsimile:
51
58
Asset Use Agreement
▇-▇▇▇-▇▇▇▇, (2) ▇▇. ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Av. ▇▇▇▇▇▇▇ No. 1506-502, Col. ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇. Mex., Telephone: ▇-▇▇▇-▇▇▇▇, Facsimile:
▇-▇▇▇-▇▇▇▇, (3) ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇, ▇▇▇▇▇ ▇▇ y
16, Col. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, D.F., Telephone: ▇-▇▇▇-▇▇▇▇/▇▇▇-▇▇▇▇,
Facsimile: ▇-▇▇▇-▇▇▇▇, or (4) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ 1218, ▇▇▇▇▇ ▇, ▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Telephone: ▇-▇▇▇-▇▇▇▇. The parties hereto
irrevocably agree that the Spanish translation of this Agreement and/or the
Asset Use Supplement so produced shall be the only Spanish translation of this
Agreement and/or the Asset Use Supplement that shall be admissible in any
Mexican or other court or before any arbitrator or arbitration panel however
constituted, and that, in case of dispute, the Spanish version shall prevail,
except in actions instituted in any country where English is the principal
language, in which case the English version shall prevail.
SECTION 38. Miscellaneous. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating or diminishing the Obligee's rights under
the remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by applicable law, the Obligor
hereby waives any provision of law which renders any provision of this Agreement
prohibited or unenforceable in any respect. All of the covenants, conditions and
obligations contained in this Agreement shall be binding upon and shall inure to
the benefit of the respective successors and assigns of the Obligee and (subject
to the restrictions of Section 14(a) hereof) the Obligor. If there is more than
one Obligor named herein, the liability of each Obligor shall be joint and
several. This Agreement and the Asset Use Supplement may be executed by the
parties hereto and thereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument; provided, that only the
counterpart marked as "Counterpart No. 1" shall evidence the monetary
obligations of the Obligor hereunder and thereunder, and to the extent, if any,
that this Agreement constitutes chattel paper (as such term is defined in the
Uniform Commercial Code, as in effect from time to time in any applicable
jurisdiction), no security interest in this Agreement or the Asset Use
Supplement may be created by the transfer or possession of any counterpart
hereof other than such Counterpart No. 1. This Agreement, the Asset Use
Supplement and each related instrument, document, agreement and certificate,
collectively constitute the complete and exclusive statement of the terms of the
agreement between the Obligee and the Obligor with respect to the acquisition
and leasing of the Assets, and cancel and supersede any and all prior oral or
written understandings with respect thereto.
52
59
Asset Use Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives as of the date first
above written.
Obligor:
Attest: OXFORD AUTOMOTRIZ DE MEXICO
(the Obligor) S.A. DE C.V.
______________________________ By: ______________________________
(Corporate Seal) Name:
Title:
Obligee:
Attest: AUTOMOTIVE BUSINESS TRUST
(the Obligee) 1999-A
By: WILMINGTON TRUST
COMPANY, not in its individual
______________________________ capacity but exclusively as Trustee
(Corporate Seal)
By: ________________________
Name:
Title:
THIS IS COUNTERPART NO. _____ OF SIX (6) SERIALLY NUMBERED MANUALLY
EXECUTED COUNTERPARTS. TO THE EXTENT, IF ANY, THAT THIS DOCUMENT
CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO
SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE
TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART
NO. 1.
53
60
Asset Use Agreement
THE UNDERSIGNED HEREBY ACKNOWLEDGES
RECEIPT OF AN EXECUTED COPY OF THE FOREGOING
ASSET USE AGREEMENT AND CONSENTS TO ITS TERMS HEREOF,
AS OF THIS _____ DAY OF _________________, ▇▇▇▇
▇▇▇▇▇▇ AUTOMOTIVE INC.,
as Guarantor
By: ________________________
Name:
Title:
54
61
EXECUTION COPY
APPENDIX A
to
Asset Use Agreement
DEFINITIONS AND INTERPRETATION
A. Interpretation. In each Operative Document, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and
vice versa;
(ii) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and
assigns are permitted by the Operative Documents, and reference to a
Person in a particular capacity excludes such Person in any other
capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Operative
Document), document or instrument means such agreement, document or
instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms of the
other Operative Documents and reference to any promissory note includes
any promissory note which is an extension or renewal thereof or a
substitute or replacement therefor;
(v) reference to any Applicable Law means such Applicable
Law as amended, modified, codified, replaced or reenacted, in whole or
in part, and in effect from time to time, including rules and
regulations promulgated thereunder and reference to any section or
other provision of any Applicable Law means that provision of such
Applicable Law from time to time in effect and constituting the
substantive amendment, modification, codification, replacement or
reenactment of such section or other provision;
(vi) reference in any Operative Document to any Article,
Section, Appendix, Schedule or Exhibit means such Article or Section
thereof or Appendix, Schedule or Exhibit thereto, and reference in any
Article, Section or definition to any clause means such clause of such
Article, Section or definition;
A-1
62
(vii) "hereunder", "hereof ', "hereto" and words of similar
import shall be deemed references to an Operative Document as a whole
and not to any particular Article, Section or other provision thereof;
(viii) "Including" (and with correlative meaning "include")
means including without limiting the generality of any description
preceding such term; and
(ix) relative to the determination of any period of
time,"from" means "from and including" and "to" means "to but
excluding".
B. Accounting Terms. In each Operative Document, unless expressly
otherwise provided, accounting terms shall be construed and interpreted, and
accounting determinations and computations shall be made, in accordance with
GAAP.
C. Conflict in Operative Documents. If there is any conflict
between any Operative Documents, such Operative Document shall be interpreted
and construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Asset Use Agreement shall
prevail and control.
D. Legal Representation of the Parties. The Operative Documents
were negotiated by the parties with the benefit of legal representation and any
rule of construction or interpretation otherwise requiring the Operative
Document to be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.
E. Defined Terms. Unless a clear contrary intention appears,
terms defined herein have the respective indicated meanings when used in each
Operative Document.
"ABR Period" means (a) any period during which, in accordance with
Section 31 of the Asset Purchase Agreement, Variable Hire is determined by
reference to the Alternate Base Rate and (b) the initial Variable Hire Period
described in clause (iii) of the proviso of the definition of "Variable Hire
Period".
"Acceleration" is defined in Section 5.2 of the Loan Agreement.
"Acquisition Cost" means with respect to the Assets on any date of
determination an amount equal to the sum of (i) the total cost paid by the
Obligee with respect to such Assets on the Acquisition Date therefor, plus (ii)
all Transaction Expenses approved and paid by the Obligor in connection with the
delivery of Land, Improvements or Equipment (it being understood that, for the
purposes of utilizing Acquisition Cost to determine Basic Hire, Casualty Loss
Value, Estimated Residual Value, Maximum Obligor Risk Amount and Maximum Obligee
Risk Amount with respect to the Property, Transaction Expenses with respect to
the transactions occurring on each Acquisition Date will be applied pro rata to
the Land, Improvements or Equipment subject to any Asset Use Supplement executed
and delivered on such Acquisition Date).
A-2
63
"Acquisition Date" means (a) the date on which the Owner purchases the
Land (b) the date of the initial Construction Advances with respect to
Improvements to be constructed on the Land or (c) the date on which the Owner
purchases the Equipment; provided, however, that no Acquisition Date shall occur
later than the Commitment Termination Date.
