EXHIBIT 10.6
RECEIVABLES PURCHASE AND SERVICING AGREEMENT
Dated as of December 10, 2001,
by and among
ADVANCE FUNDING CORPORATION
as Seller,
REDWOOD RECEIVABLES CORPORATION,
as Conduit Purchaser,
ADVP MANAGEMENT L.P.,
as Servicer,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Purchaser and as Administrative Agent
TABLE OF CONTENTS
Page
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Article I Definitions and Interpretation..........................................................................2
SECTION 1.1 DEFINITIONS.................................................................................2
SECTION 1.2 RULES OF CONSTRUCTION.......................................................................2
Article II Amounts and Terms of Purchases.........................................................................2
SECTION 2.1 PURCHASES...................................................................................2
SECTION 2.2 OPTIONAL CHANGES IN MAXIMUM PURCHASE LIMIT..................................................2
SECTION 2.3 NOTICES RELATING TO PURCHASES AND REDUCTIONS IN CAPITAL INVESTMENT..........................3
SECTION 2.4 CONVEYANCE OF TRANSFERRED RECEIVABLES.......................................................4
SECTION 2.5 FACILITY TERMINATION DATE...................................................................5
SECTION 2.6 DAILY YIELD.................................................................................5
SECTION 2.7 FEES........................................................................................5
SECTION 2.8 TIME AND METHOD OF PAYMENTS.................................................................6
SECTION 2.9 CAPITAL REQUIREMENTS; ADDITIONAL COSTS......................................................6
SECTION 2.10 BREAKAGE COSTS..............................................................................7
SECTION 2.11 PURCHASE EXCESS.............................................................................8
Article III Conditions Precedent..................................................................................8
SECTION 3.1 CONDITIONS TO EFFECTIVENESS OF AGREEMENT....................................................8
SECTION 3.2 CONDITIONS PRECEDENT TO ALL PURCHASES......................................................10
SECTION 3.3 CONDITIONS PRECEDENT TO ALL RELEASES OF FUNDS..............................................11
Article IV Representations and Warranties........................................................................12
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER...............................................12
SECTION 4.2 [RESERVED].................................................................................19
SECTION 4.3 REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES OF THE SELLER..............................19
Article V Covenants..............................................................................................19
SECTION 5.1 AFFIRMATIVE COVENANTS......................................................................19
SECTION 5.2 REPORTING REQUIREMENTS OF THE SELLER.......................................................24
SECTION 5.3 NEGATIVE COVENANTS.........................................................................24
Article VI Collections and Disbursements.........................................................................27
SECTION 6.1 ESTABLISHMENT OF ACCOUNTS..................................................................27
SECTION 6.2 FUNDING OF COLLECTION ACCOUNT..............................................................29
SECTION 6.3 DAILY DISBURSEMENTS FROM THE COLLECTION ACCOUNT; REVOLVING PERIOD..........................30
SECTION 6.4 DISBURSEMENTS FROM THE RETENTION ACCOUNT; SETTLEMENT DATE PROCEDURES; REVOLVING PERIOD.....31
SECTION 6.5 LIQUIDATION SETTLEMENT PROCEDURES..........................................................33
SECTION 6.6 INVESTMENT OF FUNDS IN ACCOUNTS............................................................34
SECTION 6.7 TERMINATION PROCEDURES.....................................................................34
Article VII Servicer Provisions..................................................................................34
SECTION 7.1 APPOINTMENT OF THE SERVICER................................................................34
SECTION 7.2 DUTIES AND RESPONSIBILITIES OF THE SERVICER................................................35
SECTION 7.3 COLLECTIONS ON TRANSFERRED RECEIVABLES.....................................................35
SECTION 7.4 AUTHORIZATION OF THE SERVICER..............................................................35
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SECTION 7.5 SERVICING FEES.............................................................................36
SECTION 7.6 REPRESENTATIONS AND WARRANTIES OF THE SERVICER.............................................37
SECTION 7.7 AFFIRMATIVE COVENANTS OF THE SERVICER......................................................41
SECTION 7.8 NEGATIVE COVENANTS OF THE SERVICER.........................................................43
SECTION 7.9 REPORTING REQUIREMENTS OF THE SERVICER.....................................................45
Article VIII Grant of Security Interests.........................................................................45
SECTION 8.1 SELLER'S GRANT OF SECURITY INTEREST........................................................45
SECTION 8.2 SELLER'S CERTIFICATION.....................................................................46
SECTION 8.3 CONSENT TO ASSIGNMENT......................................................................46
SECTION 8.4 DELIVERY OF COLLATERAL.....................................................................47
SECTION 8.5 SELLER REMAINS LIABLE......................................................................47
SECTION 8.6 COVENANTS OF THE SELLER AND THE SERVICER REGARDING THE SELLER COLLATERAL...................48
Article IX Termination Events....................................................................................50
SECTION 9.1 TERMINATION EVENTS.........................................................................50
SECTION 9.2 SERVICER TERMINATION EVENTS................................................................53
Article X Remedies...............................................................................................55
SECTION 10.1 ACTIONS UPON TERMINATION EVENT.............................................................55
SECTION 10.2 EXERCISE OF REMEDIES.......................................................................57
SECTION 10.3 POWER OF ATTORNEY..........................................................................57
SECTION 10.4 CONTINUING SECURITY INTEREST...............................................................57
Article XI Successor Servicer Provisions.........................................................................57
SECTION 11.1 SERVICER NOT TO RESIGN.....................................................................57
SECTION 11.2 APPOINTMENT OF THE SUCCESSOR SERVICER......................................................58
SECTION 11.3 DUTIES OF THE SERVICER.....................................................................58
SECTION 11.4 EFFECT OF TERMINATION OR RESIGNATION.......................................................58
Article XII Indemnification......................................................................................59
SECTION 12.1 INDEMNITIES BY THE SELLER..................................................................59
SECTION 12.2 INDEMNITIES BY THE SERVICER................................................................60
SECTION 12.3 LIMITATION OF DAMAGES; INDEMNIFIED PERSONS.................................................61
Article XIII Administrative Agent................................................................................61
SECTION 13.1 AUTHORIZATION AND ACTION...................................................................61
SECTION 13.2 RELIANCE...................................................................................62
SECTION 13.3 GE CAPITAL AND AFFILIATES..................................................................62
Article XIV Miscellaneous........................................................................................63
SECTION 14.1 NOTICES....................................................................................63
SECTION 14.2 BINDING EFFECT; ASSIGNABILITY..............................................................63
SECTION 14.3 TERMINATION; SURVIVAL OF SELLER SECURED OBLIGATIONS UPON FACILITY TERMINATION DATE.........64
SECTION 14.4 COSTS, EXPENSES AND TAXES..................................................................65
SECTION 14.5 CONFIDENTIALITY............................................................................66
SECTION 14.6 NO PROCEEDINGS.............................................................................67
SECTION 14.7 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT..............................................67
SECTION 14.8 AMENDMENTS AND WAIVERS.....................................................................67
SECTION 14.9 NO WAIVER; REMEDIES........................................................................67
SECTION 14.10 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...............................68
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SECTION 14.11 COUNTERPARTS............................................................................69
SECTION 14.12 SEVERABILITY............................................................................69
SECTION 14.13 SECTION TITLES..........................................................................69
SECTION 14.14 LIMITED RECOURSE........................................................................69
SECTION 14.15 FURTHER ASSURANCES......................................................................70
Exhibits
Exhibit 2.2(a) Form of Commitment Reduction Notice
Exhibit 2.2(b) Form of Commitment Termination Notice
Exhibit 2.3(a) Form of Investment Base Certificate
Exhibit 2.3(b) Form of Purchase Request
Exhibit 2.3(c) Form of Repayment Notice
Exhibit 2.4(a) Form of Purchase Assignment
Exhibit 3.1(a)(i) Form of Solvency Certificate
Exhibit 3.1(a)(ii)(A) Form of Seller Certificate (Closing)
Exhibit 3.1(a)(ii)(B) Form of Seller Certificate (Post-Closing)
Exhibit 3.1(a)(iii)(A) Form of Servicer's Certificate (Closing)
Exhibit 3.1(a)(iii)(B) Form of Servicer's Certificate (Post-Closing)
Exhibit 3.1(a)(iv) Form of Monthly Report
Exhibit 3.1(a)(v)(A) Form of Parent Certificate (Closing)
Exhibit 3.1(a)(v)(B) Form of Parent Certificate (Post-Closing)
Exhibit 3.1(a)(vi)(A) Form of Receivables Seller Certificate (Closing)
Exhibit 3.1(a)(vi)(B) Form of Receivables Seller Certificate (Post-Closing)
Exhibit 10.3 Form of Power of Attorney
Exhibit A Credit and Collection Policy
Schedules
Schedule 4.1(b) Formation Jurisdiction of Seller; Executive Offices;
Collateral Locations; Corporate or Other Names; FEIN
Schedule 4.1(d) Litigation
Schedule 4.1(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness/Seller
Schedule 4.1(i) Tax Matters/Seller
Schedule 4.1(r) Deposit and Disbursement Accounts/Seller
Schedule 5.1(b) Trade Names/Seller
Schedule 5.3(b) Existing Liens/Seller
Schedule 7.6(b) Formation Jurisdiction of Servicer; Executive Offices;
Collateral Locations; Corporate or Other Names; FEIN
Schedule 7.6(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness/Servicer
Schedule 7.6(i) Tax Matters/Servicer
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Schedule 7.6(j) Intellectual Property Matters/Servicer
Schedule 7.6(m) ERISA Matters/Servicer
Schedule 7.8(a) Existing Liens/Servicer
Annexes
Annex 5.2(a) Reporting Requirements of the Seller
Annex 7.9 Reporting Requirements of the Servicer
Annex X Definitions
Annex Y Schedule of Documents
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THIS
RECEIVABLES PURCHASE AND SERVICING AGREEMENT (as amended,
supplemented or otherwise modified and in effect from time to time, the
"Agreement") is entered into as of December 10, 2001, by and among ADVANCE
FUNDING CORPORATION, a Delaware corporation (the "Seller"), ADVP MANAGEMENT
L.P., a Delaware limited partnership, in its capacity as servicer hereunder (in
such capacity, the "Servicer"), REDWOOD RECEIVABLES CORPORATION, a Delaware
corporation (the "Conduit Purchaser"), and GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation, as a Committed Purchaser (the "Committed Purchaser") and
as administrative agent for the Conduit Purchaser and the Committed Purchaser
hereunder (in such capacity, the "Administrative Agent").
