EXHIBIT 4.7
EXECUTION COPY
RECEIVABLES PURCHASE AGREEMENT
dated as of December 20, 2001
Among
IDEX RECEIVABLES CORPORATION, as Seller,
IDEX CORPORATION, as Servicer,
FALCON ASSET SECURITIZATION CORPORATION,
THE SEVERAL FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
and
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Agent
IDEX RECEIVABLES CORPORATION
RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement dated as of December 20,
2001 is among IDEX Receivables Corporation, a Delaware corporation ("Seller"),
IDEX Corporation, a Delaware corporation ("IDEX"), as initial Servicer (the
Servicer together with Seller, the "Seller Parties" and each, a "Seller Party"),
the entities listed on Schedule A to this Agreement (together with any of their
respective successors and assigns hereunder, the "Financial Institutions"),
Falcon Asset Securitization Corporation ("Falcon") and Bank One, NA (Main Office
Chicago), as agent for the Purchasers hereunder or any successor agent hereunder
(together with its successors and assigns hereunder, the "Agent"). Unless
defined elsewhere herein, capitalized terms used in this Agreement shall have
the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Receivable Interests to
the Purchasers from time to time.
Falcon may, in its absolute and sole discretion, purchase
Receivable Interests from Seller from time to time.
In the event that Falcon declines to make any purchase, the
Financial Institutions shall, at the request of Seller, purchase Receivable
Interests from time to time. In addition, the Financial Institutions have agreed
to provide a liquidity facility to Falcon in accordance with the terms hereof.
Bank One, NA (Main Office Chicago) has been requested and is
willing to act as Agent on behalf of Falcon and the Financial Institutions in
accordance with the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
(a) Upon the terms and subject to the conditions hereof,
Seller may, at its option, sell and assign Receivable Interests to the Agent for
the benefit of one or more of the Purchasers. In accordance with the terms and
conditions set forth herein, Falcon may, at its option, instruct the Agent to
purchase on behalf of Falcon, or if Falcon shall decline to purchase, the Agent
shall purchase, on behalf of the Financial Institutions, Receivable Interests
from time to time in an aggregate amount not to exceed at such time the lesser
of (i) the Purchase Limit and (ii) the aggregate amount of the Commitments
during the period from the date hereof to but not including the Facility
Termination Date.
(b) Seller may, upon at least 10 Business Days' notice to the
Agent, terminate in whole or reduce in part, ratably among the Financial
Institutions, the unused portion of the Purchase Limit; provided that each
partial reduction of the Purchase Limit shall be in an amount equal to
$5,000,000 or an integral multiple thereof.
Section 1.2 Increases. Seller shall provide the Agent with at
least two Business Days' prior notice in the form set forth as Exhibit II hereto
of each Incremental Purchase (a "Purchase Notice"). Each Purchase Notice shall
be subject to Section 6.2 hereof and, except as set forth below, shall be
irrevocable and shall specify the requested Purchase Price (which shall not be
less than $1,000,000) and date of purchase (which, in the case of any
Incremental Purchase (after the initial Incremental Purchase hereunder), shall
only be on a Settlement Date and, in the case of an Incremental Purchase to be
funded by the Financial Institutions, the requested Bank Rate and Tranche
Period. Following receipt of a Purchase Notice, the Agent will determine whether
Falcon agrees to make the purchase. If Falcon declines to make a proposed
purchase, the Agent will promptly notify Seller of such fact, whereupon Seller
may cancel the Purchase Notice or, in the absence of such a cancellation, the
Incremental Purchase of the Receivable Interest will be made by the Financial
Institutions. On the date of each Incremental Purchase, upon satisfaction of the
applicable conditions precedent set forth in Article VI, Falcon or the Financial
Institutions, as applicable, shall deposit to the account of the Seller set
forth in such Purchase Notice, in immediately available funds, no later than
12:00 noon (Chicago time), an amount equal to (i) in the case of Falcon, the
aggregate Purchase Price of the Receivable Interests Falcon is then purchasing
or (ii) in the case of a Financial Institution, such Financial Institution's Pro
Rata Share of the aggregate Purchase Price of the Receivable Interests the
Financial Institutions are purchasing.
Section 1.3 Decreases. Seller shall provide the Agent with
prior written notice (a "Reduction Notice") of any proposed reduction of
Aggregate Capital. Such Reduction Notice shall designate (i) the date (the
"Proposed Reduction Date") upon which any such reduction of Aggregate Capital
shall occur (which date shall not be less than two (2) Business Days after the
date such notice is received by the Agent), and (ii) the amount of Aggregate
Capital to be reduced which shall be applied ratably to the Receivable Interests
of Falcon and the Financial Institutions in accordance with the amount of
Capital (if any) owing to Falcon, on the one hand, and the amount of Capital (if
any) owing to the Financial Institutions (ratably, based on their respective Pro
Rata Shares), on the other hand (the "Aggregate Reduction"). Only one (1)
Reduction Notice shall be outstanding at any time.
Section 1.4 Payment Requirements. All amounts to be paid or
deposited by any Seller Party pursuant to any provision of this Agreement shall
be paid or deposited in accordance with the terms hereof no later than 11:00
a.m. (Chicago time) on the day when due in immediately available funds, and if
not received before 11:00 a.m. (Chicago time) shall be deemed to be received on
the next succeeding Business Day. If such amounts are payable to a Purchaser
they shall be paid to the Agent, for the account of such Purchaser, at 1 Bank
Xxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 until otherwise notified by the Agent. All
computations of Yield, per annum fees calculated as part of any CP Costs, per
annum fees hereunder and per annum fees under the Fee Letter shall be made on
the basis of a year of 360 days for the actual number of
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days elapsed. If any amount hereunder shall be payable on a day which is not a
Business Day, such amount shall be payable on the next succeeding Business Day.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Notwithstanding any limitation on
recourse contained in this Agreement, Seller shall immediately pay to the Agent
when due, for the account of the relevant Purchaser or Purchasers on a full
recourse basis, (i) such fees as set forth in the Fee Letter (which fees shall
be sufficient to pay all fees owing to the Financial Institutions), (ii) all CP
Costs, (iii) all amounts payable as Yield, (iv) all amounts payable as Deemed
Collections (which shall be due and payable by Seller on the Settlement Date
immediately succeeding the event giving rise to such Deemed Collection and
applied to reduce outstanding Aggregate Capital hereunder in accordance with
Sections 2.2 and 2.3 hereof), (v) all amounts payable to reduce the Receivable
Interests, if required pursuant to Section 2.6, (vi) all amounts payable
pursuant to Article X, if any, (vii) all Servicer costs and expenses, including
the Servicing Fee, in connection with servicing, administering and collecting
the Receivables, (viii) all Broken Funding Costs and (ix) all Default Fees
(collectively, the "Obligations"). If Seller fails to pay any of the Obligations
when due, or if Servicer fails to make any deposit required to be made by it
under this Agreement when due, such Person agrees to pay, on demand, the Default
Fee in respect thereof until paid. Notwithstanding the foregoing, no provision
of this Agreement or the Fee Letter shall require the payment or permit the
collection of any amounts hereunder in excess of the maximum permitted by
applicable law. If at any xxxx Xxxxxx receives any Collections or is deemed to
receive any Collections, Seller shall immediately pay such Collections or Deemed
Collections to the Servicer for application in accordance with the terms and
conditions hereof and, at all times prior to such payment, such Collections or
Deemed Collections shall be held in trust by Seller for the exclusive benefit of
the Purchasers and the Agent.
Section 2.2 Collections Prior to Amortization. Prior to the
Amortization Date, any Collections and/or Deemed Collections received by the
Servicer shall be paid to the Agent in accordance with this Agreement in payment
of any accrued and unpaid Aggregate Unpaids or used for a Reinvestment as
provided in this Section 2.2. If at any time any Collections or Deemed
Collections are received by the Servicer prior to the Amortization Date, (i) the
Servicer shall set aside the Termination Percentage (hereinafter defined) of
Collections and Deemed Collections evidenced by the Receivable Interests of each
Terminating Financial Institution and (ii) Seller hereby requests and the
Purchasers (other than any Terminating Financial Institutions) hereby agree to
make (subject to the conditions precedent set forth in Section 6.2),
simultaneously with such receipt, a reinvestment (each, a "Reinvestment") with
that portion of the balance of each and every Collection received by the
Servicer that is part of any Receivable Interest (other than any Receivable
Interests of Terminating Financial Institutions), such that after giving effect
to such Reinvestment, the amount of Capital of such Receivable Interest
immediately after such receipt and corresponding Reinvestment shall be equal to
the amount of Capital immediately prior to such receipt. On each Settlement Date
prior to the occurrence of the Amortization Date, the Servicer shall remit to
the Agent's account the amounts set aside during the preceding Settlement Period
that have not been subject to a Reinvestment and apply
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such amounts (if not previously paid in accordance with Section 2.1) first, to
reduce unpaid Obligations and second, to reduce the Capital of all Receivable
Interests of Terminating Financial Institutions, applied ratably to each
Terminating Financial Institution according to its respective Termination
Percentage. If such Capital and Obligations shall be reduced to zero, any
additional Collections and Deemed Collections received by the Servicer (i) if
applicable, shall be remitted to the Agent's account no later than 11:00 a.m.
(Chicago time) to the extent required to fund any Aggregate Reduction on such
Settlement Date and (ii) any balance remaining thereafter shall be remitted from
the Servicer to Seller on such Settlement Date. Each Terminating Financial
Institution shall be allocated a ratable portion of Collections and Deemed
Collections from the date of any assignment by Falcon pursuant to Section 13.6
(the "Termination Date") until such Terminating Financing Institution's Capital
shall be paid in full. This ratable portion shall be calculated on the
Termination Date of each Terminating Financial Institution as a percentage equal
to (i) Capital of such Terminating Financial Institution outstanding on its
Termination Date, divided by (ii) the Aggregate Capital outstanding on such
Termination Date (the "Termination Percentage"). Each Terminating Financial
Institution's Termination Percentage shall remain constant prior to the
Amortization Date. On and after the Amortization Date, each Termination
Percentage shall be disregarded, and each Terminating Financial Institution's
Capital shall be reduced ratably with all Financial Institutions in accordance
with Section 2.3.
Section 2.3 Collections Following Amortization. On the
Amortization Date and on each day thereafter, the Servicer shall set aside and
hold in trust, for the holder of each Receivable Interest, (a) if no
Amortization Event has occurred, that portion of the Collections received on
such date equal to the aggregate of the Receivable Interests then outstanding,
and (b) if an Amortization Event has occurred, all Collections received on such
day and an additional amount for the payment of any accrued and unpaid
Obligations owed by Seller and not previously paid by Seller in accordance with
Section 2.1. On and after the Amortization Date, the Servicer shall, at any time
upon the request from time to time by (or pursuant to standing instructions
from) the Agent (i) remit to the Agent's account the amounts set aside pursuant
to the preceding sentence, and (ii) apply such amounts to reduce the Capital
associated with each such Receivable Interest and any other Aggregate Unpaids.
Section 2.4 Application of Collections. If there shall be
insufficient funds on deposit for the Servicer to distribute funds in payment in
full of the aforementioned amounts pursuant to Section 2.2 or 2.3 (as
applicable), the Servicer shall distribute funds:
first, to the payment of the Servicer's reasonable
out-of-pocket costs and expenses in connection with servicing,
administering and collecting the Receivables, including the Servicing
Fee,
second, to the reimbursement of the Agent's costs of
collection and enforcement of this Agreement,
third, ratably to the payment of all accrued and unpaid fees
under the Fee Letter, CP Costs and Yield,
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fourth, (to the extent applicable) to the ratable reduction of
the Aggregate Capital (without regard to any Termination Percentage),
fifth, for the ratable payment of all other unpaid
Obligations, and
sixth, after the Aggregate Unpaids have been indefeasibly
reduced to zero, to Seller.
Collections applied to the payment of Aggregate Unpaids shall
be distributed in accordance with the aforementioned provisions, and, giving
effect to each of the priorities set forth in this Section, shall be shared
ratably (within each priority) among the Agent and the Purchasers in accordance
with the amount of such Aggregate Unpaids owing to each of them in respect of
each such priority.
Section 2.5 Payment Rescission. No payment of any of the
Aggregate Unpaids shall be considered paid or applied hereunder to the extent
that, at any time, all or any portion of such payment or application is
rescinded by application of law or judicial authority, or must otherwise be
returned or refunded for any reason. Seller shall remain obligated for the
amount of any payment or application so rescinded, returned or refunded, and
shall promptly pay to the Agent (for application to the Person or Persons who
suffered such rescission, return or refund) the full amount thereof, plus the
Default Fee from the date of any such rescission, return or refunding.
Section 2.6 Maximum Receivable Interests. Seller shall ensure
that the Receivable Interests of the Purchasers shall at no time exceed in the
aggregate 100%. If the aggregate of the Receivable Interests of the Purchasers
exceeds 100%, Seller shall pay to the Agent within two (2) Business Days after
discovery of such excess an amount to be applied to reduce the Aggregate Capital
(as allocated by the Agent), such that after giving effect to such payment the
aggregate of the Receivable Interests equals or is less than 100%.
Section 2.7 Clean Up Call. In addition to Seller's rights
pursuant to Section 1.3, Seller shall have the right (after providing at least
two (2) Business Days' prior written notice to the Agent), at any time following
the reduction of the Aggregate Capital to a level that is less than 20.0% of the
original Purchase Limit, to repurchase from the Purchasers all, but not less
than all, of the then outstanding Receivable Interests. The purchase price in
respect thereof shall be an amount equal to the Aggregate Unpaids through the
date of such repurchase, payable in immediately available funds. Such repurchase
shall be without representation, warranty or recourse of any kind by, on the
part of, or against any Purchaser or the Agent.
ARTICLE III
CP FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with respect
to the Capital associated with each Receivable Interest of Falcon for each day
that any Capital in respect of such Receivable Interest is outstanding. Each
Receivable Interest funded substantially with Pooled Commercial Paper will
accrue CP Costs each day on a pro rata basis, based upon the
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percentage share the Capital in respect of such Receivable Interest represents
in relation to all assets held by Falcon and funded substantially with Pooled
Commercial Paper.
Section 3.2 CP Costs Payments. On each Settlement Date, Seller shall pay to the
Agent (for the benefit of Falcon) an aggregate amount equal to all accrued and
unpaid CP Costs in respect of the Capital associated with all Receivable
Interests of Falcon for the immediately preceding Accrual Period in accordance
with Article II.
Section 3.3 Calculation of CP Costs. On or before the third
(3rd) Business Day immediately preceding each Settlement Date, Falcon shall
calculate the aggregate amount of CP Costs for the applicable Accrual Period and
shall notify Seller of such aggregate amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each Receivable
Interest of the Financial Institutions shall accrue Yield for each day during
its Tranche Period at either the LIBO Rate or the Base Rate in accordance with
the terms and conditions hereof. Until Seller gives notice to the Agent of
another Bank Rate in accordance with Section 4.4, the initial Bank Rate for any
Receivable Interest transferred to the Financial Institutions pursuant to the
terms and conditions hereof shall be the Base Rate. If the Financial
Institutions acquire by assignment from Falcon any Receivable Interest pursuant
to Article XIII, each Receivable Interest so assigned shall be deemed to have a
new Tranche Period commencing on the date of any such assignment.
Section 4.2 Yield Payments. On the Settlement Date for each
Receivable Interest of the Financial Institutions, Seller shall pay to the Agent
(for the benefit of the Financial Institutions) an aggregate amount equal to the
accrued and unpaid Yield for the entire Tranche Period of each such Receivable
Interest in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche Periods.
(a) With consultation from the Agent, Seller shall from time
to time request Tranche Periods for the Receivable Interests of the Financial
Institutions (if any), provided that, if at any time the Financial Institutions
shall have a Receivable Interest, Seller shall always request Tranche Periods
such that at least one Tranche Period shall end on the date specified in clause
(A) of the definition of Settlement Date.
(b) Seller or the Agent, upon notice to and consent by the
other received at least three (3) Business Days prior to the end of a Tranche
Period (the "Terminating Tranche") for any Receivable Interest, may, effective
on the last day of the Terminating Tranche: (i) divide any such Receivable
Interest into multiple Receivable Interests, (ii) combine any such Receivable
Interest with one or more other Receivable Interests that have a Terminating
Tranche ending on the same day as such Terminating Tranche or (iii) combine any
such Receivable Interest with one or more new Receivable Interests to be
purchased on the day such Terminating
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Tranche ends, provided, that in no event may a Receivable Interest of Falcon be
combined with a Receivable Interest of the Financial Institutions.
Section 4.4 Financial Institution Bank Rates. Seller may
select the LIBO Rate or the Base Rate for each Receivable Interest of the
Financial Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least
three (3) Business Days prior to the expiration of any Terminating Tranche with
respect to which the LIBO Rate is being requested as the Bank Rate and (ii)
except as provided in the last sentence of Section 4.1 and the last sentence of
this Section 4.4, at least one (1) Business Day prior to the expiration of any
Terminating Tranche with respect to which the Base Rate is being requested as
the Bank Rate, give the Agent irrevocable notice of such Bank Rate for the
Receivable Interest associated with such Terminating Tranche. Until Seller gives
notice to the Agent of another Bank Rate, the initial Bank Rate for any
Receivable Interest transferred to the Financial Institutions pursuant to the
terms and conditions hereof shall be the Base Rate.