"Acquisition Date Notice" is defined in Section 3.1(c) of the Asset Use
Agreement.
"Additional Term" means, for the Assets, the period following the end
of the Basic Term for such Assets with respect to which the Obligor and the
Obligee have agreed to extend the term of the Asset Use Agreement pursuant to
Section 28(c) of the Asset Use Agreement.
"Advance" means an advance of funds by the Obligee pursuant to Article
II of the Asset Use Agreement.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Alternate Base Rate" means, for any day, a rate per annum equal to
rate of interest then most recently announced by Bank of Montreal in New York,
New York as its prime rate for U.S. Dollars loaned in the United States. If the
aforesaid rate changes from time to time after the date of the Asset Use
Agreement, the Alternate Base Rate shall be automatically increased or
decreased, if appropriate and as the case may be, without notice to the Obligor
as of the effective time of each change. The Alternate Base Rate is not
necessarily intended to be the lowest rate of interest in connection with
extensions of credit.
"Applicable Law" shall mean all applicable laws, statutes, treaties,
rules, codes, ordinances, regulations, permits, certificates, orders,
interpretations, licenses and permits of any Governmental Authority and
judgments, decrees, injunctions, writs, orders or like action of any court,
arbitrator or other administrative, judicial or quasi-judicial tribunal or
agency of competent jurisdiction.
"Appraisal" means, with respect to the Assets, an appraisal of the Fair
Market Sales Value of such Assets by American Appraisal Associates or any other
appraiser selected by the Obligee and reasonably acceptable to the Obligor.
"Asset Cost" means, with respect to the Assets determined as of any
date, the sum of the Acquisition Cost for such Assets and all Construction
Advances (if any) made with respect to such Assets (including without limitation
all Construction Advances made in accordance with Section 2(c) of the Asset Use
Agreement) on or prior to such date of determination.
A-3
64
"Assets" means collectively, (i) the Land, (ii) the Improvements and
(iii) the Equipment.
"Asset Use Agreement" means that Asset Use Agreement, dated as of March
31, 1999 between the Obligee and Obligor, to which these definitions are
appended as Appendix A.
"Asset Use Balance" means, as of any date of determination, an amount
equal to the sum of the Loan Balance and the Certificate Balance and all other
amounts owing by the Obligor under the Operative Documents (including without
limitation, accrued and unpaid Basic Hire and Supplemental Hire, if any).
"Asset Use Event of Default" means the occurrence of an Event of
Default under Section 22 of the Asset Use Agreement.
"Asset Use Supplement" means an Asset Supplement substantially in the
form attached hereto as Exhibit A, to be executed by the Obligee and the Obligor
with respect to the Asset covered thereby as provided in Section 4 of the Asset
Use Agreement, evidencing that each such Asset has been demised for use by the
Obligee to the Obligor under the Asset Use Agreement.
"Assignment Agreement" means that Assignment Agreement of Private
Sale--Purchase Agreement Rights dated as of March 31, 1999 by and between the
Obligor and the Obligee.
"Assignee Lender" is defined in Section 10.6.1 of the Loan Agreement.
"Authorized Officer" means, relative to the Obligor or the Guarantor,
those of its officers whose incumbency shall have been certified to the Obligee
and the Participants pursuant to Section 3.1(b) of the Asset Use Agreement or
pursuant to any subsequent certificate of the Secretary of such Person
certifying as to the incumbency of the officers of such Person who are
authorized to execute and deliver on behalf of such Person the documents,
instruments and agreements contemplated by the Operative Documents.
"Authorized Officer's Certificate" means, with respect to the Obligor
or the Guarantor, a certificate duly executed by an Authorized Officer of such
Person and addressed to the Obligee and each Participant.
"Basic Hire" means, on any Hire Payment Date,
(a) during the Interim Term and Basic Term, an amount
equal to (i) the amount of Variable Hire payable on the applicable Hire
Payment Date multiplied by (ii) the quotient (expressed as a decimal)
determined by dividing (x) such amount of Variable Hire by (y) such
amount of Variable Hire minus the Mexico Reserve Amount; and
(b) during each Additional Term, as the parties may agree
pursuant to Section 28(c) of the Asset Use Agreement.
A-4
65
For purposes of the formula set forth in clause (a) above, "Mexico Reserve
Amount" means the amount of Mexican income tax (withholding tax) payable by
foreign residents with respect to such Variable Hire.
"Basic Term" for the Assets means the period commencing on the Basic
Term Commencement Date and ending on the day which is five years and six months
after such date unless earlier terminated in accordance with the provisions
hereof.
"Basic Term Commencement Date" means (a) with respect to the Assets on
the Acquisition Date thereof, the date specified as the Basic Term Commencement
Date in the Asset Use Supplement for the Assets.
"Board of Directors" means the Board of Directors of any Person, or any
duly authorized committee of such Board or any officers of such Person duly
authorized so to act by such Board, provided that if the transaction giving rise
to the need for action by the Board of Directors of such Person, together with
any related transactions, involve aggregate value or consideration in excess of
$10,000,000, "Board of Directors" means the entire Board of Directors of such
Person and not a committee of such Person or an officer of such Board.
"Board Resolution" means a copy of a resolution or resolutions
certified by the Secretary or an Assistant Secretary of any Person to have been
duly adopted by the Board of Directors, or by the Executive Committee of the
Board of Directors or any other committee to the extent that such other
committee has been authorized by the Board of Directors to adopt a "Board
Resolution" for purposes hereof, and to be in full force and effect on the date
of such certification, or a certificate executed by officers of such Person to
the extent that such officers have been authorized to act for purposes hereof
setting forth the action taken by such officers and stating that the officers
are duly authorized to take such action, in each case as filed with the
corporate records of such Person.
"Builder" means ▇▇▇▇▇▇▇▇ ▇.▇. de C.V.
"Building Contract" means, with respect to the Land, the construction
contract between the Builder and the Obligor.
"Business Day" means any day other than a day on which banking
institutions in the State of New York or the State of Illinois are authorized or
required by law to close and, if the LIBOR is then the basis for calculating
Basic Hire, a day on which dealings in Dollars are carried on in the London
interbank market.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. ss.3801 et seq.
"Capitalized Asset Use Agreement Obligation" of any Person means any
obligation of such Person to pay hire or other amounts under an Asset Use
Agreement of (or other agreement conveying
A-5
66
the night to use) real or personal property that is required to be classified
and accounted for as a capital lease obligation on a balance sheet of such
Person under IAS and, for purposes of the Operative Documents, the amount of
such obligation at any date shall be the capitalized amount thereof at such
date, determined in accordance with IAS.
"Capital Stock" of any Person means any and all shares, interests,
participation or other equivalents (however designated) of such Person's capital
stock and warrants, options and similar rights to acquire such capital stock.
"Casualty Loss Value" as of any date means an amount equal to the
Acquisition Cost of such Asset minus all amounts of Casualty Loss Value
allocable to such Asset to the extent actually paid on or prior to such date,
whether pursuant to Section 16(c) or 23(a)(iv) of the Asset Use Agreement or
otherwise.
"Casualty Loss Value Payment Date" is defined in Section 16(c) of the
Asset Use Agreement.
"Certificate Amounts" means, with respect to any Class I
Certificateholder, its Class I Investment.
"Certificate Balance" means as of any date of determination an amount
equal to the sum of the outstanding Certificate Amount together with all accrued
and unpaid Yield thereon.