RECITALS
A. The Seller is a special purpose corporation owned by Holding.
B. The Seller has been formed for the purpose of, inter alia,
purchasing, or otherwise acquiring by capital contribution, all Receivables owed
by certain Obligors of the Originator and acquired by Holding.
C. The Seller intends to sell, and subject to the terms and conditions
hereof, the Conduit Purchaser and the Committed Purchaser intend to purchase,
undivided percentage interests in the Transferred Receivables, from time to
time, as described herein.
D. The Administrative Agent has been requested and is willing to act as
administrative agent on behalf of each of the Conduit Purchaser and the
Committed Purchaser in connection with the making and financing of such
purchases.
E. In order to effectuate the purposes of this Agreement, the Conduit
Purchaser and the Committed Purchaser each desires to appoint ADVP Management to
service, administer and collect the Transferred Receivables acquired by the
Purchasers pursuant to this Agreement and ADVP Management is willing to act in
such capacity as Servicer hereunder on the terms and conditions set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to them in Annex X.
SECTION 1.2 RULES OF CONSTRUCTION.
For purposes of this Agreement, the rules of construction set forth in
Annex X shall govern. All Appendices hereto, or expressly identified to this
Agreement, are incorporated herein by reference and, taken together with this
Agreement, shall constitute but a single agreement.
ARTICLE II
AMOUNTS AND TERMS OF PURCHASES
SECTION 2.1 PURCHASES.
From and after the Closing Date and until the Facility Termination Date
and subject to the terms and conditions hereof, the Conduit Purchaser and the
Committed Purchaser severally agree to purchase Purchaser Interests (each such
purchase hereunder, a "Purchase") from the Seller from time to time and the
Seller agrees to sell such Purchaser Interests to the Purchasers. The obligation
of the Conduit Purchaser to make Purchases hereunder shall be from the Closing
Date until the occurrence of a Committed Purchaser Funding Event. The obligation
of the Committed Purchaser to make Purchases hereunder shall be from and after
the occurrence of a Committed Purchaser Funding Event until the Facility
Termination Date. Under no circumstances shall a Purchaser make any Purchase if,
after giving effect thereto, a Purchase Excess would exist. Each purchase of
undivided percentage ownership interests in the Transferred Receivables by the
Purchasers hereunder shall consist of either (a) a purchase made by the
applicable Purchaser with new funds provided by such Purchaser (each, a "Capital
Purchase") or (b) a purchase made by the applicable Purchaser with funds
consisting of Collections allocated to the Purchaser Interests pursuant to the
terms of this Agreement (each, a "Reinvestment Purchase"). On each Business Day
following the Closing Date until the Facility Termination Date, but subject to
Section 3.2 hereof, each Purchaser holding a Purchaser Interest at such time
shall be automatically deemed to have made a Reinvestment Purchase with the
amount of funds to be distributed to the Seller pursuant to Section 6.3(c), if
any.
SECTION 2.2 OPTIONAL CHANGES IN MAXIMUM PURCHASE LIMIT.
(a) So long as no Incipient Termination Event or Termination Event
shall have occurred and be continuing, the Seller may, not more than twice
during each calendar year, reduce the Maximum Purchase Limit permanently;
provided, that (i) the Seller shall give ten (10) Business Days' prior written
notice of any such reduction to the Administrative Agent
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substantially in the form of Exhibit 2.2(a) (each such notice, a "Commitment
Reduction Notice"), (ii) any partial reduction of the Maximum Purchase Limit
shall be in a minimum amount of $5,000,000 or an integral multiple thereof, and
(iii) no such reduction shall reduce the Maximum Purchase Limit below the
greater of (A) Capital Investment at such time and (B) $75,000,000.
(b) The Seller may at any time on at least 10 days' prior written
notice by the Seller to the Administrative Agent irrevocably terminate the
Maximum Purchase Limit; provided, that (i) such notice of termination shall be
substantially in the form of Exhibit 2.2(b) (the "Commitment Termination
Notice"), and (ii) the Seller shall reduce the Capital Investment to zero and
make all payments required by Section 2.3(c) at the time and in the manner
specified therein. Upon such termination, the Seller's right to request that any
Purchaser make Purchases hereunder shall simultaneously terminate and the
Facility Termination Date shall automatically occur.
(c) Each written notice required to be delivered pursuant to Sections
2.2(a) or (b) shall be irrevocable and shall be effective (i) on the day of
receipt if received by the Administrative Agent and the Purchasers not later
than 4:00 p.m. (
New York time) on any Business Day and (ii) on the immediately
succeeding Business Day if received by the Administrative Agent and the
Purchasers after such time on such Business Day or if any such notice is
received on a day other than a Business Day (regardless of the time of day such
notice is received). Each such notice of termination or reduction shall specify,
respectively, the amount of, or the amount of the proposed reduction in, the
Maximum Purchase Limit.
SECTION 2.3 NOTICES RELATING TO PURCHASES AND REDUCTIONS IN CAPITAL
INVESTMENT.
(a) Not later than 12:00 noon (
New York time) on each Business Day, the
Seller shall deliver to the Purchasers and the Administrative Agent an Officer's
Certificate substantially in the form of Exhibit 2.3(a) (each, an "Investment
Base Certificate"). Capital Investment Available shall be determined by the
Administrative Agent based on information related to the Seller Collateral
available to it, including (i) any information obtained in connection with any
audit or reflected in the most recent Investment Base Certificate or any other
Investment Report delivered to the Purchasers and the Administrative Agent or
(ii) any other information that may be available to the Purchasers and the
Administrative Agent.
(b) Each Purchase resulting in an increase in Capital Investment shall
be made upon the provision of notice by the Seller to the Administrative Agent
in the manner provided herein. Any such notice must be given in writing so that
it is received no later than 12:00 noon (
New York time) on the second (2nd)
Business Day immediately preceding the proposed Purchase Date set forth therein.
Each such notice (a "Capital Purchase Request") shall (i) be substantially in
the form of Exhibit 2.3(b), (ii) be irrevocable and (iii) specify the amount of
the requested increase in Capital Investment and the proposed Purchase Date
(which shall be a Business Day), and shall include such other information as may
be required by the Purchasers and the Administrative Agent.