Section 4.5 Suspension of the LIBO Rate. (a) If any Financial
Institution notifies the Agent that it has determined that (i) funding its Pro
Rata Share of the Receivable Interests of the Financial Institutions at a LIBO
Rate would violate any applicable law, rule, regulation, or directive of any
governmental or regulatory authority, whether or not having the force of law,
(ii) deposits of a type and maturity appropriate to match fund its Receivable
Interests at such LIBO Rate are not available or (iii) such LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Receivable Interest at
such LIBO Rate, then the Agent shall suspend the availability of such LIBO Rate
and require Seller to select the Base Rate for any Receivable Interest accruing
Yield at such LIBO Rate; provided, that before making any such suspension, the
applicable Financial Institution shall use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions and so long as such
efforts would not be disadvantageous to it, in its reasonable discretion, in any
legal, economic or regulatory manner) to designate a different LIBO Rate lending
office if the making of such designation would allow such Financial Institution
or its LIBO Rate lending office to continue to fund its Pro Rata Share of the
Purchaser Interests at a LIBO Rate and avoid the situations set forth in clauses
(i)-(iii) in this Section 4.5(a).
(b) If less than all of the Financial Institutions give a
notice to the Agent pursuant to Section 4.5(a), each Financial Institution which
gave such a notice shall be obliged, at the request of Seller, Falcon or the
Agent, to assign all of its rights and obligations hereunder to (i) another
Financial Institution or (ii) another funding entity nominated by Seller or the
Agent that is acceptable to Falcon and willing to participate in this Agreement
through the Liquidity Termination Date in the place of such notifying Financial
Institution; provided that (x) the notifying Financial Institution receives
payment in full, pursuant to an Assignment Agreement, of an amount equal to such
notifying Financial Institution's Pro Rata Share of the Capital and Yield owing
to all of the Financial Institutions and all accrued but unpaid fees and other
costs and expenses payable in respect of its Pro Rata Share of the Receivable
Interests of the Financial Institutions, and (y) the replacement Financial
Institution otherwise satisfies the requirements of Section 12.1(b).
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Seller Parties. Each Seller
Party hereby represents and warrants to the Agent and the Purchasers, as to
itself, as of the date hereof and as of the date of each Incremental Purchase
and the date of each Reinvestment that:
(a) Corporate Existence and Power. Such Seller Party is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation. Such Seller Party is duly qualified to do
business and is in good standing as a foreign corporation, and has and holds all
corporate power and all governmental licenses, authorizations, consents and
approvals required to carry on its business in each jurisdiction in which its
business is conducted except where the failure to so qualify or so hold could
not reasonably be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by such Seller Party of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder and, in the case of Seller, Seller's
use of the proceeds of purchases made hereunder, are within its corporate powers
and authority and have been duly authorized by all necessary corporate action on
its part. This Agreement and each other Transaction Document to which such
Seller Party is a party has been duly executed and delivered by such Seller
Party.
(c) No Conflict. The execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party, and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its certificate or articles of incorporation or
by-laws, (ii) any law, rule or regulation applicable to it, except where such
contravention or violation could not reasonably be expected to have a Material
Adverse Effect, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or by which it or any of its property is
bound, except where such contravention or violation could not reasonably be
expected to have a Material Adverse Effect, or (iv) any order, writ, judgment,
award, injunction or decree binding on or affecting it or its property, except
where such contravention or violation could not reasonably be expected to have a
Material Adverse Effect, and do not result in the creation or imposition of any
Adverse Claim on assets of such Seller Party or its Subsidiaries (except as
created under the Transaction Documents); and no transaction contemplated hereby
requires compliance with any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party and the performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of Seller's knowledge, threatened, against or affecting
Seller, or any of its properties, in or before any court, arbitrator or other
body. There are no actions, suits or proceedings pending,
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or to the best of Servicer's knowledge, threatened, against or affecting
Servicer, or any of its properties, in or before any court, arbitrator or other
body, that could reasonably be expected to have a Material Adverse Effect. Such
Seller Party is not in default with respect to any order of any court,
arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction
Document to which such Seller Party is a party constitute the legal, valid and
binding obligations of such Seller Party enforceable against such Seller Party
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore
furnished by such Seller Party or any of its Affiliates to the Agent or the
Purchasers for purposes of or in connection with this Agreement, any of the
other Transaction Documents or any transaction contemplated hereby or thereby
is, and all such information hereafter furnished by such Seller Party or any of
its Affiliates to the Agent or the Purchasers will be, true and accurate in
every material respect on the date such information is stated or certified
(except for certain erroneous reports regarding historical performance of the
Receivables that were delivered prior to the date of this Agreement but
corrected and re-submitted prior to the date of this Agreement) and does not and
will not contain any material misstatement of fact or omit to state a material
fact or any fact necessary to make the statements contained therein not
misleading.
(h) Use of Proceeds. No proceeds of any purchase hereunder
will be used (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction which is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.
(i) Good Title. Immediately prior to each purchase hereunder,
Seller shall be the legal and beneficial owner of the Receivables and Related
Security with respect thereto, free and clear of any Adverse Claim, except as
created by the Transaction Documents. There have been duly filed (or delivered
to the Agent in form suitable for filing) all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect Seller's ownership interest in each
Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of
the financing statements contemplated hereby, is effective to, and shall, upon
each purchase hereunder, transfer to the Agent for the benefit of the relevant
Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or
Purchasers shall acquire from Seller) a valid and perfected first priority
undivided percentage ownership or security interest in each Receivable existing
or hereafter arising and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transaction Documents. There have been duly filed (or delivered to the Agent in
form suitable for filing) all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all
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appropriate jurisdictions to perfect the Agent's (on behalf of the Purchasers)
ownership or security interest in the Receivables, the Related Security and the
Collections.
(k) Places of Business and Locations of Records. The principal
places of business and chief executive office of such Seller Party and the
offices where it keeps all of its Records are located at the address(es) listed
on Exhibit III or such other locations of which the Agent has been notified in
accordance with Section 7.2(a) in jurisdictions where all action required by
Section 14.4(a) has been taken and completed. Seller is organized as a
corporation under the laws of the State of Delaware. Seller's Federal Employer
Identification Number and Delaware organizational identification number are
correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The names and addresses of all Collection Banks, together with the
account numbers of the Collection Accounts of Seller at each Collection Bank and
the post office box number of each Lock-Box, are listed on Exhibit IV. Seller
has not granted any Person, other than the Agent as contemplated by this
Agreement, dominion and control of any Lock-Box or Collection Account, or the
right to take dominion and control of any such Lock-Box or Collection Account at
a future time or upon the occurrence of a future event.
(m) Material Adverse Effect. (i) The initial Servicer
represents and warrants that since December 31, 2000, no event has occurred that
would have a material adverse effect on the financial condition or operations of
the initial Servicer and its Subsidiaries, taken as a whole, or the ability of
the initial Servicer to perform its obligations under this Agreement, and (ii)
Seller represents and warrants that since the date of this Agreement, no event
has occurred that would have a material adverse effect on (A) the financial
condition or operations of Seller, (B) the ability of Seller to perform its
obligations under the Transaction Documents, or (C) the collectibility of the
Receivables generally or any material portion of the Receivables.
(n) Names. In the past five (5) years, Seller has not used any
corporate names, trade names or assumed names other than the name in which it
has executed this Agreement.
(o) Ownership of Seller. IDEX owns, directly or indirectly,
100% of the issued and outstanding capital stock of Seller, free and clear of
any Adverse Claim. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Seller.
(p) Not a Holding Company or an Investment Company. Such
Seller Party is not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor statute. Such Seller Party is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or any successor statute.
(q) Compliance with Law. Such Seller Party has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to
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which it may be subject, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect. Seller represents and
warrants that each Receivable, together with the Contract related thereto, does
not contravene any laws, rules or regulations applicable thereto (including,
without limitation, laws, rules and regulations relating to truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation, except where such contravention or
violation could not reasonably be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Seller
Party has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and has not made
any change to such Credit and Collection Policy, other than as permitted under
Section 7.2(c) and in compliance with the notification requirements in Section
7.1(a)(vii).
(s) Payments to Transferor. With respect to each Receivable
transferred to Seller under the Receivables Sale Agreement, Seller has given
reasonably equivalent value to Transferor in consideration therefor and such
transfer was not made for or on account of an antecedent debt. No transfer by
Transferor of any Receivable under the Receivables Sale Agreement is or may be
voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C.
xx.xx. 101 et seq.), as amended.
(t) Enforceability of Contracts. Seller represents and
warrants that each Contract with respect to each Receivable is effective to
create, and has created, a legal, valid and binding obligation of the related
Obligor to pay the Outstanding Balance of the Receivable created thereunder and
any accrued interest thereon, enforceable against the Obligor in accordance with
its terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to or limiting
creditors' rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(u) Eligible Receivables. Seller represents and warrants that
each Receivable included in the Net Receivables Balance as an Eligible
Receivable on the date of its purchase under the Receivables Sale Agreement was
an Eligible Receivable on such purchase date.
(v) Net Receivables Balance. Seller has determined that,
immediately after giving effect to each purchase hereunder, the Net Receivables
Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the
Aggregate Reserves.
(w) Accounting. The manner in which such Seller Party accounts
for the transactions contemplated by this Agreement, the Receivables Sale
Agreement and the Transfer Agreement does not jeopardize the true sale analysis.
(x) Purpose. Seller has determined that, from a business
viewpoint, the purchases of the Receivables and related interests thereto from
Transferor under the Receivables
11
Sale Agreement, and the sales of Receivable Interests to the Purchasers and the
other transactions contemplated herein, are in the best interests of Seller.
Section 5.2 Financial Institution Representations and
Warranties. Each Financial Institution hereby represents and warrants to the
Agent and Falcon that:
(a) Existence and Power. Such Financial Institution is a
corporation or a banking association duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, and has all corporate power to perform its obligations hereunder.
(b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any Adverse
Claim on its assets. This Agreement has been duly authorized, executed and
delivered by such Financial Institution.
(c) Governmental Authorization. No authorization or approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution and delivery by such
Financial Institution of this Agreement and the performance of its obligations
hereunder.
(d) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of such Financial Institution enforceable against
such Financial Institution in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether such enforcement is sought
in a proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Incremental
Purchase. The initial Incremental Purchase of a Receivable Interest under this
Agreement is subject to the conditions precedent that the Agent shall have
received on or before the date of such purchase (a) those documents listed on
Schedule B, (b) all fees and expenses required to be paid on such date pursuant
to the terms of this Agreement and the Fee Letter, and (c) a Monthly Report for
the month of November.
Section 6.2 Conditions Precedent to All Purchases and
Reinvestments. Each purchase of a Receivable Interest (other than pursuant to
Section 13.1) and each Reinvestment shall be subject to the further conditions
precedent that in the case of each such purchase or
12
Reinvestment: (a) the Servicer shall have delivered to the Agent on or prior to
the date of such purchase, in form and substance satisfactory to the Agent, all
Monthly Reports as and when due under Section 8.5; (b) the Facility Termination
Date shall not have occurred; (c) the Agent shall have received such other
approvals, opinions or documents as it may reasonably request; and (d) on the
date of each such Incremental Purchase or Reinvestment, the following statements
shall be true (and acceptance of the proceeds of such Incremental Purchase or
Reinvestment shall be deemed a representation and warranty by Seller that such
statements are then true):
(i) the representations and warranties set forth in Section
5.1 are true and correct on and as of the date of such Incremental
Purchase or Reinvestment as though made on and as of such date;
(ii) (A) no event has occurred and is continuing, or would
result from such Incremental Purchase or Reinvestment, that will
constitute an Amortization Event, and (B), in the case of an
Incremental Purchase, no event has occurred and is continuing, or would
result from such Incremental Purchase that would constitute a Potential
Amortization Event; and
(iii) the Aggregate Capital does not exceed the Purchase Limit
and the aggregate Receivable Interests do not exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent for the
benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of the Seller Parties. Until the date on which
the Aggregate Unpaids have been indefeasibly paid in full and this Agreement
terminates in accordance with its terms, each Seller Party hereby covenants, as
to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will maintain, for
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent:
(i) Annual Reporting. Within 90 days after the close of each
of its respective fiscal years, (A) a copy of the audited consolidated
balance sheet of Transferor and its Subsidiaries as at the end of the
year and the related consolidated statements of income, shareholders'
equity and cash flows for such year, setting forth in each case in
13
comparative form the figures for the previous fiscal year, and
accompanied by the opinion of Deloitte & Touche or another
nationally-recognized independent public accounting firm which opinion
shall state that such consolidated financial statements present fairly
the financial position for the periods indicated in conformity with
GAAP applied on a consistent basis and which opinion shall not be
qualified or limited, in either case, because of a restricted or
limited examination by such public accounting firm of any material
portion of Transferor's or any Subsidiary's records and shall be
delivered to the Agent pursuant to a reliance letter between the Agent
and such independent auditor in form and substance satisfactory to the
Agent and (B) unaudited financial statements (which shall include
balance sheets, statements of income and retained earnings and a
statement of cash flows) for the Seller for such fiscal year.
(ii) Quarterly Reporting. Within 45 days after the close of
the first three (3) quarterly periods of each of its respective fiscal
years, (A) a copy of the unaudited consolidated balance sheet of
Transferor and its Subsidiaries and (B) a copy of the unaudited balance
sheet of Seller, in each case as at the close of each such period and
in each case together with statements of income and retained earnings
and a statement of cash flows for such Person(s) for the period from
the beginning of such fiscal year to the end of such quarter.
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in
substantially the form of Exhibit V signed by such Person's chief
financial officer or treasurer and dated the date of such annual
financial statement or such quarterly financial statement, as the case
may be.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of such Seller Party copies
(which may be in electronic format) of all financial statements,
reports and proxy statements so furnished.
(v) SEC Filings. Promptly upon the filing thereof, copies of
all financial statements and regular, periodical or special reports
(including Forms 10K, 10Q and 8K but not including Forms 3, 4 or 5)
that Transferor or any Subsidiary may make to, or file with, the
Securities and Exchange Commission.
(vi) Copies of Notices. Promptly upon its receipt of any
notice, request for consent, financial statements, certification,
report or other communication under or in connection with any
Transaction Document from any Person other than the Agent or Falcon,
copies of the same.
(vii) Change in Credit and Collection Policy. At least thirty
(30) days prior to the effectiveness of any material change in or
material amendment to the Credit and Collection Policy, a copy of the
Credit and Collection Policy then in effect and a notice (A) indicating
such change or amendment, and (B) if such proposed change or amendment
would be reasonably likely to adversely affect the collectibility of
the Receivables or decrease the credit quality of any newly created
Receivables, requesting the Agent's consent thereto.
14
(viii) Other Information. Promptly, from time to time, such
other information, documents, records or reports relating to the
Receivables or the condition or operations, financial or otherwise, of
such Seller Party as the Agent may from time to time reasonably request
in order to protect the interests of the Agent and the Purchasers under
or as contemplated by this Agreement.
(b) Notices. Such Seller Party will notify the Agent in
writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
(i) Amortization Events or Potential Amortization Events. The
occurrence of each Amortization Event and each Potential Amortization
Event, by a statement of an Authorized Officer of such Seller Party.
(ii) Judgment and Proceedings. (1) The entry of any judgment
or decree against the Servicer or any of its Subsidiaries if the
aggregate amount of all judgments and decrees then outstanding against
the Servicer and its Subsidiaries exceeds $10,000,000 after deducting
(a) the amount with respect to which the Servicer or any such
Subsidiary is insured and with respect to which the insurer has assumed
responsibility in writing, and (b) the amount for which the Servicer or
any such Subsidiary is otherwise indemnified if the terms of such
indemnification are satisfactory to the Agent, or (2) the entry of any
judgment or decree or the institution of any litigation, arbitration
proceeding or governmental proceeding against Seller.
(iii) Material Adverse Effect. The occurrence of any event or
condition that has had, or could reasonably be expected to have, a
Material Adverse Effect, including any dispute, litigation,
investigation, proceeding or suspension between the Servicer and any
governmental authority or the commencement of, or any material
development in, any litigation or proceeding affecting the Servicer.
(iv) Termination Date. The occurrence of the "Termination
Date" under and as defined in the Receivables Sale Agreement or the
Transfer Agreement.
(v) Defaults Under Other Agreements. The occurrence of a
default or an event of default under any other financing arrangement
pursuant to which such Seller Party is a debtor or an obligor.
(vi) Downgrade of Transferor. Any downgrade in the rating of
any Indebtedness of Transferor by Standard & Poor's Ratings Group or by
Xxxxx'x Investors Service, Inc., setting forth the Indebtedness
affected and the nature of such change.
(c) Compliance with Laws and Preservation of Corporate
Existence. Such Seller Party will comply in all respects with all applicable
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect. Such Seller Party
will preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified in good standing as a foreign
15
corporation in each jurisdiction where its business is conducted except where
the failure to so preserve and maintain or qualify could not reasonably be
expected to have a Material Adverse Effect.
(d) Audits. Such Seller Party will furnish to the Agent from
time to time such information with respect to it and the Receivables as the
Agent may reasonably request. Such Seller Party will, from time to time during
regular business hours as requested by the Agent upon reasonable notice and at
the sole cost of such Seller Party, permit the Agent, or its agents or
representatives (and, to the extent it may do so under the Receivables Sale
Agreement and Transfer Agreement or under applicable law, shall cause Transferor
and each Originator to permit the Agent or its agents or representatives), (i)
to examine and make copies of and abstracts from all Records in the possession
or under the control of such Person relating to the Receivables and the Related
Security, including, without limitation, the related Contracts, and (ii) to
visit the offices and properties of such Person for the purpose of examining
such materials described in clause (i) above, and to discuss matters relating to
such Person's financial condition or the Receivables and the Related Security or
any Person's performance under any of the Transaction Documents or any Person's
performance under the Contracts and, in each case, with any of the officers or
employees of Seller or the Servicer having knowledge of such matters; provided
that such Seller Party shall not be required to pay for the costs of such audit
if (x) collectively, the Seller Parties have paid the costs of two previous
audits occurring during the same fiscal quarter as such audit, (y) no
Amortization Event has occurred and (z) the results of all audits requested by
the Agent have been acceptable to the Agent.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will (and, to the extent it may do so under
the Receivables Sale Agreement and Transfer Agreement or under
applicable law, will cause Transferor and each Originator to) maintain
and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing
Receivables in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit
the immediate identification of each new Receivable and all Collections
of and adjustments to each existing Receivable). The Servicer will
(and, to the extent it may do so under the Receivables Sale Agreement
and Transfer Agreement or under applicable law, will cause Transferor
and each Originator to) give the Agent notice of any material change in
the administrative and operating procedures referred to in the previous
sentence.