"Certificate Margin" means, on any date, (a) at any time that Yield is
determined by reference to LIBOR, 3.50%, and (b) at any time during an ABR
Period, 1.75%.
"Certificate Register" shall have the meaning set forth in Section
4.3(b) of the Trust Agreement.
"Certificates" shall have the meaning set forth in Section 4.3 of the
Trust Agreement.
"Change of Control" means, and shall be deemed to have occurred if: (1)
Guarantor owns less than 51% of the outstanding voting stock of Obligor or (2)
there has been a change of control as defined in the Credit Agreement.
"Claims" shall have the meaning set forth in Section 6.5 of the Trust
Agreement.
"Class I Certificate" is defined in Section 4.3 of the Trust Agreement.
"Class I Certificate Commitment" means the commitment of each Class I
Certificateholder to make the Class I Investment under the Trust Agreement.
"Class I Certificateholders" means, collectively, each holder of a
Class I Certificate under the Trust Agreement.
A-6
67
"Class I Investment" means, with respect to each Class I
Certificateholder, the aggregate amount of investments in the Trust made by such
Class I Certificateholder pursuant to Section of the Trust Agreement.
"Closing Date" means the initial Funding Date hereunder.
"Code" means the Internal Revenue Code of 1986, as the same may be
amended from time to time, or any comparable successor law.
"Commitment" means (i) with respect to any Class I Certificateholder,
that Class I Certificateholder's Class I Certificate Commitment and (ii) with
respect to any, Lender, that Lender's Loan Commitment.
"Commitment Percentage" means either (i) relative to any Class I
Certificateholder, the applicable percentage relating to the Class I Investment,
as the case may be, set forth opposite such Class I Certificateholder's name on
Schedule III to the Asset Use Agreement under the applicable column heading, as
such percentage may be adjusted from time to time or (ii) relative to any
Lender, the applicable percentage relating to Tranche A Loans or Tranche B
Loans, as the case may be, set forth opposite such Lender's name on Schedule III
to the Asset Use Agreement under the applicable column heading or as set forth
in a lender assignment agreement pursuant to which such Lender becomes a Lender
hereunder, as such percentage may be adjusted from time to time pursuant to
lender assignment agreements executed and delivered by such Lender from time to
time. A Lender shall not have any Commitment to make Tranche A Loans or Tranche
B Loans if its Commitment Percentage under the respective heading is zero.
"Commitment Termination Date" means March 31, 2000.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participation or other equivalents (however designated, whether
voting or non-voting of such Person's common stock, whether now outstanding or
issued after the date of this Agreement, including, without limitation, all
series and classes of such common stock. For purposes of this definition,
"Common Stock" shall include shares, interests, participation or other
equivalents corresponding to common stock under the laws of the jurisdiction of
organization of the Person.
"Completion" means, with respect to the Property, such time as the
conditions set forth in Section 3.3 of the Asset Use Agreement are satisfied.
"Completion Certificate" means the Completion Certificate duly executed
by the Construction Agent on the Completion Date, substantially in the form of
Exhibit E to the Asset Use Agreement.
"Completion Date" means with respect to the Land, the date that the
Land and the Improvements thereon satisfies the conditions set forth in Section
3.3 of the Asset Use Agreement.
A-7
68
"Compliance Certificate" means a certificate duly completed and
executed by an Authorized Officer of the Guarantor, or Obligor, respectively in
such form and with such detail as the Oblige may reasonably request for the
purpose of monitoring the Guarantor's or Obligor's compliance with the financial
covenants contained in the Guaranty or Asset Use Agreement. respectively and
determining the applicable Loan Margin (as defined in the Loan Agreement).
"Condemnation" means any condemnation, requisition, confiscation,
seizure or other taking or sale of the use, access, occupancy, easement rights
or title to the Property or any part thereof, wholly or partially (temporarily
or permanently), by or on account of any actual or threatened eminent domain
proceeding or other taking of action by any Person having the power of eminent
domain, including an action by a Governmental Authority to change the grade of,
or widen the streets adjacent to, the Property or alter the pedestrian or
vehicular traffic flow to the Property so as to result in change in access to
the Property, or by or on account of an eviction by paramount title or any
transfer made in lieu of any such proceeding or action. A "Condemnation" shall
be deemed to have occurred on the earliest of the dates that use, occupancy or
title vests in the condemning authority.
"Consent and Agreement" means that Consent and Agreement attached as
Annex I to the Construction Documents Assignment.
"Consolidation" means, with respect to any Person, the consolidation of
the accounts of such Person and each of its Subsidiaries if and to the extent
that the accounts of such Person and each of its Subsidiaries would normally be
consolidated, all in accordance with IAS. The term "consolidated" shall have a
similar meaning.
"Construction" means, with respect to the Property, the applicable
construction and installation of all Improvements contemplated by the applicable
plans and specifications.
"Construction Advance" means, with respect to the Assets, each amount
funded by the Obligee pursuant to Section 3.2 of the Asset Use Agreement with
respect to such Assets, and includes each amount funded by the Obligee in
accordance with Section 2(c) of the Asset Use Agreement for the purpose of
paying interest on the Loans and Yield on the Class I Certificates during the
Construction Period for such Assets.
"Construction Advance Date" means, with respect to the Assets, each
date on which the Obligee funds a Construction Advance with respect to such
Assets; provided, however, that no Construction Advance Date shall occur later
than the Commitment Termination Date.
"Construction Advance Notice" is defined in Section 3.2(a) of the Asset
Use Agreement.
"Construction Agency Agreement" means that Construction Agency
Agreement dated as of March 1, 1999, between the Trust and the Construction
Agent.
A-8
69
"Construction Agency Event of Default" means the occurrence of a
Construction Agency Event of Default under Section 5.1 of the Construction
Agency Agreement.
"Construction Agent" is defined in the preamble to the Construction
Agency Agreement.
"Construction Documents" is defined in Section 2.4 of the Construction
Agency Agreement.
"Construction Documents Assignment" means that Construction Documents
Assignment attached as Exhibit A to the Construction Agency Agreement.
"Construction Guarantee Amount" is defined in Section 5.4 of the
Construction Agency Agreement.
"Construction Period" means, with respect to the Assets, the period
commencing on (and including) the Acquisition Date for such Assets and ending on
(but excluding) the Basic Term Commencement Date for such Assets.
"Continuation Notice" means a notice of continuation duly executed by
an Authorized Officer of the Obligor, substantially in the form of Exhibit F to
the Asset Use Agreement, specifying the duration of the next succeeding Variable
Hire Period.
"Credit Agreement" means the Amended and Restated Credit Agreement
dated as of March 31, 1999 among Guarantor, the borrowing subsidiaries thereof,
NBD Bank, as agent, and the other lenders named therein.
"Default" means any condition or event that after notice or lapse of
time or both would constitute an Event of Default.
"Deficiency" is defined in Section 28(b)(iv) of the Asset Use
Agreement.
"Deposit Account" is defined in Section 7(d)(i) of the Asset Use
Agreement.
"Deposit Bank" means Wilmington Trust Company.
"Depositor" shall have the meaning set forth in the preamble to the
Trust Agreement.
"Depositor Certificate" shall have the meaning assigned in Section
4.2(b) of the Trust Agreement.
"Disclosure Documents" means the financial statements described in
Schedule II of the Asset Use Agreement.