(c) The Seller may at any time reduce the Capital Investment; provided,
that (i) the Seller shall give one (1) Business Day's prior written notice of
any such reduction to the Administrative Agent substantially in the form of
Exhibit 2.3(c) (each such notice, a "Repayment
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Notice"), (ii) each such notice shall be irrevocable, (iii) each such notice
shall specify the amount of the requested reduction in the Capital Investment
and the proposed date of such reduction (which shall be a Business Day) and (iv)
any such reduction must be accompanied by payment of (A) all Daily Yield accrued
and unpaid on the Capital Investment being reduced through but excluding the
date of such reduction and (B) the costs, if any, required by Section 2.10. Any
such notice of reduction must be received by the Administrative Agent no later
than 12:00 noon (
New York time) on the Business Day immediately preceding the
date of the proposed reduction in Capital Investment.
SECTION 2.4 CONVEYANCE OF TRANSFERRED RECEIVABLES.
(a) Purchase Assignment. On or prior to the Closing Date, the Seller
shall complete, execute and deliver to the Administrative Agent for the benefit
of the Purchasers an assignment substantially in the form of Exhibit 2.4(a) (the
"Purchase Assignment") in order to evidence the Purchases.
(b) Funding of Collection Account; Increases in Capital Investment.
(i) Funding of Collection Account by Purchaser. Following
receipt of any Capital Purchase Request, and subject to satisfaction of
the conditions set forth in Section 3.2, the Applicable Purchaser shall
make available to or on behalf of the Seller on the Purchase Date
specified therein the lesser of (x) the requested increase in Capital
Investment specified in such Capital Purchase Request and (y) the
Capital Investment Available by depositing such amount in same day
funds into the Collection Account.
(ii) Payment of Purchase Price. The Applicable Purchaser
shall, or shall cause the Administrative Agent to, deposit into the
Seller Account on each Business Day during the Revolving Period, in
same day funds, all amounts on deposit in the Collection Account that
are to be disbursed to or on behalf of the Seller pursuant to Section
6.3(c) as payment for the Purchaser Interests.
(c) Vesting of Ownership.
(i) Effective on and as of each Purchase Date (A) prior to the
occurrence of the Committed Purchaser Funding Event, the Conduit
Purchaser shall own the Purchaser Interests sold by the Seller
hereunder on such Purchase Date, and (B) on and after the occurrence of
the Committed Purchaser Funding Event, the Committed Purchaser shall
own the Purchaser Interests sold by the Seller hereunder on such
Purchase Date. The Seller shall not take any action inconsistent with
such ownership and shall not claim any ownership interest in any
Purchaser Interests.
(ii) The Seller shall indicate in its Records that interests
in the Transferred Receivables have been sold hereunder and that
ownership of such interests is vested in the Administrative Agent on
behalf of the Purchasers. In addition, the Seller shall respond to any
inquiries with respect to the ownership of any Transferred Receivable
by stating that interests therein have been sold hereunder and that
ownership of such interests is vested in the Administrative Agent on
behalf of the Purchasers. The Seller and the Servicer shall hold all
Contracts and other documents and incidents relating to
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such Transferred Receivables in trust for the benefit of the
Administrative Agent on behalf of the Conduit Purchaser and the
Committed Purchaser, as the owner thereof, and for the sole purpose of
facilitating the servicing of such Transferred Receivables. The Seller
and the Servicer hereby acknowledge that their retention and possession
of such Contracts and documents shall at all times be at the sole
discretion of the Administrative Agent and in a custodial capacity for
the Administrative Agent's (on behalf of the Purchasers) benefit only.
(d) Repurchases of Transferred Receivables. If Holding is required to
repurchase Transferred Receivables from the Seller pursuant to Section 4.4 the
Sale Agreement, the Applicable Purchaser shall sell and reconvey its Purchaser
Interests in such Transferred Receivables to the Seller either (i) through a
transfer of such Purchaser Interests in exchange for Purchaser Interests in
other Transferred Receivables with an Outstanding Balance equal to the
Outstanding Balance of the Transferred Receivables being repurchased or (ii) if
and to the extent a Purchase Excess exists, for cash in an amount equal to the
Outstanding Balance of the Transferred Receivables being repurchased.
SECTION 2.5 FACILITY TERMINATION DATE.
Notwithstanding anything to the contrary set forth herein, no Purchaser
shall have any obligation to purchase any additional Purchaser Interests from
and after the Facility Termination Date.
SECTION 2.6 DAILY YIELD.
(a) The Seller shall pay Daily Yield to the Administrative Agent, for
the account of the Purchasers, for each day on which any Capital Investment is
outstanding, in the manner and at the times specified in Sections 6.3, 6.4 and
6.5.
(b) Notwithstanding the foregoing, the Seller shall pay interest at the
applicable Daily Yield Rate on unpaid Daily Yield and on any other amount
payable by the Seller hereunder (to the extent permitted by law) that shall not
be paid in full when due (whether at stated maturity, by acceleration or
otherwise) for the period commencing on the due date thereof to (but excluding)
the date the same is indefeasibly paid in full.
SECTION 2.7 FEES.
(a) On or prior to the Closing Date, the Seller shall pay to the
Administrative Agent, for the account of itself and the Purchasers, the fees set
forth in the Fee Letter that are payable on the Closing Date.
(b) On each Settlement Date, the Seller shall pay to the Servicer or to
the Successor Servicer, as applicable, the Servicing Fee or the Successor
Servicing Fees and Expenses, respectively, in each case to the extent of
available funds therefor as provided in Section 6.4.
(c) The Seller agrees to pay to the Administrative Agent, for the
account of the Applicable Purchaser, an unused facility fee (the "Unused
Facility Fee") equal to one-quarter of one percent (0.25%) per annum, calculated
daily from the Closing Date until the Termination
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Date and payable monthly in arrears on the fifth (5th) Business Day of each
month, commencing with the first full calendar month after the Closing Date, on
the amount by which the Maximum Purchase Limit as in effect on such date exceeds
the Capital Investment on such date, which fee shall be fully earned when
payable and shall be non-refundable.
SECTION 2.8 TIME AND METHOD OF PAYMENTS.
(a) Subject to the provisions of Sections 6.2, 6.3, 6.4, 6.5 and
7.5(b), all payments in reduction of Capital Investment and all payments of
yield, fees and other amounts payable by the Seller hereunder shall be made in
Dollars, in immediately available funds, to the Administrative Agent (for its
account or the account of the applicable Purchasers, Affected Parties or
Indemnified Persons) not later than 12:00 noon (
New York time) on the due date
therefor. Any such payment made on such date but after such time shall be deemed
to have been made on, and Daily Yield shall continue to accrue and be payable
thereon until, the next succeeding Business Day. If any such payment becomes due
on a day other than a Business Day, the maturity thereof will be extended to the
next succeeding Business Day and Daily Yield thereon shall be payable during
such extension.
(b) Any and all payments by the Seller hereunder shall be made in
accordance with this Section 2.8 without setoff or counterclaim and free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, excluding taxes imposed on or
measured by the net income of any Affected Party by the jurisdictions under the
laws of which such Affected Party is organized or by any political subdivisions
thereof (such non-excluded taxes, levies, imposts, deductions, charges and
withholdings being "Indemnified Taxes"). If the Seller shall be required by law
to deduct any Indemnified Taxes from or in respect of any sum payable hereunder,
(i) the sum payable shall be increased as much as shall be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.8) the Affected Party entitled to
receive any such payment receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Seller shall make such
deductions, and (iii) the Seller shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law. Within
thirty (30) days after the date of any payment of Indemnified Taxes, the Seller
shall furnish to the Administrative Agent the original or a certified copy of a
receipt evidencing payment thereof. The Seller shall indemnify any Affected
Party from and against, and, within ten (10) days of demand therefor, pay any
Affected Party for, the full amount of Indemnified Taxes (together with any
taxes imposed by any jurisdiction on amounts payable under this Section 2.8)
paid by such Affected Party and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such
Indemnified Taxes were correctly or legally asserted.
SECTION 2.9 CAPITAL REQUIREMENTS; ADDITIONAL COSTS.