(ii) Such Seller Party will (and, to the extent it may do so
under the Receivables Sale Agreement and Transfer Agreement or under
applicable law, will cause Transferor and each Originator to) (A) on or
prior to the date hereof, xxxx its master data processing records and
other books and records relating to the Receivable Interests with a
legend, acceptable to the Agent, describing the Receivable Interests(1)
and (B) upon the
--------
(1) E.g., Certain of the Receivables reflected herein have been sold to
IDEX Corporation which, in turn, has sold or contributed them to IDEX
Receivables Corporation. IDEX
16
request of the Agent following the occurrence of an Amortization Event:
(x) xxxx each Contract with a legend describing the Receivable
Interests and (y) deliver to the Agent all Contracts (including,
without limitation, all multiple originals of any such Contract that
constitutes an instrument, a certificated security or chattel paper
under the UCC) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection
Policy. Such Seller Party will (and, to the extent it may do so under the
Receivables Sale Agreement and Transfer Agreement or under applicable law, will
cause Transferor and each Originator to) timely and fully (i) perform and comply
with all provisions, covenants and other promises required to be observed by it
under the Contracts related to the Receivables, and (ii) comply in all respects
with the Credit and Collection Policy in regard to each Receivable and the
related Contract.
(g) Performance and Enforcement of Receivables Sale Agreement.
Seller will, and will require Transferor to, perform each of their respective
obligations and undertakings under and pursuant to the Receivables Sale
Agreement, will purchase Receivables thereunder in strict compliance with the
terms thereof and will vigorously enforce the rights and remedies accorded to
Seller under the Receivables Sale Agreement, and those rights and remedies of
Transferor under the Transfer Agreement which rights have been transferred by
Transferor to the Seller pursuant to the Receivables Sale Agreement. Seller will
take all actions to perfect and enforce its rights and interests (and the rights
and interests of the Agent and the Purchasers as assignees of Seller) under the
Receivables Sale Agreement and the Transfer Agreement as the Agent may from time
to time reasonably request, including, without limitation, making claims to
which it may be entitled under any indemnity, reimbursement or similar provision
contained in the Receivables Sale Agreement or the Transfer Agreement.
(h) Ownership. Seller will (or, to the extent it may do so
under the Receivables Sale Agreement and Transfer Agreement or under applicable
law, will cause Transferor or each Originator to) take all necessary action to
(i) vest legal and equitable title to the Receivables, the Related Security and
the Collections purchased by Transferor under the Transfer Agreement and by
Seller under the Receivables Sale Agreement irrevocably in Seller, free and
clear of any Adverse Claims other than Adverse Claims in favor of the Agent and
the Purchasers (including, without limitation, the filing of all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect Seller's
interest in such Receivables, Related Security and Collections and such other
action to perfect, protect or more fully evidence the interest of Seller therein
as the Agent may reasonably request), and (ii) establish and maintain, in favor
of the Agent, for the benefit of the Purchasers, a valid and perfected first
priority undivided percentage ownership interest (and/or a valid and perfected
first priority security interest) in all Receivables, Related Security and
Collections to the full extent contemplated herein, free and clear of any
Adverse Claims other than Adverse Claims in favor of the Agent for the benefit
of the Purchasers (including, without limitation, the filing of all financing
statements or other similar instruments
--------------------------------------------------------------------------------
Receivables Corporation has granted an undivided percentage ownership interest
and/or a security interest in such Receivables to Bank One, NA, as Agent for
various parties.
18
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect the Agent's (for the benefit of the Purchasers)
interest in such Receivables, Related Security and Collections and such other
action to perfect, protect or more fully evidence the interest of the Agent for
the benefit of the Purchasers as the Agent may reasonably request).
(i) Purchasers' Reliance. Seller acknowledges that the
Purchasers are entering into the transactions contemplated by this Agreement in
reliance upon Seller's identity as a legal entity that is separate from
Transferor, any Originator or any Affiliate thereof other than Seller (each, an
"IDEX Entity"). Therefore, from and after the date of execution and delivery of
this Agreement, Seller shall take all reasonable steps, including, without
limitation, all steps that the Agent or any Purchaser may from time to time
reasonably request, to maintain Seller's identity as a separate legal entity and
to make it manifest to third parties that Seller is an entity with assets and
liabilities distinct from those of any IDEX Entity and not just a division of an
IDEX Entity. Without limiting the generality of the foregoing and in addition to
the other covenants set forth herein, Seller will:
(A) conduct its own business in its own name and
require that all full-time employees of Seller, if any,
identify themselves as such and not as employees of any IDEX
Entity (including, without limitation, by means of providing
appropriate employees with business or identification cards
identifying such employees as Seller's employees);
(B) compensate all employees, consultants and agents
directly, from Seller's own funds, for services provided to
Seller by such employees, consultants and agents and, to the
extent any employee, consultant or agent of Seller is also an
employee, consultant or agent of an IDEX Entity, allocate the
compensation of such employee, consultant or agent between
Seller and such IDEX Entity, on a basis that reflects the
services rendered to Seller and such IDEX Entity;
(C) clearly identify its offices (by signage or
otherwise) as its offices and, if such office is located in
the offices of an IDEX Entity, Seller shall lease such office
at a fair market rent;
(D) have a separate telephone number, which will be
answered only in its name and separate stationery, invoices
and checks in its own name;
(E) conduct all transactions with each IDEX Entity
and the Servicer (including, without limitation, any
delegation of its obligations hereunder as Servicer) strictly
on an arm's-length basis, allocate all overhead expenses
(including, without limitation, telephone and other utility
charges) for items shared between Seller and any IDEX Entity
on the basis of actual use to the extent practicable and, to
the extent such allocation is not practicable, on a basis
reasonably related to actual use;
18
(F) at all times have a Board of Directors consisting
of not less than three members, at least one member of which
is an Independent Director;
(G) observe all corporate formalities as a distinct
entity, and ensure that all corporate actions relating to (A)
the selection, maintenance or replacement of the Independent
Director, (B) the dissolution or liquidation of Seller or (C)
the initiation of, participation in, acquiescence in or
consent to any bankruptcy, insolvency, reorganization or
similar proceeding involving Seller, are duly authorized by
unanimous vote of its Board of Directors (including the
Independent Director);
(H) maintain Seller's books and records separate from
those of any IDEX Entity and otherwise readily identifiable as
its own assets rather than assets of an IDEX Entity;
(I) prepare its financial statements separately from
those of any IDEX Entity and insure that any consolidated
financial statements of any IDEX Entity that include Seller
and that are filed with the Securities and Exchange Commission
or any other governmental agency have notes clearly stating
that Seller is a separate corporate entity and that its assets
will be available first and foremost to satisfy the claims of
the creditors of Seller;
(J) except as herein specifically otherwise provided,
maintain the funds or other assets of Seller separate from,
and not commingled with, those of any IDEX Entity and only
maintain bank accounts or other depository accounts to which
Seller alone is the account party, into which Seller alone
makes deposits and from which Seller alone (or the Agent
hereunder) has the power to make withdrawals;
(K) pay all of Seller's operating expenses from
Seller's own assets (except for certain payments by an IDEX
Entity or other Persons pursuant to allocation arrangements
that comply with the requirements of this Section 7.1(i));
(L) operate its business and activities such that it
does not (A) engage in any business or activity of any kind,
or enter into any transaction or indenture, mortgage,
instrument, agreement, contract, lease or other undertaking,
other than the transactions contemplated and authorized by the
Transaction Documents, or (B) create, incur, guarantee, assume
or suffer to exist any indebtedness or other liabilities,
whether direct or contingent, other than (1) as a result of
the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business, (2) the incurrence of obligations under this
Agreement, (3) the incurrence of obligations, as expressly
19
contemplated in the Receivables Sale Agreement, to make
payment to Transferor thereunder for the purchase of
Receivables from Transferor under the Receivables Sale
Agreement, and (4) the incurrence of operating expenses in the
ordinary course of business of the type otherwise contemplated
by this Agreement;
(M) maintain its corporate charter in conformity with
this Agreement, such that it does not amend, restate,
supplement or otherwise modify its Certificate of
Incorporation or By-Laws in any respect that would impair its
ability to comply with the terms or provisions of any of the
Transaction Documents, including, without limitation, Section
7.1(i) of this Agreement;
(N) maintain the effectiveness of, and continue to
perform under the Receivables Sale Agreement, such that it
does not amend, restate, supplement, cancel, terminate or
otherwise modify the Receivables Sale Agreement, or give any
consent, waiver, directive or approval thereunder (including,
without limitation, any consent, waiver, directive or approval
in connection with the Transfer Agreement) or waive any
default, action, omission or breach under the Receivables Sale
Agreement or the Transfer Agreement or otherwise grant any
indulgence thereunder, without (in each case) the prior
written consent of the Agent;
(O) maintain its corporate separateness such that it
does not merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions, and except as
otherwise contemplated herein) all or substantially all of its
assets (whether now owned or hereafter acquired) to, or
acquire all or substantially all of the assets of, any Person,
nor at any time create, have, acquire, maintain or hold any
interest in any Subsidiary.
(P) maintain at all times the Required Capital Amount
(as defined in the Receivables Sale Agreement) and refrain
from making any dividend, distribution, redemption of capital
stock or payment of any subordinated indebtedness which would
cause the Required Capital Amount to cease to be so
maintained; and
(Q) take such other actions as are necessary on its
part to ensure that the facts and assumptions set forth in the
opinion issued by Xxxxxx & Xxxxxxx, as counsel for Seller, in
connection with the closing or initial Incremental Purchase
under this Agreement and relating to substantive consolidation
issues, and in the certificates accompanying such opinion,
remain true and correct in all material respects at all times.
(j) Collections. Such Seller Party will cause (i) all
Collections to be remitted to either a Lock-Box or a Collection Account, (ii)
all proceeds from all Lock-Boxes to be
20
directly deposited by a Collection Bank into a Collection Account and (iii) each
Lock-Box and Collection Account to be subject at all times to a Collection
Account Agreement that is in full force and effect. In the event any payments
relating to Receivables are remitted directly to Seller or any Affiliate of
Seller, Seller will remit (or will cause all such payments to be remitted)
directly to a Collection Bank and deposited into a Collection Account within two
(2) Business Days following receipt thereof, and, at all times prior to such
remittance, Seller will itself hold or, if applicable, will cause such payments
to be held in trust for the exclusive benefit of the Agent and the Purchasers.
Seller will maintain exclusive ownership, dominion and control (subject to the
terms of this Agreement) of each Lock-Box and Collection Account and shall not
grant the right to take dominion and control of any Lock-Box or Collection
Account at a future time or upon the occurrence of a future event to any Person,
except to the Agent as contemplated by this Agreement.
(k) Taxes. Such Seller Party will file all tax returns and
reports required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing, except any such taxes which are not yet
delinquent or are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. Seller will (and, to the extent it may do so under
the Receivables Sale Agreement and Transfer Agreement or under applicable law,
will cause Transferor and each Originator to) pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of Falcon, the Agent or any Financial Institution.
(l) Insurance. Seller will maintain in effect, or cause to be
maintained in effect, at Seller's own expense, such casualty and liability
insurance as Seller shall deem appropriate in its good faith business judgment.
Seller will pay, or cause to be paid, the premiums therefor. The foregoing
requirements shall not be construed to negate, reduce or modify, and are in
addition to, Seller's obligations hereunder.
(m) Payment to Transferor and Originators. With respect to the
sale of each Receivable to Seller by Transferor, such sale shall be effected
under, and in strict compliance with the terms of, the Receivables Sale
Agreement, including, without limitation, the terms relating to the amount and
timing of payments to be made to Transferor in respect of the purchase price for
such Receivable. With respect to each Receivable purchased by Transferor from
any Originator, such sale shall be effected under, and in strict compliance with
the terms of, the Transfer Agreement, including, without limitation, the terms
relating to the amount and timing of payments to be made to such Originator in
respect of the purchase price for such Receivable.
Section 7.2 Negative Covenants of the Seller Parties. Until
the date on which the Aggregate Unpaids have been indefeasibly paid in full and
this Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
(a) Name Change, Offices and Records. Seller will not (and
will not permit Transferor or any Originator to) (i) make any change to its name
(within the meaning of Section 9-507(c) of any applicable enactment of the UCC),
identity, corporate structure or location of
21
books and records unless, at least fifteen (15) Business Days prior to the
effective date of any such name change, change in corporate structure, change in
location of its books and records, or change in trade or fictitious names,
Seller notifies the Agent thereof and delivers to the Agent such financing
statements (Forms UCC-1 and UCC-3) executed by Seller (if required under
applicable law) which the Agent may reasonably request to reflect such name
change, location change, change in corporate structure or fictitious name change
or use, together with such other documents and instruments that the Agent may
reasonably request in connection therewith and has taken all other steps to
ensure that the Agent, for the benefit of itself and the Purchasers, continues
to have a first priority, perfected ownership or security interest in the
Receivables, the Related Security related thereto and any Collections thereon,
or (ii) change its jurisdiction of organization unless the Agent shall have
received from the Seller, prior to such change, (A) those items described in
clause (i) hereof, and (B) if the Agent or any Purchaser shall so request, an
opinion of counsel, in form and substance reasonably satisfactory to such
Person, as to such organization and the Seller's, Transferor's or Originator's,
as applicable, valid existence and good standing and the perfection and priority
of the Agent's ownership or security interest in the Receivables, the Related
Security and Collections.
(b) Change in Payment Instructions to Obligors. Except as may
be required by the Agent pursuant to Section 8.2(b), such Seller Party will not
add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
provided, however, that the Servicer may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection
Policy. Such Seller Party will not, and will not permit Transferor or any
Originator to, make any change to the Credit and Collection Policy that could
adversely affect the collectibility of the Receivables or decrease the credit
quality of any newly created Receivables. Except as provided in Section 8.2(d),
the Servicer will not, and will not permit Transferor or any Originator to,
extend, amend or otherwise modify the terms of any Receivable or any Contract
related thereto other than in accordance with the Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of the Agent and
the Purchasers provided for herein), and Seller will defend the right, title and
interest of the Agent and the Purchasers in, to and under any of the foregoing
property, against all claims of third parties claiming through or under Seller,
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Transferor or any Originator. Seller will not create or suffer to exist any
mortgage, pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory.
(e) Net Receivables Balance. At no time prior to the
Amortization Date shall Seller permit the Net Receivables Balance to be less
than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the ----
Aggregate Reserves.
(f) Termination Date Determination. Seller will not designate
the "Termination Date" (as defined in the Receivables Sale Agreement), or send
any written notice to Transferor in respect thereof, without the prior written
consent of the Agent, except (i)with respect to the occurrence of such
Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale
Agreement and (ii) in connection with the Seller's delivery to the Agent of a
notice pursuant to clause (iv) of the definition of Amortization Date, provided
that the Agent receives ten (10) Business Days' prior notice of such designated
Termination Date and such date occurs on the Amortization Date designated by the
Seller. Seller will not, and will not permit Transferor to designate the
"Termination Date" (as defined in the Transfer Agreement), or send any written
notice to any Originator in respect thereof, without the prior written consent
of the Agent, except (i) with respect to the occurrence of such Termination Date
arising pursuant to Section 5.1(d) of the Transfer Agreement and (ii) in
connection with the Seller's delivery to the Agent of a notice pursuant to
clause (iv) of the definition of Amortization Date, provided that the Agent
receives ten (10) Business Days' prior notice of such designated Termination
Date and such date occurs on the Amortization Date designated by the Seller.
(g) Restricted Junior Payments. From and after the occurrence
and during the continuation of any Amortization Event, Seller will not make any
Restricted Junior Payment if, after giving effect thereto, Seller would fail to
meet its obligations set forth in Section 7.2(e).
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer. (a) The servicing,
administration and collection of the Receivables shall be conducted by such
Person (the "Servicer") so designated from time to time in accordance with this
Section 8.1. IDEX is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Servicer pursuant to the terms of this Agreement.
The Agent may at any time following the occurrence of an Amortization Event
designate as Servicer any Person to succeed IDEX or any successor Servicer.
(b) IDEX may delegate, and IDEX hereby advises the Purchasers
and the Agent that it has delegated, to each Originator, as sub-servicer of the
Servicer, certain of its duties and responsibilities as Servicer hereunder in
respect of the Receivables originated by each such Originator. Without the prior
written consent of the Agent and the Required Financial Institutions, IDEX shall
not be permitted to delegate any of its duties or responsibilities as Servicer
to any Person other than (i) Seller, (ii) the Originators as stated in the
immediately preceding sentence and (iii) with respect to certain Charged-Off
Receivables, outside collection agencies in accordance with its customary
practices. Neither Seller nor any Originator shall be
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permitted to further delegate to any other Person any of the duties or
responsibilities of the Servicer delegated to it by IDEX. If at any time the
Agent shall designate as Servicer any Person other than IDEX, all duties and
responsibilities theretofore delegated by IDEX to Seller or any Originator may,
at the discretion of the Agent, be terminated forthwith on notice given by the
Agent to IDEX and Seller or such Originator, as applicable.