A-9
70
"Disqualified Stock" of any Person means any Capital Stock of such
Person that, by its terms (or by the terms of any security into which it is
convertible or for which it is exercisable, redeemable or exchangeable),
matures, or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in
part on or prior to, the stated final maturity of the Indenture Notes, except to
the extent that such Capital Stock is solely redeemable with, or solely
exchangeable for any Capital Stock of such Person that is not Disqualified
Stock.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"EBO Purchase Option Amount" is defined in Section 28(a)(ii) of the
Asset Use Agreement.
"Eligible Trustee" shall mean a bank (within the meaning of Section
2(a)(5) of the Investment Company Act of 1940 (the "1940 Act")) that meets the
requirements of Section 26(a)(1) of the 1940 Act, is not an Affiliate of the
Depositor or an Affiliate of any Person involved in the organization or
operation of the Depositor, is organized and doing business under the laws of
any state or the United States of America, is authorized under such laws to
exercise corporate trust powers and to accept the trust conferred under the
Trust Agreement, has a combined capital and surplus and undivided profits of at
least $100,000,000 and is subject to supervision or examination by federal or
state authority. If such bank publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this definition the combined capital surplus
and undivided profits of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
"End of Term Purchase Option Amount" is defined in Section 28(a)(i) of
the Asset Use Agreement.
"Environmental Law" means all applicable international, foreign,
federal, state and local laws, regulations, conventions, treaties, written
governmental agreements and written governmental policies that are legally
binding, statutes, ordinances, codes, rules, directives, orders, decrees,
judicial and administrative judgments and rules of common law, whether now or
hereafter in effect, that relate in any way to any Hazardous Substance in
connection with the regulation or protection of human health, natural resources
or the environment.
"Equipment" means the equipment described in Schedule I to the Asset
Use Supplement.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Group" means the Guarantor and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Guarantor, are treated as a single
employer under section 414(b) or 414(c) of the Code.
A-10
71
"Estimated Equipment Costs" is defined in Section 2.8(c) of the
Construction Agency Agreement.
"Estimated Improvement Costs" is defined in Section 2.8(c) of the
Construction Agency Agreement.
"Event of Default" means either an Asset Use Event of Default or a
Construction Agency Event of Default, as the case may be.
"Event of Loss" with respect to the Assets means (i) the permanent loss
of such Assets or any substantial part thereof, or (ii) the loss of the use of
such Assets due to theft or disappearance for a period in excess of sixty (60)
days, or (iii) the destruction, damage beyond repair, or rendition of such
Assets or any substantial part thereof permanently unfit for commercial use for
any reason whatsoever, or (iv) the Condemnation, confiscation, seizure, or
requisition of title to such Assets by any Governmental Authority under the
power of eminent domain or otherwise, or (v) the requisition of use of such
Assets for a period in excess of the shorter of one hundred eighty (180)
consecutive days, the remainder of the Term or (vi) as a result of any rule,
regulation, order or other action by any Governmental Authority, the use of such
Assets in the normal course of the Obligor's business shall have been prohibited
for a continuous period of six (6) months.
"Expenses" shall mean liabilities, obligations, losses (excluding loss
of anticipated profits), damages, claims, actions, suits, judgments,
out-of-pocket costs, expenses and disbursements (including reasonable legal fees
and expenses) of any kind and nature whatsoever.
"Facility Fee" means, at any date:
(a) with respect to the Tranche A Loans, the percentage
set forth below opposite the then effective Pricing Level for such
date:
Pricing Level Facility Fee
I 0.500%
II 0.500%
III 0.450%
IV 0.375%
V 0.375%;
(b) with respect to the Tranche B Loans, 0.50%; and
A-11
72
(c) with respect to the Certificate Amounts, 0.50%.
"Fair Market Sales Value" means, with respect to the Assets, the amount
that would be cash an arm's-length transaction between an informed and willing
purchaser and an informed and willing seller, neither of whom is under any
compulsion to purchase or sell, respectively, for the ownership of such Assets.
"Fee Letter" means the fee letter dated as of March 31, 1999, between
the Funding Agent and the Guarantor.
"First Acquisition Date" means the date on which the Obligor shall
purchase the Land and any Improvements existing thereon.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve (12) consecutive calendar
months ending on March 31.
"Force Majeure Event" means any event beyond the control of the
Construction Agent, including, but not limited to a non-performance by any
Person other than Construction Agent under any Construction Documents so long as
Construction Agent is diligently pursuing the enforcement of rights under such
Construction Documents and/or seeking alternate means of performance, an Event
of Loss, a Condemnation, strikes, lockouts, adverse soil conditions, acts of
God, adverse weather conditions, inability to obtain labor or materials,
government activities (including zoning delays or unavailability of Governmental
Action), civil commotion and enemy action; but excluding any event, cause or
condition that results from the Construction Agent's financial condition or
failure to pay or any event, cause or condition which could be remedied by the
Construction Agent through the exercise of commercially reasonable efforts or
the commercially reasonable expenditure of funds.
"Funding" means the payment of the Acquisition Cost for the Assets or
the funding of any Construction Advance for the Assets.
"Funding Agent" means Bank of Montreal as Funding Agent for the Lenders
and the Class I Certificateholders.
"Funding Date" means an Acquisition Date or a Construction Advance
Date.
"Funding Office" means the office of the Obligee or any Participant
hereafter identified in writing as its Funding Office.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, decrees,
licenses, exemptions, publications, filings, notices to and declarations of or
with, or required by, any Governmental Authority, or
A-12
73
required by any Applicable Law, and shall include, without limitation, all
environmental and operating permits and licenses that are required for the full
use and operation of the Assets (or any part thereof).
"Governmental Authority" shall mean any Federal, state, county,
municipal, foreign, international, regional or other governmental authority,
agency, board, body, instrumentality or court.
"Guarantor" shall mean Oxford Automotive Inc.
"Guaranty" shall mean the Oxford Automotive Inc. Guaranty, dated as of
March 31, 1999, of Guarantor in favor of the Trust.
"Guaranty Event of Default" is defined in Section 7 of the Guaranty.
"Hazardous Substance" means any of the following: (i) explosives,
radioactive materials, asbestos, polychlorinated biphenyls, lead and radon gas;
or (ii) any substance, material, product, derivative, compound, mixture,
mineral, chemical, waste, gas, medical waste, or pollutant, in each case whether
naturally occurring, human-made or the by-product of any process, that is
considered under any applicable Environmental Law to be toxic, corrosive,
flammable, carcinogenic, mutagenic or hazardous to the environment or human
health.
"Hire Payment Date" means (i) the last day of each applicable Variable
Hire Period (and, if such Variable Hire Period shall exceed three months, also
on the date occurring three months after the commencement of such Variable Hire
Period) and (ii) the last day of the Basic Term and, if applicable, the last day
of each Additional Term; provided, however, that during any ABR Period. "Hire
Payment Date" shall also mean the last day of March, June, September and
December, or, if any such day is not a Business Day, the next succeeding
Business Day.
"IAS" means accounting principles issued by the International
Accounting Standards Committee as in effect from time to time;
"Improvements" means the improvements described in Schedule I to the
Asset Use Supplement.