(a) If the Administrative Agent on behalf of any Affected Party shall
have determined that the adoption after the date hereof of any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by such Affected Party with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force
6
of law) from any central bank or other Governmental Authority increases or would
have the effect of increasing the amount of capital, reserves or other funds
required to be maintained by such Affected Party against commitments made by it
under this Agreement, any other Related Document or any Program Document and
thereby reducing the rate of return on such Affected Party's capital as a
consequence of its commitments hereunder or thereunder, then the Seller shall
from time to time upon demand by the Administrative Agent pay to the
Administrative Agent on behalf of such Affected Party additional amounts
sufficient to compensate such Affected Party for the Seller's Share of such
reduction together with interest thereon from the date of any such demand until
payment in full at the applicable Daily Yield Rate. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by the Administrative Agent to the Seller shall be final, binding and
conclusive on the parties hereto (absent manifest error) for all purposes.
(b) If, due to any Regulatory Change, there shall be any increase in
the cost to any Affected Party of agreeing to make or making, funding or
maintaining any commitment hereunder, under any other Related Document or under
any Program Document, including with respect to any Purchases, Capital
Investment, LOC Draws or Liquidity Loans, or any reduction in any amount
receivable by such Affected Party hereunder or thereunder, including with
respect to any Purchases, Capital Investment, LOC Draws or Liquidity Loans (any
such increase in cost or reduction in amounts receivable are hereinafter
referred to as "Additional Costs"), then the Seller shall, from time to time
upon demand by the Administrative Agent, pay to the Administrative Agent on
behalf of such Affected Party additional amounts sufficient to compensate such
Affected Party for the Seller's Share of such Additional Costs together with
interest thereon from the date demanded until payment in full thereof at the
applicable Daily Yield Rate. Such Affected Party agrees that, as promptly as
practicable after it becomes aware of any circumstance referred to above that
would result in any such Additional Costs, it shall, to the extent not
inconsistent with its internal policies of general application, use reasonable
commercial efforts to minimize costs and expenses incurred by it and payable to
it by the Seller pursuant to this Section 2.9(b).
(c) Determinations by any Affected Party for purposes of this Section
2.9 of the effect of any Regulatory Change on its costs of making, funding or
maintaining any commitments hereunder, under any other Related Document or under
any Program Document or on amounts receivable by it hereunder or thereunder or
of the additional amounts required to compensate such Affected Party in respect
of any Additional Costs shall be set forth in a written notice to the Seller in
reasonable detail and shall be final, binding and conclusive on the Seller
(absent manifest error) for all purposes.
SECTION 2.10 BREAKAGE COSTS.
The Seller shall pay to the Administrative Agent for the account of
either Purchaser, upon request of such Purchaser, such amount or amounts as
shall compensate such Purchaser for any loss, cost or expense incurred by such
Purchaser (as determined by such Purchaser) as a result of any reduction by the
Seller in Capital Investment (and accompanying loss of Daily Yield thereon)
other than on the maturity date of the Commercial Paper (or other financing
source) funding such Capital Investment, which compensation shall include an
amount equal to any loss or expense incurred by such Purchaser during the period
from the date of such reduction to (but
7
excluding) the maturity date of such Commercial Paper (or other financing
source) if the rate of interest obtainable by such Purchaser upon the
redeployment of funds in an amount equal to such reduction is less than the
interest rate applicable to such Commercial Paper (or other financing source)
(any such loss, cost or expense, "Breakage Costs"). The determination by such
Purchaser of the amount of any such loss or expense shall be set forth in a
written notice to the Seller in reasonable detail and shall be final, binding
and conclusive on the Seller (absent manifest error) for all purposes.
SECTION 2.11 PURCHASE EXCESS.
On each Business Day during the Revolving Period and after completion
of the disbursements specified in Section 6.3, the Administrative Agent shall
notify the Seller and the Servicer of any Purchase Excess on such day, and the
Seller shall deposit the amount of such Purchase Excess in the Collection
Account by 12:00 noon (
New York time) on the immediately succeeding Business
Day.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS TO EFFECTIVENESS OF AGREEMENT.
Neither the Conduit Purchaser nor the Committed Purchaser shall be
obligated to purchase Purchaser Interests hereunder on the occasion of the
initial Purchase, nor shall any Purchaser or the Administrative Agent be
obligated to take, fulfill or perform any other action hereunder, until the
following conditions have been satisfied, in the sole discretion of, or waived
in writing by, the Purchasers and the Administrative Agent:
(a) Purchase Agreement; Other Related Documents. This Agreement shall
have been duly executed by, and delivered to, the parties hereto and the
Purchasers and the Administrative Agent shall have received such other
documents, instruments, agreements and legal opinions as each Purchaser and the
Administrative Agent shall request in connection with the transactions
contemplated by this Agreement, including all those listed in the Schedule of
Documents as attached hereto as Annex Y, each in form and substance satisfactory
to each Purchaser and the Administrative Agent.
(b) Governmental Approvals. The Purchasers and the Administrative Agent
shall have received (i) satisfactory evidence that the Seller and the Servicer
have obtained all required consents and approvals of all Persons, including all
requisite Governmental Authorities, to the execution, delivery and performance
of this Agreement and the other Related Documents and the consummation of the
transactions contemplated hereby or thereby or (ii) an Officer's Certificate
from each of the Seller and the Servicer in form and substance satisfactory to
the Purchasers and the Administrative Agent affirming that no such consents or
approvals are required.
(c) Compliance with Laws. The Seller and the Servicer shall be in
compliance in all material respects with all applicable foreign, federal, state
and local laws and regulations, including those specifically referenced in
Section 5.1(a).
8
(d) Payment of Fees. The Seller shall have paid all fees required to be
paid by it on the Closing Date, including all fees required hereunder and under
the Fee Letter, and shall have reimbursed each Purchaser for all fees, costs and
expenses of closing the transactions contemplated hereunder and under the other
Related Documents, including each Purchaser's legal, rating agency and audit
expenses, and other document preparation costs.
(e) Representations and Warranties. Each representation and warranty by
the Seller contained herein and in each other Related Document shall be true and
correct as of the Closing Date, except to the extent that such representation or
warranty expressly relates solely to an earlier date.
(f) No Termination Event. No Incipient Termination Event or Termination
Event hereunder or any event of default under (and as defined in) the Senior
Credit Facility shall have occurred and be continuing or would result after
giving effect to any of the transactions contemplated on the Closing Date.
(g) Senior Credit Facility; Intercreditor Agreement. The Administrative
Agent shall have received confirmation acceptable to it that the transactions
under this Agreement, the Sale Agreement, the Contribution Agreement and the
other Related Documents do not violate the Senior Credit Facility, and the
Senior Credit Facility Collateral Agent shall have entered into the
Intercreditor Agreement (in form and substance satisfactory to the Purchasers
and the Administrative Agent) with the Seller, the Servicer and the
Administrative Agent.
(h) Confirmation of Commercial Paper Ratings. The Administrative Agent
shall have received written confirmation from each Rating Agency that the
then-current rating of the Commercial Paper shall not be withdrawn or downgraded
after giving effect to this Agreement and the transactions contemplated thereby.
(i) Completion of Due Diligence. Each of the Purchasers and the
Administrative Agent shall have completed its legal and business due diligence
with results satisfactory to each of them including, without limitation,
completion of an audit of the receivables and of Holding's and Originator's
operating locations.
(j) Audit and Review of Transferred Receivables. The Purchasers and the
Administrative Agent shall have completed an audit and pre-funding review of the
Transferred Receivables, including, without limitation (i) a review of a report
listing all of the Included Obligors with aging balances in Excel format, (ii)
procedures to segregate Transferred Receivables, including segregation of
collections of Transferred Receivables, (iii) an aging comparative with respect
to Transferred Receivables and (iv) a receivable rollforward with respect to
Transferred Receivables, each of the foregoing with results satisfactory to the
Administrative Agent in its sole discretion.
(k) Financial Reporting. The Administrative Agent shall have confirmed
that the Originator has provided financial reporting to the Administrative Agent
from August [__], 2001 until the Closing Date in form and substance satisfactory
to the Administrative Agent.
(l) Payment of Taxes. The Seller or the Originator, as applicable,
shall have paid all taxes required to be paid by it on the Closing Date,
including, but not limited to, any stamp duty
9
which may be imposed as a result of closing the transaction contemplated
hereunder and under the Related Documents.