(c) Notwithstanding any delegation by IDEX pursuant to the
foregoing subsection (b), (i) IDEX shall be and remain primarily liable to the
Agent and the Purchasers for the full and prompt performance of all duties and
responsibilities of the Servicer hereunder and (ii) the Agent and the Purchasers
shall be entitled to deal exclusively with IDEX in matters relating to the
discharge by the Servicer of its duties and responsibilities hereunder. The
Agent and the Purchasers shall not be required to give notice, demand or other
communication to any Person other than IDEX in order for communication to the
Servicer and its sub-servicer or other delegate with respect thereto to be
accomplished. IDEX, at all times that it is the Servicer, shall be responsible
for providing any sub-servicer or other delegate of the Servicer with any notice
given to the Servicer under this Agreement.
Section 8.2 Duties of Servicer.
(a) The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Receivable from time to
time, all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and Collection
Policy.
(b) The Servicer will instruct all Obligors to pay all
Collections directly to a Lock-Box or Collection Account. The Servicer shall
effect a Collection Account Agreement substantially in the form of Exhibit VI
with each bank party to a Collection Account at any time. In the case of any
remittances received in any Lock-Box or Collection Account that shall have been
identified, to the satisfaction of the Servicer, to not constitute Collections
or other proceeds of the Receivables or the Related Security, the Servicer shall
promptly remit such items to the Person identified to it as being the owner of
such remittances. From and after the date the Agent delivers to any Collection
Bank a Collection Notice pursuant to Section 8.3, the Agent may request that the
Servicer, and the Servicer thereupon promptly shall instruct all Obligors with
respect to the Receivables, to remit all payments thereon to a new depositary
account specified by the Agent and, at all times thereafter, Seller and the
Servicer shall not deposit or otherwise credit, and shall not permit any other
Person to deposit or otherwise credit to such new depositary account any cash or
payment item other than Collections.
(c) The Servicer shall administer the Collections in
accordance with the procedures described herein and in Article II. The Servicer
shall set aside and hold in trust for the account of Seller and the Purchasers
their respective shares of the Collections in accordance with Article II. The
Servicer shall, upon the request of the Agent, segregate, in a manner acceptable
to the Agent, all cash, checks and other instruments received by it from time to
time constituting Collections from the general funds of the Servicer or Seller
prior to the remittance thereof in accordance with Article II. If the Servicer
shall be required to segregate Collections pursuant to the preceding sentence,
the Servicer shall segregate and deposit with a bank
24
designated by the Agent such allocable share of Collections of Receivables set
aside for the Purchasers on the first Business Day following receipt by the
Servicer of such Collections, duly endorsed or with duly executed instruments of
transfer.
(d) The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; provided, however, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable or Charged-Off Receivable or limit the rights of the Agent
or the Purchasers under this Agreement. Notwithstanding anything to the contrary
contained herein, at any time after the occurrence of an Amortization Event, the
Agent shall have the absolute and unlimited right to direct the Servicer to
commence or settle any legal action with respect to any Receivable or to
foreclose upon or repossess any Related Security.
(e) The Servicer shall hold in trust for Seller and the
Purchasers all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Security or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent, deliver or make available to the Agent all such Records, at
a place selected by the Agent. The Servicer shall, as soon as practicable
following receipt thereof turn over to Seller any cash collections or other cash
proceeds received with respect to Indebtedness not constituting Receivables. The
Servicer shall, from time to time at the request of the Agent or any Purchaser,
furnish to such Person (promptly after any such request) a calculation of the
amounts set aside for the Agent and the Purchasers pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness
owed by it to the applicable Originator, Transferor or Seller shall, except as
otherwise specified by such Obligor or otherwise required by contract or law and
unless otherwise instructed by the Agent, be applied as a Collection of any
Receivable of such Obligor (starting with the oldest such Receivable) to the
extent of any amounts then due and payable thereunder before being applied to
any other receivable or other obligation of such Obligor.
Section 8.3 Collection Notices. The Agent is authorized at any
time following the occurrence of an Amortization Event to date and to deliver to
the Collection Banks the Collection Notices. Seller hereby transfers to the
Agent for the benefit of the Purchasers, effective when the Agent delivers such
notice, the exclusive ownership and control of each Lock-Box and the Collection
Accounts. In case any authorized signatory of Seller whose signature appears on
a Collection Account Agreement shall cease to have such authority before the
delivery of such notice, such Collection Notice shall nevertheless be valid as
if such authority had remained in force. Seller hereby authorizes the Agent, and
agrees that the Agent shall be entitled to (i) endorse Seller's name on checks
and other instruments representing Collections, (ii) enforce the Receivables,
the related Contracts and the Related Security and (iii) take such action as
shall be necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of the Agent
rather than Seller.
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Section 8.4 Responsibilities of Seller. Anything herein to the
contrary notwithstanding, the exercise by the Agent and the Purchasers of their
rights hereunder shall not release the Servicer, the applicable Originator,
Transferor or Seller from any of their duties or obligations with respect to any
Receivables or under the related Contracts. The Purchasers shall have no
obligation or liability with respect to any Receivables or related Contracts,
nor shall any of them be obligated to perform the obligations of Seller.
Section 8.5 Reports. The Servicer shall prepare and forward to
the Agent (i) on the 15th day of each month (or if such day is not a Business
Day, the immediately succeeding Business Day), and at such times as the Agent
shall request at any time after the occurrence of a Potential Amortization Event
or an Amortization Event, a Monthly Report and (ii) at such times as the Agent
shall request at any time after the occurrence of a Potential Amortization Event
or an Amortization Event, a listing by Obligor of all Receivables together with
an aging of such Receivables. The Servicer shall prepare and forward to the
Agent on any date an Originator becomes an Ineligible Originator, a revised
version of the most recently delivered Monthly Report which excludes the
Receivables originated by such Ineligible Originator.
Section 8.6 Servicing Fees. In consideration of IDEX's
agreement to act as Servicer hereunder, the Purchasers hereby agree that, so
long as IDEX shall continue to perform as Servicer hereunder, Seller shall pay
over to IDEX a fee (the "Servicing Fee") on the first calendar day of each
month, in arrears for the immediately preceding month, equal to one-twelfth of
1.0% per annum times the lesser of (i) the average daily Net Receivables Balance
during such period and (ii) the average daily Aggregate Capital outstanding
during such period, as compensation for its servicing activities.
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or
more of the following events shall constitute an Amortization Event:
(a) Any Seller Party shall fail (i) to make any payment or
deposit required hereunder when due, or (ii) to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clause (i) of this
paragraph (a), paragraph 9.1(e) and paragraph 9.1(k)) and such failure shall
continue for three (3) consecutive Business Days.
(b) Any representation, warranty, certification or statement
made by any Seller Party in this Agreement, any other Transaction Document or in
any other document delivered pursuant hereto or thereto shall prove to have been
incorrect when made or deemed made.
(c) Failure of Seller to pay any Indebtedness when due (taking
into account any applicable period of grace) or the failure of Transferor to pay
Indebtedness when due (taking into account any applicable period of grace) in
excess of $10,000,000; or the default by Seller or Transferor in the performance
of any term, provision or condition contained in any agreement under which any
such Indebtedness was created or is governed, the effect of which is to cause,
or
26
to permit the holder or holders of such Indebtedness to cause, such Indebtedness
to become due prior to its stated maturity; or any such Indebtedness of Seller
or Transferor shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the date of maturity
thereof.
(d) Seller, Servicer, Transferor or any of such Person's
Subsidiaries shall generally not pay its debts as such debts become due or shall
admit in writing its inability to pay its debts generally or shall make a
general assignment for the benefit of creditors; or (ii) any proceeding shall be
instituted by or against Seller, Servicer, Transferor or any of such Person's
Subsidiaries seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property or (iii) Seller,
Servicer, Transferor or any of such Person's Subsidiaries shall take any
corporate action to authorize any of the actions set forth in clauses (i) or
(ii) above in this subsection (d).
(e) Seller shall fail to comply with the terms of Section 2.6
hereof.
(f) As at the end of any calendar month, (i) the average of the
Delinquency Ratios as at the end of such month and the two preceding months
shall exceed 2.25%, (ii) the average of the Default Ratios as at the end of such
month and the two preceding months shall exceed 2.75%, or (iii) the average of
the Dilution Ratios as at the end of such month and the two preceding months
shall exceed 5.00%.
(g) A Change of Control shall occur with respect to any Seller
Party.
(h) (i) One or more final judgments for the payment of money
shall be entered against Seller or (ii) one or more final judgments for the
payment of money in an amount in excess of $10,000,000, individually or in the
aggregate, shall be entered against Transferor on claims not covered by
insurance or as to which the insurance carrier has denied its responsibility,
and such judgment shall continue unsatisfied and in effect for fifteen (15)
consecutive days without a stay of execution.
(i) (i) The "Termination Date" under and as defined in the
Receivables Sale Agreement shall occur under the Receivables Sale Agreement or
(ii) Seller or Transferor shall fail to perform any of their respective
obligations and undertakings under or pursuant to the Receivables Sale Agreement
or shall fail to vigorously enforce the rights and remedies accorded under the
Receivables Purchase Agreement after the occurrence of such failure, or (iii)
Transferor shall for any reason cease to transfer, or cease to have the legal
capacity to transfer, or otherwise be incapable of transferring Receivables to
Seller under the Receivables Sale Agreement.
(j) Transferor shall cease to perform any of its obligations
and undertakings under or pursuant to the Transfer Agreement or shall fail to
vigorously enforce its rights and remedies accorded under the Transfer
Agreement.
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(k) This Agreement shall terminate in whole or in part (except
in accordance with its terms), or shall cease to be effective or to be the
legally valid, binding and enforceable obligation of Seller, or any Obligor
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of the Purchasers
shall cease to have a valid and perfected first priority security interest in
the Receivables, the Related Security and the Collections with respect thereto
and the Collection Accounts.
(l) IDEX shall fail to satisfy Section 8.16 or any additional
"financial covenant" under the IDEX Credit Agreement, as such agreement is in
effect on the date hereof, without giving effect to any subsequent amendment or
modification unless Bank One, NA, as the Agent hereunder, consents to such
amendment or modification.
Section 9.2 Remedies. Upon the occurrence and during the
continuation of an Amortization Event, the Agent may, or upon the direction of
the Required Financial Institutions shall, take any of the following actions:
(i) replace the Person then acting as Servicer, (ii) declare the Amortization
Date to have occurred, whereupon the Amortization Date shall forthwith occur,
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by each Seller Party; provided, however, that upon the
occurrence of an Amortization Event described in Section 9.1(d), or of an actual
or deemed entry of an order for relief with respect to Seller, Servicer or
Transferor under the Federal Bankruptcy Code, the Amortization Date shall
automatically occur, without demand, protest or any notice of any kind, all of
which are hereby expressly waived by each Seller Party, (iii) to the fullest
extent permitted by applicable law, declare that the Default Fee shall accrue
with respect to any of the Aggregate Unpaids outstanding at such time, (iv)
deliver the Collection Notices to the Collection Banks, and (v) notify Obligors
of the Purchasers' interest in the Receivables. The aforementioned rights and
remedies shall be without limitation, and shall be in addition to all other
rights and remedies of the Agent and the Purchasers otherwise available under
any other provision of this Agreement, by operation of law, at equity or
otherwise, all of which are hereby expressly preserved, including, without
limitation, all rights and remedies provided under the UCC, all of which rights
shall be cumulative.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnities by the Seller Parties. Without
limiting any other rights that the Agent or any Purchaser may have hereunder or
under applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand
to) the Agent and each Purchaser and their respective assigns, officers,
directors, agents and employees (each, an "Indemnified Party") from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys' fees (which attorneys
may be employees of the Agent or such Purchaser) and disbursements (all of the
foregoing being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by a Purchaser of
an interest in the Receivables, and (B) the Servicer hereby agrees to indemnify
(and pay upon demand to) each
28
Indemnified Party for Indemnified Amounts awarded against or incurred by any of
them arising out of the Servicer's activities as Servicer hereunder excluding,
however, in all of the foregoing instances under the preceding clauses (A) and
(B):
(1) Indemnified Amounts to the extent a final judgment of a
court of competent jurisdiction holds that such Indemnified Amounts
resulted from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification;
(2) Indemnified Amounts to the extent the same includes losses
in respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; or
(3) taxes imposed by the jurisdiction in which such
Indemnified Party's principal executive office is located, on or
measured by the overall net income of such Indemnified Party to the
extent that the computation of such taxes is consistent with the
characterization for income tax purposes of the acquisition by the
Purchasers of Receivable Interests as a loan or loans by the Purchasers
to Seller secured by the Receivables, the Related Security, the
Collection Accounts and the Collections;
provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, but subject to the exclusions in clauses (1),
(2) and (3) above, Seller shall indemnify each Indemnified Party for Indemnified
Amounts (including, without limitation, losses in respect of uncollectible
receivables, regardless of whether reimbursement therefor would constitute
recourse to Seller or the Servicer) relating to or resulting from:
(i) any representation or warranty made by any Seller Party,
Transferor or any Originator (or any officers of any such Person) under
or in connection with this Agreement, any other Transaction Document or
any other information or report delivered by any such Person pursuant
hereto or thereto, which shall have been false or incorrect when made
or deemed made;
(ii) the failure by Seller, the Servicer, Transferor or any
Originator to comply with any applicable law, rule or regulation with
respect to any Receivable or Contract related thereto, or the
nonconformity of any Receivable or Contract included therein with any
such applicable law, rule or regulation or any failure of any
Originator to keep or perform any of its obligations, express or
implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer, Transferor or any
Originator to perform its duties, covenants or other obligations in
accordance with the provisions of this Agreement or any other
Transaction Document;
29
(iv) any products liability, personal injury or damage suit,
or other similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of any Contract
or any Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable (including, without limitation, a defense based on
such Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance
with its terms), or any other claim resulting from the sale of the
merchandise or service related to such Receivable or the furnishing or
failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time
with other funds;
(vii) any investigation, litigation or proceeding related to
or arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, the use of the proceeds of an
Incremental Purchase or a Reinvestment, the ownership of the Receivable
Interests or any other investigation, litigation or proceeding relating
to Seller, the Servicer (at any time Servicer is IDEX or one of its
Affiliates), Transferor or any Originator in which any Indemnified
Party becomes involved as a result of any of the transactions
contemplated hereby;
(viii) any inability to litigate any claim against any Obligor
in respect of any Receivable as a result of such Obligor being immune
from civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event described in Section 9.1(d);
(x) any failure of Transferor to acquire and maintain legal
and equitable title to, and ownership of any Receivable and the Related
Security and Collections with respect thereto from the applicable
Originator, free and clear of any Adverse Claim (other than as created
under the Transaction Documents); or any failure of Transferor to give
reasonably equivalent value to the applicable Originator under the
Transfer Agreement in consideration of the transfer by such Originator
of any Receivable, or any attempt by any Person to void such transfer
under statutory provisions or common law or equitable action;
(xi) any failure of Seller to acquire and maintain legal and
equitable title to, and ownership of any Receivable and the Related
Security and Collections with respect thereto from Transferor, free and
clear of any Adverse Claim (other than as created under the Transaction
Documents); or any failure of Seller to give reasonably equivalent
value to Transferor under the Receivables Sale Agreement in
consideration of the transfer by Transferor of any Receivable, or any
avoidance by any Person of such transfer under statutory provisions or
common law or equitable action;
(xii) any failure to vest and maintain vested in the Agent for
the benefit of the Purchasers, or to transfer to the Agent for the
benefit of the Purchasers, legal and
30
equitable title to, and ownership of, a first priority perfected
undivided percentage ownership interest (to the extent of the
Receivable Interests contemplated hereunder) or security interest in
the Receivables, the Related Security and the Collections, free and
clear of any Adverse Claim (except as created by the Transaction
Documents);
(xiii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivable, the Related Security and Collections with
respect thereto, and the proceeds of any thereof, whether at the time
of any Incremental Purchase or Reinvestment or at any subsequent time;
(xiv) any action or omission by any Seller Party which reduces
or impairs the rights of the Agent or the Purchasers with respect to
any Receivable or the value of any such Receivable (other than such an
action taken or omission made at the request of the Agent or any
Purchaser or any action taken by the Servicer in accordance with the
Credit and Collection Policy);
(xv) avoidance by any Person of any Incremental Purchase or
Reinvestment hereunder under statutory provisions or common law or
equitable action; and
(xvi) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible Receivable to
be an Eligible Receivable at the time so included.
Notwithstanding the foregoing, to the extent that any Indemnified Amounts
arising under clauses (i), (ii), (iii), (vii), (x) and (xi) above result from a
misrepresentation, breach, action or omission by Transferor or any Originator,
Seller shall be obligated to pay such Indemnified Amounts only to the extent it
receives a payment in respect of such amounts pursuant to the Transfer Agreement
or the Receivables Sale Agreement.
