[Execution Copy]
=================================================================
U.S. $150,000,000
RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of October 6, 1995
among
SNAP-ON CREDIT CORPORATION
as Seller
and
CORPORATE ASSET FUNDING COMPANY, INC.
as Investor
and
CITICORP NORTH AMERICA, INC.
Individually and as Agent
=================================================================
TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . . . . . . 2
SECTION 1.02. Other Terms . . . . . . . . . . . . . . . . . . . . . 22
SECTION 1.03. Computation of Time Periods . . . . . . . . . . . . . 22
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Receivable Facility . . . . . . . . . . . . . . . . . 22
SECTION 2.02. Making Purchases from the Seller . . . . . . . . . . . 23
SECTION 2.03. Termination or Reduction of the
Purchase Limit . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.04. Eligible Asset . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.05. Non-Liquidation Settlement Procedures . . . . . . . . 24
SECTION 2.06. Liquidation Settlement Procedures . . . . . . . . . . 25
SECTION 2.07. General Settlement Procedures . . . . . . . . . . . . 26
SECTION 2.08. Payments and Computations, Etc. . . . . . . . . . . . 26
SECTION 2.09. Dividing or Combining of Eligible Assets . . . . . . . 27
SECTION 2.10. Yield and Fees . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.11. Yield Protection . . . . . . . . . . . . . . . . . . . 29
SECTION 2.12. Increased Capital . . . . . . . . . . . . . . . . . . 30
SECTION 2.13. Taxes and Other Taxes . . . . . . . . . . . . . . . . 31
SECTION 2.14. Sharing of Payments, Etc. . . . . . . . . . . . . . . 32
SECTION 2.15. Agreement to Assign . . . . . . . . . . . . . . . . . 33
ARTICLE III CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase . . . . . . . 33
SECTION 3.02. Conditions Precedent to All Purchases
and Reinvestments . . . . . . . . . . . . . . . . . . 35
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties
of the Seller . . . . . . . . . . . . . . . . . . . . 37
ARTICLE V GENERAL COVENANTS OF THE SELLER
SECTION 5.01. Affirmative Covenants of the Seller . . . . . . . . . 40
SECTION 5.02. Reporting Requirements of the Seller . . . . . . . . . 43
SECTION 5.03. Negative Covenants of the Seller . . . . . . . . . . . 45
ARTICLE VI ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent . . . . . . . . . . . 47
SECTION 6.02. Duties of the Collection Agent . . . . . . . . . . . . 47
SECTION 6.03. Rights of the Agent . . . . . . . . . . . . . . . . . 49
SECTION 6.04. Responsibilities of the Seller . . . . . . . . . . . . 49
SECTION 6.05. Possession by the Seller as Trustee;
Further Action Evidencing Purchases . . . . . . . . . 50
SECTION 6.06. Delivery of Contracts to Agent . . . . . . . . . . . . 51
SECTION 6.07. Application of Collections . . . . . . . . . . . . . . 51
ARTICLE VII EVENTS OF INVESTMENT INELIGIBILITY
SECTION 7.01. Events of Investment Ineligibility . . . . . . . . . . 51
ARTICLE VIII THE AGENT
SECTION 8.01. Authorization and Action . . . . . . . . . . . . . . . 54
SECTION 8.02. UCC Filings . . . . . . . . . . . . . . . . . . . . . 55
SECTION 8.03. Agent's Reliance. Etc. . . . . . . . . . . . . . . . . 55
SECTION 8.04. Agent and Affiliates . . . . . . . . . . . . . . . . . 56
SECTION 8.05. Purchase Decision . . . . . . . . . . . . . . . . . . 56
SECTION 8.06. Indemnification . . . . . . . . . . . . . . . . . . . 56
SECTION 8.07. Successor Agent . . . . . . . . . . . . . . . . . . . 57
ARTICLE IX ASSIGNMENT OF ELIGIBLE ASSETS
SECTION 9.01. Assignment . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE X INDEMNIFICATION
SECTION 10.01. Indemnities by the Seller . . . . . . . . . . . . . . 58
ARTICLE XI MISCELLANEOUS
SECTION 11.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . 61
SECTION 11.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . . 61
SECTION 11.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . 62
SECTION 11.04. Binding Effect; Assignability . . . . . . . . . . . . 62
SECTION 11.05. Governing Law . . . . . . . . . . . . . . . . . . . . 63
SECTION 11.06. Costs, Expenses and Taxes . . . . . . . . . . . . . . 63
SECTION 11.07. No Proceedings . . . . . . . . . . . . . . . . . . . 64
SECTION 11.08. Additional Investor . . . . . . . . . . . . . . . . . 64
SECTION 11.09. Confidentiality . . . . . . . . . . . . . . . . . . . 65
SECTION 11.10. Execution in Counterparts; Severability . . . . . . . 65
LIST OF EXHIBITS
EXHIBIT A Form of Assumption Agreement
EXHIBIT B Form of Contracts
EXHIBIT C Description of Credit and Collection Policy
EXHIBIT D Trade Names, Fictitious Names and "Doing Business As" Names
EXHIBIT E Investor Report
EXHIBIT F List of Offices of Seller where Records
are Kept
RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of October 6, 1995
SNAP-ON CREDIT CORPORATION, a Wisconsin corporation (the
"Seller"), CORPORATE ASSET FUNDING COMPANY, INC., a Delaware corporation
(collectively, with any Person which may become a party hereto pursuant to
Section 11.08, the "Investors" and, individually, an "Investor"), and
CITICORP NORTH AMERICA, INC., a Delaware corporation, individually
("CNAI"), and as agent (the "Agent") for the "Owners" (as defined herein)
agree as follows:
PRELIMINARY STATEMENTS. (1) Certain terms which are capitalized
and used throughout this Agreement (in addition to those defined above)
are defined in Article I of this Agreement.
(2) The Seller has, and expects to have, Receivables in which
the Seller intends to sell interests referred to herein as Eligible
Assets.
(3) Each Investor desires to purchase such Eligible Assets from
the Seller.
(4) In consideration of the reinvestment by the Owners in Pool
Receivables of daily Collections of the Eligible Assets (other than, in
certain circumstances, with regard to accrued Yield), the Seller will sell
additional interests in the Pool Receivables as part of such Eligible
Assets until such reinvestment is terminated. It is intended that such
daily reinvestment of Collections be effected by an automatic daily
adjustment to the Owners' respective Eligible Assets. Such daily
reinvestment is intended to permit the Owners to maintain their respective
Capital fully invested in uncollected Pool Receivables.
(5) CNAI has been requested and is willing to act as Agent.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. 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):
"Additional Reduction Amount" means, at any time, the sum of (a)
the amount by which the aggregate Outstanding Balance of all Receivables
owing from Sales Representatives exceeds $500,000, plus (b) the amount by
which the aggregate Outstanding Balance of all Receivables required,
according to the related Contract, to be paid in full within more than 36
months but no more than 60 months of the Original Date of such Contract,
exceeds $500,000, plus (c) the amount by which the aggregate Outstanding
Balance of all Receivables owing from and Canadian Obligors and Mexican
Obligors exceeds $500,000.
"Adjusted LIBO Rate" for any Owner with respect to any Eligible
Asset for any Fixed Period means an interest rate per annum equal to
(a) 0.125% per annum, plus (b) the rate of interest per annum (the "LIBO
Rate") at which deposits in U.S. Dollars are offered by the principal
office of Citibank in London, England to prime banks in the London
interbank market at 11:00 a.m. (London time) two "LIBO Business Days" (as
defined below) before the first day of such Fixed Period in an amount
approximately equal or comparable to the Capital of such Eligible Asset
and for a period equal to such Fixed Period plus (c) the remainder
obtained by subtracting (i) the LIBO Rate for such Fixed Period from
(ii) the rate obtained by dividing such LIBO Rate by the percentage equal
to 100% minus the "Eurodollar Reserve Percentage" (as defined below) for
such Fixed Period. "LIBO Business Day" means a day of the year on which
dealings are carried on in the London interbank market and banks are open
for business in London and are not required or authorized to close in New
York City. "Eurodollar Reserve Percentage" for any Fixed Period means the
reserve percentage applicable to Citibank during such Fixed Period under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) (or if more than one such
percentage shall be so applicable, the daily average of such percentages
for those days in such Fixed Period during which any such percentage shall
be so applicable) under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for Citibank in respect of liabilities or assets consisting
of or including "Eurocurrency liabilities" (as that term is used in
Regulation D of the Board of Governors of the Federal Reserve System as in
effect from time to time) having a term equal to such Fixed Period.
"Adverse Claim" means a lien, security interest, charge or other
encumbrance.
"Affected Person" means each of the Agent, CNAI, Citibank, any
Owner, any entity which enters into a commitment to purchase Eligible
Assets or interests therein, or any of their respective Affiliates.
"Affiliate" means, with respect to any Person, a Person: (a)
that directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such Person; (b)
that beneficially owns or holds 5% or more of any class of the voting
stock (or, in the case of a Person that is not a corporation, 5% or more
of the equity interest) of such Person; or (c) 5% or more of the voting
stock (or, in the case of a Person that is not a corporation, 5% or more
of the equity interest) of which is beneficially owned or held, directly
or indirectly, by such Person; provided, however, that neither the Agent
nor any Owner shall be deemed to be an Affiliate of the Seller. The term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting stock or an equity interest, by
contract, or otherwise.
"Affiliated Obligor" means any Obligor that is an Affiliate of
another Obligor.
"Alternate Base Rate" means a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall
at all times be equal to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time as Citibank's base rate;
(b) 0.50% per annum above the latest three-week moving average
of secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average being determined weekly on each
Monday (or, if any such day is not a Business Day on the next succeeding
Business Day) for the three-week period ending on the previous Friday by
Citibank on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New York or, if
such publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by
Citibank, in either case adjusted to the nearest 0.25% or, if there is no
nearest 1/4 of one percent, to the next higher 0.25%; and
(c) 0.50% per annum above the Federal Funds Rate.
"Assignee Rate" for any Owner with respect to any Fixed Period
for any Eligible Asset means an interest rate per annum equal to the
Adjusted LIBO Rate; provided, however, that (a) in the case of any Fixed
Period of less than one month (measured as described in the definition of
"Fixed Period" with reference to Eligible Assets on which Yield is
calculated based upon the Adjusted LIBO Rate), the "Assignee Rate" for
such Fixed Period for such Eligible Asset shall be calculated using an
interest rate per annum equal to the Alternate Base Rate; (b) if any Owner
shall have notified the Agent on or before the first day of such Fixed
Period that a LIBO Rate Disruption Event has occurred and is continuing,
then the "Assignee Rate" for such Fixed Period for such Eligible Asset
shall be calculated using an interest rate per annum equal to the
Alternate Base Rate; (c) in the case of any Fixed Period for an Eligible
Asset the Capital of which is less than $500,000, the "Assignee Rate" for
such Fixed Period for such Eligible Asset shall be calculated using an
interest rate per annum equal to the Alternate Base Rate; and (d) if an
Event of Investment Ineligibility has occurred and is continuing, the
"Assignee Rate" for any Fixed Period for such Eligible Asset shall be the
sum of the applicable interest rate per annum determined pursuant to the
provisions set forth above plus 1.00% per annum.
"Assumption Agreement" means an Assumption Agreement, in
substantially the form of Exhibit A, by which any Person may become a
party to, and an Investor under, this Agreement.
"Banks" means the financial institutions parties to the Parallel
Purchase Agreement.
"Benefit Plan" means a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of
which the Seller or any ERISA Affiliate is, or at any time during the
immediately preceding six years was, an "employer" as defined in Section
3(5) of ERISA.
"Business Day" means (a) any day other than a Saturday, Sunday
or public holiday or the equivalent for banks in New York City, and (b) if
the term "Business Day" is used in connection with the Adjusted LIBO Rate,
a LIBO Business Day.
"Canadian Obligor" means any Obligor that is a resident of
Canada but whose place of employment is located in the United States.
"Capital" of any Eligible Asset means the original amount paid
to the Seller for such Eligible Asset at the time of its acquisition by an
Investor pursuant to Sections 2.01 and 2.02, reduced from time to time by
Collections received and distributed on account of such Capital pursuant
to Section 2.06 below. If any Owner or the Agent is required (or believes
in good faith that it is required) by law to repay (as a preference or
otherwise, and to the Seller, an Obligor, a trustee for the Seller or any
Obligor, a court or any other Person) any amount that previously caused a
reduction in Capital, then, to the extent that such amount is so repaid,
Capital shall be reinstated by the amount of such repayment and the Seller
will (but without duplication of any recovery made as a result of any
related reinstatement of Capital) indemnify and hold such Owner or the
Agent harmless for the amount of such repayment, interest thereon required
(or believed in good faith by such Owner or the Agent to be required) to
be paid in connection therewith and all losses, liabilities, costs and
expenses related thereto (including but not limited to reasonable
attorneys' fees and expenses).
"Capital Increase Purchase" means any Purchase by an Investor
which, pursuant to Section 2.02, causes the aggregate outstanding Capital
hereunder in respect of such Investor to increase.
"Citibank" means Citibank, N.A., a national banking association.
"Collection Agent" means at any time the Person then authorized
pursuant to Article VI to service, administer and collect Receivables.
"Collection Agent Fee" has the meaning assigned to that term in
Section 2.10.
"Collection Date" means the earliest date following the initial
Purchase hereunder on which all Owners have received the accrued Yield for
their respective Eligible Assets, the Capital of such Eligible Assets and
all other amounts payable to such Owners pursuant to this Agreement, and
the Collection Agent has received the accrued Collection Agent Fee for all
such Eligible Assets.
"Collections" means, (a) with respect to any Receivable, all
cash collections and other cash proceeds of such Receivable, including,
without limitation, all cash proceeds of Related Security with respect to
such Receivable, and any Collection of such Receivable deemed to have been
received pursuant to Section 2.07 (it being understood that the Seller
shall pay all such deemed Collection amounts to the Collection Agent) and
(b) any amounts paid to the Agent pursuant to the terms of the Parent
Support Agreement.
"Commitment Capital" means, at any time, the aggregate "Capital"
of all "Eligible Assets" then outstanding under (and as defined in) the
Parallel Purchase Agreement.
"Concentration Limit" for any Obligor means, at any time, (a)
1.67% of the aggregate outstanding Capital hereunder at such time, or (b)
such higher amount for any Obligor designated by Agent in a writing
delivered to Seller from time to time; provided, however, that in the case
of an Obligor with any Affiliated Obligors, the Concentration Limit and
the Receivables related thereto shall be calculated as if such Obligor and
such one or more Affiliated Obligors were one Obligor.
"Contract" means an agreement in substantially the form of one
of the forms of written contract set forth in Exhibit B or otherwise
approved by the Agent, initially executed between a Dealer or the Parent
and an Obligor, and subsequently assigned, as applicable, (a) by such
Dealer either directly to the Seller or to the Parent and subsequently by
the Parent to the Seller or (b) by the Parent to the Seller, pursuant to
or under which agreement such Obligor shall be obligated to pay for
merchandise sold or services rendered by such Dealer or the Parent, as
applicable.
"Contract Rider" means, with respect to any Contract, any rider
thereto executed and delivered by the Obligor thereunder evidencing the
purchase by such Obligor of additional goods or merchandise manufactured
by the Seller and a resulting increase in the Outstanding Balance of the
Receivable arising under such Contract, which increased Outstanding
Balance has been refinanced as of the date of such rider under terms
providing for the payment in full of such increased Outstanding Balance by
way of substantially equal installments payable no less frequently than
monthly within no more than 60 months of the date of such rider.