"[I]ncluding" means including, without limitation.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services that in
accordance with IAS would be shown on the liability side of the balance sheet of
such Person (but excluding trade account payables and other accrued current
liabilities arising in the ordinary course of business); (c) all obligations
incurred in connection with bankers' acceptances and the face amount of all
letters of credit (other than letters of credit issued for the benefit of trade
A-13
74
creditors in the ordinary course of business of such Person in connection with
obtaining goods, materials or services) issued for the account of such Person
and, without duplication, all drafts drawn thereunder; (d) all obligations of
the Person and its Subsidiaries under leases of property (whether real, personal
or mixed) by that Person as an obligor that, in conformity with IAS, is, or is
required to be, accounted for as a capital lease on the balance sheet of that
Person, in each case taken at the amount thereof accounted for as liabilities in
accordance with IAS; (e) all Indebtedness referred to in clauses (a) through (d)
above secured or covered by any Lien upon or in property owned by such Person,
even though such Person has not assumed or become liable for the payment of such
Indebtedness; (f) all obligations of such Person under currency exchange
agreements, interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency exchange rates; and (g) without duplication, all direct or indirect
guarantees in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clauses
(a) through (f) above.
"Indemnified Person" is defined in Section 19 of the Asset Use
Agreement.
"Insolvency Event" means the an event where
(i) the Obligor or the Guarantor shall become insolvent
or make an assignment for the benefit of creditors or consent to the
appointment of a trustee, sindico, liquidator or receiver; or a
trustee, sindico, liquidator or a receiver shall be appointed for the
Obligor or the Guarantor or for a substantial part of its property
without its consent and shall not be dismissed for a period of ninety
(90) consecutive days; or any execution or writ or process shall be
issued under any action or proceeding against the Obligor or the
Guarantor whereby any of the Assets may be taken or restrained; or
(ii) the Obligor or the Guarantor shall (A) generally fail
to pay, or admit in writing its inability to pay, its debts as they
become due, or shall voluntarily commence any case or proceeding or
file any petition under the Ley de Quiebras y de Suspension de Pagos or
any bankruptcy, suspension of payments, insolvency or similar law or
seeking dissolution, liquidation or reorganization or the appointment
of a receiver, trustee, sindico, liquidator, custodian or liquidator
for itself or a substantial portion of its property, assets or business
or to effect a plan or other arrangement with its creditors, or shall
file any answer admitting the jurisdiction of the court and the
material allegations of any involuntary petition filed against it in
any bankruptcy, suspension of payments, insolvency or similar case or
proceeding, or shall be adjudicated bankrupt, or shall make a general
assignment for the benefit of creditors, or shall consent to, or
acquiesce in the appointment of, a receiver, trustee, sindico,
liquidator, custodian or liquidator for itself or a substantial portion
of its property, assets or business, or (B) take corporate action for
the purpose of effectuating any of the foregoing; or
A-14
75
(iii) involuntary proceedings or an involuntary petition
shall be commenced or filed against the Obligor or the Guarantor under
the Ley de Quiebras v de Suspension de Pagos or any bankruptcy.
suspension of payments, insolvency or similar law or seeking the
dissolution, liquidation or reorganization of the Obligor or the
Guarantor or the appointment of a receiver, trustee, custodian or
liquidator for the Obligor or the Guarantor or of a substantial part of
the property, assets or business of the Obligor or the Guarantor, or
any writ, judgment, warrant of attachment, execution or similar process
shall be issued or levied against a substantial part of the property,
assets or business of the Obligor or the Guarantor, and such
proceedings or petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be
stayed, release, vacated or fully bonded, within ninety (90)
consecutive days after commencement, filing or levy, as the case may
be.
"Insurance Requirements" means, collectively, (a) all terms of any
insurance policy covering or applicable to the Assets, and (b) all requirements
of the issuer of any such policy.
"Interest Rate" means, on any date with respect to any Loan, the sum of
LIBOR (Reserve Adjusted) for the applicable Variable Hire Period plus the
applicable Loan Margin for such Loan on such date plus the Facility Fee for such
Loan; provided, however, that if such date occurs during an ABR Period, the
Interest Rate for such Loan on such date shall be equal to the sum of the
Alternate Base Rate on such date plus the applicable Loan Margin for such Loan
on such date.
"Interim Term" means, with respect to the Assets the period commencing
on (and including) the Acquisition Date for such Assets and ending on (but
excluding) the Basic Tenn Commencement Date therefor.
"Land" means the land described in Schedule I to the Asset Use
Supplement.
"Land Acquisition Cost" is defined in Section 2.8(c) of the
Construction Agency Agreement.
"Lenders" means, collectively, the Tranche A Lenders and the Tranche B
Lenders.
"LIBOR" means, relative to any Variable Hire Period, the U.S. Dollar
rate (rounded upward, if necessary, to the nearest one-sixteenth of one percent)
listed on page 3750 (i.e., the LIBOR page) of the Telerate News Service titled
"British Banker Association Interest Settlement Rates" for a designated maturity
of three (3) months determined as of 11:00 a.m. London Time, on the day that is
two (2) Business Days prior to the first day of such Variable Hire Period for
delivery on the first day of such Hire Period (provided that if the Telerate
News Services publishes more than one (1) such LIBOR, the average of such rates
shall apply, or ceases to publish the LIBOR, then the LIBOR shall be determined
from the Reuters Screen LIBOR Page or, if such "Reuters" quotation is not
available, from such substitute financial reporting service as the Obligee in
its discretion shall determine).
▇-▇▇
▇▇
"▇▇▇▇▇ (▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇)" means, with respect to any Variable Hire
Period, a rate per annum (rounded upwards, if necessary, to the nearest
one-sixteenth of one percent) determined pursuant to the following formula:
LIBOR = LIBOR
-------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBOR (Reserve Adjusted) for any Variable Hire Period will be determined by
the Funding Agent on the basis of the LIBOR Reserve Percentage in effect on, and
the applicable rates furnished to and received by the Funding Agent two (2)
Business Days before the first day of such Variable Hire Period.
"LIBOR Reserve Percentage" means, relative to any Variable Hire Period,
the reserve percentage (expressed as a decimal) equal to the maximum aggregate
reserve requirements (including all basic, emergency, supplemental, marginal and
other reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements) specified under regulations issued
from time to time by the Board of Governors of the Federal Reserve System or any
successor thereto (the "F.R.S. Board") and then applicable to assets or
liabilities consisting of or including "Eurocurrency Liabilities", as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Variable Hire Period.
"Lien" means liens, mortgages, encumbrances, pledges, charges, guaranty
or payment source trust arrangements and security interests of any kind.
"Loan Agreement" means the Loan Agreement dated as of March 31, 1999,
among the Obligee, as the borrower thereunder, and the various financial
institutions as are or may from time to time become parties thereto.
"Loan Agreement Default" means any condition or event that after notice
or lapse of time or both would constitute a Loan Agreement Event of Default.
"Loan Agreement Event of Default" is defined in Section 5.1 of the Loan
Agreement.
"Loan Balance" means as of any date of determination an amount equal to
the sum of the outstanding Loans together with all accrued and unpaid interest
thereon.
"Loan Commitments" means the commitments of the Lenders to make Loans
under the Loan Agreement.
"Loan Margin" means, as the context may require, the Tranche A Loan
Margin or the Tranche B Loan Margin.
"Loans" is defined in Section 2.1 of the Loan Agreement.
A-16
77
"Manager" means the plant manager.
"Marketing Period" is defined in Section 28(b) of the Asset Use
Agreement.