(m) Reorganization of Parent. The Parent shall have provided to the
Administrative Agent all details regarding the final structure of the
reorganization of Parent (and its Subsidiaries) and the Administrative Agent
shall have confirmed that such Structure is satisfactory in form and substance
to the Administrative Agent as determined in its sole discretion.
(n) Contribution Agreement Conditions. Each of the conditions precedent
set forth in Sections 3.1 and 3.2 of the Contribution Agreement shall have been
satisfied or waived in writing as provided therein.
(o) Sale Agreement Conditions. Each of the conditions precedent set
forth in Sections 3.1 and 3.2 of the Sale Agreement shall have been satisfied or
waived in writing as provided therein.
(p) Ownership of Holding. Holding shall have provided evidence to the
Administrative Agent regarding the number of Class A Stock and Class B Stock
issued by it, which when converted to a percentage shall reflect that Holding
has issued 79% Class A Stock and 21% Class B Stock.
SECTION 3.2 CONDITIONS PRECEDENT TO ALL PURCHASES.
No Purchaser shall be obligated to purchase Purchaser Interests
hereunder on any Purchase Date if, as of the date thereof:
(a) any representation or warranty of the Seller or the Servicer
contained herein or in any of the other Related Documents shall be untrue or
incorrect as of such date, either before or after giving effect to the Purchase
of Purchaser Interests on such date and to the application of the proceeds
therefrom, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly permitted by
this Agreement;
(b) any event shall have occurred, or would result from the Purchase of
Purchaser Interests on such Purchase Date or from the application of the
proceeds therefrom, that constitutes an Incipient Termination Event, a
Termination Event, an Incipient Servicer Termination Event or a Servicer
Termination Event;
(c) the Seller shall not be in compliance with any of its covenants or
other agreements set forth herein;
(d) the Facility Termination Date shall have occurred;
(e) either before or after giving effect to such Purchase and to the
application of the proceeds therefrom, a Purchase Excess would exist;
(f) the Purchaser Interests sold hereunder would, after giving effect
to such purchase, exceed 100%;
10
(g) the Originator, the Seller or the Servicer shall fail to have taken
such other action, including delivery of approvals, consents, opinions,
documents and instruments to the Purchasers and the Administrative Agent, (i) as
any Purchaser or the Administrative Agent may reasonably request, or (ii) as
either Rating Agency may request;
(h) the Administrative Agent shall have determined that any event or
condition has occurred that has had, or could reasonably be expected to have or
result in, a Material Adverse Effect;
(i) the Administrative Agent shall not have received an Investment Base
Certificate on such date as required by Section 2.3(a);
(j) the Administrative Agent shall not have received a certificate from
the Servicer confirming that the Non-Transferred Receivables Servicing Fee and
the Servicing Fee for the immediately preceding Settlement Period has been paid
by Holding and the Seller, respectively, and the same has been received by the
Servicer;
(k) any of the conditions precedent set forth in Sections 3.1 and 3.2
of the Contribution Agreement shall not have been satisfied or waived in writing
as provided therein; or
(l) any of the conditions precedent set forth in Sections 3.1 and 3.2
of the Sale Agreement shall not have been satisfied or waived in writing as
provided therein.
The delivery by the Seller of a Capital Purchase Request and the acceptance by
the Seller of the funds from such Capital Purchase on any Purchase Date shall be
deemed to constitute, as of any such Purchase Date, a representation and
warranty by the Seller that the conditions in this Section 3.2 have been
satisfied.
SECTION 3.3 CONDITIONS PRECEDENT TO ALL RELEASES OF FUNDS.
The Administrative Agent shall not be obligated to authorize any
release of funds to the Seller Account under Section 6.3(c) on any date if, as
of the date thereof:
(a) any representation or warranty of the Seller or the Servicer
contained herein or in any of the other Related Documents shall be untrue or
incorrect as of such date, either before or after giving effect to the release
of such funds on such date and to the application of the proceeds therefrom,
except to the extent that such representation or warranty expressly relates to
an earlier date and except for changes therein expressly permitted by this
Agreement;
(b) any event shall have occurred, or would result from such release of
funds or from the application of the proceeds therefrom, that constitutes an
Incipient Termination Event, a Termination Event, an Incipient Servicer
Termination Event or a Servicer Termination Event;
(c) the Seller shall not be in compliance with any of its covenants or
other agreements set forth herein;
(d) the Facility Termination Date shall have occurred;
11
(e) either before or after giving effect to such release of funds and
to the application of the proceeds therefrom, a Purchase Excess would exist;
(f) the Originator, the Seller or the Servicer shall fail to have taken
such other action, including delivery of approvals, consents, opinions,
documents and instruments to the Lenders and the Administrative Agent, (i) as
any Lender or the Administrative Agent may reasonably request, or (ii) as either
Rating Agency may request;
(g) the Administrative Agent shall have determined that any event or
condition has occurred that has had, or could reasonably be expected to have or
result in, a Material Adverse Effect;
(h) the Administrative Agent has not received an Investment Base
Certificate on such date as required pursuant to Section 2.3(a); or
(i) the Administrative Agent shall not have received a certificate from
the Servicer confirming that the Non-Transferred Receivables Servicing Fee and
the Servicing Fee for the immediately preceding Settlement Period has been paid
by Holding and the Seller, respectively, and the same has been received by the
Servicer.
The acceptance by the Seller of the funds released to the Seller Account from
the Collection Account on any date shall be deemed to constitute, as of any such
date, a representation and warranty by the Seller that the conditions in this
Section 3.3 have been satisfied.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER.
To induce each Purchaser to purchase the Purchaser Interests and the
Administrative Agent to take any action hereunder, the Seller makes the
following representations and warranties to each Purchaser and the
Administrative Agent, each and all of which shall survive the execution and
delivery of this Agreement.
(a) Corporate Existence; Compliance with Law. The Seller (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation; (ii) is duly qualified to conduct business
and is in good standing in each other jurisdiction where its ownership or lease
of property or the conduct of its business requires such qualification; (iii)
has the requisite corporate power and authority and the legal right to own,
pledge, mortgage or otherwise encumber and operate its properties, to lease the
property it operates under lease, and to conduct its business, in each case, as
now, heretofore and proposed to be conducted; (iv) has all licenses, permits,
consents or approvals from or by, and has made all filings with, and has given
all notices to, all Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct; (v) is in compliance with
its charter and bylaws; and (vi) subject to specific representations set forth
herein regarding ERISA, tax and other laws, is in compliance with all applicable
provisions of law, except where the failure to comply,
12
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) Jurisdiction of Formation; Executive Offices; Collateral Locations;
Corporate or Other Names; FEIN. The Seller's Formation Jurisdiction is Delaware
and the Seller is a "registered organization" (as defined in the UCC) in such
Formation Jurisdiction. As of the Closing Date, the current location of the
Seller's chief executive office, principal place of business, other offices, the
warehouses and premises within which any Seller Collateral is stored or located,
and the locations of its records concerning the Seller Collateral (including
originals of the Seller Assigned Agreements) are set forth in Schedule 4.1(b)
and none of such locations has changed within the past 12 months (or such
shorter time as the Seller has been in existence). During the prior five years
(or such shorter time as the Seller has been in existence), except as set forth
in Schedule 4.1(b), the Seller has not been known as or used any corporate,
fictitious or trade name. In addition, Schedule 4.1(b) lists the federal
employer identification number and jurisdiction of incorporation of the Seller.
(c) Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by the Seller of this Agreement and the
other Related Documents to which it is a party, the creation and perfection of
all Liens and ownership interests provided for therein: (i) are within the
Seller's corporate power; (ii) have been duly authorized by all necessary or
proper corporate and shareholder action; (iii) do not contravene any provision
of the Seller's charter or bylaws; (iv) do not violate any law or regulation, or
any order or decree of any court or Governmental Authority; (v) do not conflict
with or result in the breach or termination of, constitute a default under or
accelerate or permit the acceleration of any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which the Seller or the Originator is a party or by which the Seller or the
Originator or any of the property of the Seller or the Originator is bound; (vi)
do not result in the creation or imposition of any Adverse Claim upon any of the
property of the Seller or the Originator; and (vii) do not require the consent
or approval of any Governmental Authority or any other Person, except those
which have been duly obtained, made or complied with prior to the Closing Date
as provided in Section 3.1(b). The exercise by each of the Seller, the
Purchasers or the Administrative Agent of any of its rights and remedies under
any Related Document to which it is a party, do not require the consent or
approval of any Governmental Authority or any other Person (other than consents
or approvals solely relating to or required to be obtained by a Purchaser or the
Administrative Agent, and subject to the Bankruptcy Code), except those which
will have been duly obtained, made or complied with prior to the Closing Date as
provided in Section 3.1(b). Each of the Related Documents to which the Seller is
a party has been duly executed and delivered by the Seller and each such Related
Document constitutes a legal, valid and binding obligation of the Seller
enforceable against it in accordance with its terms.