"CP Rate" means, for any Eligible Asset for any Fixed Period,
the per annum rate equivalent to the weighted average of the per annum
rates paid or payable by the applicable Investor from time to time as
interest on or otherwise (by means of interest rate xxxxxx or otherwise)
in respect of the commercial paper notes of such Investor that are
allocated, in whole or in part, by such Investor to fund or maintain for
such Fixed Period such Eligible Asset, all other Eligible Assets held by
such Investor hereunder and all interests in receivables or other assets
of "Other Pool Sellers" (as defined below) held by such Investor, which
rates shall reflect and give effect to the commissions of placement agents
and dealers in respect of such commercial paper notes, to the extent such
commissions are allocated, in whole or in part, to such commercial paper
notes by such Investor; provided, however, that (a) if any component of
such rate is a discount rate, in calculating the "CP Rate" for such
Eligible Asset for such Fixed Period, the Investor shall for such
component use the rate resulting from converting such discount rate to an
interest bearing equivalent rate per annum; and (b) to the extent that
such Investor funds or maintains such Eligible Asset at any time during
such Fixed Period other than by issuing commercial paper notes, the "CP
Rate" for such Fixed Period (or applicable portion thereof) shall be the
Assignee Rate or such other rate as the Seller and such Investor shall
agree to in writing. The Investor shall report the "CP Rate" for each
Eligible Asset for each Fixed Period to the Agent and the Seller. As used
in this definition, "Other Pool Sellers" means with respect to any
Investor, all Other Sellers with respect to such Investor to the extent
that the interests in receivables or other financial assets of each such
Other Seller held by such Investor are aggregated with the Eligible Assets
held by such Investor hereunder and funded on a pooled basis by such
Investor, whether by the issuance of commercial paper notes or otherwise.
"Credit and Collection Policy" means those credit and collection
policies and practices relating to Contracts and Receivables described in
Exhibit C, as modified in compliance with Section 5.03(c).
"Dealer" means any Person, authorized pursuant to an effective
Dealer Agreement with the Parent, to act as a dealer for Equipment
manufactured and/or sold or distributed by the Parent.
"Dealer Agreement" means an agreement (as amended, supplemented
or otherwise modified from time to time) between any Person and the Parent
authorizing such Person to act as a dealer for the Parent, including,
without limitation, if the relevant Dealer is a franchise dealer, a
"Dealer Franchise Agreement" or "Conversion Dealer Franchise Agreement."
"Debt" of any Person means (a) indebtedness of such Person for
borrowed money, (b) obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) obligations of such
Person to pay the deferred purchase price of property or services,
(d) obligations of such Person as lessee under leases which shall have
been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (e) obligations secured by any
lien or other charge upon property or assets owned by such Person, even
though such Person has not assumed or become liable for the payment of
such obligations, (f) obligations of such Person in connection with any
letter of credit issued for the account of such Person and (g) obligations
of such Person under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (f)
above.
"Default Ratio" means for any month, the average of the Monthly
Default Ratios for such month and each of the immediately preceding two
consecutive months.
"Defaulted Receivable" means a Receivable, other than a Write-
off: (a) as to which any payment, or part thereof, remains unpaid for
more than 90 days from the scheduled due date for such payment (determined
by reference to the payment schedule with respect to such Receivable
established as of the Original Date of the related Contract) or (b) as to
which the Obligor thereof has taken any action, or suffered any event to
occur, of the type described in Section 7.01(g).
"Delinquency Ratio" means for any month the average of the
Monthly Delinquency Ratios for such month and each of immediately
preceding two consecutive months.
"Delinquent Receivable" means a Receivable that is not a
Defaulted Receivable and (a) as to which any payment, or part thereof,
remains unpaid for more than 30 days from the scheduled due date for such
payment (determined by reference to the payment schedule with respect to
such Receivable established as of the Original Date of the related
COntract) or (b) which, consistent with the Credit and Collection Policy,
has been or should be classified as delinquent by the Seller.
"Designated Obligor" means, at any time, any Obligor of any
Receivable, unless the Agent, in the exercise of its reasonable credit
judgment, has advised the Seller following three Business Days' notice
that such Obligor shall not be considered a Designated Obligor.
"Dilution Factors" means, with respect to the Receivables, any
credits, rebates (including, without limitation, in connection with any
prepayment or acceleration of any Receivable), freight charges, cash
discounts, volume discounts, cooperative advertising expenses, royalty
payments, warranties, cost of parts required to be maintained by agreement
(whether express or implied), allowances, disputes, chargebacks, returned
or repossessed goods, inventory transfers, allowances for early payments
and other allowances that are made or coordinated with the Seller's usual
practices.
"Eligible Asset" means, at any time, an undivided percentage
ownership interest at such time in (a) all then outstanding Pool
Receivables arising prior to the time of the most recent computation or
recomputation of such undivided percentage interest pursuant to Section
2.04, (b) all Related Security with respect to such Pool Receivables and
(c) all Collections with respect to, and other proceeds of, such Pool
Receivables. Such undivided percentage interest for such Eligible Asset
shall be computed as
C + YR + LR
NRPB
where:
C = the Capital of such Eligible Asset at the time of such
computation.
YR = the Yield Reserve of such Eligible Asset at the time of
such computation.
LR = the Loss Reserve of such Eligible Asset at the time of such
computation.
NRPB = the Net Receivables Pool Balance at the time of such
computation.
Each Eligible Asset shall be determined from time to time pursuant to the
provisions of Section 2.04. The sum of all Eligible Assets shall equal,
at all times, 100% of the interests described in clauses (a), (b) and (c)
above.
"Eligible Receivable" means, at any time and with respect to any
Eligible Asset, a Receivable:
(a) the Obligor of which, if not a Sales Representative, is not
an Affiliate of any of the parties hereto;
(b) the Obligor of which is a Designated Obligor;
(c) the Obligor of which is not the Obligor of any Defaulted
Receivables;
(d) which is not a Defaulted Receivable;
(e) which, according to the Contract related thereto, is (i)
required to be paid in full within 60 months of the Original Date of such
Contract and (ii) payable in substantially equal installments to be made
no less frequently than monthly;
(f) which arises under a Contract, the performance of which has
been completed by all other applicable parties other than the Obligor, and
which Receivable is fully assignable and has been properly documented in
accordance with the requirements of the Credit and Collection Policy, and
all Equipment, other goods or services in connection therewith have been
delivered to or performed for the Obligor;
(g) which is indebtedness representing all or part of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended;
(h) a purchase of which with the proceeds of notes would
constitute a "current transaction" within the meaning of Section 3(a)(3)
of the Securities Act of 1933, as amended;
(i) which constitutes "chattel paper" within the meaning of the
UCC of all applicable jurisdictions and in respect of which only one set
of instruments and other documents evidencing such Receivable has been
executed;
(j) which is denominated and payable only in United States
Dollars in the United States;
(k) which arises under a Contract which has been duly
authorized and which, together with such Receivable (which shall not in
any event satisfy this clause (k) if such Receivable has been paid by the
Obligor thereof), is in full force and effect and constitutes the legal,
valid and binding obligation of the Obligor of such Receivable enforceable
against such Obligor in accordance with its terms and is not subject (at
the time each determination of eligibility is made hereunder) to any
dispute, offset, counterclaim or defense whatsoever;
(l) which was (i) originated by a Dealer and acquired from such
Dealer in the ordinary course of business (A) by the Seller, together with
a security interest in the related Equipment or (B) by the Parent and
subsequently assigned in the ordinary course of business by the Parent to
the Seller, together with a security interest in the related Equipment,
pursuant to the Transfer Agreement or (ii) originated by the Parent and
acquired from the Parent in the ordinary course of business by the Seller,
together with a security interest in the related Equipment, pursuant to
the Transfer Agreement;
(m) which has not been compromised, adjusted, rescheduled or
otherwise modified (including by extension of time of payment) as a result
of delinquency or other negative credit reasons;
(n) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto (including, to the extent applicable, but 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 with respect to which no party to
the Contract related thereto is in violation of any such law, rule or
regulation in any material respect;
(o) which (i) satisfies in all material respects all applicable
requirements of the Credit and Collection Policy and (ii) complies with
such other criteria and requirements as the Agent may, in the exercise of
its reasonable credit judgment, from time to time specify to the Seller
following 30 days' notice;
(p) with respect to which, to the extent required by the Credit
and Collection Policy, the Seller has received a valid, first security
interest in the Equipment, the sale of which gave rise to such Receivable,
and all steps necessary to perfect such security interest in all
applicable jurisdictions shall have been taken, including the filing of
UCC financing statements;
(q) with respect to which the related Equipment is insured, for
the benefit of the Seller, against loss as a result of fire or other
casualty, in accordance with the requirements of Section 5.01(m);
(r) with respect to which none of the related Equipment has
been returned, rejected or repossessed;
(s) the Obligor of which is a United States resident, a
Canadian Obligor or a Mexican Obligor, and is not a government or a
governmental subdivision or agency; and
(t) as to which the Agent has not notified the Seller that the
Agent has determined, in its reasonable credit judgement, that such
Receivable (or class of Receivables) is not acceptable for purchase
hereunder.
"ERISA" means the U.S. Employee Retirement Income Security Act
of 1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" means any (a) corporation which is a member of
the same controlled group of corporations (within the meaning of Section
414(b) of the IRC) as the Seller; (b) partnership or other trade or
business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the IRC) with the Seller or (c) member of the
same affiliated service group (within the meaning of Section 414(m) of the
IRC) as the Seller, any corporation described in clause (a) above or any
partnership or other trade or business described in clause (b) above.
"Equipment" means tools and equipment manufactured and/or sold
by the Parent and/or Dealers, and any attachments thereto, and "related
Equipment" means, when used in reference to any Receivable, the Equipment
financed under the related Contract.
"Event of Investment Ineligibility" has the meaning assigned to
that term in Section 7.01.
"Facility Fee" has the meaning assigned to that term in Section
2.10.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers,
as published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day for such transactions received by
Citibank from three Federal funds brokers of recognized standing selected
by it.
"Fee Letter" means the letter agreement of even date herewith
among the Seller, the Investor, Citibank, CNAI, the Agent and the "Agent"
under and as defined in the Parallel Purchase Agreement.
"Fixed Period" means with respect to any Eligible Asset:
(a) the period commencing on the date of the creation of such
Eligible Asset pursuant to Section 2.02 or 2.09 and ending on (i) if Yield
thereon is to be calculated at the CP Rate for such Fixed Period, the
first day of the immediately succeeding calendar month; (ii) if Yield
thereon is to be calculated at the Assignee Rate using the Adjusted LIBO
Rate for such Fixed Period, the numerically corresponding date occurring
one, two, three or six months thereafter, as selected by the Seller and
approved by the Agent pursuant to Section 2.02 or Section 2.09; and (iii)
if Yield thereon is to be calculated at the Assignee Rate using the
Alternate Base Rate for such Fixed Period, such number of days as the
Seller shall select and the Agent shall approve pursuant to Section 2.02
or Section 2.09, as the case may be, up to 30 days from such date; and
(b) thereafter, each period commencing on the last day of the
immediately preceding Fixed Period for such Eligible Asset and ending on
(i) if Yield thereon is to be calculated at the CP Rate for such Fixed
Period, the first day of the immediately succeeding calendar month; (ii)
if Yield thereon is to be calculated at the Assignee Rate using the
Adjusted LIBO Rate for such Fixed Period, the numerically corresponding
date occurring one, two, three or six months thereafter, as selected by
the Seller and approved by the Agent on notice by the Seller received by
the Agent (including notice by telephone, confirmed in writing) not later
than or 10:00 a.m. (New York City time) on the third LIBO Business Day
prior to the first day of such subsequent Fixed Period; and (iii) if Yield
thereon is to be calculated at the Assignee Rate using the Alternate Base
Rate for such Fixed Period, such number of days, not to exceed 30, as the
Seller shall select and the Agent shall approve on notice by the Seller
received by the Agent (including notice by telephone, confirmed in
writing) not later than 11:00 a.m. (New York City time) on such last day;
provided, however, that
(1) any such Fixed Period (other than of one day) which would
otherwise end on a day which is not a Business Day shall be extended to
the next succeeding Business Day (except that if Yield in respect of such
Fixed Period is computed by reference to the Adjusted LIBO Rate, and such
next succeeding Business Day is in the next calendar month, then such
Fixed Period shall end on the next preceding Business Day);
(2) in the case of Fixed Periods of one day for any Eligible
Asset, (A) the initial Fixed Period shall be the day of the creation of
such Eligible Asset pursuant to Section 2.02 or Section 2.09; (B) any
subsequently occurring Fixed Period which is one day shall, if the
immediately preceding Fixed Period is more than one day, be the last day
of such immediately preceding Fixed Period, and if the immediately
preceding Fixed Period is one day, be the day next following such
immediately preceding Fixed Period; and (C) any Fixed Period of one day
which occurs on a day immediately preceding a day which is not a Business
Day shall be extended to the next succeeding Business Day;
(3) in the case of any Fixed Period for any Eligible Asset,
which commences before the Termination Date and would otherwise end on a
date occurring after such Termination Date, such Fixed Period shall end on
such Termination Date and the duration of each such Fixed Period which
commences on or after the Termination Date shall be of such duration as
shall be selected by the Agent; and
(4) from time to time until the Termination Date, subject to
the exceptions and limitations described above and in Sections 2.02 and
2.09, and the Agent's approval in accordance with the procedures above and
in Sections 2.02 and 2.09, the Seller shall select Fixed Periods for each
Eligible Asset so that the outstanding Capital of all Eligible Assets is
at all times allocated to a Fixed Period.
"Interim Procedures Letter" means a letter agreement of even
date herewith among the Seller, the Parent, the Investor, Citibank, CNAI,
the Agent and the "Agent" under and as defined in the Parallel Purchase
Agreement.
"Investor Investment Fee" has the meaning assigned to that term
in Section 2.10.
"Investor Report" means a report, in substantially the form of
Exhibit E, furnished by the Collection Agent to the Agent for each Owner
pursuant to Section 2.07.
"IRC" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute.
"LIBO Rate Disruption Event" means, for any Owner with respect
to any Eligible Asset for any Fixed Period, any of the following: (a) a
determination by such Owner that it would be contrary to law or to the
directive of any central bank or other governmental authority (whether or
not having the force of law) to obtain United States dollars in the London
interbank market for the purchase or maintenance of such Eligible Asset
for such Fixed Period, (b) the inability of Citibank to furnish a LIBO
Rate quotation to such Owner prior to 1:00 p.m. (London time) on the
second Business Day before the first day of such Fixed Period, (c) a
determination by such Owner that the rate at which deposits of United
States dollars are being offered to such Owner in the London interbank
market does not accurately reflect the cost to such Owner of funding its
purchase or maintenance of such Eligible Asset for such Fixed Period or
(d) the inability of such Owner, by reason of circumstances affecting the
London interbank market generally, to obtain United States dollars in such
market to fund its purchase or maintenance of Eligible Assets for such
Fixed Period.
"Liquidation Fee" means, for each Eligible Asset (or Owner's
interest therein) for the Fixed Period (computed without regard to clause
(3) of the definition of "Fixed Period") during which the Capital for such
Eligible Asset is reduced, the amount, if any, by which (a) the additional
Yield (calculated without taking into account any Liquidation Fee) which
would have accrued on the reductions of Capital of such Eligible Asset (or
Owner's interest therein) during such Fixed Period (as so computed) if
such reductions had remained as Capital exceeds (b) the income received by
the Owner of such Eligible Asset (or interest therein) from such Owner's
investing the proceeds of such reductions of Capital to the extent it may
reasonably do so in the circumstances.
"Liquidation Yield" means, for any Eligible Asset at any time,
an amount equal to the Rate Variance Factor multiplied by the product of
(a) the Capital of such Eligible Asset and (b) the product of (i) the
Assignee Rate for such Eligible Asset for a Fixed Period deemed to
commence at such time for a period of one month and (ii) a fraction having
the number of months in the period equal to the Weighted Average Life, as
numerator, and 12, as denominator.
"Loss-to-Liquidation Ratio" means, for any month, the ratio
(expressed as a percentage) computed by dividing (a) the aggregate
Outstanding Balance of all Receivables that became Write-offs during each
of the immediately preceding twelve months (net of recoveries of Write-
offs received during each of the immediately preceding twelve months) by
(b) the aggregate amount of all Collections received during each of the
immediately preceding twelve months.