Section 10.2 Increased Cost and Reduced Return. If after the
date hereof, any Funding Source shall be charged any fee, expense or increased
cost on account of the adoption of any applicable law, rule or regulation
(including any applicable law, rule or regulation regarding capital adequacy) or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency (a "Regulatory Change"): (i) that
subjects any Funding Source to any charge or withholding on or with respect to
any Funding Agreement or a Funding Source's obligations under a Funding
Agreement, or on or with respect to the Receivables, or changes the basis of
taxation of payments to any Funding Source of any amounts payable under any
Funding Agreement (except for changes in the rate of tax on the overall net
income of a Funding Source or taxes excluded by Section 10.1) or (ii) that
imposes, modifies or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for
the account of a Funding Source, or credit extended by a Funding Source pursuant
to a Funding Agreement or (iii) that imposes any other condition the result of
which is to increase the cost to a
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Funding Source of performing its obligations under a Funding Agreement, or to
reduce the rate of return on a Funding Source's capital as a consequence of its
obligations under a Funding Agreement, or to reduce the amount of any sum
received or receivable by a Funding Source under a Funding Agreement or to
require any payment calculated by reference to the amount of interests or loans
held or interest received by it, then, upon demand by the Agent, Seller shall
pay to the Agent, for the benefit of the relevant Funding Source, such amounts
charged to such Funding Source or such amounts to otherwise compensate such
Funding Source for such increased cost or such reduction.
Section 10.3 Other Costs and Expenses. Seller shall pay to the
Agent and Falcon on demand all costs and out-of-pocket expenses in connection
with the preparation, execution, delivery and administration of this Agreement,
the transactions contemplated hereby and the other documents to be delivered
hereunder, including without limitation (i) subject to Section 7.1(d), the cost
of Falcon's auditors auditing the books, records and procedures of Seller,
Transferor and each Originator and (ii) reasonable fees and out-of-pocket
expenses of legal counsel for Falcon and the Agent (which such counsel may be
employees of Falcon or the Agent) with respect thereto and with respect to
advising Falcon and the Agent as to their respective rights and remedies under
this Agreement. Seller shall pay to the Agent on demand any and all costs and
expenses of the Agent and the Purchasers, if any, including reasonable counsel
fees and expenses in connection with the enforcement of this Agreement and the
other documents delivered hereunder and in connection with any restructuring or
workout of this Agreement or such documents, or the administration of this
Agreement following an Amortization Event.
ARTICLE XI
THE AGENT
Section 11.1 Authorization and Action. Each Purchaser hereby
designates and appoints Bank One to act as its agent hereunder and under each
other Transaction Document, and authorizes the Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the Agent by
the terms of this Agreement and the other Transaction Documents together with
such powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth herein or in any
other Transaction Document, or any fiduciary relationship with any Purchaser,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.
Each Purchaser hereby authorizes the Agent to execute each of the Uniform
Commercial Code financing
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statements and the Collection Account Agreements on behalf of such Purchaser
(the terms of which shall be binding on such Purchaser).
Section 11.2 Delegation of Duties. The Agent may execute any of
its duties under this Agreement and each other Transaction Document by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. Neither the Agent nor any
of its directors, officers, agents or employees shall be (i) liable for any
action lawfully taken or omitted to be taken by it or them under or in
connection with this Agreement or any other Transaction Document (except for
its, their or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Purchasers for any recitals, statements,
representations or warranties made by any Seller Party contained in this
Agreement, any other Transaction Document or any certificate, report, statement
or other document referred to or provided for in, or received under or in
connection with, this Agreement, or any other Transaction Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, or any other Transaction Document or any other document
furnished in connection herewith or therewith, or for any failure of any Seller
Party to perform its obligations hereunder or thereunder, or for the
satisfaction of any condition specified in Article VI, or for the perfection,
priority, condition, value or sufficiency of any collateral pledged in
connection herewith. The Agent shall not be under any obligation to any
Purchaser to ascertain or to inquire as to the observance or performance of any
of the agreements or covenants contained in, or conditions of, this Agreement or
any other Transaction Document, or to inspect the properties, books or records
of the Seller Parties. The Agent shall not be deemed to have knowledge of any
Amortization Event or Potential Amortization Event unless the Agent has received
notice from Seller or a Purchaser.
Section 11.4 Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Seller), independent
accountants and other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence of Falcon or the Required Financial Institutions or all of
the Purchasers, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Purchasers, provided that unless and
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Falcon or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
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Section 11.5 Non-Reliance on Agent and Other Purchasers. Each
Purchaser expressly acknowledges that neither the Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Seller
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Purchaser represents and warrants to the Agent that it has and will,
independently and without reliance upon the Agent or any other Purchaser and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of Seller and
made its own decision to enter into this Agreement, the other Transaction
Documents and all other documents related hereto or thereto.
Section 11.6 Reimbursement and Indemnification. The Financial
Institutions agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller Parties (i) for
any amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Seller Parties hereunder and (ii) for any other expenses
incurred by the Agent, in its capacity as Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.
Section 11.7 Agent in its Individual Capacity. The Agent and
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with Seller or any Affiliate of Seller as though the Agent
were not the Agent hereunder. With respect to the acquisition of Receivable
Interests pursuant to this Agreement, the Agent shall have the same rights and
powers under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent, and the terms "Financial
Institution," "Purchaser," "Financial Institutions" and "Purchasers" shall
include the Agent in its individual capacity.
Section 11.8 Successor Agent. The Agent may, upon five days'
notice to Seller and the Purchasers, and the Agent will, upon the direction of
all of the Purchasers (other than the Agent, in its individual capacity) resign
as Agent. If the Agent shall resign, then the Required Financial Institutions
during such five-day period shall appoint from among the Purchasers a successor
agent. If for any reason no successor Agent is appointed by the Required
Financial Institutions during such five-day period, then effective upon the
termination of such five day period, the Purchasers shall perform all of the
duties of the Agent hereunder and under the other Transaction Documents and
Seller and the Servicer (as applicable) shall make all payments in respect of
the Aggregate Unpaids directly to the applicable Purchasers and for all purposes
shall deal directly with the Purchasers. After the effectiveness of any retiring
Agent's resignation hereunder as Agent, the retiring Agent shall be discharged
from its duties and obligations hereunder and under the other Transaction
Documents and the provisions of this Article XI and Article X shall continue in
effect for its benefit with respect to any actions taken or omitted to be taken
by it while it was Agent under this Agreement and under the other Transaction
Documents.
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ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments. (a) Seller and each Financial
Institution hereby agree and consent to the complete or partial assignment by
Falcon of all or any portion of its rights under, interest in, title to and
obligations under this Agreement to the Financial Institutions pursuant to
Section 13.1, to any commercial paper conduit administered by a Financial
Institution which issues commercial paper rated at least A-1 by Standard &
Poor's Ratings Group and P-1 by Xxxxx'x Investor Service, Inc. or, with the
consent of Seller which consent shall not be unreasonably withheld or delayed,
to any other Person; provided that the consent of the Seller shall not be
required at any time after the occurrence of an Amortization Event; and upon
such assignment, Falcon shall be released from its obligations so assigned.
Further, Seller and each Financial Institution hereby agree that any assignee of
Falcon of this Agreement or all or any of the Receivable Interests of Falcon
shall have all of the rights and benefits under this Agreement as if the term
"Falcon" explicitly referred to such party, and no such assignment shall in any
way impair the rights and benefits of Falcon hereunder. Neither Seller nor the
Servicer shall have the right to assign its rights or obligations under this
Agreement.
(b) Any Financial Institution may at any time and from time to
time assign to one or more Persons ("Purchasing Financial Institutions") all or
any part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
(the "Assignment Agreement") executed by such Purchasing Financial Institution
and such selling Financial Institution. The consent of Falcon shall be required
prior to the effectiveness of any such assignment, and, prior to the occurrence
of an Amortization Event, the consent of Seller shall also be required prior to
the effectiveness of any such assignment (which consent of Seller shall not be
unreasonably withheld or delayed). Each assignee of a Financial Institution must
(i) have a short-term debt rating of A-1 or better by Standard & Poor's Ratings
Group and P-1 by Xxxxx'x Investor Service, Inc. and (ii) agree to deliver to the
Agent, promptly following any request therefor by the Agent or Falcon, an
enforceability opinion in form and substance satisfactory to the Agent and
Falcon. Upon delivery of the executed Assignment Agreement to the Agent, such
selling Financial Institution shall be released from its obligations hereunder
to the extent of such assignment. Thereafter the Purchasing Financial
Institution shall for all purposes be a Financial Institution party to this
Agreement and shall have all the rights and obligations of a Financial
Institution under this Agreement to the same extent as if it were an original
party hereto and no further consent or action by Seller, the Purchasers or the
Agent shall be required.
(c) Each of the Financial Institutions agrees that in the event
that it shall cease to have a short-term debt rating of A-1 or better by
Standard & Poor's Ratings Group and P-1 by Xxxxx'x Investor Service, Inc. (an
"Affected Financial Institution"), such Affected Financial Institution shall be
obliged, at the request of Falcon or the Agent, to assign all of its rights and
obligations hereunder to (x) another Financial Institution or (y) another
funding entity nominated by the Agent and acceptable to Falcon, and willing to
participate in this Agreement through the Liquidity Termination Date in the
place of such Affected Financial Institution; provided that the Affected
Financial Institution receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such Financial Institution's Pro Rata Share of
the Aggregate Capital and
35
Yield owing to the Financial Institutions and all accrued but unpaid fees and
other costs and expenses payable in respect of its Pro Rata Share of the
Receivable Interests of the Financial Institutions.
Section 12.2 Participations. Any Financial Institution may, in
the ordinary course of its business at any time sell to one or more Persons
(each, a "Participant") participating interests in its Pro Rata Share of the
Receivable Interests of the Financial Institutions, its obligation to pay Falcon
its Acquisition Amounts or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution's rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Falcon and the Agent shall continue to deal
solely and directly with such Financial Institution in connection with such
Financial Institution's rights and obligations under this Agreement. Each
Financial Institution agrees that any agreement between such Financial
Institution and any such Participant in respect of such participating interest
shall not restrict such Financial Institution's right to agree to any amendment,
supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in Section 14.1(b)(i).
ARTICLE XIII
LIQUIDITY FACILITY
Section 13.1 Transfer to Financial Institutions. Each Financial
Institution hereby agrees, subject to Section 13.4, that immediately upon
written notice from Falcon delivered on or prior to the Liquidity Termination
Date, it shall acquire by assignment from Falcon, without recourse or warranty,
its Pro Rata Share of one or more of the Receivable Interests of Falcon as
specified by Falcon. Each such assignment by Falcon shall be made pro rata among
all of the Financial Institutions, except for pro rata assignments to one or
more Terminating Financial Institutions pursuant to Section 13.6. Each such
Financial Institution shall, no later than 1:00 p.m. (Chicago time) on the date
of such assignment, pay in immediately available funds (unless another form of
payment is otherwise agreed between Falcon and any Financial Institution) to the
Agent at an account designated by the Agent, for the benefit of Falcon, its
Acquisition Amount. Unless a Financial Institution has notified the Agent that
it does not intend to pay its Acquisition Amount, the Agent may assume that such
payment has been made and may, but shall not be obligated to, make the amount of
such payment available to Falcon in reliance upon such assumption. Falcon hereby
sells and assigns to the Agent for the ratable benefit of the Financial
Institutions, and the Agent hereby purchases and assumes from Falcon, effective
upon the receipt by Falcon of the Falcon Transfer Price, the Receivable
Interests of Falcon which are the subject of any transfer pursuant to this
Article XIII.
Section 13.2 Transfer Price Reduction Yield. If the Adjusted
Funded Amount is included in the calculation of the Falcon Transfer Price for
any Receivable Interest, each Financial Institution agrees that the Agent shall
pay to Falcon the Reduction Percentage of any Yield received by the Agent with
respect to such Receivable Interest.
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Section 13.3 Payments to Falcon. In consideration for the
reduction of the Falcon Transfer Prices by the Falcon Transfer Price Reductions,
effective only at such time as the aggregate amount of the Capital of the
Receivable Interests of the Financial Institutions equals the Falcon Residual,
each Financial Institution hereby agrees that the Agent shall not distribute to
the Financial Institutions and shall immediately remit to Falcon any Yield,
Collections or other payments received by it to be applied pursuant to the terms
hereof or otherwise to reduce the Capital of the Receivable Interests of the
Financial Institutions.
Section 13.4 Limitation on Commitment to Purchase from Falcon.
Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have any obligation to purchase any Receivable Interest from
Falcon, pursuant to Section 13.1 or otherwise, if:
(i) Falcon shall have voluntarily commenced any proceeding or
filed any petition under any bankruptcy, insolvency or similar law
seeking the dissolution, liquidation or reorganization of Falcon or
taken any corporate action for the purpose of effectuating any of the
foregoing; or
(ii) involuntary proceedings or an involuntary petition shall
have been commenced or filed against Falcon by any Person under any
bankruptcy, insolvency or similar law seeking the dissolution,
liquidation or reorganization of Falcon and such proceeding or petition
shall have not been dismissed.
Section 13.5 Defaulting Financial Institutions. If one or more
Financial Institutions defaults in its obligation to pay its Acquisition Amount
pursuant to Section 13.1 (each such Financial Institution shall be called a
"Defaulting Financial Institution" and the aggregate amount of such defaulted
obligations being herein called the "Falcon Transfer Price Deficit"), then upon
notice from the Agent, each Financial Institution other than the Defaulting
Financial Institutions (a "Non-Defaulting Financial Institution") shall promptly
pay to the Agent, in immediately available funds, an amount equal to the lesser
of (x) such Non-Defaulting Financial Institution's proportionate share (based
upon the relative Commitments of the Non-Defaulting Financial Institutions,
after excluding the Commitment of any Approved Unconditional Liquidity
Providers) of the Falcon Transfer Price Deficit and (y) the unused portion of
such Non-Defaulting Financial Institution's Commitment; provided, however, that
if an Approved Unconditional Liquidity Provider is the Defaulting Financial
Institution, the Non-Defaulting Financial Institutions shall have no obligation
to pay any amount to the Agent pursuant to this Section 13.5 as a result of a
default by such Approved Unconditional Liquidity Provider; provided, further,
that in no event shall any Approved Unconditional Liquidity Provider be required
to make any payment as a Non-Defaulting Financial Institution pursuant to this
Section 13.5. A Defaulting Financial Institution shall forthwith upon demand pay
to the Agent for the account of the Non-Defaulting Financial Institutions all
amounts paid by each Non-Defaulting Financial Institution on behalf of such
Defaulting Financial Institution, together with interest thereon, for each day
from the date a payment was made by a Non-Defaulting Financial Institution until
the date such Non-Defaulting Financial Institution has been paid such amounts in
full, at a rate per annum equal to the Federal Funds Effective Rate plus two
percent (2%). In addition, without prejudice to any other rights that Falcon may
have under applicable
37
law, each Defaulting Financial Institution shall pay to Falcon forthwith upon
demand, the difference between such Defaulting Financial Institution's unpaid
Acquisition Amount and the amount paid with respect thereto by the
Non-Defaulting Financial Institutions, together with interest thereon, for each
day from the date of the Agent's request for such Defaulting Financial
Institution's Acquisition Amount pursuant to Section 13.1 until the date the
requisite amount is paid to Falcon in full, at a rate per annum equal to the
Federal Funds Effective Rate plus two percent (2%).
Section 13.6 Terminating Financial Institutions.
(a) Each Financial Institution hereby agrees to deliver
written notice to the Agent not more than 30 Business Days and not less than 5
Business Days prior to the Liquidity Termination Date indicating whether such
Financial Institution intends to renew its Commitment hereunder. If any
Financial Institution fails to deliver such notice on or prior to the date that
is 5 Business Days prior to the Liquidity Termination Date, such Financial
Institution will be deemed to have declined to renew its Commitment (each
Financial Institution which has declined or has been deemed to have declined to
renew its Commitment hereunder, a "Non-Renewing Financial Institution"). The
Agent shall promptly notify Falcon of each Non-Renewing Financial Institution
and Falcon, in its sole discretion, may (A) to the extent of Commitment
Availability, declare that such Non-Renewing Financial Institution's Commitment
shall, to such extent, automatically terminate on a date specified by Falcon on
or before the Liquidity Termination Date or (B) upon one (1) Business Day's
notice to such Non-Renewing Financial Institution assign to such Non-Renewing
Financial Institution on a date specified by Falcon its Pro Rata Share of the
aggregate Receivable Interests then held by Falcon, subject to, and in
accordance with, Section 13.1. In addition, Falcon may, in its sole discretion,
at any time (x) to the extent of Commitment Availability, declare that any
Affected Financial Institution's Commitment shall automatically terminate on a
date specified by Falcon or (y) assign to any Affected Financial Institution on
a date specified by Falcon its Pro Rata Share of the aggregate Receivable
Interests then held by Falcon, subject to, and in accordance with, Section 13.1
(each Affected Financial Institution or each Non-Renewing Financial Institution
is hereinafter referred to as a "Terminating Financial Institution"). The
parties hereto expressly acknowledge that any declaration of the termination of
any Commitment, any assignment pursuant to this Section 13.6 and the order of
priority of any such termination or assignment among Terminating Financial
Institutions shall be made by Falcon in its sole and absolute discretion.
(b) Upon any assignment to a Terminating Financial Institution
as provided in this Section 13.6, any remaining Commitment of such Terminating
Financial Institution shall automatically terminate. Upon reduction to zero of
the Capital of all of the Receivable Interests of a Terminating Financial
Institution (after application of Collections thereto pursuant to Sections 2.2
and 2.3) all rights and obligations of such Terminating Financial Institution
hereunder shall be terminated and such Terminating Financial Institution shall
no longer be a "Financial Institution" hereunder; provided, however, that the
provisions of Article X shall continue in effect for its benefit with respect to
Receivable Interests held by such Terminating Financial Institution prior to its
termination as a Financial Institution.
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ARTICLE XIV
MISCELLANEOUS
Section 14.1 Waivers and Amendments. (a) No failure or delay
on the part of the Agent or any Purchaser in exercising any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any other
further exercise thereof or the exercise of any other power, right or remedy.