"Material Adverse Effect" means any of (a) a material adverse effect on
the business, assets, operations, properties or financial condition of the
Obligor, Guarantor and any of their respective Subsidiaries, taken as a whole,
(b) a material adverse effect on the use, operation, value or estimated useful
life of any Asset or (c) a material adverse effect on the enforceability of the
Liens of the Obligee upon any Asset.
"Maximum Cost" means $75,000,000.
"Maximum Obligee Risk Amount" for the Assets means (a) the percentage
set forth in the Asset Use Supplement for such Assets under the caption "Maximum
Obligee Risk Percentage" applicable to the Basic Term or Additional Term,
multiplied by (b) the Casualty Loss Value for such Assets (determined as of the
Termination Date).
"Maximum Obligee Risk Percentage" is defined in the Asset Use
Supplement.
"Maximum Obligor Risk Amount" for the Assets means (a) the percentage
set forth in the Asset Use Supplement for such Assets under the caption "Maximum
Obligor Risk Percentage" applicable to the Basic Term or Additional Term,
multiplied by (b) the Casualty Loss Value for such Assets (determined as of the
Termination Date).
"Maximum Obligor Risk Percentage" is defined in the Asset Use
Supplement.
"Mortgage" means that certain mortgage entered into by and between the
Obligee and the Lenders dated as of March 31, 1999.
"Multiemployer Plan" means any multiple employer plan, as defined in
Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then
making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"Net Income" means, for any period, the aggregate of all amounts which,
in accordance with IAS, would be included as net income on the consolidated
financial statements of the Obligor, Guarantor and their respective Subsidiaries
for such period.
"Note" means a Tranche A Note or a Tranche B Note.
"Obligations" means all obligations (monetary or otherwise) of any type
or description under any Operative Document, owing by the Obligor to the
Obligee, Trust Company, the Depositor, any Participant or any Indemnified
Person, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising,
and
A-17
78
whether for Basic Hire, Supplemental Hire, principal, interest, fees, expenses,
indemnification or otherwise.
"Obligee" is defined in the preamble of this Asset Use Agreement.
"Obligor" is defined in the preamble of the Asset Use Agreement.
"Officer's Certificate" shall mean the Certificate signed (i) in the
case of a corporation, by the President, any Vice President, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of such
corporation, (ii) in the case of a partnership or limited liability company, by
the Chairman of the Board, the President or any Vice President, the Treasurer or
an Assistant Treasurer of a corporate general partner, and (iii) in the case of
a commercial bank or trust company, by the Chairman or Vice Chairman of the
Executive Committee or the Treasurer, any Trust Officer, any Vice President, any
Executive or Senior or Second or Assistant Vice President, or any other officer
or assistant officer or other authorized Person customarily performing the
functions similar to those performed by the persons who at the time shall be
such officers, or to whom any corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject.
"Operative Documents" means, collectively, this Asset Use Agreement,
the Asset Use Supplement, the Real Estate Purchase and Sale Contract, the
Assignment Agreement, the Trust Agreement, the Loan Agreement, the Guaranty, the
Pledge Agreement, the Construction Agency Agreement, the Construction Documents
Assignment, the Mortgage and any other document or agreement that the Obligor
and Required Participants agree in writing to designate as an "Operative
Document".
"Outside Completion Date" means, with respect to the Assets, the date
specified as the Outside Completion Date for the Assets in the Asset Use
Supplement covering such Assets; provided, that such date shall be satisfactory
to the Obligee in its sole discretion.
"Overdue Rate" means the lesser of (a) the highest interest rate
permitted by Applicable Law and (b) an interest rate per annum equal to the
Alternate Base Rate plus the Tranche A Loan Margin, Tranche B Loan Margin or
Certificate Margin (as applicable) plus 29%.
"Owner" is defined in the preamble to the Asset Use Agreement.
"Oxford Entity" means the Guarantor, the Construction Agent, the
Obligor, any other Guarantor and any other Construction Agent.
"Participant Balance" means, with respect to any Participant as of any
date of determination: (i) with respect to any Lender, an amount equal to the
aggregate outstanding Loans of such Lender, together with all accrued and unpaid
interest thereon or (ii) with respect to any Class I Certificateholder, an
amount equal to the aggregate outstanding Certificate Amounts of the Obligee,
together with all amounts of accrued and unpaid Yield thereon.
A-18
79
"Participants" means, collectively, each Lender and each Class I
Certificateholder.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Permitted Investments" means each of (i) direct obligations of the
United States of America and agencies thereof; (ii) obligations fully guaranteed
by the United States of America; (iii) certificates of deposit issued by, or
bankers' acceptances of, or time deposits with, any bank, trust company or
national banking association incorporated or doing business under the laws of
the United States of America or one of the states thereof having combined
capital and surplus and retained earnings of at least $100,000,000, having
general obligations rated at least A1 by ▇▇▇▇▇'▇ Investors Service, Inc. or A+
by Standard & Poor's Corporation (but excluding any new investment as to which
there is a public announcement by the rating agency providing a rating thereon
that such rating is under consideration for a possible downgrade below A1 or A+,
as the case may be), including the Obligee in its individual capacity if such
conditions are met; or (iv) commercial paper of any holding company of a bank,
trust company or national banking association described in clause (iii);
provided, however, that no investment shall be eligible as and included within
the definition of the term "Permitted Investment" unless the final maturity or
date of return of such investment is equal to three months or less from the date
of purchase thereof.
"Permitted Liens" means:
(a) any rights in favor of the Obligee, the Depositor or
the Participants under the Operative Documents;
(b) any Lien arising out of any act of, or any failure to
act by, or any claim (including any claim for taxes) against, the
Obligee, any Participant, the Depositor or any of their respective
Affiliates which is unrelated to the transactions contemplated by the
Asset Use Agreement or any Lien arising out of any breach by the
Obligee, any Participant, the Depositor or any of their respective
Affiliates of their obligations under the Operative Documents;
(c) any Lien, claim, security interest or encumbrance
(including, without limitation, Liens of landlords, carriers,
warehousemen, mechanics or materialmen) in favor of any person securing
payment of the price of goods or services provided in the ordinary
course of business for amounts the payment of which is not overdue or
is being contested in good faith by appropriate proceedings, so long as
such proceedings do not involve any reasonable danger of sale,
forfeiture or loss of all or any material part of the Assets and do not
materially adversely affect any Lien created in favor of the Obligee
under this Asset Use Agreement;
(d) any Lien for current taxes, assessments or other
governmental charges which are not delinquent or the validity of which
is being contested in good faith by appropriate proceedings promptly
initiated and diligently prosecuted so long as such proceedings do not
A-19
80
involve any reasonable danger of sale, forfeiture or loss of all or any
material part of the Assets and do not materially adversely affect any
Lien in favor of the Obligee under this Asset Use Agreement;
(e) attachments, judgments and other similar Liens
arising in connection with court proceedings, provided that within
sixty (60) days of the attachment thereof (or five (5) days prior to
any execution or sale pursuant thereto), the execution or other
enforcement of such Liens is effectively stayed and the claims secured
thereby are being contested in good faith and by appropriate
proceedings; and
(f) any rights of the Obligor under this Asset Use
Agreement.
"Permitted Noncompliance" is defined in Section 10(b) of the Asset Use
Agreement.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, trustee(s) of a trust, unincorporated
organization, or government or governmental authority, agency or political
subdivision thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and is maintained, or
contributed to, by any member of the ERISA Group for employees of any member of
the ERISA Group.