"Loss Percentage" for any Eligible Asset means on any day during
any Fixed Period for such Eligible Asset the greatest of (a) three times
the highest Monthly Default Ratio on any day during the three months
preceding such day, (b) three times the Loss-to-Liquidation Ratio for the
current month and (c) 5.00%.
"Loss Reserve" of any Eligible Asset at any time means an amount
equal to
LP x (C + YR)
where:
LP = the Loss Percentage for such Eligible Asset at such
time.
C = the Capital of such Eligible Asset at such time.
YR = the Yield Reserve for such Eligible Asset at such
time.
"Mexican Obligor" means any Obligor that is a resident of Mexico
but whose place of employment is located in the United States.
"Material Subsidiary" means any Subsidiary of the Parent except
a Subsidiary that has neither (a) assets with a book value in excess of
$10,000,000 nor (b) annual revenues for the most recently completed
calendar year in excess of $10,000,000.
"Monthly Default Ratio" means for any month the ratio (expressed
as a percentage) computed as of the last day of the immediately preceding
month by dividing (a) the aggregate Outstanding Balance of all Receivables
that were Defaulted Receivables on such last day or that became Write-offs
at any time during such immediately preceding month by (b) the aggregate
Outstanding Balance of all Receivables on such last day.
"Monthly Delinquency Ratio" means for any month the ratio
(expressed as a percentage) computed as of the last day of the immediately
preceding month by dividing (a) the aggregate Outstanding Balance of all
Receivables that were Delinquent Receivables on such last day by (b) the
aggregate Outstanding Balance of all Receivables on such last day.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is, or within the immediately preceding
six years was, contributed to by the Seller or any ERISA Affiliate.
"Net Receivables Pool Balance" means at any time the Outstanding
Balance of the Eligible Receivables in the Receivables Pool at such time,
reduced by the sum of (a) the sum of the aggregate amount by which the
Outstanding Balance of all Pool Receivables of each Obligor exceeds the
Concentration Limit for such Obligor at such time and (b) the Additional
Reduction Amount at such time.
"Obligor" means a Person obligated to make payments pursuant to
a Contract.
"Original Date" means, with respect to any Contract, the later
of (a) the original date of such Contract and (b) the date of the most
recent Contract Rider entered into in compliance with the requirements of
Section 5.03(b).
"Other Costs" has the meaning assigned to that term in Section
11.06(c).
"Other Sellers" has the meaning assigned to that term in Section
11.06(c).
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal balance thereof excluding therefrom any
available cash discounts.
"Owner" shall include each Investor and all other owners by
assignment or otherwise of an Eligible Asset and, to the extent of the
undivided interest so purchased, shall include any participants.
"Parent" means Snap-on Incorporated, a Delaware corporation.
"Parent Support Agreement" means the Support Agreement of even
date herewith between the Parent and the Agent, as the same may be
amended, supplemented or otherwise modified from time to time.
"Parallel Purchase Agreement" means that certain Receivables
Purchase and Sale Agreement of even date herewith between the Seller, the
Banks and CNAI.
"Payment Date" means for any Eligible Asset (a) for any
Settlement Period during which Yield accrues on such Eligible Asset at the
CP Rate, the first Business Day following the last day of such Settlement
Period and (b) for any other Settlement Period, the last day thereof.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, government (or any agency or political
subdivision thereof) or other entity.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Program Fee" has the meaning assigned to that term in Section
2.10.
"Purchase" means a purchase by an Investor of an Eligible Asset
from the Seller pursuant to Article II, including, without limitation, the
initial purchase of an Eligible Asset under Section 2.02, and the
remittance by the Collection Agent to the Seller of Collections of
Receivables pursuant to Section 2.05.
"Purchase Limit" means at any time $150,000,000, as such amount
may be reduced pursuant to Section 2.03; provided, however, that at all
times on and after the Termination Date, the "Purchase Limit" shall mean
the aggregate Capital for all Eligible Assets.
"Rate Variance Factor" means 1.25.
"Ratings Requirement" means the requirement that the senior
unsecured long-term debt of the Parent be rated at least A- by Standard &
Poor's Ratings Group and A3 by Xxxxx'x Investors Service, Inc.
"Receivable" means the indebtedness of any Obligor under a
Contract whether constituting an account, chattel paper, instrument or
general intangible, arising from a sale of merchandise or the performance
of services by a Dealer or the Parent, and includes the right to payment
of any interest or finance charges and other obligations of such Obligor
with respect thereto.
"Receivables Pool" means at any time all the outstanding
Receivables of the respective Obligors existing or arising at any time
such respective Obligors are Designated Obligors.
"Records" means all Contracts and other documents, books,
records and other information (including, without limitation, computer
programs, tapes, discs, punch cards, data processing software and related
property and rights) maintained with respect to Receivables and the
related Obligors.
"Reinvestment Termination Date" means that Business Day which
the Seller designates as the Reinvestment Termination Date by notice to
the Agent at least ten Business Days prior to such Business Day or, if any
of the conditions precedent in Section 3.02 are not satisfied, such
earlier Business Day which the Agent designates as the Reinvestment
Termination Date by notice to the Seller at least one Business Day prior
to such Business Day or, if the written request of the Seller to the Agent
described in the first sentence of Section 2.15 of the Parallel Purchase
Agreement has been made, the Business Day of such request.
"Related Security" means with respect to any Receivable:
(a) all of the Seller's interest in the merchandise (including
returned, repossessed or foreclosed merchandise), if any, relating to the
sale which gave rise to such Receivable;
(b) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise;
(c) the assignment to the Agent, for the benefit of any Owner,
of all UCC financing statements, if any, covering any collateral securing
payment of such Receivable;
(d) all of the Seller's right and title to, and interest in,
all guarantees, indemnities, warranties, insurance policies and proceeds
and premium refunds thereof 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, including, without limitation, all recourse
rights of the Seller, howsoever arising, against the Dealer that
originated such Receivable and the related Contract or the Parent;
(e) all Records; and
(f) all proceeds of the foregoing.
"Sales Representative" means any individual duly employed by the
Parent as a sales representative for merchandise manufactured by the
Parent.
"Settlement Period" for any Eligible Asset means each period
commencing on the first day of each Fixed Period for such Eligible Asset
and ending on the last day of such Fixed Period, and, on and after the
Termination Date, such period (including, without limitation, a daily
period) as shall be selected from time to time by the Agent or, in absence
of any such selection, each period of thirty days from the last day of the
immediately preceding Settlement Period; provided, however, that with
respect to any Fixed Period of one day as described in clauses (2)(A) and
(B) of the proviso clause of the definition of "Fixed Period," the related
Settlement Period shall be the first day following such Fixed Period.
"Subsidiary" means, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the Board of Directors or other
Persons performing similar functions are at the time directly or
indirectly owned by such Person.
"Termination Date" means the earliest of (a) the Reinvestment
Termination Date, (b) the reduction of the Purchase Limit to zero pursuant
to Section 2.04, (c) the declaration or automatic occurrence of the
Termination Date pursuant to Section 7.01, (d) the "Termination Date"
under the Parallel Purchase Agreement, (e) the date that the Seller
reduces the "Commitment" (as defined in the Parallel Purchase Agreement)
to zero and (f) October 2, 1998.
"Transfer Agreement" means the Transfer Agreement of even date
herewith among the Parent, the Seller and Snap-on Financial Services,
Inc., a Nevada corporation, as in effect on the date of the initial
Purchase hereunder.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
"Weighted Average Life" means, on any day, that period
(expressed in months and rounded up to the next full month) equal to the
sum of (a) the weighted average remaining maturity of the Receivables as
of the end of the most recently ended calendar month, plus (b) one month,
as calculated by the Collection Agent and set forth in the Investor Report
prepared as of the end of such most recently ended calendar month;
provided, however, if the Agent shall disagree with any such calculation,
the Agent may recalculate the Weighted Average Life for such day.
"Write-off" means a Receivable that, in accordance with the
Credit and Collection Policy, has been or should be (a) assigned to a
category reserved for doubtful Receivables or otherwise recorded on the
Seller's books as a Receivable the collectibility of which is doubtful or
(b) written off the Seller's books as uncollectible. A Write-off shall
continue to constitute a Receivable for purposes of this Agreement until
the indebtedness of the Obligor related thereto shall have been paid in
full, extinguished by agreement between the Seller and such Obligor or
otherwise extinguished pursuant to applicable law.
"Yield" means for each Eligible Asset for any Fixed Period:
YR x C x ED
360
where:
YR = the applicable Yield Rate for such Eligible Asset for such
Fixed Period,
C = the Capital of such Eligible Asset during such Fixed
Period, and
ED = the actual number of days elapsed during such Fixed Period;
provided, however that (a) no provision of this Agreement shall require
the payment or permit the collection of Yield in excess of the maximum
permitted by applicable law and (b) Yield for any Eligible Asset shall not
be considered paid by any distribution if at any time such distribution is
rescinded or must otherwise be returned for any reason.
"Yield Rate" means with respect to each Eligible Asset for any
Fixed Period, (a) the CP Rate to the extent that the Owner of such
Eligible Asset for such Fixed Period is an Investor, and (b) the Assignee
Rate to the extent that the Owner of such Eligible Asset for such Fixed
Period is a Person other than an Investor.
"Yield Reserve" for any Eligible Asset means (a) so long as the
Ratings Requirement is satisfied, zero and (b) at any time when the
Ratings Requirement is not satisfied, the sum of (i) the Liquidation Yield
for such Eligible Asset and (ii) the accrued and unpaid Yield for such
Eligible Asset.
SECTION 1.02. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles. All terms used in Article 9 of
the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
SECTION 1.03. Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Receivable Facility. On the terms and conditions
hereinafter set forth, the Investors may, in their sole discretion,
purchase undivided percentage ownership interests in Pool Receivables from
the Seller by making Purchases of Eligible Assets from time to time during
the period from the date hereof to the Termination Date. Under no
circumstances shall an Investor make any Purchase of any Eligible Asset
if, after giving effect to such Purchase, the aggregate Capital for all
Eligible Assets hereunder would exceed the Purchase Limit. In addition,
the Owners may, in their sole discretion, but subject to the terms and
conditions of this Agreement, with the proceeds of Collections in respect
of each of their respective Eligible Assets (or interests therein),
purchase from the Seller, pursuant to Section 2.05, additional undivided
percentage ownership interests in Pool Receivables by making appropriate
readjustments of such Eligible Assets. Nothing in this Agreement shall be
deemed to be or construed as a commitment by any Owner or CNAI to purchase
any Eligible Asset, or to reinvest such proceeds of Collections, at any
time.
SECTION 2.02. Making Purchases from the Seller. Each Capital
Increase Purchase from the Seller by an Investor shall be made on at least
three Business Days' notice from the Seller to the Agent. Each such
notice of a proposed Capital Increase Purchase shall specify the Investor
that will make such Capital Increase Purchase, the desired amount and date
of such Capital Increase Purchase and the duration of the initial Fixed
Period for the Eligible Asset or Eligible Assets to be purchased. The
Agent shall promptly thereafter notify the Seller whether the designated
Investor has determined to make such Capital Increase Purchase. The Agent
shall also notify the Seller whether the desired duration of the initial
Fixed Period for the Eligible Asset or Eligible Assets to be purchased is
acceptable. In the event that the Seller and the Agent fail to agree on
the duration of any Fixed Period for a Capital Increase Purchase prior to
the Business Day of such Capital Increase Purchase, the duration of such
Fixed Period shall be selected by the Agent in its sole discretion. On
the date of each Capital Increase Purchase, the Investor shall, upon
satisfaction of the applicable conditions set forth in Article III, make
available to the Agent at its address referred to in Section 2.08 the
amount of its Capital Increase Purchase in same day funds, and following
receipt by the Agent of such funds from the Investor, the Agent will make
such funds immediately available to the Seller at Citibank's address at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
SECTION 2.03. Termination or Reduction of the Purchase Limit.
The Seller may, upon at least five Business Days' notice to the Agent,
terminate in whole or reduce in part the unused portion of the Purchase
Limit; provided, however, that each partial reduction shall be in an
amount equal to $1,000,000 or an integral multiple thereof. On each day
on which the Seller shall, pursuant to Section 2.03 of the Parallel
Purchase Agreement, reduce in part the unused portion of the "Commitment"
(as defined in the Parallel Purchase Agreement), the Purchase Limit shall
reduce automatically by an equal amount.
SECTION 2.04. Eligible Asset. (a) Each Eligible Asset shall be
initially computed as of the opening of business of the Collection Agent
on the date of Purchase of such Eligible Asset from the Seller.
Thereafter until the Termination Date, such Eligible Asset shall be
automatically recomputed as of (i) the opening of business of the
Collection Agent on any day on which the aggregate Capital of all Eligible
Assets hereunder is increased and (ii) the close of business of the
Collection Agent on each day. An Eligible Asset shall become zero at such
time as the Owner of such Eligible Asset shall have received the accrued
Yield for such Eligible Asset, shall have recovered the Capital of such
Eligible Asset and shall have received all other amounts payable to such
Owner pursuant to this Agreement. Each Eligible Asset shall remain
constant from the time as of which any such computation or recomputation
is made until the time as of which the next such recomputation, if any,
shall be made.
(b) The Agent shall maintain books and records in which shall
be recorded (i) the date and amount of each Capital Increase Purchase
hereunder, the Investor making each such Capital Increase Purchase and
each Eligible Asset purchased pursuant thereto, (ii) the date and amount
of and parties to any assignment of rights and obligations hereunder
pursuant to Article IX or Section 11.04 notified to it, (iii) the amount
of any Yield, fees or other amounts due and payable or to become due from
the Seller to the Agent, any Owner or the Collection Agent hereunder and
(iv) the amount and date of any reduction in the Capital of any Eligible
Asset. The entries made in the Agent's books and records as described in
this Section 2.04(b) shall be conclusive and binding for all purposes
absent manifest error.
SECTION 2.05. Non-Liquidation Settlement Procedures. Prior to
the Termination Date, on each day during each Settlement Period for each
Eligible Asset, the Collection Agent shall, out of Collections of Pool
Receivables allocable in respect of such Eligible Asset received on such
day, to the extent that the Ratings Requirement is not satisfied on such
day, set aside and hold in trust for the benefit of the Owner(s) of such
Eligible Asset an amount equal to the Yield accrued through such day for
such Eligible Asset and not so previously set aside (the amount of such
Yield to be set aside on any day to be determined in consultation with the
Agent at such time as the Ratings Requirement shall no longer be
satisfied) and (b) apply the remainder of such Collections to the
purchase, for the benefit of such Owner(s), of certain additional
undivided interests in Pool Receivables. Such remainder of Collections
shall be paid to the Seller and such Eligible Asset shall be recomputed as
described in Section 2.04(a). The recomputed Eligible Asset shall
constitute the percentage ownership interest in Pool Receivables
(determined pursuant to Section 2.04(a)) on such day held by such
Owner(s). On each Payment Date for each Eligible Asset occurring prior to
the Termination Date, but without limitation to the obligations of the
Seller pursuant to Section 2.10(a) of this Agreement, the Collection Agent
shall deposit to the Agent's account, as described in Section 2.08, the
amounts set aside or required to be set aside with respect to such
Eligible Asset pursuant to clause (a) of the first sentence of this
Section 2.05, but only to the extent that the Seller has not satisfied its
obligations under Section 2.10(a) with respect to such Payment Date. Upon
receipt of such funds by the Agent, the Agent shall distribute them to the
Owner(s) of such Eligible Asset in payment of the accrued and unpaid Yield
for such Eligible Asset. Notwithstanding anything to the contrary in this
Section 2.05, the Collection Agent shall not be required to segregate
Collections set aside for the benefit of the Owners preceding remittance
thereof to the Agent unless the Agent shall have so requested as
contemplated in Section 6.02(b).