(d) No Litigation. No Litigation is now pending or, to the knowledge of
the Seller, threatened against the Seller that (i) challenges the Seller's, or
any of its Affiliates' right or power to enter into or perform any of its
obligations under the Related Documents to which it is a party, or the validity
or enforceability of any Related Document or any action taken thereunder, (ii)
seeks to prevent the transfer, sale, pledge or contribution of any Receivable or
the consummation of any of the transactions contemplated under this Agreement or
the other Related Documents, or (iii) has a reasonable risk of being determined
adversely to the Seller and that, if so determined, could
13
have a Material Adverse Effect. Except as set forth on Schedule 4.1(d), as of
the Closing Date there is no Litigation pending or threatened that seeks damages
or injunctive relief against, or alleges criminal misconduct by, the Seller.
(e) Solvency. Both before and after giving effect to (i) the
transactions contemplated by this Agreement and the other Related Documents and
(ii) the payment and accrual of all transaction costs in connection with the
foregoing, the Seller is and will be Solvent.
(f) Material Adverse Effect. Since the date of the Seller's
organization, (i) the Seller has not incurred any obligations, contingent or
non-contingent liabilities, liabilities for charges, long-term leases or unusual
forward or long-term commitments that, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (ii) no contract,
lease or other agreement or instrument has been entered into by the Seller or
has become binding upon the Seller's assets and no law or regulation applicable
to the Seller has been adopted that has had or could reasonably be expected to
have a Material Adverse Effect and (iii) the Seller is not in default and no
third party is in default under any material contract, lease or other agreement
or instrument to which the Seller is a party that alone or in the aggregate
could reasonably be expected to have a Material Adverse Effect. Since the date
of the Seller's organization, no event has occurred that alone or together with
other events could reasonably be expected to have a Material Adverse Effect.
(g) Ownership of Property; Liens. No Transferred Receivable is subject
to any Adverse Claim, none of the other properties and assets of the Seller are
subject to any Adverse Claims, and there are no facts, circumstances or
conditions known to the Seller that may result in (i) with respect to the
Transferred Receivables, any Adverse Claims (including Adverse Claims arising
under Environmental Laws) and (ii) with respect to its other properties and
assets, any Adverse Claims (including Adverse Claims arising under Environmental
Laws). The Seller has received all assignments, bills of sale and other
documents, and has duly effected all recordings, filings and other actions
necessary to establish, protect and perfect the Seller's right, title and
interest in and to the Transferred Receivables and its other properties and
assets. The Liens granted to the Purchaser pursuant to Section 8.1 will at all
times be fully perfected first priority Liens in and to the Seller Collateral.
(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Schedule 4.1(h), the Seller has no
Subsidiaries, is not engaged in any joint venture or partnership with any other
Person, and is not an Affiliate of any other Person. All of the issued and
outstanding Stock of the Seller is owned by each of the Stockholders in the
amounts set forth on Schedule 4.1(h). There are no outstanding rights to
purchase, options, warrants or similar rights or agreements pursuant to which
the Seller may be required to issue, sell, repurchase or redeem any of its Stock
or other equity securities or any Stock or other equity securities of its
Subsidiaries. All outstanding Debt of the Seller as of the Closing Date is
described in Section 5.3(i).
(i) Taxes. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by the
Seller and each of its Affiliates included in the Parent Group have been filed
with the appropriate Governmental Authority and all charges have been paid prior
to the date on which any fine, penalty, interest or late charge
14
may be added thereto for nonpayment thereof (or any such fine, penalty,
interest, late charge or loss has been paid), excluding charges or other amounts
being contested in accordance with Section 5.1(e). Proper and accurate amounts
have been withheld by the Seller or such Affiliate from its respective employees
for all periods in full and complete compliance with all applicable federal,
state, local and foreign laws and such withholdings have been timely paid to the
respective Governmental Authorities. Schedule 4.1(i) sets forth as of the
Closing Date (i) those taxable years for which the Seller's or such Affiliates'
tax returns are currently being audited by the IRS or any other applicable
Governmental Authority and (ii) any assessments or threatened assessments in
connection with any such audit or otherwise currently outstanding. Except as
described on Schedule 4.1(i), neither the Seller nor any such Affiliate has
executed or filed with the IRS or any other Governmental Authority any agreement
or other document extending, or having the effect of extending, the period for
assessment or collection of any charges. The Seller is not liable for any
charges: (A) under any agreement (including any tax sharing agreements) or (B)
to the best of the Seller's knowledge, as a transferee. As of the Closing Date,
neither the Seller nor any of its Affiliates included in the Parent Group has
agreed or been requested to make any adjustment under IRC Section 481(a), by
reason of a change in accounting method or otherwise, that would have a Material
Adverse Effect.
(j) Full Disclosure. All information contained in this Agreement, any
Investment Base Certificate or any of the other Related Documents, or any
written statement furnished by or on behalf of the Seller to any Purchaser or
the Administrative Agent pursuant to the terms of this Agreement or any of the
other Related Documents is true and accurate in every material respect, and none
of this Agreement, any Investment Base Certificate or any of the other Related
Documents, or any written statement furnished by or on behalf of the Seller to
any Purchaser or the Administrative Agent pursuant to the terms of this
Agreement or any of the other Related Documents is misleading as a result of the
failure to include therein a material fact.
(k) ERISA. The Seller is in compliance with ERISA and has not incurred
and does not expect to incur any liabilities (except for premium payments
arising in the ordinary course of business) payable to the PBGC under ERISA.
(l) Brokers. No broker or finder acting on behalf of the Seller was
employed or utilized in connection with this Agreement or the other Related
Documents or the transactions contemplated hereby or thereby and the Seller has
no obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
(m) Margin Regulations. The Seller is not engaged in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
security," as such terms are defined in Regulation U of the Federal Reserve
Board as now and from time to time hereafter in effect (such securities being
referred to herein as "Margin Stock"). The Seller owns no Margin Stock, and no
portion of the proceeds of the purchase price for Transferred Receivables sold
hereunder will be used, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock, for the purpose of reducing or retiring any Debt that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any portion of such proceeds to be considered a
"purpose credit" within the meaning of Regulations T, U or X of the Federal
Reserve Board. The Seller will not take or permit to be taken any action that
might cause any Related Document to violate any regulation of the Federal
Reserve Board.
15
(n) Nonapplicability of Bulk Sales Laws. No transaction contemplated by
this Agreement or any of the Related Documents requires compliance with any bulk
sales act or similar law.
(o) Securities Act and Investment Company Act Exemptions. Each purchase
of Purchaser Interests under this Agreement will constitute (i) a "current
transaction" within the meaning of Section 3(a)(3) of the Securities Act 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.
(p) Government Regulation. The Seller is not an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act.