"Plans and Specifications" means the plans and specifications for the
Construction, as delivered by the Obligor on or prior to the First Acquisition
Date, as such plans and specifications may be amended from time to time in
accordance with the Construction Agency Agreement.
"Pledge Agreement" means the Equipment Pledge Agreement entered into as
of March 31, 1999 by and among the Pledgor, the Pledgee and ▇▇. ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as depository.
"Pledgee" means Bank of Montreal in its individual capacity and as
Funding Agent for the Tranche B Lenders under the Loan Agreement and the Class I
Certificateholders under the Trust Agreement.
"Pledgor" means "Automotive Business Trust 1999-A".
"Pricing Level" means, on any date, the Pricing Level (i.e. Pricing
Level I, II, III, IV or V) set forth below opposite the Total Debt to Adjusted
EBITDA Ratio (as defined in the Credit Agreement) of the Obligor on such date:
A-20
81
Ratio of Total Debt
Pricing Level to Adjusted EBITDA
------------- -----------------------------
I more than 4.75:1.00
II more than 4.00:1.00 but less
than or equal to 4.75:1.00
III more than 3.50:1.00 but less
than or equal to 4:00:1:00
IV more than or equal to
3.00:1.00 but less than or
equal to 3.50:1.00
V less than 3.00:1.00
The Pricing Level shall be based upon the Total Debt to Adjusted EBITDA Ratio as
calculated as of the last day of each fiscal quarter of the Obligor and the
Pricing Level shall be adjusted on (a) the last day of the second month
following the close of the fiscal quarter for the first three fiscal quarters,
and (b) the last day of the fourth month following the close of the last fiscal
quarter, based on the financial statements of the Obligor and related compliance
certificate delivered pursuant to Section 9 of the Asset Use Agreement;
provided, that upon the occurrence and during the continuance of an Event of
Default the Pricing Level shall be Pricing Level I, in each case regardless of
the actual Total Debt to Adjusted EBITDA Ratio.
"Prime Architect" means ▇▇▇▇▇▇▇▇ Contractors Inc. of Arizona.
"Prime Construction Contract" means the construction contract dated as
of ______________, 1999 between ▇▇▇▇▇▇▇▇ ▇.▇. de C.V., as Prime Contractor and
Oxford Automotriz de Mexico S.A. De C.V. as Construction Agent.
"Prime Contractor" means ▇▇▇▇▇▇▇▇ ▇.▇. de C.V.
"Project Costs" means the aggregate of the Land Acquisition Cost,
Estimated Equipment Costs and Estimated Improvement Costs.
"Property" means the Land and all Improvement constructed thereon.
"Purchase Order" means, with respect to any Asset or Replacement Part,
a purchase order substantially in the form of Exhibit C of the Asset Use
Agreement, duly executed by the Seller or the Builder of such Asset or
Replacement Part, conveying title to such Asset or Replacement Part to the
Obligee.
A-21
82
"Real Estate Purchase and Sale Contract" means that Real Estate
Purchase and Sale Contract dated as of March 31, 1999 between Promociones Y
Construcciones Santa ▇▇▇▇▇, S.A. and Oxford Automotriz de Mexico, S.A. de C.V.
"Redelivery Condition" is defined in clause (b) of Section 6 of the
Asset Use Agreement.
"Replacement Parts" is defined in Section 12 of the Asset Use
Agreement.
"Required Alteration" is defined in Section 12 of the Asset Use
Agreement.
"Required Class I Certificateholders" shall mean 66-2/3% of the Class I
Certificateholders.
"Required Lenders" means, at any time, Lenders holding more than
66-2/3% of the aggregate principal amount of Loans outstanding at such time (or,
if no Loans are then outstanding, Lenders having more than 66-2/3% of the Loan
Commitments at such time).
"Required Participants" means, at any time, Participants holding more
than 66-2/3% of the sum of (x) the aggregate principal amount of Loans
outstanding at such time and (y) the aggregate Certificate Amounts outstanding
at such time.
"Required Prepayment" means, as of any date of determination, an amount
equal to the sum of all Basic Hire scheduled to become due on the Hire Payment
Date immediately following such date.
"Resident Trustee" means a trustee of the Trust meeting the
requirements of Section 3807(a) of the Business Trust Statute and shall
initially be Wilmington Trust Company, not in its individual capacity but solely
as resident trustee under this Agreement.
"Responsible Officer" means as to any Oxford Entity, the President,
Chief Executive Officer, Executive Vice President, the Treasurer or any
Assistant Treasurer, Secretary or any Assistant Secretary of such Person.
"Return Option" is defined in Section 28(b) of the Asset Use Agreement.
"Reversion Right" means the Obligor's reversion right as described in
Section 5.10 of the Trust Agreement.
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Subsidiary" means with respect to any Person, any corporation,
partnership or other business entity of which more than 50% of the outstanding
capital stock (or other ownership interest) having ordinary voting power to
elect a majority of the board of directors, managers or other voting members of
the governing body of such entity (irrespective of whether at the time capital
stock (or
A-22
83
other ownership interest) of any other class or classes of such entity shall or
might have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and one or more
other Subsidiaries of such Person, or by one or more other Subsidiaries of such
Person.
"Supplemental Hire" means (a) all amounts, liabilities and obligations
which the Obligor assumes or agrees to pay hereunder to the Obligee or others,
including, without limitation, payments of Casualty Loss Value, EBO Purchase
Option Amount, End of Tenn Purchase Option Amount, any amounts due under Section
23, LIBOR break costs and any indemnities that may become payable by the Obligor
hereunder, but excluding Basic Hire, (b) all commitment fees payable to the
Lenders by the Obligee pursuant to Section 2.6 of the Loan Agreement and (c) all
commitment fees payable to the Class I Certificate holders pursuant to Section
4.8 of the Trust Agreement.
"Tax Indemnitee" is defined in Section 18 of the Asset Use Agreement.
"Term" means the full term of the Asset Use Agreement with respect to
the Assets, including the Interim Term (if any), the Basic Tenn and each
Additional Term (if any).
"Termination Date", for the Assets, means the last day of the Basic
Term for such Assets, or if the Term for such Assets has been extended pursuant
to Section 28(c) of the Asset Use Agreement, the last day of the Additional Term
for such Assets.
"Total Commitments" means the total commitments indicated on Schedule
III to the Asset Use Agreement.
"Tranche" means, as the context may require, the Tranche A Loans, the
Tranche B Loans or the Class I Certificates.
"Tranche A Lenders" means, collectively, each financial institution
party from time to time to the Loan Agreement as a Tranche A Lender.
"Tranche A Loan Commitment" is defined in Section 2.1(a) of the Loan
Agreement and listed in Schedule III of the Asset Use Agreement.
"Tranche B Loan Commitment" is defined in Section 2.1(b) of the Loan
Agreement and listed in Schedule III of the Asset Use Agreement.
"Tranche A Loan Margin" means, at any date, the percentage set forth
below opposite the then effective Pricing Level for such day:
▇-▇▇
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Pricing Level LIBOR Margin Rate Margin
------------- ------------ --------------
I 0.2625% 1.00%
II 0.2375% 0.75%
III 0.1875% 0.50%
IV 0.175% 0.125%
V 0.150% 0%
"Tranche A Loans" is defined in Section 2.1 of the Loan Agreement.