SECTION 2.06. Liquidation Settlement Procedures. On the
Termination Date and on each day thereafter, the Collection Agent shall
set aside and hold in trust for the Owner(s) of each Eligible Asset, the
Collections of Pool Receivables allocable in respect of such Eligible
Asset received on such day. On each Payment Date for each Eligible Asset
occurring on or after the Termination Date, but without limitation to the
Seller's obligations under Section 2.10(a) of this Agreement, the
Collection Agent shall deposit to the Agent's account, as described in
Section 2.08 below, the amounts set aside pursuant to the preceding
sentence with respect to such Eligible Asset, together with any remaining
amounts set aside pursuant to Section 2.05 prior to the Termination Date,
but not to exceed the sum of (a) the accrued Yield for such Eligible
Asset, (b) the Capital of such Eligible Asset and (c) the aggregate amount
of other amounts owed hereunder by the Seller to the Owner(s) of such
Eligible Asset. Upon receipt of funds deposited to the Agent's account
pursuant to the preceding sentences, the Agent shall distribute them to
the Owner(s) of such Eligible Asset (x) ratably in accordance with their
respective interests therein, (i) if the Ratings Requirement was not
satisfied as of the Termination Date, in payment of the accrued Yield for
such Eligible Asset, but only to the extent that the Seller has not
satisfied its obligations under Section 2.10(a) with respect to such
Payment Date, (ii) in reduction (to zero) of the Capital of such Eligible
Asset, and (iii) if the Ratings Requirement was satisfied as of the
Termination Date, in payment of the accrued Yield for such Eligible Asset,
but only to the extent that the Seller has not satisfied its obligations
under Section 2.10(a) with respect to such Payment Date, and (y) in
payment of any other amounts owed by the Seller hereunder to such Owner.
If there shall be insufficient funds on deposit for the Agent to
distribute funds in payment in full of the aforementioned amounts, the
Agent shall distribute funds, first, if the Ratings Requirement was not
satisfied as of the Termination Date, in payment of the accrued Yield for
such Eligible Asset, second, in reduction of Capital of such Eligible
Asset, third, if the Ratings Requirement was satisfied as of the
Termination Date, in payment of the accrued Yield for such Eligible Asset,
and fourth, in payment of other amounts payable to the Owner(s) of such
Eligible Asset. On the first Business Day following the Collection Date,
the Collection Agent shall pay to the Seller any remaining Collections set
aside and held by the Collection Agent pursuant to the first sentence of
this Section 2.06. Notwithstanding anything to the contrary in this
Section 2.06, the Collection Agent shall not be required to segregate
Collections set aside for the benefit of the Owners preceding remittance
thereof to the Agent unless the Agent shall have so requested as
contemplated in Section 6.02(b).
SECTION 2.07. General Settlement Procedures.
(a) If on any day the Outstanding Balance of any Pool
Receivable is either (i) reduced or adjusted as a result of any defective,
rejected, returned, repossessed or foreclosed merchandise, any defective
or rejected services, any cash discount or any other adjustment made or
performed by the Seller or any other Person (including, without
limitation, those described in the definition of "Dilution Factors") or
(ii) reduced or canceled as a result of a set-off in respect of any claim
by the Obligor thereof against the Seller or any other Person (whether
such claim arises out of the same or a related transaction or an unrelated
transaction), for purposes of this Agreement, the Seller shall be deemed
to have received on such day a Collection of such Pool Receivable in the
amount of such reduction, cancellation or adjustment. If on any day any
of the representations or warranties in the first sentence of Section
4.01(h) is no longer true with respect to a Pool Receivable, the Seller
shall be deemed to have received on such day a Collection of such Pool
Receivable in full. If on any day the representation and warranty in the
second sentence of Section 4.01(h) is no longer true the Seller shall be
deemed to have received on such day Collections of Pool Receivables in an
amount necessary to make such representation true and accurate.
(b) Prior to the 15th day of each calendar month, the
Collection Agent shall prepare and forward to the Agent for each Owner, an
Investor Report, relating to all Eligible Assets, as of the close of
business of the Collection Agent on the last day of the immediately
preceding calendar month.
SECTION 2.08. Payments and Computations, Etc. All amounts to
be paid or deposited by the Seller or the Collection Agent hereunder
(including, without limitation, Yield, Liquidation Fee and other fees and
expenses) shall be paid or deposited in accordance with the terms hereof
no later than 11:00 a.m. (New York City time) on the day when due in
lawful money of the United States of America in immediately available
funds to a special account (having an account number to be specified by
the Agent to the Seller in writing) in the name of Agent and maintained at
Citibank's office at 000 Xxxx Xxxxxx in New York City. The Seller shall,
to the extent permitted by law, pay to the Agent, on demand, interest on
all amounts not paid or deposited when due hereunder (whether owing by the
Seller individually or as Collection Agent) at 2% per annum above the
Alternate Base Rate; provided, however, that such interest rate shall not
at any time exceed the maximum rate permitted by applicable law. Such
interest shall be retained by the Agent except to the extent that such
failure to make a timely payment or deposit has continued beyond the date
for distribution by the Agent of such overdue amount to the Owner of an
Eligible Asset, in which case such interest accruing after such date shall
be for the account of, and distributed by the Agent to the Owners ratably
in accordance with their respective interests in such overdue amount. All
computations of interest and all computations of Yield, Liquidation Yield,
Liquidation Fee and other fees hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including the first but
excluding the last day) elapsed.
SECTION 2.09. Dividing or Combining of Eligible Assets. The
Seller may, prior to the Termination Date, on notice received by the Agent
not later than 11:00 a.m. (New York City time) three Business Days before
the last day of any Fixed Period for any then existing Eligible Asset
("Existing Eligible Asset"), divide such Existing Eligible Asset on such
last day into two or more new Eligible Assets, each such new Eligible
Asset having Capital as designated in such notice and all such new
Eligible Assets collectively having aggregate Capital equal to the Capital
of such Existing Eligible Asset. The Seller may, prior to the Termination
Date, on notice received by the Agent not later than 11:00 a.m. (New York
City time) three Business Days before the last day of any Fixed Period for
two or more Existing Eligible Assets (owned by the same Owner(s) in the
same proportions) or the date of any proposed Purchase of an Eligible
Asset pursuant to Section 2.02 by the same Owner(s) in the same
proportions, either (a) combine such Existing Eligible Assets or
(b) combine such Existing Eligible Asset or Eligible Assets and such
Eligible Asset proposed to be purchased on such last day into one new
Eligible Asset, such new Eligible Asset having Capital equal to the
aggregate Capital of such Existing Eligible Assets, or such Existing
Eligible Asset or Eligible Assets and such Eligible Asset proposed to be
purchased, as the case may be. Each such notice of a proposed division or
combination of Eligible Assets as described above shall, in addition,
specify the desired duration of the initial Fixed Period for each of the
new Eligible Assets resulting from such division or combination. The
Agent shall notify the Seller whether the desired duration of the initial
Fixed Periods for each such new Eligible Asset is acceptable or, if not
acceptable, will advise the Seller of such Fixed Periods, if any, as may
be acceptable. In the event that the Seller and the Agent fail to agree
on the duration of the Fixed Period for any new Eligible Asset resulting
from a division or combination pursuant to this Section 2.09 prior to the
Business Day of such division or combination, the duration of such Fixed
Period shall be selected by the Agent in its sole discretion. On and
after any division or combination of Eligible Assets as described above,
each of the new Eligible Assets resulting from such division, or the new
Eligible Asset resulting from such combination, as the case may be, shall
be a separate Eligible Asset having Capital as set forth above, and shall
take the place of such Existing Eligible Asset or Eligible Assets or
Eligible Asset proposed to be purchased, as the case may be, in each case
under and for all purposes of this Agreement. On and after the
Termination Date, the Agent shall have the right to divide and/or combine
Eligible Assets in any manner which it may select in its sole discretion.
SECTION 2.10. Yield and Fees. (a) From and after the date of
the initial Purchase until the later of the Termination Date and the
Collection Date, the Seller shall, on the Payment Date in respect of each
Settlement Period for each Eligible Asset, pay to the Agent for the
ratable account of the Owner(s) of such Eligible Asset, (i) an amount
equal to the accrued and unpaid Yield for such Eligible Asset and (ii) an
amount equal to the Liquidation Fee, if applicable, for such Eligible
Asset.
(b) From and after the date hereof until the later of the
Termination Date or the Collection Date, the Seller shall pay:
(i) to the Agent, for the account of the Banks, a facility fee
(the "Facility Fee") equal to the product of (i) the average daily amount
of the Purchase Limit, whether used or unused, and (ii) the per annum rate
specified in the Fee Letter;
(ii) to CNAI, in consideration for its support of the program
contemplated herein, a fee (the "Program Fee") equal to the product of (i)
the average daily amount of the aggregate outstanding Capital of all
Eligible Assets hereunder and (ii) the per annum rate specified in the Fee
Letter; and
(iii) to the Agent for the account of the Investors (to be
allocated as the Investors may agree) a fee (the "Investor Investment
Fee") equal to the product of (i) the average daily Purchase Limit and
(ii) the per annum rate of specified in the Fee Letter.
(c) The Seller shall be entitled to a credit against the
Facility Fee payable under this Agreement for any month by the full amount
of the "Facility Fee" (under and as defined in the Parallel Purchase
Agreement) actually paid by the Seller under the Parallel Purchase
Agreement for such month. The Facility Fee and the Program Fee are
payable monthly in arrears for each calendar month (or portion thereof) on
the second Business Day of the immediately succeeding calendar month
during the term of this Agreement and on the later of the Termination Date
and the Collection Date. The Investor Investment Fee is payable in
arrears annually on the last Business Day of November, beginning on
November 30, 1995 and continuing on the last Business Day of each November
thereafter and on the later of the Termination Date and the Collection
Date.
(d) As part of the consideration for the Purchases hereunder,
the Seller agrees to perform the duties of the Collection Agent hereunder
until the Agent designates a new Collection Agent as described in Section
6.01. If at any time the Seller is not the Collection Agent, the Seller
shall pay, for the account of the Collection Agent, a fee (the "Collection
Agent Fee") equal to 110% of the reasonable and appropriate costs and ex-
penses incurred by the Collection Agent in connection with servicing,
collecting and administering the Receivables or paying another Person to
do so.
SECTION 2.11. Yield Protection. If due to either: (a) the
introduction of or any change (including, without limitation, any change
by way of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation or (b) the compliance by any
Affected Person with any guideline or request issued or made by or
otherwise emanating from any central bank or other governmental authority
after the date of this Agreement (whether or not having the force of law),
(i) there shall be an increase in the cost to an Affected Person of
making, funding or maintaining any Purchase hereunder or agreeing to
purchase, purchasing or maintaining an investment in an Eligible Asset or
any interest therein, as the case may be (other than by reason of any
interpretation of or change in laws or regulations relating to income
taxes), (ii) there shall be a reduction in the amount receivable with
regard to any Pool Receivable, or (iii) an Affected Person shall be
required to make a payment calculated by reference to the Pool Receivables
in which it has agreed to purchase, has purchased or maintains an interest
or Yield (or other fees calculated on the basis of Yield) received by it
(other than by reason of any interpretation of or change in laws or
regulations relating to income taxes), the Seller shall, from time to
time, within fifteen days after demand by such Affected Person (with a
copy to the Agent), pay to such Affected Person (as a third party
beneficiary, in the case of an Affected Person which is not also an Owner
hereunder), that portion of such increased costs incurred, amounts not
received or receivable or required payment made or to be made, which such
Affected Person reasonably determines is attributable to making, funding
or maintaining any Purchase hereunder or agreeing to purchase, purchasing
or maintaining an investment in an Eligible Asset or any interest therein,
as the case may be. In determining such amount, such Affected Person may
use any reasonable averaging and attribution methods. Such Affected
Person shall submit to the Seller and the Agent a certificate as to such
increased costs incurred, amounts not received or receivable or required
payment made or to be made, which certificate, setting forth the
calculation thereof, shall be conclusive and binding for all purposes
absent manifest error. Each Affected Person that determines to seek
compensation under this Section 2.11 shall notify the Seller of the
circumstances that entitle such Affected Person to such compensation
pursuant to this Section 2.11, and will take such action as such Affected
Person may determine in its sole and absolute discretion will avoid the
need for or reduce the amount of such compensation without disadvantage of
any kind to such Affected Person. Notwithstanding the provisions of this
Section 2.11, the Seller shall not be required to compensate any Affected
Person for amounts claimed under this Section 2.11 to the extent that
those amounts were incurred more than three months prior to the date that
such Affected Person (or the Agent on its behalf) notifies the Seller
thereof.
SECTION 2.12. Increased Capital. If either (a) the
introduction of or any change in or in the interpretation of any law or
regulation or (b) compliance by any Affected Person with any guideline or
request issued or made by or otherwise emanating from any central bank or
other governmental authority after the date of this Agreement (whether or
not having the force of law) affects or would affect the amount of capital
required or expected to be maintained by any Affected Person, and such
Affected Person determines that the amount of such capital is increased by
or based upon (x) the existence of the Investors' agreement, in their
discretion, to make or maintain Purchases hereunder and other similar
agreements or facilities, or (y) the existence of any agreement by
Affected Persons to make purchases of or otherwise maintain an investment
in Eligible Assets or interests therein related to this Agreement or to
the funding thereof and any other commitments of the same type, then,
within fifteen days following demand by such Affected Person (with a copy
to the Agent), the Seller shall immediately pay to such Affected Person
(as a third party beneficiary, in the case of an Affected Person which is
not also an Owner hereunder) from time to time, as specified by such
Affected Person, additional amounts sufficient to compensate such Affected
Person in light of such circumstances, to the extent that such Affected
Person reasonably determines such increase in capital to be allocable to
the existence of the Investors' agreements described in clause (x) above
or the commitments of certain other Affected Persons described in clause
(y) above. A certificate as to such amounts submitted to the Seller and
the Agent by such Affected Person, setting forth the calculation thereof,
shall be conclusive and binding for all purposes absent manifest error.
Each Affected Person agrees, but without limitation to its rights
hereunder, that promptly after becoming aware of any event or circumstance
described in clause (a) or (b) of the first sentence of this Section 2.12
that is likely to give rise to a payment liability on the part of the
Seller under this Section 2.12, such Affected Person will notify the
Seller of such event or circumstance. Each Affected Person that
determines to seek compensation under this Section 2.12 shall notify the
Seller of the circumstances that entitle such Affected Person to such
compensation pursuant to this Section 2.12, and will take such action as
such Affected Person may determine in its sole and absolute discretion
will avoid the need for or reduce the amount of such compensation without
disadvantage of any kind to such Affected Person. Notwithstanding the
provisions of this Section 2.12, the Seller shall not be required to
compensate any Affected Person for amounts claimed under this Section 2.12
to the extent that those amounts were incurred more than three months
prior to the date that such Affected Person (or the Agent on its behalf)
notifies the Seller thereof.
SECTION 2.13. Taxes and Other Taxes. (a) Any and all payments
and deposits required to be made hereunder or under any instrument
delivered hereunder by the Seller and/or the Collection Agent (if the
Seller or appointed by the Seller) shall be made free and clear of and
without deduction for any present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding taxes imposed on net income and all income and
franchise taxes of the United States and any political subdivisions
thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Seller and/or the Collection Agent (if the Seller or
appointed by the Seller) shall be required by law to deduct any Taxes from
or in respect of any sum required to be paid or deposited hereunder or
under any instrument delivered hereunder, (i) such sum shall be increased
as may be necessary so that after making all required deductions
(including deductions applicable to additional sums required to be paid or
deposited under this Section 2.13) the amount received by the relevant
Affected Person, or otherwise deposited hereunder or under such
instrument, shall be equal to the sum which would have been so received or
deposited had no such deductions been made, (ii) the Seller or the
Collection Agent (as appropriate) shall make such deductions and (iii) the
Seller or the Collection Agent (as appropriate) shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Seller agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or under any
instrument delivered hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
instrument delivered hereunder (hereinafter referred to as "Other Taxes").