The Purchase of Purchaser Interests by the Purchasers hereunder, the application
of the proceeds thereof and the consummation of the transactions contemplated by
this Agreement and the other Related Documents will not violate any provision of
any such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
(q) Separate Existence. The Seller is operated in such a manner that
the separate corporate existence of the Seller, on the one hand, and any member
of the Parent Group, on the other hand, would not be disregarded in the event of
the bankruptcy or insolvency of any member of the Parent Group and, without
limiting the generality of the foregoing:
(i) the Seller is a limited purpose corporation whose
activities are restricted in its certificate or articles of
incorporation to those activities expressly permitted hereunder and
under the other Related Documents and the Seller has not engaged, and
does not presently engage, in any activity other than those activities
expressly permitted hereunder and under the other Related Documents,
nor has the Seller entered into any agreement other than this
Agreement, the other Related Documents to which it is a party and, with
the prior written consent of the Purchasers and the Administrative
Agent, any other agreement necessary to carry out more effectively the
provisions and purposes hereof or thereof;
(ii) no member of the Parent Group or any individual at the
time he or she is acting as an officer of any such member is or has
been involved in the day-to-day management of the Seller;
(iii) other than the purchase and acceptance through capital
contribution of Transferred Receivables, the repayment of Subordinated
Loans, the payment of dividends and the return of capital to Holding
and the payment of servicing fees to the Servicer under this Agreement,
the Seller engages and has engaged in no intercorporate transactions
with any member of the Parent Group;
(iv) the Seller maintains corporate records and books of
account separate from that of each member of the Parent Group, holds
regular corporate meetings and otherwise
16
observes corporate formalities and has a business office separate from
that of each member of the Parent Group;
(v) the financial statements and books and records of the
Seller and the members of the Parent Group reflect the separate
corporate existence of the Seller;
(vi) (A) the Seller maintains its assets separately from the
assets of each member of the Parent Group (including through the
maintenance of separate bank accounts and except for any Records to the
extent necessary to assist the Servicer in connection with the
servicing of the Transferred Receivables), (B) the Seller's funds
(including all money, checks and other cash proceeds) and assets, and
records relating thereto, have not been and are not commingled with
those of any member of the Parent Group and (C) the separate creditors
of the Seller will be entitled to be satisfied out of the Seller's
assets prior to any value in the Seller becoming available to the
Seller's Stockholders;
(vii) except as otherwise expressly permitted hereunder, under
the other Related Documents and under the Seller's organizational
documents, no member of the Parent Group (A) pays the Seller's
expenses, (B) guarantees the Seller's obligations, or (C) advances
funds to the Seller for the payment of expenses or otherwise;
(viii) all business correspondence and other communications of
the Seller are conducted in the Seller's own name, on its own
stationery and through a separately-listed telephone number;
(ix) the Seller does not act as agent for any member of the
Parent Group, but instead presents itself to the public as a
corporation separate from each such member and independently engaged in
the business of purchasing and financing Transferred Receivables;
(x) the Seller maintains at least two (2) independent
directors, one of whom has at least three (3) years of employment
experience with one or more entities that provide, in the ordinary
course of their respective businesses, advisory, management or
placement services to issuers of securitization or structured finance
instruments, agreements or securities, and each of whom (A) is not a
Stockholder, director, officer, employee or associate, or any relative
of the foregoing, of any member of the Parent Group, all as provided in
its certificate or articles of incorporation, (B) has prior experience
as an independent director for a corporation whose charter documents
required the unanimous consent of all independent directors thereof
before such corporation could consent to the institution of bankruptcy
or insolvency proceedings against it or could file a petition seeking
relief under any applicable federal or state law relating to
bankruptcy, (C) is otherwise acceptable to the Purchasers and the
Administrative Agent, and (D) is employed by a nationally-recognized
firm, satisfactory to the Purchasers and the Administrative Agent,
which specializes in providing independent directors or managers for
special purpose corporations or companies; and
(xi) the bylaws or the certificate or articles of
incorporation of the Seller require (A) the affirmative vote of each
independent director before a voluntary petition
17
under Section 301 of the Bankruptcy Code may be filed by the Seller,
and (B) the Seller to maintain (1) correct and complete books and
records of account and (2) minutes of the meetings and other
proceedings of its Stockholders and board of directors.
(r) Deposit and Disbursement Accounts. Schedule 4.1(r) lists all banks
and other financial institutions at which the Seller maintains deposit or other
bank accounts as of the Closing Date, including any Lockbox Accounts, and such
schedule correctly identifies the name, address and telephone number of each
depository, the name in which the account is held, a description of the purpose
of the account, and the complete account number therefor.
(s) Transferred Receivables.
(i) Transfers. Each Transferred Receivable was purchased by or
contributed to the Seller on the relevant Transfer Date pursuant to the
Sale Agreement.
(ii) Eligibility. Each Transferred Receivable designated as an
Eligible Receivable in each Investment Base Certificate constitutes an
Eligible Receivable as of the date specified in such Investment Base
Certificate.
(iii) No Material Adverse Effect. The Seller has no knowledge
of any fact (including any defaults by the Obligor thereunder on any
other Receivable) that would cause it or should have caused it to
expect that any payments on each Transferred Receivable designated as
an Eligible Receivable in any Investment Base Certificate will not be
paid in full when due or to expect any other Material Adverse Effect.
(iv) Nonavoidability of Transfers. The Seller shall (A) have
received each Contributed Receivable as a contribution to the capital
of the Seller by Holding and (B) (1) have purchased each Sold
Receivable from Holding for cash consideration or an increase in the
amounts outstanding under the Subordinated Note and (2) have accepted
assignment of any Eligible Receivables transferred pursuant to clause
(b) of Section 4.4 of the Sale Agreement, in each case in an amount
that constitutes fair consideration and reasonably equivalent value
therefor. Each Sale of a Sold Receivable effected pursuant to the terms
of the Sale Agreement shall not have been made for or on account of an
antecedent debt owed by Holding to the Seller and no such Sale is or
may be avoidable or subject to avoidance under any bankruptcy laws,
rules or regulations. Holding shall (I) have received each Originator
Contributed Receivable as a contribution to the capital of Holding by
Originator and (II) (x) have purchased each Originator Sold Receivable
from Originator for cash consideration or an increase in the amounts
outstanding under the Subordinated Originator Note and (y) have
accepted assignment of any Eligible Receivables transferred pursuant to
clause (b) of Section 4.4 of the Contribution Agreement, in each case
in an amount that constitutes fair consideration and reasonably
equivalent value therefor. Each Originator Sale of an Originator Sold
Receivable effected pursuant to the terms of the Contribution Agreement
shall not have been made for or on account of an antecedent debt owed
by Originator to Holding and no such Originator Sale is or may be
avoidable or subject to avoidance under any bankruptcy laws, rules or
regulations.
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(t) Representations and Warranties in Other Related Documents. Each of
the representations and warranties of the Seller contained in the Related
Documents (other than this Agreement) is true and correct in all respects and
the Seller hereby makes each such representation and warranty to, and for the
benefit of, the Purchasers and the Administrative Agent as if the same were set
forth in full herein.
(u) No Termination Event. No event has occurred and no condition exists
which constitutes a Termination Even or an Incipient Termination Event.
(v) Good Title. Immediately preceding each Purchase hereunder, the
Seller shall be the owner of all of the Transferred Receivables free and clear
of all Adverse Claims (other than Adverse Claims in favor of the Administrative
Agent, for itself and as agent for the Purchasers). On or prior to each Purchase
and each recomputation of the Purchaser Interest, all financing statements and
other documents required to be recorded or filed in order to perfect and protect
the Purchaser Interest against all creditors of, and purchasers from, the
Originator, Holder and the Seller will have been duly filed in each filing
office necessary for such purpose, and all filing fees and taxes, if any,
payable in connection with such filings shall have been paid in full.
(w) Perfection. This Agreement is effective to create a valid security
interest in favor of the Administrative Agent for itself and for the benefit of
the Purchasers in the Transferred Receivables free and clear of any Adverse
Claim except as created by the Related Documents. There have been duly filed all
financing statements or other similar instruments or necessary documents under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect the
Administrative Agent's (for itself and on behalf of the Purchasers) security
interest in the Transferred Receivables.
(x) Credit and Collection Policy. Since December 31, 2000, there have
been no changes in the Credit and Collection Policy.
SECTION 4.2 [RESERVED].
SECTION 4.3 REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES OF THE
SELLER.
On each day that a Purchase is made hereunder, the Seller by accepting
the proceeds of such Purchase, shall be deemed to have certified that all
representations and warranties described in Section 4.1 hereof are true and
correct on and as of such day as though made on and as of such day.
ARTICLE V
COVENANTS
SECTION 5.1 AFFIRMATIVE COVENANTS.