The rights and remedies herein provided shall be cumulative and nonexclusive of
any rights or remedies provided by law. Any waiver of this Agreement shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing in accordance with the
provisions of this Section 14.1(b). Falcon, Seller and the Agent, at the
direction of the Required Financial Institutions, may enter into written
modifications or waivers of any provisions of this Agreement, provided, however,
that no such modification or waiver shall:
(i) without the consent of each affected Purchaser, (A) extend
the Liquidity Termination Date or the date of any payment or deposit of
Collections by Seller or the Servicer, (B) reduce the rate or extend
the time of payment of Yield or any CP Costs (or any component of Yield
or CP Costs), (C) reduce any fee payable to the Agent for the benefit
of the Purchasers, (D) except pursuant to Article XII hereof, change
the amount of the Capital of any Purchaser, any Financial Institution's
Pro Rata Share (except pursuant to Sections 13.1 or 13.5) or any
Financial Institution's Commitment, (E) amend, modify or waive any
provision of the definition of Required Financial Institutions or this
Section 14.1(b), (F) consent to or permit the assignment or transfer by
Seller of any of its rights and obligations under this Agreement, (G)
change the definition of "Eligible Receivable," "Loss Reserve,"
"Dilution Reserve," "Yield and Servicer Reserve," "Delinquency Ratio,"
"Default Ratio," "Dilution Ratio" or "Concentration Limit" or (H) amend
or modify any defined term (or any defined term used directly or
indirectly in such defined term) used in clauses (A) through (G) above
in a manner that would circumvent the intention of the restrictions set
forth in such clauses; or
(ii) without the written consent of the then Agent, amend,
modify or waive any provision of this Agreement if the effect thereof
is to affect the rights or duties of such Agent.
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Falcon, the Agent may amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and Falcon may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII,
Section 14.13 or any other provision of this Agreement without the consent of
Seller, provided that such amendment has no negative impact upon Seller. Any
modification or waiver made in accordance with this Section 14.1 shall apply to
each of the Purchasers equally and shall be binding upon Seller, the Purchasers
and the Agent.
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Section 14.2 Notices. Except as provided in this Section 14.2,
all communications and notices provided for hereunder shall be in writing
(including bank wire, telecopy or electronic facsimile transmission or similar
writing) and shall be given to the other parties hereto at their respective
addresses or telecopy numbers set forth on the signature pages hereof or at such
other address or telecopy number as such Person may hereafter specify for the
purpose of notice to each of the other parties hereto. Each such notice or other
communication shall be effective if given by telecopy, upon the receipt thereof,
if given by mail, three (3) Business Days after the time such communication is
deposited in the mail with first class postage prepaid or if given by any other
means, when received at the address specified in this Section 14.2. Seller
hereby authorizes the Agent to effect purchases and Tranche Period and Bank Rate
selections based on telephonic notices made by any Person whom the Agent in good
faith believes to be acting on behalf of Seller. Seller agrees to deliver
promptly to the Agent a written confirmation of each telephonic notice signed by
an authorized officer of Seller; provided, however, the absence of such
confirmation shall not affect the validity of such notice. If the written
confirmation differs from the action taken by the Agent, the records of the
Agent shall govern absent manifest error.
Section 14.3 Ratable Payments. If any Purchaser, whether by
setoff or otherwise, has payment made to it with respect to any portion of the
Aggregate Unpaids owing to such Purchaser (other than payments received pursuant
to Section 10.2 or 10.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 14.4 Protection of Ownership Interests of the
Purchasers. (a) Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may request, to
perfect, protect or more fully evidence the Receivable Interests, or to enable
the Agent or the Purchasers to exercise and enforce their rights and remedies
hereunder. At any time after the occurrence of an Amortization Event, the Agent
may, or the Agent may direct Seller or the Servicer to, notify the Obligors of
Receivables, at Seller's expense, of the ownership or security interests of the
Purchasers under this Agreement and may also direct that payments of all amounts
due or that become due under any or all Receivables be made directly to the
Agent or its designee. Seller or the Servicer (as applicable) shall, at any
Purchaser's request, withhold the identity of such Purchaser in any such
notification.
(b) If any Seller Party fails to perform any of its
obligations hereunder, the Agent or any Purchaser may (but shall not be required
to) perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes
the Agent at any time and from time to time in the sole discretion of the Agent,
and appoints the Agent as its attorney-in-fact, to act on behalf of such Seller
Party (i) to execute on
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behalf of Seller as debtor and to file financing statements necessary or
desirable in the Agent's sole discretion to perfect and to maintain the
perfection and priority of the interest of the Purchasers in the Receivables and
(ii) to file a carbon, photographic or other reproduction of this Agreement or
any financing statement with respect to the Receivables as a financing statement
in such offices as the Agent in its sole discretion deems necessary or desirable
to perfect and to maintain the perfection and priority of the interests of the
Purchasers in the Receivables. This appointment is coupled with an interest and
is irrevocable.
Section 14.5 Confidentiality. (a) Each Seller Party and each
Purchaser shall maintain and shall cause each of its employees and officers to
maintain the confidentiality of this Agreement and the other confidential or
proprietary information with respect to the Agent and Falcon and their
respective businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
such Seller Party and such Purchaser and its officers and employees may disclose
such information to such Seller Party's and such Purchaser's external
accountants, attorneys, and, except with respect to the terms of the Fee Letter,
financial advisors, and in any case as required by any applicable law
(including, without limitation, applicable securities laws) or order of any
judicial or administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each
Seller Party hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Financial Institutions or Falcon by each
other, (ii) by the Agent or the Purchasers to any prospective or actual assignee
or participant of any of them and (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to Falcon or any entity organized for the purpose of purchasing, or
making loans secured by, financial assets for which Bank One acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, provided, that such Person is
advised of the confidential nature of such information and agrees (to the extent
required under Regulation FD promulgated by the Securities and Exchange
Commission from time to time pursuant to the Securities Act of 1933) to maintain
the confidentiality thereof. In addition, the Purchasers and the Agent may
disclose any such nonpublic information pursuant to any law, rule, regulation,
direction, request or order of any judicial, administrative or regulatory
authority or proceedings (whether or not having the force or effect of law).
Section 14.6 Bankruptcy Petition. Seller, the Servicer, the
Agent and each Financial Institution hereby covenants and agrees that, prior to
the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of Falcon or any Unconditional Liquidity
Provider, it will not institute against, or join any other Person in instituting
against, Falcon or any such entity any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.
Section 14.7 Limitation of Liability. Except with respect to
any claim arising out of the willful misconduct or gross negligence of any party
hereto, no claim may be made by any other party or any other Person against such
first party or its respective Affiliates, directors,
41
officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in
connection therewith; and each party hereby waives, releases, and agrees not to
xxx upon any claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor; provided, however, that nothing in
this Section 14.7 shall limit in any way the indemnification obligations of the
Seller Parties set forth in Article X.
Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF ILLINOIS.
Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING
PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER
OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT
EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
42
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii) the indemnification and payment provisions of
Article X, and Sections 14.5 and 14.6 shall be continuing and shall survive any
termination of this Agreement.
Section 14.12 Counterparts; Severability; Section References.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same Agreement. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to "Article," "Section," "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits to,
this Agreement.
Section 14.13 Bank One Roles. Each of the Financial
Institutions acknowledges that Bank One acts, or may in the future act, (i) as
administrative agent for Falcon or any Financial Institution, (ii) as issuing
and paying agent for the Commercial Paper, (iii) to provide credit or liquidity
enhancement for the timely payment for the Commercial Paper and (iv) to provide
other services from time to time for Falcon or any Financial Institution
(collectively, the "Bank One Roles"). Without limiting the generality of this
Section 14.13, each Financial Institution hereby acknowledges and consents to
any and all Bank One Roles and agrees that in connection with any Bank One Role,
Bank One may take, or refrain from taking, any action that it, in its
discretion, deems appropriate, including, without limitation, in its role as
administrative agent for Falcon, and the giving of notice to the Agent of a
mandatory purchase pursuant to Section 13.1.
Section 14.14 Characterization.
(a) Except as specifically provided in this Agreement, each
sale of a Purchaser Interest hereunder is made without recourse to Seller;
provided, however, that (i) Seller shall be liable to each Purchaser and the
Agent for all representations, warranties, covenants and indemnities made by
Seller pursuant to the terms of this Agreement, and (ii) such sale does not
constitute and is not intended to result in an assumption by any Purchaser or
the Agent or any assignee thereof of any obligation of Seller, Transferor or any
Originator or any other Person arising in connection with the Receivables, the
Related Security, or the related Contracts, or any other obligations of Seller,
Transferor or any Originator.
(b) In addition to any ownership interest which the Agent may
from time to time acquire pursuant hereto, Seller hereby grants to the Agent for
the ratable benefit of the Purchasers a valid and perfected security interest in
all of Seller's right, title and interest in, to
43
and under all Receivables now existing or hereafter arising, the Collections,
each Lock-Box, each Collection Account, all Related Security, all other rights
and payments relating to such Receivables, the Receivables Sale Agreement and
the Transfer Agreement (including, without limitation, (a) all rights to
indemnification arising thereunder, and (b) all UCC financing statements filed
pursuant thereto), all proceeds of any thereof and all other assets in which the
Agent on behalf of the Purchasers has acquired, may hereafter acquire and/or
purports to have acquired an interest under this Agreement prior to all other
liens on and security interests therein to secure the prompt and complete
payment of the Aggregate Unpaids. The Agent and the Purchasers shall have, in
addition to the rights and remedies that they may have under this Agreement, all
other rights and remedies provided to a secured creditor under the UCC and other
applicable law, which rights and remedies shall be cumulative. The Seller hereby
authorizes the Agent, within the meaning of 9-509 of any applicable enactment of
the UCC, as secured party for the benefit of itself and of the Purchasers, to
file, without the signature of the debtor, the UCC financing statements
contemplated herein, under the Receivables Sale Agreement and under each
Transfer Agreement.
(c) In connection with Seller's transfer of its right, title
and interest in, to and under the Receivables Sale Agreement and the Transfer
Agreement, the Seller agrees that the Agent shall have the right to enforce the
Seller's rights and remedies under the Receivables Sale Agreement and
Transferor's rights under the Transfer Agreement, to receive all amounts payable
thereunder or in connection therewith, to consent to amendments, modifications
or waivers thereof, and to direct, instruct or request any action thereunder,
but in each case without any obligation on the part of the Agent or any
Purchaser or any of its or their respective Affiliates to perform any of the
obligations of the Seller or Transferor under the Receivables Sale Agreement or
the Transfer Agreement. To the extent that the Seller enforces the Seller's or
Transferor's rights and remedies under the Receivables Sale Agreement or the
Transfer Agreement, from and after the occurrence of an Amortization Event, and
during the continuance thereof, the Agent shall have the exclusive right to
direct such enforcement by the Seller.
[SIGNATURE PAGES FOLLOW]
44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date hereof.
IDEX RECEIVABLES CORPORATION,
as Buyer
By:
---------------------------------------------------
Xxxxx X. Xxxxxx
Vice President
Address: 000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: 000-000-0000
Fax 000-000-0000
With a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxx & Xxxxxxx
Sears Tower, Suite 5800
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: 000-000-0000
IDEX CORPORATION,
as Transferor
By:
---------------------------------------------------
Xxxxx X. Xxxxxx
Vice President - General Counsel and Secretary
Address: 000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: 000-000-0000
Fax 000-000-0000
With a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxx & Xxxxxxx
Sears Tower, Suite 5800
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: 000-000-0000
FALCON ASSET SECURITIZATION CORPORATION
By:
-----------------------------------------------------
Name: Xxx Xxxxxxxx
Title: Authorized Signatory
Address: c/o Bank One, NA (Main Office Chicago),
as Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
BANK ONE, NA (MAIN OFFICE CHICAGO),
as a Financial Institution and as
Agent
By:
----------------------------------------------------
Name: Xxx Xxxxxxxx
Title: Authorized Signatory
Address: Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0596, 1-21
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"Accrual Period" means each calendar month, provided that the
initial Accrual Period hereunder means the period from (and including) the date
of the initial purchase hereunder to (and including) the last day of the
calendar month thereafter.
"Acquisition Amount" means, on the date of any purchase from
Falcon of one or more Receivable Interests pursuant to Section 13.1, (a) with
respect to each Financial Institution (other than any Unconditional Liquidity
Provider), the lesser of (i) such Financial Institution's Pro Rata Share of the
sum of (A) the lesser of (1) the Adjusted Liquidity Price of each such
Receivable Interest and (2) the Capital of each such Receivable Interest and (B)
all accrued and unpaid CP Costs for each such Receivable Interest and (ii) such
Financial Institution's unused Commitment and (b) with respect to each
Unconditional Liquidity Provider, the lesser of (i) such Unconditional Liquidity
Provider's Pro Rata Share of the sum of (A) the Capital of each such Receivable
Interest and (B) all accrued and unpaid CP Costs for each such Receivable
Interest and (ii) such Unconditional Liquidity Provider's unused Commitment.
"Adjusted Funded Amount" means, in determining the Falcon
Transfer Price for any Receivable Interest, an amount equal to the sum of (a)
the Adjusted Liquidity Price of each such Receivable Interest and (b) an amount
equal to each Unconditional Liquidity Provider's Pro Rata Share of the
difference between (i) the Adjusted Liquidity Price of each such Receivable
Interest and (ii) the Capital of each such Receivable Interest.
"Adjusted Liquidity Price" means an amount equal to:
RI[(i) DC + (ii) [ NDR ]]
--------
1.04
where:
RI = the undivided percentage interest evidenced by
such Receivable Interest.
DC = the Deemed Collections.
NDR = the Outstanding Balance of all Receivables as to
which any payment, or part thereof, has not remained unpaid for 91 days or more
from the original due date for such payment.
Ex. A-1
Each of the foregoing shall be determined from the most recent Monthly Report
received from the Servicer.
"Adverse Claim" means a lien, security interest, financing
statement, charge or encumbrance, or other right or claim in, of or on any
Person's assets or properties in favor of any other Person.
"Affected Financial Institution" has the meaning specified in
Section 12.1(c).
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person or any Subsidiary of such Person. A
Person shall be deemed to control another Person if the controlling Person owns
10% or more of any class of voting securities of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of stock, by contract or otherwise.
"Agent" has the meaning set forth in the preamble to this
Agreement.
"Aggregate Capital" means, on any date of determination, the
aggregate amount of Capital of all Receivable Interests outstanding on such
date.
"Aggregate Reduction" has the meaning specified in Section
1.3.
"Aggregate Reserves" means, on any date of determination, the
sum of the Loss Reserve, the Dilution Reserve and the Yield and Servicer
Reserve.
"Aggregate Unpaids" means, at any time, an amount equal to the
sum of the Aggregate Capital and all other unpaid Obligations (whether due or
accrued) at such time.
"Agreement" means this Receivables Purchase Agreement, as it
may be amended or modified and in effect from time to time.
"Amortization Date" means the earliest to occur of (i) the day
on which any of the conditions precedent set forth in Section 6.2 are not
satisfied, (ii) the Business Day immediately prior to the occurrence of an
Amortization Event set forth in Section 9.1(d), (iii) the Business Day specified
in a written notice from the Agent following the occurrence of any other
Amortization Event and (iv) the date which is ten (10) Business Days after the
Agent's receipt of written notice from Seller that it wishes to terminate the
facility evidenced by this Agreement.
"Amortization Event" has the meaning specified in Article IX.
"Approved Unconditional Liquidity Provider" means an
Unconditional Liquidity Provider which has received approval from Standard &
Poor's Ratings Group and Xxxxx'x Investors Service, Inc. to be relieved from any
obligation to pay amounts as a Non-Defaulting Financial Institution pursuant to
Section 13.5 hereof.
Ex. A-2
"Assignment Agreement" has the meaning set forth in Section
12.1(b).
"Authorized Officer" means, with respect to any Person, its
president, corporate controller, treasurer or chief financial officer.
"Bank One" means Bank One, NA (Main Office Chicago) in its
individual capacity and its successors.
"Bank Rate" means, the LIBO Rate or the Base Rate, as
applicable, with respect to each Receivable Interest of the Financial
Institutions.
"Base Rate" means a rate per annum equal to the corporate base
rate, prime rate or base rate of interest, as applicable, announced by the Bank
One or Bank One Corporation from time to time, changing when and as such rate
changes.
"Broken Funding Costs" means for any Receivable Interest
which: (i) has its Capital reduced without compliance by Seller with the notice
requirements hereunder or (ii) does not become subject to an Aggregate Reduction
following the delivery of any Reduction Notice or (iii) is assigned under
Article XIII or terminated prior to the date on which it was originally
scheduled to end; an amount equal to the excess, if any, of (A) the CP Costs or
Yield (as applicable) that would have accrued during the remainder of the
Tranche Periods or the tranche periods for Commercial Paper determined by the
Agent to relate to such Receivable Interest (as applicable) subsequent to the
date of such reduction, assignment or termination (or in respect of clause (ii)
above, the date such Aggregate Reduction was designated to occur pursuant to the
Reduction Notice) of the Capital of such Receivable Interest if such reduction,
assignment or termination had not occurred or such Reduction Notice had not been
delivered, over (B) the sum of (x) to the extent all or a portion of such
Capital is allocated to another Receivable Interest, the amount of CP Costs or
Yield actually accrued during the remainder of such period on such Capital for
the new Receivable Interest, and (y) to the extent such Capital is not allocated
to another Receivable Interest, the income, if any, actually received during the
remainder of such period by the holder of such Receivable Interest from
investing the portion of such Capital not so allocated (and the Purchasers agree
to use reasonable efforts to maximize the proceeds of such investment). In the
event that the amount referred to in clause (B) exceeds the amount referred to
in clause (A), the relevant Purchaser or Purchasers agree to pay to Seller the
amount of such excess. All Broken Funding Costs shall be due and payable
hereunder upon demand.