(c) The Seller will indemnify each Affected Person (as a third
party beneficiary, in the case of an Affected Person which is not also an
Owner hereunder) for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable under this Section 2.13) paid by such Affected Person
and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall be made
within 30 days from the date the Affected Person makes written demand
therefor. A certificate as to the amount of such indemnification
submitted to the Seller and the Agent by such Affected Person, setting
forth the calculation thereof, shall be conclusive and binding for all
purposes absent manifest error.
(d) Within 30 days after the date of any payment of Taxes the
Seller will furnish to the Agent the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of
the Seller or the Collection Agent hereunder, the agreements and
obligations of the Seller and the Collection Agent (if the Seller or
appointed by the Seller) contained in this Section 2.13 shall survive the
Collection Date.
SECTION 2.14. Sharing of Payments, Etc. If any Owner shall
obtain any payment (whether voluntary, involuntary, through the exercise
of any right of setoff, or otherwise) on account of Eligible Assets owned
by it (other than pursuant to Section 2.10, 2.11, 2.12, 2.13, or 10.01 and
other than as a result of the differences in the timing of the application
of Collections pursuant to Section 2.05 or 2.06) in excess of its ratable
share of payments on account of Eligible Assets obtained by all the
Owners, such Owner shall forthwith purchase from the other Owners such
participations in the Eligible Assets owned by them as shall be necessary
to cause such purchasing Owner to share the excess payment ratably with
each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Owner, such purchase
from each Owner shall be rescinded and each other Owner shall repay to the
purchasing Owner the purchase price to the extent of such recovery
together with an amount equal to each other Owner's ratable share
(according to the proportion of (i) the amount of such other Owner's
required payment to (ii) the total amount so recovered from the purchasing
Owner) of any interest or other amount paid or payable by the purchasing
Owner in respect of the total amount so recovered.
SECTION 2.15. Agreement to Assign. On any Business Day on or
after the Termination Date and before the occurrence of a "Termination
Date" under the Parallel Purchase Agreement, at the written request of
each of the Banks, each of the Owners shall assign to the Banks (in
accordance with each Bank's "Percentage," as such term is defined in the
Parallel Purchase Agreement) all of its right and title to, and interest
in, all Eligible Assets then owned by such Owners, upon receipt of
consideration (in cash) equal to the amount of aggregate Capital, Yield
and all other amounts then accrued and unpaid or otherwise outstanding
with respect to all such Eligible Assets. Any such assignment shall be
without recourse or warranty, express or implied, except in respect of
Adverse Claims against the Eligible Assets created by the Agent or such
Owners. Upon such assignment, any Settlement Period hereunder ending
after the date of such assignment shall terminate.
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase. The
initial Capital Increase Purchase hereunder is subject to the condition
precedent that the Agent shall have received on or before the date of such
Capital Increase Purchase the following, each (unless otherwise indicated)
dated such date, in form and substance satisfactory to the Agent:
(a) A copy of the resolutions of the Board of Directors of the
Seller approving this Agreement and the other documents to be delivered by
it hereunder and the transactions contemplated hereby, certified by its
Secretary or Assistant Secretary;
(b) The Articles of Incorporation of the Seller certified by
the Secretary of State of Wisconsin.
(c) Good Standing Certificates for the Seller issued by the
Secretaries of State of New Jersey, Minnesota, Indiana and Wisconsin.
(d) A certificate of the Secretary or Assistant Secretary of
the Seller certifying (i) the names and true signatures of the officers
authorized on its behalf to sign this Agreement and the other documents to
be delivered by it hereunder (on which certificate the Agent and the
Owners may conclusively rely until such time as the Agent shall receive
from the Seller a revised certificate meeting the requirements of this
subsection (d)) and (ii) a copy of the Seller's by-laws;
(e) Acknowledgment copies of proper Financing Statements (Form
UCC-1), dated a date reasonably near to the date of the initial Capital
Increase Purchase, naming the Seller as the assignor of Receivables and
Related Security and CNAI, as Agent, as assignee, or other, similar
instruments or documents, as may be necessary or, in the opinion of the
Agent, desirable under the UCC of all appropriate jurisdictions or any
comparable law to perfect the Owners' ownership interests in all
Receivables and Related Security;
(f) Acknowledgment copies of proper Financing Statements (Form
UCC-3), if any, necessary to release all security interests and other
rights of any Person in the Receivables and Related Security previously
granted by the Seller;
(g) Certified copies of Requests for Information or Copies
(Form UCC-11) (or a similar search report certified by a party acceptable
to the Agent), dated a date reasonably near to the date of the initial
Capital Increase Purchase, listing all effective financing statements
which name the Seller (under its present name and any previous name) as
debtor and which are filed in the jurisdictions in which filings were made
pursuant to subsection (f) above, together with copies of such financing
statements (none of which shall cover any Receivables or Contracts);
(h) A copy of the Parallel Purchase Agreement and the other
instruments, agreements and documents required to be delivered thereunder;
(i) A copy of the resolutions of the Board of Directors of the
Parent approving the Parent Support Agreement and the other documents to
be delivered by it hereunder and the transactions contemplated hereby,
certified by its Secretary or Assistant Secretary;
(j) The Articles of Incorporation of the Parent certified by
the Secretary of State of Delaware;
(k) Good Standing Certificates for the Parent issued by the
Secretaries of State of Delaware and Wisconsin;
(l) A certificate of the Secretary or Assistant Secretary of
the Parent certifying (i) the names and true signatures of the officers
authorized on its behalf to sign the Parent Support Agreement and the
other documents to be delivered by it hereunder (on which certificate the
Agent and the Owners may conclusively rely until such time as the Agent
shall receive from the Parent a revised certificate meeting the
requirements of this subsection (l)) and (ii) a copy of the Parent's
by-laws;
(m) Opinions of (i) Xxxxx X. Xxxxxxxx, General Counsel of the
Parent acting on behalf the Parent and the Seller and (ii) Xxxxx &
Lardner, counsel for the Seller and the Parent, in each case, as to such
matters as the Agent may reasonably request;
(n) A copy of the Fee Letter;
(o) A copy of the Interim Procedures Letter; and
(p) An opinion of Sidley & Austin, counsel for the Agent, as
the Agent may reasonably request.
SECTION 3.02. Conditions Precedent to All Purchases and
Reinvestments. The rights of the Seller to receive the proceeds of any
Purchase hereunder (including, without limitation, the initial Capital
Increase Purchase and each remittance of Collections by the Collection
Agent to the Seller pursuant to Section 2.06) shall be subject to the
further conditions precedent that (a) with respect to any such Purchase
(other than the initial Capital Increase Purchase), on or prior to the
date of such Purchase, the Collection Agent shall have delivered to the
Agent, in form and substance satisfactory to the Agent, a completed
Investor Report dated within thirty days prior to the date of such
Purchase and containing such additional information as may be reasonably
requested by the Agent; (b) on the date of such Purchase the following
statements shall be true and the Seller by accepting the amount of such
Capital Increase Purchase or by receiving the proceeds of such Collections
shall be deemed to have certified that:
(i) The representations and warranties contained in Section
4.01 (other than in Sections 4.01(e) and 4,01(f)) are correct on and as of
such day as though made on and as of such date,
(ii) No event has occurred and is continuing, or would result
from such Purchase or reinvestment, which constitutes an Event of
Investment Ineligibility or would constitute an Event of Investment
Ineligibility but for the requirement that notice be given or time elapse
or both,
(iii) The Agent shall not have delivered to the Seller a notice
stating that the Investors shall not make any further Purchases hereunder
and/or that the Collection Agent shall not reinvest Collections in any
Eligible Receivables on behalf of the Owners, and
(iv) On such date, all of the Seller's unsecured long-term
public senior debt securities are rated at least BBB- by Standard & Poor's
Corporation and Baa3 by Xxxxx'x Investors Service, Inc.,
and (c) the Agent shall have received such other approvals, opinions or
documents as the Agent may reasonably request.
Notwithstanding the fact that any of the above-described conditions
precedent may not, in fact, have been satisfied in connection with any
Purchase hereunder, (x) such failure shall not impair the effectiveness of
the related Purchase, (y) the Purchase of the relevant Eligible Assets
shall be deemed to have been made automatically pursuant to Section 2.01
and Section 2.06 and (z) the relevant Eligible Assets shall be computed
initially pursuant to Section 2.05, but in each case with respect to the
foregoing clauses (x), (y) and (z), without waiver of any claim that the
Agent or any Owner may have against the Seller for failure to satisfy such
condition precedent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller.
The Seller represents and warrants as follows:
(a) The Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction named at
the beginning hereof and is duly qualified to do business, and is in good
standing, in every jurisdiction in which the nature of its business
requires it to be so qualified, except to the extent that the failure to
be qualified to do business or in good standing in any jurisdiction would
not, when taken together with all similar failures, materially adversely
affect the financial condition or operations of the Seller, the
collectibility of any Receivable or the rights of the Agent or any Owner
hereunder. The Seller has no Subsidiaries.
(b) The execution, delivery and performance by the Seller of
this Agreement, the Transfer Agreement and all other instruments and
documents to be delivered hereunder and thereunder, and the transactions
contemplated hereby and thereby, are within the Seller's corporate powers,
have been duly authorized by all necessary corporate action, do not
contravene (i) the Seller's charter or by-laws, (ii) any law, rule or
regulation applicable to the Seller, other than any such laws, rules or
regulations the contravention of which on an aggregate basis would not
materially adversely affect the financial condition or operations of the
Seller, the collectibility of any Receivable or the rights of the Agent or
any Owner hereunder (iii) any contractual restriction contained in any
indenture, loan or credit agreement, lease, mortgage, security agreement,
bond, note, or other agreement or instrument binding on or affecting the
Seller or its property or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting the Seller or its property,
and do not result in or require the creation of any Adverse Claim upon or
with respect to any of its properties (other than as contemplated herein
and in the Parallel Purchase Agreement with respect to the Pool
Receivables and Related Security); and no transaction contemplated hereby
requires compliance with any bulk sales act or similar law. This
Agreement has been duly executed and delivered on behalf of the Seller.
(c) 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, delivery and performance by the Seller of
this Agreement, the Transfer Agreement or any other document or instrument
to be delivered hereunder or thereunder, except for the filing of the
financing statements referred to in Article III, all of which, at the time
required in Article III, shall have been duly made and shall be in full
force and effect.
(d) This Agreement and the Transfer Agreement constitute the
legal, valid and binding obligations of the Seller enforceable against the
Seller in accordance with their respective terms.
(e) The consolidated balance sheets of the Parent and its
consolidated Subsidiaries as at December 31, 1994, and the related
consolidated statements of cash flows and consolidated statements of
changes in financial position of the Parent and its consolidated
Subsidiaries for the fiscal year then ended, certified by Xxxxxx Xxxxxxxx
LLP, independent public accountants, copies of which have been furnished
to the Agent, fairly present the consolidated financial condition of the
Parent and its consolidated Subsidiaries as at such date and the
consolidated results of the operations of the Parent and its consolidated
Subsidiaries for the period ended on such date, all in accordance with
generally accepted accounting principles consistently applied, and since
December 31, 1994, there has been no material adverse change in any such
condition or operations.
(f) There are no actions, suits or proceedings pending, or to
the knowledge of the Seller threatened, against or affecting the Parent,
the Seller or any other Subsidiary of the Parent, or the property of the
Parent, the Seller or of any other Subsidiary of the Parent, in any court,
or before any arbitrator of any kind, or before or by any governmental
body, which may reasonably be expected to materially adversely affect the
financial condition or operations of the Seller or the Parent or the
Parent and its consolidated Subsidiaries taken as a whole, or materially
adversely affect the ability of the Seller or the Parent to perform their
respective obligations under this Agreement and the Transfer Agreement.
None of the Parent, the Seller or any Subsidiary of the Parent, is in
default with respect to any order of any court, arbitrator or governmental
body except for defaults with respect to orders of governmental agencies
which defaults are not material to the business or operations of the
Seller or the Parent or the Parent and its consolidated Subsidiaries taken
as a whole.
(g) No proceeds of any Purchase will be used by the Seller to
acquire any security in any transaction which is subject to Section 13 or
14 of the Securities Exchange Act of 1934, as amended.
(h) Each Receivable, together with the Contract related
thereto, is owned by the Seller free and clear of any Adverse Claim except
as provided herein and upon each Purchase and reinvestment, the Owner
making such Purchase or reinvestment shall acquire a valid and perfected
first priority undivided percentage ownership interest to the extent of
the Eligible Asset(s) purchased by such Owner in each Pool Receivable then
existing or thereafter arising and in the Related Security and Collections
with respect thereto, free and clear of any Adverse Claim except as
provided hereunder; and no effective financing statement or other
instrument similar in effect covering any Receivable or the Related
Security or Collections with respect thereto shall at any time be on file
in any recording office except such as may be filed in favor of the Agent
in accordance with this Agreement. The sum of all Eligible Assets and all
"Eligible Assets" under and as defined in the Parallel Purchase Agreement
shall at no time exceed 100%.
(i) No Investor Report (if prepared by the Seller, or, if not
prepared by the Seller, to the extent that information contained therein
is supplied by the Seller), information, exhibit, financial statement,
document, book, record or report furnished or to be furnished by the
Seller to the Agent or any Owner in connection with this Agreement is or
shall be inaccurate in any material respect as of the date it is or shall
be dated or (except as otherwise disclosed to the Agent or such Owner, as
the case may be, at such time) as of the date so furnished, or contains or
shall contain any material misstatement of fact or omits or shall omit to
state a material fact or any fact necessary to make the statements
contained therein not materially misleading.
(j) The chief place of business and chief executive office of
the Seller are located at the address of the Seller referred to in Section
11.02 hereof and the locations of the offices where the Seller keeps all
the Records are listed on Exhibit F (or at such other locations, notified
to the Agent in accordance with Section 5.01(f), in jurisdictions where
all action required by Section 6.05 has been taken and completed).
(k) The Purchase of Eligible Assets and the reinvestment of
Collections pursuant to Section 2.05 will constitute (i) a "current
transaction" within the meaning of Section 3(a)(3) of the Securities Act
of 1933, as amended, and (ii) a purchase or other acquisition of notes,
drafts, acceptances, open accounts receivable or other obligations
representing part or all of the sales price of merchandise, insurance or
services within the meaning of Section 3(c)(5) of the Investment Company
Act of 1940, as amended.
(l) As of the date hereof, except as described on Exhibit D,
the Seller has no trade names, fictitious names, assumed names or "doing
business as" names.
(m) The Seller or the Parent, as applicable, shall have given
reasonably equivalent value to each Dealer in consideration for the
transfer to the Seller or the Parent, as applicable of the Receivables and
related Contracts from such Dealer or the Parent, as applicable, and none
of such transfers is or may be voidable under Sections 544, 545, 548, 549
or 724(a) of the Bankruptcy Code.
(n) Each Receivable and related Contract that has been
transferred to the Seller by the Parent has been purchased by the Seller
from the Parent pursuant to the Transfer Agreement.
ARTICLE V
GENERAL COVENANTS OF THE SELLER
SECTION 5.01. Affirmative Covenants of the Seller. From the
date hereof until the later of the Termination Date or the Collection
Date, the Seller will, unless the Agent shall otherwise consent in
writing:
(a) Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders with respect to
its business and properties or the Receivables and related Contracts,
except to the extent that any failure to so comply, when taken together
with all similar failures, would not materially adversely affect the
financial condition or operations of the Seller, the collectibility of any
Receivable or the rights and remedies of the Agent or any Owner hereunder.
(b) Preservation of Corporate Existence. Preserve and maintain
its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in
good standing in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualifications
would materially adversely affect (i) the interests hereunder of the Agent
or any Owner, (ii) the collectibility of any Receivable or (iii) the
ability of the Seller or the Collection Agent to perform their respective
obligations hereunder.