"Tranche A Note" means a promissory note of the Obligee payable to the
order or any Lender, substantially in the form of Exhibit A to the Loan
Agreement (as such promissory note may be amended, endorsed or otherwise
modified form time to time), evidencing the aggregate indebtedness of the
Obligee to such Lender resulting from Tranche A Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"Tranche B Lenders" means, collectively, each financial institution
party from time to time to the Loan Agreement as a Tranche B Lender.
"Tranche B Loan Margin" means, on any date, (a) at any time that
interest on the Loans is determined by reference to LIBOR, 3.50%, and (b) at any
time during an ABR Period, 1.75%.
"Tranche B Loans" is defined in Section 2.1 of the Loan Agreement.
"Tranche B Note" means a promissory note of the Obligee payable to the
order or any Lender, substantially in the form of Exhibit B to the Loan
Agreement (as such promissory note may be amended, endorsed or otherwise
modified form time to time), evidencing the aggregate indebtedness of the
Obligee to such Lender resulting from Tranche B Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"Transaction Expenses" means all costs and expenses actually incurred
in connection with the preparation, execution and delivery of the Asset Use
Agreement and the other Operative Documents and the transactions contemplated
hereby and thereby including without limitation:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel for each of the Obligee, the Obligor and the
Guarantor negotiating the terms of the Operative Documents, including
this Asset Use Agreement, the Asset Use Supplement, the Guaranty and
any documents, agreements and instruments necessary to consummate the
transactions
A-24
85
contemplated hereby and thereby, preparing for the closings under, and
rendering opinions in connection with, such transactions and in
rendering other services customary for counsel representing parties to
transactions contemplated by such Operative Documents;
(b) any other reasonable fees, out-of-pocket expenses,
disbursements or costs of the Obligee related to such Operative
Documents and the transactions contemplated thereby; and
(c) any and all taxes and fees incurred in recording,
registering or filing this Asset Use Agreement, any Supplement or any
other Operative Document, any deed, declaration, mortgage, security
agreement, notice or financing statement with any public office,
registry or governmental agency in connection with the transactions
contemplated by the Operative Documents.
"Trust" means Automotive Business Trust 1999-A.
"Trust Agreement" means the Trust Agreement dated as of March 19, 1999,
between the Depositor, the Class I Certificateholders, and Wilmington Trust
Company.
"Trust Assets" shall mean all right, title and interest of the Trust in
and to the property and rights deposited with and assigned to the trust from
time to time.
"Trust Company" means Wilmington Trust Company, a Delaware banking
corporation.
"Trustee" means Wilmington Trust Company, not in its individual
capacity but exclusively as trustee of Automotive Business Trust 1999-A.
"United States" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"Variable Hire" means, on any date, the sum of
(a) the sum of (x) (i) the aggregate outstanding
principal amount of the Tranche A Loans on such date, multiplied by
(ii) the Interest Rate for the Tranche A Loans multiplied by (iii)
1/360 (or, if such date occurs during an ABR Period, 1/365 or 1/366, as
applicable), plus (y) (i) the aggregate Loan Commitments of the Tranche
A Lenders minus the aggregate outstanding principal amount of the
Tranche A Loans on such date, multiplied by (ii) the Facility Fee for
Tranche A Loans in effect on such date, multiplied by (iii) 1/360 (or,
if such date occurs during an ABR Period, 1/365 or 1 /366, as
applicable);
plus
A-25
86
(b) the sum of (x) (i) the aggregate outstanding
principal amount of the Tranche B Loans on such date, multiplied by
(ii) the Interest Rate for the Tranche B Loans multiplied by (iii)
1/360 (or, if such date occurs during an ABR Period, 1/365 or 1/366, as
applicable), plus (y) (i) the aggregate Loan Commitments of the Tranche
B Lenders minus the aggregate outstanding principal amount of the
Tranche B Loans on such date, multiplied by (ii) the Facility Fee for
Tranche B Loans, multiplied by (iii) 1/360 (or, if such date occurs
during an ABR Period, 1/365 or 1/366, as applicable);
plus
(c) the sum of (x) (i) the aggregate outstanding
Certificate Amounts on such date, multiplied by (ii) the Yield Rate
multiplied by (iii) 1/360 (or, if such date occurs during an ABR
Period, 1/365 or 1/366, as applicable), plus (y) (i) the aggregate
Commitments of the Class I Certificateholders minus the aggregate
outstanding Certificate Amounts on such date, multiplied by (ii) the
Facility Fee for Certificate Amounts, multiplied by (iii) 1/360 (or, if
such date occurs during an ABR Period, 1/365 or 1/366, as applicable).
"Variable Hire Period" means, with respect to any Assets acquired on
any Acquisition Date,
(a) initially, the period beginning on (and including)
the Acquisition Date for such Assets and ending on (but excluding) the
day which numerically corresponds to such Acquisition Date one month
thereafter (or, if such month has no numerically corresponding day, on
the last Business Day of such month);
(b) thereafter until the Basic Term Commencement Date,
each period beginning on (and including) the last day of the
immediately preceding Variable Hire Period for such Assets and ending
on (but excluding) the earlier of (x) the day which numerically
corresponds to such day one month thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month)
and (y) the Basic Term Commencement Date; and
(c) on and after the Basic Term Commencement Date, each
period beginning on (and including) the last day of the immediately
preceding Variable Hire Period and ending on (but excluding) the day
which numerically corresponds to such day one, two, three or six months
thereafter (or, if such month has no numerically corresponding day, on
the last Business Day of such month), as the Obligor may select in a
Continuation Notice (provided, that (x) the Obligor shall not be
permitted to select Variable Hire Periods to be in effect at any one
time which have expiration dates occurring on more than four different
dates and (y) if the Obligor shall not have delivered a Continuation
Notice to the Funding Agent on or prior to 10:00 a.m. (New York time)
on the date occurring three Business Days prior to the last day of
then-current Variable Hire Period, then the next succeeding Variable
Hire Period shall be of one month's duration);
A-26
87
provided, however, that (i) if such Variable Hire Period would otherwise end on
a day which is not a Business Day, such Variable Hire Period shall end on the
next following Business Day (unless such next following Business Day is the
first Business Day of a calendar month, in which case such Variable Hire Period
shall end on the Business Day next preceding such numerically corresponding
day), (ii) no Variable Hire Period may end later than the last day of the
then-current Term of the Asset Use Agreement and (iii) with respect to the
Assets acquired on the First Acquisition Date, the initial Variable Hire Period
shall begin on (and include) the First Acquisition Date and end on (but exclude)
the date occurring three (3) Business Days after the First Acquisition Date
(provided that such initial Variable Hire Period shall be deemed to be extended
until the Obligor provides the Obligee with a Continuation Notice), and the
succeeding Variable Hire Periods with respect thereto shall be determined as set
forth in clauses (b) and (c) above.
"Warranty Assignment" is defined in Section 3.1(g) of the Asset Use
Agreement.
"Yield" is defined in Section 4.5(a) of the Trust Agreement.
"Yield Rate" means, on any date with respect to the Certificate
Amounts, the sum of LIBOR (Reserve Adjusted) plus the applicable Certificate
Margin plus the Facility Fee for the Certificate Amounts; provided, however,
that if such date occurs during an ABR Period, the Yield Rate shall be equal to
the sum of the Alternate Base Rate on such date plus the applicable Certificate
Margin.
A-27