"Business Day" means any day on which banks are not authorized
or required to close in New York, New York or Chicago, Illinois and The
Depository Trust Company of New York is open for business, and, if the
applicable Business Day relates to any computation or payment to be made with
respect to the LIBO Rate, any day on which dealings in dollar deposits are
carried on in the London interbank market.
"Capital" of any Receivable Interest means, at any time, (A)
the Purchase Price of such Receivable Interest, minus (B) the sum of the
aggregate amount of Collections and other payments received by the Agent which
in each case are applied to reduce such Capital in accordance with the terms and
conditions of this Agreement; provided that such Capital shall be
Ex. A-3
restored (in accordance with Section 2.5) in the amount of any Collections or
other payments so received and applied if at any time the distribution of such
Collections or payments are rescinded, returned or refunded for any reason.
"Change of Control" means (i) the acquisition by any Person,
or two or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 30% or more of the issued and outstanding
shares of Transferor's capital stock having the right to vote for the election
of directors of Transferor under ordinary circumstances, (ii) during any period
of twelve consecutive calendar months, individuals who at the beginning of such
period constituted Transferor's board of directors (together with any new
directors whose election by Transferor's board of directors or whose nomination
for election by Transferor's stockholders was approved by a vote of a majority
of the directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office, or (iii) the failure of Transferor to
maintain ownership of 100% of the outstanding shares of voting stock of the
Seller.
"Charged-Off Receivable" means a Receivable: (i) as to which
the Obligor thereof has taken any action, or suffered any event to occur, of the
type described in Section 9.1(d) (as if references to Seller Party therein refer
to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off Seller's books as uncollectible, (iv) which has been identified
by Seller as uncollectible or (v) as to which any payment, or part thereof,
remains unpaid for 91 days or more from the original due date for such payment.
"Collection Account" means each concentration account,
depositary account, lock-box account or similar account in which any Collections
are collected or deposited and which is listed on Exhibit IV.
"Collection Account Agreement" means an agreement
substantially in the form of Exhibit VI among the applicable Originator,
Transferor, Seller, the Agent and a Collection Bank.
"Collection Bank" means, at any time, any of the banks holding
one or more Collection Accounts.
"Collection Notice" means a notice, in substantially the form
of Annex A to Exhibit VI, from the Agent to a Collection Bank.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all yield, Finance Charges or other related amounts accruing
in respect thereof and all cash proceeds of Related Security with respect to
such Receivable.
"Commercial Paper" means promissory notes of Falcon issued by
Falcon in the commercial paper market.
Ex. A-4
"Commitment" means, for each Financial Institution, the
commitment of such Financial Institution to purchase Receivable Interests from
(i) Seller and (ii) Falcon, in either case in an amount not to exceed (a) in the
aggregate, the amount set forth opposite such Financial Institution's name on
Schedule A to this Agreement, as such amount may be modified in accordance with
the terms hereof (including, without limitation, any termination of Commitments
pursuant to Section 13.6 hereof) and (b) with respect to any individual purchase
hereunder, its Pro Rata Share of the Purchase Price therefor.
"Commitment Availability" means at any time the positive
difference (if any) between (a) an amount equal to the aggregate amount of the
Commitments minus an amount equal to 2% of such aggregate Commitments at such
time minus (b) the Aggregate Capital at such time.
"Concentration Limit" means, at any time, for any Obligor,
2.667% of the Outstanding Balance of all Eligible Receivables, or such other
amount (a "Special Concentration Limit") for such Obligor designated by the
Agent; provided, that in the case of an Obligor and any Affiliate of such
Obligor, the Concentration Limit shall be calculated as if such Obligor and such
Affiliate are one Obligor; and provided, further, that Falcon or the Required
Financial Institutions may, upon not less than three Business Days' notice to
Seller, cancel any Special Concentration Limit.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees, endorses,
contingently agrees to purchase or provide funds for the payment of, or
otherwise becomes or is contingently liable upon, the obligation or liability of
any other Person, or agrees to maintain the net worth or working capital or
other financial condition of any other Person, or otherwise assures any creditor
of such other Person against loss, including, without limitation, any comfort
letter, operating agreement, take-or-pay contract or application for a letter of
credit.
"Contract" means, with respect to any Receivable, any and all
instruments, agreements, invoices or other writings pursuant to which such
Receivable arises or which evidences such Receivable.
"CP Costs" means, for each day, the sum of (i) discount or
yield accrued on Pooled Commercial Paper on such day, plus (ii) any and all
accrued commissions in respect of placement agents and Commercial Paper dealers,
and issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (iii) other costs associated with funding small or
odd-lot amounts with respect to all receivable purchase facilities which are
funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income
net of expenses received on such day from investment of collections received
under all receivable purchase facilities funded substantially with Pooled
Commercial Paper, minus (v) any payment received on such day net of expenses in
respect of Broken Funding Costs related to the prepayment of any Receivable
Interest of Falcon pursuant to the terms of any receivable purchase facilities
funded substantially with Pooled Commercial Paper. In addition to the foregoing
costs, if Seller shall request any Incremental Purchase during any period of
time determined by the Agent in its sole discretion to result in incrementally
higher CP Costs
Ex. A-5
applicable to such Incremental Purchase, the Capital associated with any such
Incremental Purchase shall, during such period, be deemed to be funded by Falcon
in a special pool (which may include capital associated with other receivable
purchase facilities) for purposes of determining such additional CP Costs
applicable only to such special pool and charged each day during such period
against such Capital.
"Credit and Collection Policy" means Seller's credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in Exhibit VIII hereto, as modified from time
to time in accordance with this Agreement.
"Deemed Collections" means the aggregate of all amounts Seller
shall have been deemed to have received as a Collection of a Receivable. Seller
shall be deemed to have received a Collection of a Receivable if at any time (i)
the Outstanding Balance of any such Receivable is either (x) reduced as a result
of any defective or rejected goods or services, any discount or any adjustment
or otherwise by Seller (other than cash Collections on account of the
Receivables) or (y) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction) or (ii) any of the representations or
warranties in Article V are no longer true with respect to any Receivable.
"Default Fee" means with respect to any amount due and payable
by Seller (or required to be deposited by Servicer) in respect of any Aggregate
Unpaids, an amount equal to interest on any such unpaid Aggregate Unpaids at a
rate per annum equal to 2% above the Base Rate.
"Default Ratio" means, at any time, a percentage equal to (i)
the aggregate Outstanding Balance of all Receivables that were Charged-Off
Receivables at such time divided by (ii) the aggregate Outstanding Balance of
all Receivables at such time.
"Defaulting Financial Institution" has the meaning set forth
in Section 13.5.
"Delinquency Ratio" means, at any time, a percentage equal to
(i) the aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables at such time divided by (ii) the aggregate Outstanding Balance of
all Receivables at such time.
"Delinquent Receivable" means a Receivable, other than a
Charged-Off Receivable, as to which any payment, or part thereof, remains unpaid
for 61-90 days from the original due date for such payment.
"Dilution Horizon Ratio" means, as of the last day of any
calendar month, a percentage equal to (i) the aggregate Originator Sales during
the three (3) most recently ended calendar months divided by (ii) the aggregate
Outstanding Balance of all Eligible Receivables as of such date.
"Dilution Percentage" means, as of the last day of any
calendar month, a percentage equal to the greater of (i) 9.00% and (ii) the
following calculation:
Ex. A-6
[(2 x ED) + ((DS - ED) x DS / ED)] x DHR
where:
ED = the Expected Dilution Ratio at such time.
DS = the Dilution Spike Ratio at such time.
DHR = the Dilution Horizon Ratio at such time.
"Dilution Ratio" means, at any time, a percentage equal to (i)
the aggregate amount of Dilutions which occurred during the calendar month then
most recently ended, divided by (ii) the Originator Sales during the calendar
month ending two (2) calendar months prior to such calendar month.
"Dilution Reserve" means, on any date, an amount equal to the
Dilution Percentage multiplied by the Net Receivables Balance at such time.
"Dilutions" means, at any time, the aggregate amount of
reductions or cancellations described in clause (i) of the definition of "Deemed
Collections".
"Dilution Spike Ratio" means, as of the last day of any
calendar month, a percentage equal to the highest three-month rolling average
Dilution Ratio as of the last day of any of the twelve (12) months then most
recently ended.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a
resident of the United States or, if a corporation or other business
organization, is organized under the laws of the United States or any
political subdivision thereof and has its chief executive office in the
United States; (b) is not an Affiliate of any of the parties hereto;
and (c) is not a government or a governmental subdivision or agency,
(ii) the Obligor of which is not the Obligor of any
Charged-Off Receivables which in the aggregate constitute more than 25%
of all Receivables of such Obligor,
(iii) which is not a Charged-Off Receivable or a Delinquent
Receivable,
(iv) which (a) by its terms is due and payable within 30 days
of the original billing date therefor or within 60 days of the original
billing date therefor if the Outstanding Balance of such Receivable
when added to the aggregate Outstanding Balance of all other
Receivables due and payable within 60 days of the original billing date
therefor does not exceed 5% of the aggregate Outstanding Balance of all
Receivables and (b) has not had its payment terms extended,
Ex. A-7
(v) which is an "account" within the meaning of Section 9-102
of the UCC of all applicable jurisdictions,
(vi) which is denominated and payable only in United States
dollars in the United States,
(vii) which arises under a Contract in substantially the form
of one of the form contracts set forth on Exhibit IX hereto or
otherwise approved by the Agent in writing, which, together with such
Receivable, is in full force and effect and constitutes the legal,
valid and binding obligation of the related Obligor enforceable against
such Obligor in accordance with its terms subject to no offset,
counterclaim or other defense (other than potential discharge in
bankruptcy) (it being understood that only a portion of a Receivable
equal to the amount of such offset, counterclaim or defense shall be
deemed not to be an Eligible Receivable),
(viii) which arises under a Contract which (A) does not
require the Obligor under such Contract to consent to the transfer,
sale or assignment of the rights and duties of the applicable
Originator or any of its assignees under such Contract and (B) does not
contain a confidentiality provision that purports to restrict the
ability of any Purchaser to exercise its rights under this Agreement,
including, without limitation, its right to review the Contract,
(ix) which arises under a Contract that contains an obligation
to pay a specified sum of money, contingent only upon the sale of goods
or the provision of services by the applicable Originator,
(x) which does not contravene any law, rule or regulation
applicable thereto (including, without limitation, any law, rule and
regulation relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no part of the
Contract related thereto is in violation of any such law, rule or
regulation, except where such violation could not reasonably be
expected to have a Material Adverse Effect,
(xi) which satisfies all applicable requirements of the Credit
and Collection Policy,
(xii) which was generated in the ordinary course of the
applicable Originator's business by an Originator that is not an
Ineligible Originator,
(xiii) which arises solely from the sale of goods or the
provision of services to the related Obligor by the applicable
Originator, and not by any other Person (in whole or in part),
(xiv) as to which the Agent has not notified Seller that the
Agent has determined that such Receivable or class of Receivables is
not acceptable as an Eligible Receivable,
Ex. A-8
(xv) which is not subject to any right of rescission, set-off,
counterclaim, any other defense (including defenses arising out of
violations of usury laws) of the applicable Obligor against the
applicable Originator or any other Adverse Claim, and the Obligor
thereon holds no right as against the applicable Originator to cause
such Originator to repurchase the goods or merchandise the sale of
which shall have given rise to such Receivable (except with respect to
sale discounts effected pursuant to the Contract, or defective goods
returned in accordance with the terms of the Contract),
(xvi) as to which the applicable Originator has satisfied and
fully performed all obligations on its part with respect to such
Receivable required to be fulfilled by it, and no further action is
required to be performed by any Person with respect thereto other than
payment thereon by the applicable Obligor, and
(xvii) all right, title and interest to and in which has been
validly transferred (a) by the applicable Originator directly to
Transferor under and in accordance with the Transfer Agreement, and (b)
by Transferor directly to Seller under and in accordance with the
Receivables Sale Agreement, and Seller has good and marketable title
thereto free and clear of any Adverse Claim.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Expected Dilution Ratio" means, as of any date, the average
of the Dilution Ratios in respect of the twelve (12) immediately preceding
months.
"Facility Termination Date" means the earliest of (i) the
Liquidity Termination Date, (ii) December 20, 2006 and (iii) the Amortization
Date.
"Falcon" has the meaning set forth in the preamble to this
Agreement.
"Falcon Residual" means the sum of the Falcon Transfer Price
Reductions.
"Falcon Transfer Price" means, with respect to the assignment
by Falcon of one or more Receivable Interests to the Agent for the benefit of
one or more of the Financial Institutions pursuant to Section 13.1, the sum of
(i) the lesser of (a) the Capital of each such Receivable Interest and (b) the
Adjusted Funded Amount of each such Receivable Interest and (ii) all accrued and
unpaid CP Costs for each such Receivable Interest.
"Falcon Transfer Price Deficit" has the meaning set forth in
Section 13.5.
"Falcon Transfer Price Reduction" means in connection with the
assignment of a Receivable Interest by Falcon to the Agent for the benefit of
the Financial Institutions, the positive difference (if any) between (i) the
Capital of such Receivable Interest and (ii) the Adjusted Funded Amount for such
Receivable Interest.
"Federal Bankruptcy Code" means Title 11 of the United States
Code entitled "Bankruptcy," as amended and any successor statute thereto.
Ex. A-9
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate per annum for each day during such period equal to (a)
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.
"Fee Letter" means that certain letter agreement dated as of
the date hereof among Seller, Falcon and the Agent, as it may be amended or
modified and in effect from time to time.
"Finance Charges" means, with respect to a Contract, any
finance, interest, late payment charges or similar charges owing by an Obligor
pursuant to such Contract.
"Financial Institutions" has the meaning set forth in the
preamble in this Agreement.
"Funding Agreement" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of Falcon.
"Funding Source" means (i) any Financial Institution or (ii)
any insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to Falcon in connection
with this Agreement (either alone or together with other similar facilities).
"GAAP" means generally accepted accounting principles in
effect in the United States of America as of the date of this Agreement.
"IDEX" has the meaning set forth in the preamble to this
Agreement.
"IDEX Credit Agreement" means that certain Credit Agreement,
dated as of June 8, 2001, among IDEX, Bank of America, N.A., as agent and
issuing bank, and the other financial institutions party thereto, without giving
effect to any amendments or other modifications thereto from and after the date
hereof.
"IDEX Entity" has the meaning set forth in Section 7.1(i).
"Incremental Purchase" means a purchase of one or more
Receivable Interests which increases the total outstanding Aggregate Capital
hereunder.
"Indebtedness" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person,
Ex. A-10
(iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
"Independent Director" shall mean a member of the Board of
Directors of Seller who satisfies the requirements for an "Independent Director"
as set forth in the Seller's Certificate of Incorporation.
"Ineligible Originator" means an Originator with respect to
which any of the following shall occur, from and after the date of such
occurrence:
(i) Such Originator shall fail to pay any Indebtedness when
due (taking into account any applicable period of grace) in excess of
$2,500,000 or default in the performance of any term, provision or
condition contained in any agreement under which such Indebtedness was
created or is governed, the effect of which is to cause, or to permit
the holder or holders of such Indebtedness to cause, such Indebtedness
to become due prior to its stated maturity, or any such Indebtedness of
such Originator shall be declared to be due and payable or required to
be prepaid (other than by a regularly scheduled payment) prior to the
date of maturity thereof,
(ii) (a) Such Originator shall generally fail to pay its debts
as such debts become due or admit in writing its inability to pay its
debts generally or make a general assignment for the benefit of
creditors; or (b) any proceeding shall be instituted by or against such
Originator seeking to adjudicate it bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of such Originator or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or
any substantial part of its property or (c) such Originator shall take
any corporate action to authorize any of the actions set forth in
clauses (a) or (b) above,
(iii) Transferor shall fail to maintain ownership of at least
70% of the outstanding shares of voting stock of such Originator,
(iv) One or more final judgments for the payment of money in
an amount in excess of $2,500,000, individually or in the aggregate,
shall be entered against such Originator on claims not covered by
insurance or as to which the insurance carrier has denied its
responsibility, and such judgment shall continue unsatisfied and in
effect for fifteen (15) consecutive days without stay of execution, or
(v) (a) The "Termination Date" under and as defined in the
Transfer Agreement shall occur with respect to such Originator, (b)
such Originator shall cease to perform any of its obligations and
undertakings under or pursuant to the Transfer Agreement or (c) such
Originator shall for any reason cease to transfer, or cease to have
Ex. A-11
the legal capacity to transfer, or otherwise be incapable of
transferring Receivables to Transferor under the Transfer Agreement.
"LIBO Rate" means the rate per annum equal to the sum of (i)
(a) the applicable British Bankers' Association Interest Settlement Rate for
deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m.
(London time) two Business Days prior to the first day of the relevant Tranche
Period, and having a maturity equal to such Tranche Period, provided that, (x)
if Reuters Screen FRBD is not available to the Agent for any reason, the
applicable LIBO Rate for the relevant Tranche Period shall instead be the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars as reported by any other generally recognized financial information
service as of 11:00 a.m. (London time) two Business Days prior to the first day
of such Tranche Period, and having a maturity equal to such Tranche Period, and
(y) if no such British Bankers' Association Interest Settlement Rate is
available to the Agent, the applicable LIBO Rate for the relevant Tranche Period
shall instead be the rate determined by the Agent to be the rate at which Bank
One offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Tranche Period, in the approximate amount to
be funded at the LIBO Rate and having a maturity equal to such Tranche Period,
divided by (b) one minus the maximum aggregate reserve requirement (including
all basic, supplemental, marginal or other reserves) which is imposed against
the Agent in respect of Eurocurrency liabilities, as defined in Regulation D of
the Board of Governors of the Federal Reserve System as in effect from time to
time (expressed as a decimal), applicable to such Tranche Period plus (ii) the
Applicable Rate (under and as defined in the IDEX Credit Agreement) per annum.