(c) Audits. At any time and from time to time during regular
business hours and upon five Business Days' (or if an Event of Investment
Ineligibility has occurred and is continuing one Business Day's) prior
notice (which may be by telephone) to the Seller, permit the Agent, or its
agents or representatives, (i) to examine and make copies of and abstracts
from all Records and (ii) to visit the offices and properties of the
Seller for the purpose of examining such Records, and to discuss matters
relating to the Receivables or the Seller's performance hereunder with any
of the officers or employees of the Seller having knowledge of such
matters.
(d) Keeping of Records and Books of Account. Maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing the 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 daily identification of
each new Pool Receivable and all Collections of and adjustments to each
existing Pool Receivable).
(e) Performance and Compliance with Receivables and Contracts.
At its expense, timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by it
under the Contracts related to the Receivables.
(f) Location of Records. Keep its chief place of business and
chief executive office, and the offices where it keeps the Records, at the
address(es) of the Seller referred to in Section 4.01(j) or, upon 30 days'
prior written notice to the Agent, at such other locations within the
United States where all action required by Section 6.05 shall have been
taken and completed.
(g) Credit and Collection Policies. Comply in all material
respects with its Credit and Collection Policy in regard to each
Receivable and the related Contract.
(h) Collections. Instruct all Obligors to cause all
Collections to be paid directly to a Dealer or the Parent; instruct all
Dealers or the Parent, as applicable, to remit all Collections to the
Seller within ten days of its receipt thereof from the applicable Obligor;
and remit all Collections to the Collection Agent (including, without
limitation, any Collections deemed to have been received pursuant to
Section 2.07) within one Business Day following the Seller's receipt
thereof.
(i) Identification of Eligible Receivables. Establish and
maintain procedures as are necessary for determining whether each
outstanding Pool Receivable qualifies as an Eligible Receivable.
(j) Returned Equipment. At all times on and after the
Termination Date, whenever possession (whether by return, repossession or
otherwise) of any Equipment relating to any Pool Receivable is obtained by
the Seller, any Affiliate of the Seller or any of their respective agents,
such Person shall hold such Equipment in trust for the benefit of the
Owners to the extent of their interest therein, and following the Agent's
request, clearly identify such equipment as subject to such interest;
provided, however, that the Seller may at any time sell or otherwise
realize upon any such returned or repossessed Equipment in accordance with
the terms of the Credit and Collection Policy, subject to the requirement
the proceeds of such sale or other realization be remitted to the
Collection Agent for application pursuant to the terms of this Agreement.
The Seller will use its best efforts to sell or otherwise realize upon any
returned or repossessed Equipment.
(k) Seller's Acquisition of Receivables. With respect to each
Receivable and related Contract acquired by the Parent from a Dealer,
cause the Parent to take all action necessary to perfect, protect and
evidence the Parent's ownership interest in such Receivable and related
Contract and with respect to each Receivable and related Contract acquired
by the Seller from the Parent or a Dealer, take all action necessary to
perfect, protect and evidence the Seller's interest in such Receivable and
related Contract.
(l) Security Interest In Equipment. With respect to each
Receivable and related Contract, to the extent required by the Credit and
Collection Policy, maintain filed UCC financing statements in all
applicable jurisdictions so that the Seller has a perfected security
interest in the Equipment related to such Receivable and related Contract
free and clear of any Adverse Claim.
(m) Insurance. To the extent required by the Credit and
Collection Policy, maintain or cause to be maintained for the benefit of
the Seller, one or more casualty insurance policies on each item of
Equipment relating to the Pool Receivables and the related Contracts
covering loss thereof and damage thereto in an amount at least equal to
the Outstanding Balance of such Pool Receivable and, upon the Agent's
request, deliver, or cause to be delivered, loss payee endorsements
reflecting the Agent's right to receive any payments payable under any
such policies to the extent of the Owners' interest in the Pool
Receivables and related Contracts.
SECTION 5.02. Reporting Requirements of the Seller. From the
date hereof until the later of the Termination Date or the Collection
Date, the Seller will, unless the Agent shall otherwise consent in
writing, furnish to the Agent:
(a) as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of the
Parent, consolidated balance sheets of the Parent and its consolidated
Subsidiaries as of the end of such quarter, and the related consolidated
statements of cash flows and consolidated statements of changes in
financial position of the Parent and its consolidated Subsidiaries each
for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter, certified by the chief financial
officer or chief accounting officer of the Parent;
(b) as soon as available and in any event within 120 days after
the end of each fiscal year of the Parent, a copy of the consolidated
balance sheets of the Parent and its consolidated Subsidiaries as of the
end of such year and the related consolidated statements of cash flows and
consolidated statements of changes in financial position of the Parent and
its consolidated Subsidiaries for such year each reported on by nationally
recognized independent public accountants acceptable to the Agent, all in
reasonable detail and certified without adverse opinion or disclaimer by
nationally recognized independent public accountants acceptable to the
Agent, whose certificate shall be in conformity with generally accepted
accounting principles;
(c) together with the financial statements delivered pursuant
to the foregoing clauses (a) and (b), a certificate of the chief financial
officer or chief accounting officer of the Seller stating that there
exists no Event of Investment Ineligibility or event which, with the
passage of time or the giving of notice or both, would constitute an Event
of Investment Ineligibility, or, if any such event exists, specifying the
nature thereof, the period of existence thereof and what action the Seller
proposes to take with respect thereto;
(d) promptly after the sending or filing thereof, copies of all
reports which the Parent sends to any of its security holders and copies
of all reports and other documents which the Parent files with the
Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended, and, to the extent requested by the Agent, copies of
such other reports and registration statements as the Parent may file with
the Securities and Exchange Commission or any national securities
exchange;
(e) promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any reportable event defined in
Title IV of ERISA which could result in the imposition of any lien and
which the Parent or any ERISA Affiliate of the Parent files under ERISA
with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or which the Parent or any
ERISA Affiliate of the Parent receives from such Corporation;
(f) as soon as possible and in any event within five days after
the occurrence of each Event of Investment Ineligibility or each event
which, with the giving of notice or lapse of time or both, would
constitute an Event of Investment Ineligibility, the statement of the
chief financial officer or chief accounting officer of the Seller setting
forth details of such or event and the action which the Seller proposes to
take with respect thereto;
(g) promptly upon the Agent's request therefor, a certificate
of the chief financial officer or chief accounting officer of the Seller
to the effect that, at such time, the sum of the Eligible Asset and all
"Eligible Assets" under and as defined in the Parallel Purchase Agreement
does not exceed 100%;
(h) promptly after becoming aware thereof, notice of (i) any
pending or threatened actions, suits or proceedings against or affecting
the Parent, the Seller or any other Subsidiary of the Parent, or the
property of the Parent, the Seller or of any other Subsidiary of the
Parent, in any court, or before any arbitrator of any kind, or before or
by any governmental body, which may reasonably be expected to materially
adversely affect the financial condition or operations of the Seller or
the Parent or the Parent and its consolidated Subsidiaries taken as a
whole, or materially adversely affect the ability of the Seller or the
Parent to perform their respective obligations under this Agreement and
the Transfer Agreement and (ii) the existence of any default on the part
of the Parent, the Seller or any Subsidiary of the Parent with respect to
any order of any court, arbitrator or governmental body, other than any
such default that, which when taken together with all other such defaults,
is not material to the business or operations of the Seller or the Parent
or the Parent and its consolidated Subsidiaries taken as a whole.
(i) promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the conditions
or operations, financial or otherwise, of the Seller, the Parent or any
Subsidiary of the Seller or the Parent as the Agent may from time to time
reasonably request in order to protect the interests of the Agent or of
any Owner under or as contemplated by this Agreement.
SECTION 5.03. Negative Covenants of the Seller. From the date
hereof until the later of the Termination Date or the Collection Date, the
Seller will not, without the written consent of the Agent:
(a) Sales, Liens, Etc. Except as otherwise provided herein or
in the Parallel Purchase Agreement, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to, any Receivable, Related Security or
Collections, or any related Contract, or upon or with respect to any
account to which any Collections of any Receivable are sent, or assign any
right to receive income in respect thereof.
(b) Extension or Amendment of Receivables. Extend, amend or
otherwise modify the terms of any Pool Receivable, or amend, modify or
waive any term or condition of any Contract related thereto, except (i) as
otherwise permitted in Section 6.02 or (ii) prior to the Termination Date,
in accordance with the terms of the applicable Credit and Collection
Policy; it being understood further that the Seller will not at any time,
without the prior written consent of the Agent, enter into any Contract
Rider with respect to any Contract relating to a Pool Receivable if
immediately prior to entering into such Contract Rider such Pool
Receivable is a Defaulted Receivable.
(c) Change in Business or Credit and Collection Policy. Make
or permit the Parent to make any change in the Credit and Collection
Policy, or make or permit the Parent to make any change in the character
of its business, which change would, in either case, impair the
collectibility of any Pool Receivable.
(d) Change in Payment Instructions to Obligors. Make or permit
to be made any change in the instructions made to Obligors, Dealers or the
Parent regarding payments to be made on Pool Receivables, unless the Agent
shall have received ten Business Days' prior notice of such change, and
prior to the effective date of such change deliver to the Agent such
instruments, agreements and other documents (including, to the extent
payments of Obligors are remitted lock-boxes, lock-box notices to the
relevant lock-box banks) as the Agent shall reasonably request.
(e) Merger, etc. (i) Merge with or into or consolidate with
or into, or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions), all or substantially all
of its assets (whether now owned or hereafter acquired), or acquire all or
substantially all of the assets or capital stock or other ownership
interest of, any Person.
(f) Change in Corporate Names. Make any change to its
corporate name or use any tradenames, fictitious names, assumed names or
"doing business as" names other than those described in Exhibit D, unless
prior to the effective date of any such name change or use, the Seller
delivers to the Agent such Financing Statements (Form UCC-1 and UCC-3)
executed by the Seller which the Agent may request to reflect such name
change or use, together with such other documents and instruments that the
Agent may request in connection therewith.
(g) Change in Transfer Agreement. Amend, modify, waive or
terminate, or permit the Parent to amend, modify, waive or terminate, any
term, provision or condition of the Transfer Agreement.
(h) ERISA Matters. (i) Engage or permit any ERISA Affiliate
to engage in any prohibited transaction described in Sections 406 of ERISA
or 4975 of the Internal Revenue Code of 1986 for which an exemption is not
available or has not previously been obtained from the Department of
Labor; (ii) permit to exist any accumulated funding deficiency, as defined
in Section 302(a) of ERISA and Section 412(a) of the Internal Revenue
Code, or funding deficiency with respect to any Benefit Plan other than a
Multiemployer Plan; (iii) fail, or permit any ERISA Affiliate to fail, to
make any payments to any Multiemployer Plan that the Seller or any ERISA
Affiliate may be required to make under the agreement relating to such
Multiemployer Plan or any law pertaining thereto; (iv) terminate, or
permit any ERISA Affiliate to terminate, any Benefit Plan so as to result
in any liability; (v) fail, or permit any ERISA Affiliate to fail, to pay
timely required contributions or annual installments due with respect to
any waived funding deficiency to any Benefit Plan; (vi) fail, or permit
any ERISA Affiliate to fail, to pay any required installment or any other
payment required under Section 412 of the Internal Revenue Code of 1986 on
or before the due date for such installment or other payment; or
(vii) permit to exist any occurrence of any reportable event described in
Title IV of ERISA which represents a material risk of a liability of the
Seller or any ERISA Affiliate under ERISA or the Internal Revenue Code, if
such prohibited transactions, accumulated funding deficiencies, payments,
terminations and reportable events occurring within any fiscal year of the
Seller, in the aggregate, involve a payment of money by or an incurrence
of liability of the Seller or any ERISA Affiliate (collectively, "ERISA
Liabilities") in an amount in excess of $25,000,000.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent. (a) The
servicing, administering and collection of the Receivables shall be
conducted by the Person (the "Collection Agent") so designated from time
to time in accordance with this Section 6.01. Until the Agent gives
notice to the Seller of the designation of a new Collection Agent pursuant
to Section 6.01(b) (a "Servicer Notice"), the Seller is hereby designated
as, and hereby agrees to perform the duties and obligations of, the
Collection Agent pursuant to the terms hereof. The Seller agrees that it
will terminate its activities hereunder as Collection Agent on the day
following the Successor Notice.
(b) At any time following the occurrence of an Event of
Investment Ineligibility, the Agent may designate as Collection Agent any
Person (including itself) to succeed the Seller or any successor
Collection Agent, on the condition in each case that any such Person so
designated shall agree to perform the duties and obligations of the
Collection Agent pursuant to the terms hereof. The Collection Agent may,
with the prior consent of the Agent, subcontract with any other Person for
servicing, administering or collecting the Receivables, provided that the
Collection Agent shall remain liable for the performance of the duties and
obligations of the Collection Agent pursuant to the terms hereof.
SECTION 6.02. Duties of the Collection Agent. (a) The
Collection Agent shall take or cause to be taken all such actions as may
be reasonably 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. Each of the Seller, the Owners and the Agent hereby
appoints as its agent the Collection Agent, from time to time designated
pursuant to Section 6.01, to enforce its respective rights and interests
in and under the Receivables, the Related Security and the Contracts. The
Collection Agent shall set aside for the account of the Seller and each
Owner their respective allocable shares of the Collections of Receivables
in accordance with Section 2.05 and Section 2.06 but shall not be required
(unless the Ratings Requirement is no longer satisfied and the Agent shall
have requested otherwise) to segregate the funds constituting such portion
of such Collections prior to the remittance thereof in accordance with
said Sections. If the Ratings Requirement is no longer satisfied and the
Agent so instructs, the Collection Agent shall segregate and deposit with
a bank (which may be Citibank) designated by the Agent such allocable
share of Collections of Pool Receivables, set aside for each Owner, on the
first Business Day following receipt by the Collection Agent of such
Collections and will, if so requested by the Agent, provide payment
instructions to such bank as directed by the Agent. Provided that the
Termination Date shall not have occurred, the Seller, while it is
Collection Agent, may, in accordance with the Credit and Collection
Policy, (i) extend the maturity or adjust the Outstanding Balance of any
Defaulted Receivable as the Seller may determine to be appropriate to
maximize Collections thereof and/or (ii) adjust the Outstanding Balance of
any Receivable to reflect the reductions or cancellations described in the
first sentence of Section 2.07. The Seller shall deliver to the
Collection Agent, and the Collection Agent shall hold in trust for the
Seller and each Owner in accordance with their respective interests, all
Records. Notwithstanding anything to the contrary contained herein, so
long as the Ratings Requirement is not satisfied the Agent shall have the
absolute and unlimited right to direct the Collection Agent (whether the
Collection Agent is the Seller or any other Person) to commence or settle
any legal action to enforce collection of any Pool Receivable or to
foreclose upon or repossess any Related Security.
(b) The Collection Agent shall as soon as practicable following
receipt turn over to the Seller the Collections of any Receivable which is
not a Pool Receivable less, in the event the Seller is not the Collection
Agent, all reasonable and appropriate out-of-pocket costs and expenses of
such Collection Agent of servicing, collecting and administering the
Receivables to the extent not covered by the Collection Agent Fee received
by it. The Collection Agent, if other than the Seller, shall as soon as
practicable upon demand deliver to the Seller all Records in its
possession relating to Receivables of the Seller other than Pool
Receivables, and copies of Records in its possession relating to Pool
Receivables. The Collection Agent's authorization under this Agreement
shall terminate after the Termination Date on the Collection Date.
(c) Notwithstanding anything to the contrary contained in this
Article VI, the Collection Agent, if the Agent or its designee, shall have
no obligation to collect, enforce or take any other action described in
this Article VI with respect to any Receivable that is not a Pool
Receivable other than as described in the first two sentences of Section
6.02(b).
SECTION 6.03. Rights of the Agent. (a) The Agent may notify
at any time the Obligors of Pool Receivables, or any of them, of the
Owners' ownership of Eligible Assets.
(b) At any time following the designation of a Collection Agent
other than the Seller pursuant to Section 6.01:
(i) the Agent may direct the Obligors of Receivables, or any of
them, that payment of all amounts payable under any Receivable be made
directly to the Agent or its designee;
(ii) the Seller shall, at the Agent's request and at the
Seller's expense, give notice of the Owners' ownership interest in Pool
Receivables to each Obligor and direct that payments be made directly to
the Agent or its designee;
(iii) the Seller shall, at the Agent's request, (A) assemble
all Records, and shall make the same available to the Agent at a place
selected by the Agent or its designee, and (B) segregate all cash, checks
and other instruments received by it from time to time constituting
Collections of Receivables in a manner acceptable to the Agent and shall,
promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Agent or
its designee; and
(iv) each of the Seller and the Owners hereby authorizes the
Agent to take any and all steps in the Seller's name and on behalf of the
Seller and the Owners necessary or desirable, in the determination of the
Agent, to collect all amounts due under any and all Receivables,
including, without limitation, endorsing the Seller's name on checks and
other instruments representing Collections and enforcing such Receivables
and the related Contracts.
SECTION 6.04. Responsibilities of the Seller. Anything herein
to the contrary notwithstanding:
(a) The Seller shall (i) perform all of its obligations under
the Contracts related to the Pool Receivables to the same extent as if
Eligible Assets had not been sold hereunder and the exercise by Agent of
its rights hereunder shall not relieve Seller from such obligations and
(ii) pay when due any taxes (other than taxes based upon or measured by
income of the Agent or any Owner), including without limitation, sales and
excise taxes, payable in connection with the Pool Receivables; and
(b) Except as otherwise contemplated in this Agreement, none of
the Agent or the Owners shall have any obligation or liability with
respect to any Pool Receivables or related Contracts, nor shall any of
them be obligated to perform any of the obligations of the Seller
thereunder.
SECTION 6.05. Possession by the Seller as Trustee; Further
Action Evidencing Purchases. The Seller hereby agrees that until the
Agent requests the Seller to deliver the Contracts relating to Pool
Receivables and/or the documentary items of Related Security to it as
provided in Section 6.06, the Seller shall maintain possession of such
items at its address described in Section 5.01(f) in trust for the benefit
of the Agent and the Owners to the extent of their interests therein. The
Seller agrees that from time to time, at its expense, it will promptly
execute and deliver all further instruments and documents, and take all
further action that the Agent may reasonably request in order to perfect,
protect or more fully evidence the Eligible Assets purchased by the
Investors hereunder, or to enable any of the Owners or the Agent to
exercise or enforce any of their respective rights hereunder. Without
limiting the generality of the foregoing, the Seller will upon the request
of the Agent: (a) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate or as the Agent
may request to evidence, or otherwise in connection with, this Agreement
and the transactions contemplated hereby, (b) if the Ratings Requirement
is no longer satisfied, xxxx conspicuously each Contract evidencing the
Pool Receivables with a legend, acceptable to the Agent, evidencing that
the Investors have purchased all right and title thereto and interest
therein as provided in this Agreement; and (c) xxxx its master data
processing records evidencing such Pool Receivables and related Contracts
with such legend. The Seller hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Pool Receivables and
the Related Security now existing or hereafter arising, without the
signature of the Seller where permitted by law. A carbon, photographic or
other reproduction of this Agreement or any financing statement covering
the Pool Receivables, or any part thereof shall be sufficient as a
financing statement. If the Seller fails to perform any of its agreements
or obligations under this Agreement, the Agent may (but shall not be
required to) itself perform, or cause performance of, such agreement or
obligation, and the expenses of the Agent incurred in connection therewith
shall be payable by the Seller upon the Agent's demand therefor.
SECTION 6.06. Delivery of Contracts to Agent. In order to
perfect, protect or more fully evidence the Eligible Assets purchased by
the Investors hereunder, the Agent may at any time that the Ratings
Requirement is not satisfied request the Seller to, and promptly following
Agent's request the Seller shall promptly deliver to the Agent the
original Contracts relating to Pool Receivables fully executed by the
related Obligor, together with (a) all other original documents,
instruments and agreements that constitute part of the Related Security
and (b) endorsements or assignments in blank satisfactory in form and
substance to the Agent and executed by a duly authorized officer of the
Seller.
SECTION 6.07. Application of Collections. Any payment by an
Obligor in respect of any indebtedness owed by it to the 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 Pool Receivable of such Obligor (in the order of
the age of such Receivables, starting with the oldest such Pool
Receivable) to the extent of any amounts then due and payable thereunder
before being applied to any other Receivable or other indebtedness of such
Obligor.
ARTICLE VII
EVENTS OF INVESTMENT INELIGIBILITY
SECTION 7.01. Events of Investment Ineligibility. If any of
the following events ("Events of Investment Ineligibility") shall occur:
(a) (i) The Collection Agent (if the Seller or a Person
designated by the Seller) shall fail to perform or observe any term,
covenant or agreement hereunder in its capacity as the Collection Agent or
the Seller shall fail to perform or observe any term, covenant or
agreement contained in Article VI in its capacity as the Seller (other
than, in either case, as referred to in clause (ii) of this
Section 7.01(a)) and, in either case, any such failure shall remain
unremedied for three Business Days after written notice thereof shall have
been given by the Agent to the Seller or (ii) either the Collection Agent
(if the Seller or a Person designated by the Seller) or the Seller shall
fail to make any payment or deposit to be made by it hereunder when due;
or
(b) Any representation or warranty made or deemed to be made by
the Seller (or any of its officers) under or in connection with this
Agreement or any Investor Report or other information or report delivered
pursuant hereto shall prove to have been false or incorrect in any
material respect when made; provided, however, that except to the extent
that any such falsity or inaccuracy in respect of any of the
representations and warranties set forth in Sections 4.01(a), 4.01(b),
4.01(c), 4.01(g), 4.01(h), 4.01(i) and 4.01(l) would constitute an Event
of Investment Ineligibility under some other subsection of this Section
7.01, if, within ten Business Days following the earlier of the date on
which the Seller learns of such falsity or inaccuracy (on which date the
Seller shall also give the Agent notice thereof) or the date on which the
Agent gives the Seller notice of such inaccuracy or falsity, the Seller
shall cure such falsity or inaccuracy in respect of any of the
representations and warranties set forth in the Sections specified above
in this proviso clause so as to render such representation and warranty
true and accurate, then such falsity or inaccuracy shall not constitute an
Event of Investment Ineligibility under this Section 7.01(b), subject,
however, to the further conditions that (i) the Seller shall pay to the
Agent, on written demand setting forth in reasonable detail the basis
therefor, any amount necessary to indemnify the Owners, the Agent, CNAI
and any of their respective Affiliates in full for any loss, cost or
expense incurred by any of them as a result of such falsity or inaccuracy
and (ii) no purchases of Eligible Assets shall be made during the pendency
of such cure period; or
(c) The Seller shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be
performed or observed and any such failure shall remain unremedied for ten
Business Days after written notice thereof shall have been given by the
Agent to the Seller; or
(d) A default or defaults or any other event shall occur under
any agreement or instrument relating to any Debt of the Parent, the Seller
or any other Subsidiary of the Parent in an amount exceeding $25,000,000
in the aggregate, and such default, defaults or other event shall result
in a declaration of acceleration of the payment of such Debt; or
(e) Any Purchase of an Eligible Asset shall for any reason,
except to the extent permitted by the terms hereof, cease to create a
valid and perfected first priority undivided percentage interest to the
extent of such Eligible Asset in each Pool Receivable and the Related
Security and Collections with respect thereto, free and clear of any
Adverse Claims (except to the extent contemplated hereunder or under the
Parallel Purchase Agreement in favor of the Owners or the Banks); or
(f) (i) The Parent, the Seller or any Material Subsidiary
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 the Parent, the Seller or any Material
Subsidiary seeking to adjudicate it a 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 for any substantial
part of its property; or (iii) the Parent, the Seller or any Material
Subsidiary shall take any corporate action to authorize any of the actions
set forth in clauses (i) or (ii) above in this subsection (f); or
(g) The Loss-to-Liquidation Ratio for any month shall exceed
2.50%, or the Default Ratio for any month shall exceed 2.00%, or the
Delinquency Ratio for any month shall exceed 5.00%; or
(h) The sum of all Eligible Assets hereunder and all "Eligible
Assets" under and as defined in the Parallel Purchase Agreement shall
exceed 100%; or
(i) The Parent shall cease to own, directly or indirectly, 100%
of the issued and outstanding capital stock of the Seller;
(j) The Parent shall terminate, disaffirm or otherwise fail to
honor or perform any of the terms, provisions or covenants of, or any of
its other obligations under the Parent Support Agreement, or notice is
received by the Agent, CNAI, or any Owner from the Parent of the Parent's
intention to take any of the aforementioned action, or any representation
or warranty made by the Parent under the Parent Support Agreement shall
prove to have been false or incorrect when made in any respect material to
the respective interests of any Owner, the Agent or CNAI thereunder, or
the Parent Support Agreement shall cease to constitute the legal, valid
and binding obligation of the Parent enforceable against the Parent in
accordance with its terms; or
(k) There shall have occurred any event which materially
adversely affects the collectibility of the Receivables or there shall
have occurred any other event which materially adversely affects the
ability of the Seller to collect Receivables or the ability of the Seller
to perform hereunder; or
(l) Since December 31, 1994, there shall have occurred any
material adverse change in the consolidated financial condition of the
Parent and its consolidated Subsidiaries or the consolidated results of
the operations of the Parent and its consolidated Subsidiaries for any
period; or
(m) An "Event of Termination" (as defined in the Parallel
Purchase Agreement) shall occur;
then, and in any such event, the Agent may, by notice to the Seller
declare the Termination Date to have occurred, except that, in the case of
any event described in clause (ii) of subsection (f), above, the
Termination Date shall be deemed to have occurred automatically upon the
occurrence of such event. Upon any such declaration or automatic
occurrence, the Agent and the Owners shall have, in addition to all other
rights and remedies under this Agreement or otherwise, all other rights
and remedies provided under the UCC of all applicable jurisdictions and
other applicable laws, which rights shall be cumulative. Without limiting
the foregoing or the general applicability of Article IX or Section 11.04,
any Owner may elect to assign any Eligible Asset (or undivided percentage
interest therein) owned by such Owner to an assignee following the
occurrence of any Event of Investment Ineligibility.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action. Each Owner hereby
accepts the appointment of and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers as are delegated to the
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. The Agent reserves the right, in its sole discretion
to exercise any rights and remedies under this Agreement or any instrument
or document executed and delivered pursuant hereto, or pursuant to
applicable law, and also to agree to any amendment, notification or waiver
of this Agreement or any instrument or document executed and delivered
pursuant hereto. Notwithstanding anything herein or elsewhere to the
contrary, the Agent shall not be required to take any action which exposes
the Agent to personal liability or which is contrary to this Agreement or
applicable law. The appointment and authority of the Agent hereunder
shall terminate at the Collection Date.
SECTION 8.02. UCC Filings. The Owners and the Seller expressly
recognize and agree that the Agent may be listed as the assignee or
secured party of record on the various UCC filings required to be made
hereunder in order to perfect the transfer of the Eligible Assets from the
Seller to the Owners, that such listing shall be for administrative
convenience only in creating a record or nominee owner to take certain
actions hereunder on behalf of the Owners and that such listing will not
affect in any way the status of the Owners as the beneficial owners of the
Eligible Assets. In addition, such listing shall impose no duties on the
Agent other than those expressly and specifically undertaken in accordance
with this Article VIII. In furtherance of the foregoing, each Owner shall
be entitled to enforce its rights created under this Agreement without the
need to conduct such enforcement through the Agent except as provided
herein.
SECTION 8.03. Agent's Reliance. Etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them as Agent under or in
connection with this Agreement (including, without limitation, the Agent's
servicing, administering or collecting Receivables as Collection Agent
pursuant to Article VI), except for its or their own gross negligence or
willful misconduct. Without limiting the foregoing, the Agent: (i) may
consult with legal counsel (including counsel for the Seller), independent
public accountants and other experts selected by it and shall not liable
for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (ii)
makes no warranty or representation to any Owner and shall not be
responsible to any Owner for any statements, warranties or representations
made in or in connection with this Agreement; (iii) shall not have any
duty to (A) ascertain or to inquire as to, and shall not be responsible
for, the performance or observance of any of the terms, covenants or
conditions of this Agreement or any instrument or document furnished
pursuant hereto on the part of the Seller or (B) inspect the property
(including the books and records) of the Seller; (iv) shall not be
responsible to any Owner for the due execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Agreement or
any other instrument or document furnished pursuant hereto; (v) shall not
be deemed to be acting as any Owner's trustee or otherwise in a fiduciary
capacity hereunder or under or in connection with the Parallel Purchase
Agreement or any Eligible Asset; and (vi) shall incur no liability under
or in respect of this Agreement by acting upon any notice (including
notice by telephone), consent, certificate or other instrument or writing
(which may be by telex) believed by it to be genuine and signed or sent by
the proper party or parties.
SECTION 8.04. Agent and Affiliates. To the extent that the
Agent or any of its Affiliates shall become an Owner hereunder, the Agent
or such Affiliate, in such capacity, shall have the same rights and powers
under this Agreement as would any Owner hereunder and may exercise the
same as though it were not the Agent. The Agent and its Affiliates may
generally engage in any kind of business with the Seller or any Obligor,
any of their respective Affiliates and any Person who may do business with
or own securities of the Seller or any Obligor or any of their respective
Affiliates, all as if it were not the Agent hereunder and without any duty
to account therefor to the Owners (including, without limitation, acting
as "Agent" under the Parallel Purchase Agreement).
SECTION 8.05. Purchase Decision. Each Owner acknowledges that
it has, independently and without reliance upon the Agent or any other
Owner and based on such documents and information as it has deemed
appropriate, made its own evaluation and decision to enter into this
Agreement and, if it so determines, to purchase an undivided ownership
interest in the Pool Receivables hereunder. Each Owner also acknowledges
that it will, independently and without reliance upon the Agent or any
other Owner, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own decisions in taking or
not taking action under this Agreement.
SECTION 8.06. Indemnification. Each Owner agrees to indemnify
the Agent (to the extent not reimbursed by the Seller), ratably according
to its share of the aggregate outstanding Capital from time to time, from
and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this
Agreement or any other agreement, document or instrument executed in
connection herewith, or any action taken or omitted by the Agent under
this Agreement or any other agreement, document or instrument executed in
connection herewith; provided, however, that an Owner shall not be liable
for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, or disbursements
resulting from the Agent's gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, each Owner agrees
to reimburse the Agent, ratably according to its share of the aggregate
outstanding Capital from time to time, promptly upon demand, for any out-
of-pocket expenses (including reasonable counsel fees) incurred by the
Agent in connection with the administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement.