The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.
"Liquidity Termination Date" means December 19, 2002.
"Lock-Box" means each locked postal box with respect to which
a bank who has executed a Collection Account Agreement has been granted
exclusive access for the purpose of retrieving and processing payments made on
the Receivables and which is listed on Exhibit IV.
"Loss Horizon Ratio" means, as of the last day of any calendar
month, a percentage equal to (i) the aggregate Originator Sales during the
four-month period ended on such date, divided by (ii) the aggregate Outstanding
Balance of all Eligible Receivables as of such date.
"Loss Percentage" means, at any time, the greater of (i) 8.00%
and (ii) (A) two (2), times (B) the Loss Ratio, times (C) the Loss Horizon Ratio
(in each case as determined as of the last day of the calendar month then most
recently ended).
"Loss Ratio" means, as of the last day of any calendar month,
a percentage equal to the highest three-month rolling average Default Ratio as
of the last day of any of the twelve (12) months then most recently ended.
"Loss Reserve" means, on any date, an amount equal to the Loss
Percentage multiplied by the Net Receivables Balance at such time.
Ex. A-12
"Material Adverse Effect" means a material adverse effect on
(i) the financial condition or operations of any Seller Party and its
Subsidiaries, taken as a whole, (ii) the ability of any Seller Party to perform
its obligations under this Agreement, (iii) the legality, validity or
enforceability of this Agreement or any other Transaction Document, (iv) any
Purchaser's interest in the Receivables generally or in any significant portion
of the Receivables, the Related Security or the Collections with respect
thereto, or (v) the collectibility of the Receivables generally or of any
material portion of the Receivables.
"Monthly Report" means a report, in substantially the form of
Exhibit X hereto (appropriately completed), furnished by the Servicer to the
Agent pursuant to Section 8.5.
"Net Receivables Balance" means, at any time, the aggregate
Outstanding Balance of all Eligible Receivables at such time reduced by the
aggregate amount by which the Outstanding Balance of all Eligible Receivables of
each Obligor and its Affiliates exceeds the Concentration Limit for such
Obligor.
"Non-Defaulting Financial Institution" has the meaning set
forth in Section 13.5.
"Non-Renewing Financial Institution" has the meaning set forth
in Section 13.6(a).
"Obligations" shall have the meaning set forth in Section 2.1.
"Obligor" means a Person obligated to make payments pursuant
to a Contract.
"Originator" means each Subsidiary of IDEX listed on Schedule
C to this Agreement that is a party to the Transfer Agreement as of the date
hereof; provided that any additional Subsidiary of IDEX (but no more than two
such Subsidiaries in any calendar year) may, with the written approval of the
Agent, become an Originator pursuant to Section 7.3 of the Transfer Agreement by
executing a Joinder Agreement substantially in the form of Exhibit VI to the
Transfer Agreement and delivering to the Agent such other agreements, documents,
lien search reports, financing statements, opinions and certificates requested
by the Agent; provided, further, that any Originator (but no more than two
Originators in any calendar year) may, with the written approval of the Agent,
cease to be an Originator by executing a Termination Agreement substantially in
the form of Exhibit VII to the Transfer Agreement; provided, further, that the
Servicer shall from time to time update Schedule C as provided in the applicable
Joinder Agreement or Termination Agreement to reflect the addition or
termination of any Originator.
"Originator Sales" means, in respect of any period, aggregate
sales by the Originators that shall have given rise to Receivables in accordance
with generally accepted accounting principles.
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal balance thereof.
"Participant" has the meaning set forth in Section 12.2.
Ex. A-13
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Pooled Commercial Paper" means Commercial Paper notes of
Falcon subject to any particular pooling arrangement by Falcon, but excluding
Commercial Paper issued by Falcon for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by Falcon.
"Potential Amortization Event" means an event which, with the
passage of time or the giving of notice, or both, would constitute an
Amortization Event.
"Proposed Reduction Date" has the meaning set forth in Section
1.3.
"Pro Rata Share" means, for each Financial Institution, a
percentage equal to (i) the Commitment of such Financial Institution, divided by
(ii) the aggregate amount of all Commitments of all Financial Institutions
hereunder, adjusted as necessary to give effect to the application of the terms
of Sections 13.5 or 13.6.
"Purchase Limit" means $50,000,000, as such amount may be
modified from time to time in accordance with the terms of this Agreement.
"Purchase Notice" has the meaning set forth in Section 1.2.
"Purchase Price" means, with respect to any Incremental
Purchase of a Receivable Interest, the amount paid to Seller for such Receivable
Interest which shall not exceed the least of the amount requested by Seller in
the applicable Purchase Notice, the unused portion of the Purchase Limit on the
applicable purchase date and the excess, if any, of the Net Receivables Balance
(less the Aggregate Reserves) on the applicable purchase date over the aggregate
outstanding amount of Aggregate Capital determined as of the date of the most
recent Monthly Report, taking into account such proposed Incremental Purchase.
"Purchasers" means Falcon and each Financial Institution.
"Purchasing Financial Institution" has the meaning set forth
in Section 12.1(b).
"Receivable" means all indebtedness and other obligations owed
by an Obligor that is either a resident of the United States or a business
organization organized under the laws of the United States or any political
subdivision thereof to Seller, Transferor or the applicable Originator (at the
time it arises, and before giving effect to any transfer or conveyance under the
Transfer Agreement, the Receivables Sale Agreement or hereunder) or in which
Seller, Transferor or such Originator has a security interest or other interest,
including, without limitation, any indebtedness, obligation or interest
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale of goods or the rendering of services by
such Originator and further includes, without limitation, the obligation to pay
any Finance Charges with respect thereto. Indebtedness and other rights and
obligations arising from any one transaction, including, without limitation,
indebtedness and other rights and obligations
Ex. A-14
represented by an individual invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction; provided, that any indebtedness,
rights or obligations referred to in the immediately preceding sentence shall be
a Receivable regardless of whether the account debtor, Seller, Transferor or the
applicable Originator treats such indebtedness, rights or obligations as a
separate payment obligation.
"Receivable Interest" means, at any time, an undivided
percentage ownership interest (computed as set forth below) associated with a
designated amount of Capital, selected pursuant to the terms and conditions
hereof in (i) each Receivable arising prior to the time of the most recent
computation or recomputation of such undivided interest, (ii) all Related
Security with respect to each such Receivable, and (iii) all Collections with
respect to, and other proceeds of, each such Receivable. Each such undivided
percentage interest shall equal:
C
----------
NBR - AR
where:
C = the Capital of such Receivable Interest.
AR = the Aggregate Reserves.
NRB = the Net Receivables Balance.
Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Receivable
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Receivable Interest as computed (or deemed recomputed) as of the close of the
Business Day immediately preceding the Amortization Date shall remain constant
at all times thereafter.
"Receivables Sale Agreement" means that certain Receivables
Sale Agreement, dated as of December 20, 2001, between Transferor and Seller, as
the same may be amended, restated or otherwise modified from time to time.
"Records" means, with respect to any Receivable, all Contracts
and other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"Reduction Notice" has the meaning set forth in Section 1.3.
"Reduction Percentage" means, for any Receivable Interest
acquired by the Financial Institutions from Falcon for less than the Capital of
such Receivable Interest, a
Ex. A-15
percentage equal to a fraction the numerator of which is the Falcon Transfer
Price Reduction for such Receivable Interest and the denominator of which is the
Capital of such Receivable Interest.
"Regulatory Change" has the meaning set forth in Section
10.2(a).
"Reinvestment" has the meaning set forth in Section 2.2.
"Related Security" means, with respect to any Receivable:
(i) all of Seller's interest in the inventory and goods
(including returned or repossessed inventory or goods), if any, the
sale, financing or lease of which by the applicable Originator gave
rise to such Receivable, and all insurance contracts with respect
thereto,
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure payment
of such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise, together with all financing statements and
security agreements describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to
the Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of Seller's right, title and interest in, to and
under the Transfer Agreement and the Receivables Sale Agreement in
respect of such Receivable, and
(vii) all proceeds of any of the foregoing.
"Required Financial Institutions" means, at any time,
Financial Institutions with Commitments in excess of 66-2/3% of the Purchase
Limit.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of Seller now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock or in any junior class of stock of
Seller, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of Seller now or hereafter outstanding, (iii) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission
Ex. A-16
with respect to the Subordinated Loans (as defined in the Receivables Sale
Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of capital stock of Seller now or hereafter
outstanding, and (v) any payment of management fees by Seller (except for
reasonable management fees to Transferor or its Affiliates in reimbursement of
actual management services performed).
"Seller" has the meaning set forth in the preamble to this
Agreement.
"Seller Parties" has the meaning set forth in the preamble to
this Agreement.
"Servicer" means at any time the Person (which may be the
Agent) then authorized pursuant to Article VIII to service, administer and
collect Receivables.
"Servicing Fee" has the meaning set forth in Section 8.6.
"Settlement Date" means (A) the 17th day of each month (or if
such day is not a Business Day, the next succeeding Business Day), and (B) the
last day of the relevant Tranche Period in respect of each Receivable Interest
of the Financial Institutions.
"Settlement Period" means (A) in respect of each Receivable
Interest of Falcon, the immediately preceding Accrual Period, and (B) in respect
of each Receivable Interest of the Financial Institutions, the entire Tranche
Period of such Receivable Interest.
"Subsidiary" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of which shall at
the time be owned or controlled, directly or indirectly, by such Person or by
one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, association, limited liability company,
joint venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of Seller.
"Termination Date" has the meaning set forth in Section 2.2.
"Termination Percentage" has the meaning set forth in Section
2.2.
"Terminating Financial Institution" has the meaning set forth
in Section 13.6(a).
"Terminating Tranche" has the meaning set forth in Section
4.3(b).
"Tranche Period" means, with respect to any Receivable
Interest held by a Financial Institution:
(a) if Yield for such Receivable Interest is calculated on the
basis of the LIBO Rate, a period of one, two or three months, or such other
period as may be mutually agreeable to the Agent and Seller, commencing on a
Business Day selected by Seller or the Agent pursuant to
Ex. A-17
this Agreement. Such Tranche Period shall end on the day in the applicable
succeeding calendar month which corresponds numerically to the beginning day of
such Tranche Period, provided, however, that if there is no such numerically
corresponding day in such succeeding month, such Tranche Period shall end on the
last Business Day of such succeeding month; or
(b) if Yield for such Receivable Interest is calculated on the
basis of the Base Rate, a period commencing on a Business Day selected by Seller
and agreed to by the Agent, provided no such period shall exceed one month.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Receivable Interest which commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortization Date. The duration of each Tranche Period
which commences after the Amortization Date shall be of such duration as
selected by the Agent.
"Transaction Documents" means, collectively, this Agreement,
each Purchase Notice, the Receivables Sale Agreement, the Transfer Agreement,
each Collection Account Agreement, the Fee Letter, the Subordinated Note (as
defined in the Receivables Sale Agreement) and all other instruments, documents
and agreements executed and delivered in connection herewith.
"Transfer Agreement" means that certain Receivables Purchase
and Sale Agreement, dated as of December 20, 2001, between each Originator and
IDEX, as purchaser, as the same may be amended, restated or otherwise modified
from time to time.
"Transferor" means IDEX, in its capacity as purchaser under
the Transfer Agreement and as seller under the Receivables Sale Agreement.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
"Unconditional Liquidity Provider" means a Financial
Institution that is identified by the Agent or by Bank One as an entity which
will not under any circumstance receive any Falcon Transfer Price Reduction
hereunder.
"Yield" means for each respective Tranche Period relating to
Receivable Interests of the Financial Institutions, an amount equal to the
product of the applicable Bank Rate for each Receivable Interest multiplied by
the Capital of such Receivable Interest for each day elapsed during such Tranche
Period, annualized on a 360 day basis.
"Yield and Servicer Reserve" means, on any date, an amount
equal to 2% multiplied by the Net Receivables Balance as of the close of
business of the Servicer on such date.
Ex. A-18
All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC in the
State of Illinois, and not specifically defined herein, are used herein as
defined in such Article 9.
Ex. A-19
TABLE OF CONTENTS
(CONTINUED)
Page
ARTICLE I
PURCHASE ARRANGEMENTS................................................1
Section 1.1 Purchase Facility.........................................1
Section 1.2 Increases.................................................2
Section 1.3 Decreases.................................................2
Section 1.4 Payment Requirements......................................2
ARTICLE II
PAYMENTS AND COLLECTIONS.............................................3
Section 2.1 Payments..................................................3
Section 2.2 Collections Prior to Amortization.........................3
Section 2.3 Collections Following Amortization........................4
Section 2.4 Application of Collections................................4
Section 2.5 Payment Rescission........................................5
Section 2.6 Maximum Receivable Interests..............................5
Section 2.7 Clean Up Call.............................................5
ARTICLE III
CP FUNDING...........................................................5
Section 3.1 CP Costs..................................................5
Section 3.2 CP Costs Payments.........................................6
Section 3.3 Calculation of CP Costs...................................6
ARTICLE IV
FINANCIAL INSTITUTION FUNDING........................................6
Section 4.1 Financial Institution Funding.............................6
Section 4.2 Yield Payments............................................6
Section 4.3 Selection and Continuation of Tranche Periods.............6
Section 4.4 Financial Institution Bank Rates..........................7
Section 4.5 Suspension of the LIBO Rate...............................7
ARTICLE V
REPRESENTATIONS AND WARRANTIES.......................................8
Section 5.1 Representations and Warranties of the Seller Parties......8
Section 5.2 Financial Institution Representations and Warranties.....12
ARTICLE VI
CONDITIONS OF PURCHASES.............................................12
Page xx
TABLE OF CONTENTS
(CONTINUED)
Section 6.1 Conditions Precedent to Initial Incremental Purchase......12
Section 6.2 Conditions Precedent to All Purchases and Reinvestments...12
ARTICLE VII
COVENANTS............................................................13
Section 7.1 Affirmative Covenants of the Seller Parties...............13
Section 7.2 Negative Covenants of the Seller Parties..................21
ARTICLE VIII
ADMINISTRATION AND COLLECTION........................................23
Section 8.1 Designation of Servicer...................................23
Section 8.2 Duties of Servicer........................................24
Section 8.3 Collection Notices........................................25
Section 8.4 Responsibilities of Seller................................26
Section 8.5 Reports...................................................26
Section 8.6 Servicing Fees............................................26
ARTICLE IX
AMORTIZATION EVENTS..................................................26
Section 9.1 Amortization Events.......................................26
Section 9.2 Remedies..................................................28
ARTICLE X
INDEMNIFICATION......................................................28
Section 10.1 Indemnities by the Seller Parties.........................28
Section 10.2 Increased Cost and Reduced Return.........................31
Section 10.3 Other Costs and Expenses..................................32
ARTICLE XI
THE AGENT............................................................32
Section 11.1 Authorization and Action..................................32
Section 11.2 Delegation of Duties......................................33
Section 11.3 Exculpatory Provisions....................................33
Section 11.4 Reliance by Agent.........................................33
Section 11.5 Non-Reliance on Agent and Other Purchasers................34
Section 11.6 Reimbursement and Indemnification.........................34
Section 11.7 Agent in its Individual Capacity..........................34
Section 11.8 Successor Agent...........................................34
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS..........................................35
Section 12.1 Assignments...............................................35
Section 12.2 Participations............................................36
Ex. A-xxi
ARTICLE XIII
LIQUIDITY FACILITY...................................................36
Section 13.1 Transfer to Financial Institutions........................36
Section 13.2 Transfer Price Reduction Yield............................36
Section 13.3 Payments to Falcon........................................37
Section 13.4 Limitation on Commitment to Purchase from Falcon..........37
Section 13.5 Defaulting Financial Institutions.........................37
Section 13.6 Terminating Financial Institutions........................38
ARTICLE XIV
MISCELLANEOUS........................................................39
Section 14.1 Waivers and Amendments...................................39
Section 14.2 Notices..................................................40
Section 14.3 Ratable Payments.........................................40
Section 14.4 Protection of Ownership Interests of the Purchasers......40
Section 14.5 Confidentiality..........................................41
Section 14.6 Bankruptcy Petition......................................41
Section 14.7 Limitation of Liability..................................41
Section 14.8 CHOICE OF LAW............................................42
Section 14.9 CONSENT TO JURISDICTION..................................42
Section 14.10 WAIVER OF JURY TRIAL.....................................42
Section 14.11 Integration; Binding Effect; Survival of Terms...........42
Section 14.12 Counterparts; Severability; Section References...........43
Section 14.13 Bank One Roles...........................................43
Section 14.14 Characterization.........................................43
Ex. A-xxii
Exhibits and Schedules
Exhibit I Definitions
Exhibit II Form of Purchase Notice
Exhibit III Places of Business of the Seller Parties; Locations
of Records; Federal Employer Identification Number(s)
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Form of Collection Account Agreement
Exhibit VII Form of Assignment Agreement
Exhibit VIII Credit and Collection Policy
Exhibit IX Form of Contract(s)
Exhibit X Form of Monthly Report
Schedule A Commitments
Schedule B Closing Documents
Schedule C Originators
Ex. A-xxiii