SECTION 8.07. Successor Agent. The Agent may resign at any
time by giving thirty days' notice thereof to the Owners, the Seller and
the Collection Agent. Upon any such resignation, the Owners shall have
the right to appoint a successor Agent approved by the Seller (which
approval will not be unreasonably withheld or delayed). If no successor
Agent shall have been so appointed by the Owners and accepted such
appointment within thirty days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Owners,
appoint a successor Agent approved by the Seller (which approval will not
be unreasonably withheld or delayed), which successor Agent shall be (a)
either (i) a commercial bank having a combined capital and surplus of at
least $250,000,000 or (ii) an Affiliate of such bank and (b) experienced
in the types of transactions contemplated by this Agreement. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all
of the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
ARTICLE IX
ASSIGNMENT OF ELIGIBLE ASSETS
SECTION 9.01. Assignment. Subject to compliance with Section
11.04, each Owner may assign to each other Owner or to any other Person
all or any portion of its rights and title to, and interest in, any
Eligible Asset owned by such Owner. Such assignments shall be upon such
terms and conditions as the assignor and the assignee may mutually agree,
and such assignor shall promptly execute and deliver all further
instruments and documents, and take all further action, that the assignee
may reasonably request, in order to perfect, protect or more fully
evidence the assignee's right and title to, and interest in, such Eligible
Asset, and to enable the assignee to exercise or enforce any rights
hereunder. Each assignor of an Eligible Asset or any interest therein
shall notify the Agent and the Seller of any such assignment.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. Indemnities by the Seller. Without limiting any
other rights which CNAI, the Agent, each Owner or their Affiliates may
have hereunder or under applicable law, the Seller hereby agrees to
indemnify each of the Agent, CNAI, the Owners and their Affiliates from
and against any and all damages, losses, claims, liabilities and related
costs and expenses, including reasonable attorneys' fees 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 ownership of Eligible Assets or in
respect of any Receivable or any Contract, excluding, however, (x)
Indemnified Amounts to the extent resulting from gross negligence or
willful misconduct on the part of the Agent, CNAI, such Owner and their
Affiliates, (y) recourse (except as otherwise specifically provided in
this Agreement) for uncollectible Pool Receivables or (z) Indemnified
Amounts to the extent arising solely in connection with a dispute between
or among CNAI, the Agent, any Owner or any of their respective Affiliates
as a result of an alleged default by any such Person in the performance of
any obligation owing to another such Person in connection with this
Agreement. Without limiting the foregoing, Seller shall indemnify the
Agent, CNAI, each Owner and their Affiliates for Indemnified Amounts
relating to or resulting from:
(a) the transfer hereunder of an interest in any Receivable
other than an Eligible Receivable;
(b) reliance on any representation or warranty made or deemed
made by the Seller (or any of its officers) under or in connection with
this Agreement, any Investor Report or any other information or report
delivered by the Seller pursuant hereto, or by the Parent pursuant to the
Parent Support Agreement, which shall have been false or incorrect in any
material respect when made or deemed made or delivered;
(c) the failure by the Seller (individually or as Collection
Agent) to comply with any term, provision or covenant contained in this
Agreement, or with any applicable law, rule or regulation with respect to
any Receivable, the related Contract or the Related Security, or the
nonconformity of any Receivable, the related Contract or the Related
Security with any such applicable law, rule or regulation;
(d) the failure to vest and maintain vested in each Owner or to
transfer to each Owner a valid and perfected first priority undivided
percentage interest, to the extent of each Eligible Asset owned by it
hereunder, in the Receivables which are, or are intended to be, Pool
Receivables, together with all Collections and Related Security, free and
clear of any Adverse Claim whether existing at the time of the Purchase of
such Eligible Asset or at any time thereafter;
(e) the failure at any time on or before the Termination Date
of the sum of all Eligible Assets and all "Eligible Assets" under and as
defined in the Parallel Purchase Agreement to be less than or equal to
100%;
(f) the failure to perfect or any delay in perfecting as
against the Seller, any of its Affiliates or any Dealer under the UCC of
all applicable jurisdictions or other applicable laws (whether by the
filing of financing statements or other similar instruments or documents
or otherwise) the interests of the Owners and the Agent in all Receivables
that are, or are intended to be, Pool Receivables, whether at the time of
any Purchase or at any subsequent time;
(g) any dispute, claim, offset or defense (other than discharge
in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable which is, or is intended to be, a Pool 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 Equipment or services related to such
Receivable or the furnishing or failure to furnish such Equipment or
services;
(h) any failure of the Seller, as Collection Agent or
otherwise, to perform its duties or obligations in accordance with the
provisions of Article VI;
(i) any products liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever sort
arising out of or in connection with Equipment or services which are the
subject of any Receivable or Contract;
(j) the failure by the Seller, any of its Affiliates or any
Dealer to pay when due any taxes, including without limitation, sales,
excise or personal property taxes payable in connection with the
Receivables;
(k) the failure of the Parent, the Seller, any Dealer or any of
their respective agents and representatives to collect Receivables as
contemplated by the related Contract and the Credit and Collection Policy
or the failure of the Parent, any Dealer or any of their respective agents
or representatives to remit to the Seller Collections of Pool Receivables
remitted to the Parent or any such Dealer, agent or representative, or the
failure of the Seller or any of its agents and representatives to remit to
the Collection Agent or the Agent, Collections of Pool Receivables
remitted to the Seller or such agent or representative;
(l) the termination as a Dealer of any Dealer by the Parent or
any Affiliate;
(m) any claim, litigation or other action asserted or commenced
by a Dealer for the payment to such Dealer of any dealer reserve or other
amounts or other obligations allegedly owing to such Dealer by the Seller,
the Parent or any of their respective Affiliates;
(n) any failure of the Seller or the Parent to give reasonably
equivalent value to any Dealer or the Parent, as applicable in
consideration for the transfer by such Dealer or the Parent, as applicable
of any Receivable and related Contract, or any attempt by any Person to
void any such transfer under any statutory provision or common law or
equitable action, including, without limitation, any provision of the
Bankruptcy Code;
(o) the failure by the Seller, the Parent or any Dealer to be
duly qualified to do business, to be in good standing or to have filed
appropriate fictitious or assumed name registration documents in any
jurisdiction;
(p) the occurrence with respect to any Dealer of any event of
the type described in Section 7.01(f) hereof; or
(q) the commingling of Collections of Pool Receivables at any
time with other funds, whether by a Dealer, the Seller, the Parent or any
of their respective affiliates.
Any amounts subject to the indemnification provisions of this Section
10.01 shall be paid by Seller to the Agent within two Business Days
following Agent's demand therefor.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Seller
therefrom, shall in any event be effective unless the same shall be in
writing and signed by (i) the Seller, CNAI and the Agent as agent for the
Owners (with respect to an amendment) or (ii) CNAI and the Agent as agent
for the Owners (with respect to a waiver or consent by them) or the Seller
(with respect to a waiver or consent by it), as the case may be, and then
such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. This Agreement contains a
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.
SECTION 11.02. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise stated
herein, be in writing (including telex and facsimile communication) and
mailed, telexed, transmitted or delivered, as to each party hereto, at its
address set forth under its name on the signature pages hereof or
specified in such party's Assumption Agreement or at such other address as
shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective, upon
receipt, or in the case of delivery by mail, five days after being
deposited in the mails, postage prepaid, or, in the case of notice by
telex, when telexed against receipt of answer back, or in the case of
notice by facsimile copy, when verbal confirmation of receipt is obtained,
in each case addressed as aforesaid, except that notices and
communications pursuant to Article II shall not be effective until
received.
SECTION 11.03. No Waiver; Remedies. No failure on the part of
CNAI, the Agent or any Owner to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Without limiting the foregoing, the Agent is hereby authorized by the
Seller at any time and from time to time following the occurrence of an
Event of Investment Ineligibility, to the fullest extent permitted by law,
to instruct Citibank or any Affiliate of Citibank to set-off and apply any
and all deposits (whether general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by
Citibank or such Affiliate to or for the credit or the account of the
Seller against any and all of the obligations of Seller, now or hereafter
existing under this Agreement, to the Agent or any Owner or their
respective successors and assigns irrespective of whether or not demand
therefor shall have been made under this Agreement and although such
obligations may be contingent and unmatured. The Seller acknowledges that
the rights of the Agent and any Owner or any of their respective
successors and assigns described in this paragraph are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) such parties may have.
SECTION 11.04. Binding Effect; Assignability. This Agreement
shall be binding upon each of the Seller, CNAI, the Agent, the Owners and
their respective successors and permitted assigns, and shall inure to the
benefit of the Seller, CNAI, Citibank, the Agent, the Owners and any other
Affected Persons and their respective successors and permitted assigns.
Neither the Seller nor any Owner may assign any of its rights and
obligations hereunder or any interest herein without the prior written
consent of the Agent, except that an Owner may assign its rights and
obligations hereunder and its interest herein to any other Owner or any
Affiliate of CNAI without such consent. Each Owner and each permitted
assignee of an Owner may assign its rights and obligations hereunder or
interest herein to (a) any other Owner or any Affiliate of CNAI without
the consent of the Seller and (b) to any other Person with the prior
written consent of the Seller, which consent shall not be unreasonably
withheld. The Agent may assign at any time its rights and obligations
hereunder and interests herein without the consent of the Owners or the
Seller unless the applicable assignee is not an Affiliate of CNAI, in
which case such assignment shall require the prior written consent of the
Seller, which consent shall not be unreasonably withheld. Furthermore,
each Owner and its permitted assigns may, at any time, without the consent
of the Seller, sell undivided participation interests in all or any of its
rights, obligations and interests (including, without limitation, the
Eligible Assets) hereunder. 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 such time, after
the Termination Date until the Collection Date; provided, however, that
the rights and remedies with respect to any breach of any representation
and warranty made by the Seller pursuant to Article IV, and the
indemnification and payment provisions of Articles VIII, X and XI, and
Sections 2.11, 2.12 and 2.13, shall be continuing and shall survive any
termination of this Agreement.
SECTION 11.05. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the internal laws (as opposed to
conflict of laws provisions) of the State of New York, except to the
extent that the validity or perfection of the interests of the Owners in
the Pool Receivables, or remedies hereunder, in respect thereof, are
governed by the laws of a jurisdiction other than the State of New York.
SECTION 11.06. Costs, Expenses and Taxes. (a) In addition to
the rights of indemnification granted to CNAI, the Agent, the Owners and
their Affiliates under Article X hereof, the Seller agrees to pay on
demand all costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic auditing) of
this Agreement and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for CNAI, the Agent and the Investors with respect
thereto and with respect to advising CNAI, the Agent and the Investors as
to their respective rights and remedies under this Agreement, and all
costs and expenses, if any (including reasonable counsel fees and
expenses) of each of the Agent, the Owners, CNAI and their respective
Affiliates, in connection with the enforcement of this Agreement and the
other documents to be delivered hereunder.
(b) In addition, the Seller shall pay any and all stamp, sales,
excise and other taxes (other than taxes based upon or measured by income
of the Agent or any Owner) and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this
Agreement or the other documents to be delivered hereunder, and agrees to
indemnify CNAI, the Agent and each Owner against any liabilities with
respect to or resulting from any delay by the Seller in paying or omission
to pay such taxes and fees.
(c) In addition, the Seller shall pay on demand all other
costs, expenses and taxes (excluding income taxes) incurred by any
Investor or any general or limited partner or shareholder of any Investor
("Other Costs"), including, without limitation, the cost of auditing such
Investor's books by certified public accountants, the cost of rating such
Investor's commercial paper by independent financial rating agencies, the
taxes (excluding income taxes) resulting from such Investor's operations,
and the reasonable fees and out-of-pocket expenses of counsel for such
Investor or any counsel for any general or limited partner or shareholder
of such Investor with respect to (i) advising such Investor or such
general or limited partner or shareholder as to its rights and remedies
under this Agreement, (ii) the enforcement of this Agreement and the other
documents to be delivered hereunder or (iii) advising such Investor or
such general or limited partner or shareholder as to matters relating to
such Investor's operations; provided, however, that if such Investor
enters into agreements for the purchase of interests in receivables from
one or more other Persons ("Other Sellers"), the Seller and such Other
Sellers shall each be liable for such Other Costs ratably in accordance
with the usage under the respective facilities of such Investor to
purchase receivables or interests therein from the Seller and each Other
Seller; and provided, further, that if such Other Costs are attributable
to the Seller and not attributable to any Other Seller, the Seller shall
be solely liable for such Other Costs.
SECTION 11.07. No Proceedings. Each of the Seller, the Agent,
CNAI, the Owners and each other assignee of an Eligible Asset or any
interest therein and each entity which enters into a commitment to
purchase Eligible Asset or interests therein hereby agrees that it will
not institute against any Investor any proceeding of the type referred to
in clause (ii) of Section 7.01(f) so long as any commercial paper issued
by such Investor shall be outstanding or there shall not have elapsed one
year plus one day since the last day on which any such commercial paper
shall have been outstanding.
SECTION 11.08. Additional Investor. At any time and from time
to time, any party hereto (other than the Agent) may, by notice to the
Agent, propose that a Person specified in such notice become an Investor
hereunder, provided that such person is a receivables investment company
which in the ordinary course of its business issues commercial paper or
other securities to fund its acquisition and maintenance of receivables.
The Agent shall, promptly upon its receipt of any such notice, notify the
other parties hereto (including any Person having become a party pursuant
to this Section 11.08) of such proposal. In the event that all parties
hereto agree in writing to the addition of such Person as an Investor
hereunder (provided that the addition of any receivables investment
company managed by CNAI shall not require the agreement of the Seller or
any other Person), such Person shall become a party hereto as an Investor
hereunder, effective as at the date specified by the parties hereto in
connection with their agreement as to the addition of such Person, and,
effective as at such date, such Person shall become a party hereto and an
Investor hereunder, entitled to the benefits hereof and subject to the
obligations of an Investor hereunder; provided, however, that, on or prior
to such date, such Person shall have delivered to the Agent (in sufficient
counterparts for each party hereto) an Assumption Agreement.
SECTION 11.09. Confidentiality. Unless otherwise required by
applicable law, the Seller agrees to maintain the confidentiality of this
Agreement and all other instruments and documents executed (or proposed to
be executed) in connection herewith (and all drafts thereof) in its
communications with third parties and otherwise; provided, however, that
the Agreement may be disclosed to third parties to the extent such
disclosure is (a) (i) required in connection with a sale of securities of
Seller or (ii) made solely to Persons who are legal counsel for the
purchaser or underwriter of such securities, and (b) made pursuant to a
written agreement of confidentiality in form and substance reasonably
satisfactory to the Agent; provided further, however, that the Agreement
may be disclosed to the Seller's legal counsel or accountants; and
provided further, however, that the Seller shall have no obligation of
confidentiality in respect of any information which may be generally
available to the public or becomes available to the public through no
fault of the Seller.
SECTION 11.10. Execution in Counterparts; Severability. 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. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired
thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
SELLER: SNAP-ON CREDIT CORPORATION
By /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
INVESTOR: CORPORATE ASSET FUNDING
COMPANY, INC.
By Citicorp North America,
Inc., as Attorney-in-Fact
By /s/ Xxxxxxx Xxxxx
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, X.X. 00000
Attention: President
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
CNAI/AGENT: CITICORP NORTH AMERICA, INC.,
individually and as Agent
By /s/ Xxxxxxx Xxxxx
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, X.X. 00000
Attention: Corporate
Asset Funding Department
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
EXHIBIT A
FORM OF ASSUMPTION AGREEMENT
To Each of the Parties to the
Purchase Agreement Referred to Below
Gentlemen:
Reference is made to the Trade Receivable Purchase and Sale
Agreement, dated as of October 6, 1995, among Snap-on Credit Corporation,
Corporate Asset Funding Company, Inc., [__________________], and Citicorp
North America, Inc., individually and as Agent (the "Purchase Agreement").
We hereby confirm that we desire to be added as a party to and
as an Investor (as defined in the Purchase Agreement) under the Purchase
Agreement, as contemplated by Section 11.08 thereof. Subject to our
receipt of the documents contemplated by Section 11.08(b) of the Purchase
Agreement on or prior to such date, we hereby agree that, effective
_________________, we shall be a party to and an Investor under the
Purchase Agreement, and we hereby expressly agree to be bound by all of
the provisions of the Purchase Agreement as and from such date.
We hereby expressly acknowledge and confirm that we are familiar
with the Purchase Agreement (including, without limitation, Section 8.04
thereof) and the transactions contemplated thereby. Our address for
purposes of Section 11.02 of the Purchase Agreement is set forth beneath
our signature below.
This Assumption Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Very truly yours,
[Name of Additional Investor]
By ___________________________
Name:
Title:
Address: ______________________________
______________________________
______________________________
EXHIBIT B
FORMS OF CONTRACTS
Attached.
EXHIBIT C
DESCRIPTION OF CREDIT AND COLLECTION POLICIES
Attached.
EXHIBIT D
TRADE NAMES, FICTITIOUS NAMES AND
"DOING BUSINESS AS" NAMES
None.
EXHIBIT E
FORM OF INVESTOR REPORT
Attached.
EXHIBIT F
LIST OF OFFICES OF THE SELLER WHERE RECORDS ARE KEPT
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000-0000