The Seller and/or the Servicer covenants and agrees that from and after
the Closing Date and until the Termination Date:
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(a) Compliance with Agreements and Applicable Laws. The Seller shall
perform each of its obligations under this Agreement and the other Related
Documents and comply with all federal, state and local laws and regulations
applicable to it and the Transferred Receivables, including those relating to
truth in lending, retail installment sales, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices, privacy,
licensing, taxation, ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to so comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(b) Maintenance of Existence and Conduct of Business. The Seller shall:
(i) do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and its rights and franchises; (ii)
continue to conduct its business substantially as now conducted or as otherwise
permitted hereunder and in accordance with (A) the terms of its certificate of
incorporation and bylaws, (B) Sections 4.1(q) and (r) and (C) the assumptions
set forth in each legal opinion of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P. or
other counsel to the Seller from time to time delivered pursuant to Section
3.2(d) of the Sale Agreement with respect to issues of substantive consolidation
and true sale and absolute transfer; (iii) at all times maintain, preserve and
protect all of its assets and properties used or useful in the conduct of its
business, including all licenses, permits, charters and registrations, and keep
the same in good repair, working order and condition in all material respects
(taking into consideration ordinary wear and tear) and from time to time make,
or cause to be made, all necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices; and (iv) transact
business only in such corporate and trade names as are set forth in Schedule
5.1(b).
(c) Deposit of Collections. The Seller and the Servicer shall hold in
trust, and shall deposit or cause to be deposited promptly into a Lockbox
Account, and in any event no later than the first (1st) Business Day after
receipt thereof, all Collections it may receive with respect to any Transferred
Receivable.
(d) Use of Proceeds. The Seller shall utilize the proceeds of the
Purchases made hereunder solely for (i) the purchase of Transferred Receivables
from Holding pursuant to the Sale Agreement, (ii) the repayment of Subordinated
Loans, (iii) the payment of dividends to its Stockholders, and (iv) the payment
of administrative fees or Servicing Fees or expenses to the Servicer or routine
administrative or operating expenses, in each case only as expressly permitted
by and in accordance with the terms of this Agreement and the other Related
Documents.
(e) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 5.1(e)(ii), the Seller shall pay,
perform and discharge or cause to be paid, performed and discharged
promptly all charges payable by it, including (A) charges imposed upon
it, its income and profits, or any of its property (real, personal or
mixed) and all charges with respect to tax, social security and
unemployment withholding with respect to its employees, and (B) lawful
claims for labor, materials, supplies and services or otherwise before
any thereof shall become past due.
(ii) The Seller may in good faith contest, by appropriate
proceedings, the validity or amount of any charges or claims described
in Section 5.1(e)(i); provided, that (A)
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adequate reserves with respect to such contest are maintained on the
books of the Seller, in accordance with GAAP, (B) such contest is
maintained and prosecuted continuously and with diligence, (C) none of
the Seller Collateral becomes subject to forfeiture or loss as a result
of such contest, (D) no Lien shall be imposed to secure payment of such
charges or claims other than inchoate tax liens and (E) none of the
Purchasers or the Administrative Agent has advised the Seller in
writing that such Affected Party reasonably believes that failure to
pay or to discharge such claims or charges could have or result in a
Material Adverse Effect.
(f) ERISA. The Seller shall give the Administrative Agent prompt
written notice of any event that could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA.
(g) Furnishing of Information and Inspection of Records. The Seller and
the Servicer will furnish to the Administrative Agent from time to time such
information with respect to the Transferred Receivables as the Administrative
Agent may reasonably request, including, without limitation, listings
identifying the Obligor and the Outstanding Balance for each Transferred
Receivable, together with an aging of Transferred Receivables. The Seller will
at any time and from time to time during regular business hours and upon not
less than five (5) Business Days' notice (unless a Termination Event or an
Incipient Termination Event shall have occurred, in which case no notice shall
be required) permit the Administrative Agent, or any of 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, Holding, the
Servicer or the Originator, as applicable, for the purpose of examining such
Records, and to discuss matters relating to Transferred Receivables or the
Seller's, Holding's, the Servicer's or the Originator's performance hereunder
and under the other Related Documents to which such Person is a party with any
of the officers, directors, employees or independent public accountants of the
Seller, Holding, the Servicer or the Originator, as applicable, having knowledge
of such matters.
(h) Keeping of Records and Books of Account. The Seller, Holding, the
Servicer and the Originator will maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing Transferred 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
Transferred Receivables (including, without limitation, records adequate to
permit the daily identification of each new Transferred Receivable and all
Collections of and adjustments to each existing Transferred Receivable). The
Seller, Holding, the Servicer and the Originator will give the Administrative
Agent notice of any material change in the administrative and operating
procedures of the Seller, Holding, the Servicer or the Originator, as
applicable, referred to in the previous sentence.
(i) Performance and Compliance with Transferred Receivables and
Contracts. The Servicer will and the Seller will cause the Originator to timely
and fully perform and comply with all material provisions, covenants and other
promises required to be observed by the Servicer and the Originator under the
Contracts related to the Transferred Receivables.
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(j) Credit and Collection Policy. The Seller and the Servicer will
comply in all respects with the Credit and Collection Policy in regard to each
Transferred Receivable and Related Contract.
(k) Separate Existence. The Seller shall at all times be operated in
such a manner that the separate corporate existence of the Seller, on the one
hand, and any member of the Parent Group, on the other hand, will not be
disregarded in the event of the bankruptcy or insolvency of any member of the
Parent Group and, without limiting the generality of the foregoing:
(i) the Seller shall at all times be a limited purpose
corporation whose activities are restricted in its certificate or
articles of incorporation to those activities expressly permitted
hereunder and under the other Related Documents and the Seller does not
presently engage and will not engage, in any activity other than those
activities expressly permitted hereunder and under the other Related
Documents, nor will the Seller enter into any agreement other than this
Agreement, the other Related Documents to which it is a party and, with
the prior written consent of the Purchasers and the Administrative
Agent, any other agreement necessary to carry out more effectively the
provisions and purposes hereof or thereof;
(ii) no member of the Parent Group or any individual at the
time he or she is acting as an officer of any such member will be
involved in the day-to-day management of the Seller;
(iii) other than the purchase and acceptance through capital
contributions of Transferred Receivables, the repayment of Subordinated
Loans, the payment of dividends and the return of capital to Holding
and the payment of Servicing Fees to the Servicer under this Agreement,
the Seller will not engage in any intercorporate transactions with any
member of the Parent Group;
(iv) the Seller will maintain corporate records and books of
account separate from that of each member of the Parent Group, hold
regular corporate meetings and otherwise observe corporate formalities
and will have a business office separate from that of each member of
the Parent Group;
(v) the financial statements and books and records of the
Seller and the members of the Parent Group do and will reflect the
separate corporate existence of the Seller;
(vi) (A) the Seller will maintain its assets separately from
the assets of each member of the Parent Group (including through the
maintenance of separate bank accounts and except for any Records to the
extent necessary to assist the Servicer in connection with the
servicing of the Transferred Receivables), (B) the Seller's funds
(including all money, checks and other cash proceeds) and assets, and
records relating thereto, will not be commingled with those of any
member of the Parent Group and (C) the separate creditors of the Seller
will be entitled to be satisfied out of the Seller's assets prior to
any value in the Seller becoming available to the Seller's
Stockholders;
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(vii) except as otherwise expressly permitted hereunder, under
the other Related Documents and under the Seller's organizational
documents, no member of the Parent Group (A) will pay the Seller's
expenses, (B) guarantee the Seller's obligations, or (C) advance funds
to the Seller for the payment of expenses or otherwise;
(viii) all business correspondence and other communications of
the Seller will be conducted in the Seller's own name, on its own
stationery and through a separately-listed telephone number;
(ix) the Seller will not act as agent for any member of the
Parent Group, but instead will present itself to the public as a
corporation separate from each such member and independently engaged in
the business of purchasing and financing Transferred Receivables;
(x) the Seller will maintain at least two (2) independent
directors, one of whom has at least three (3) years of employment
experience with one or more entities that provide, in the ordinary
course of their respective businesses, advisory, management or
placement services to issuers of securitization or structured finance
instruments, agreements or securities, and each of whom (A) is not a
Stockholder, director, officer, employee or associate, or any relative
of the foregoing, of any member of the Parent Group, all as provided in
its certificate or articles of incorporation, (B) has prior experience
as an independent director for a corporation whose charter documents
required the unanimous consent of all independent directors thereof
before such corporation could consent to the institution of bankruptcy
or insolvency proceedings against it or could file a petition seeking
relief under any applicable federal or state law relating to bankruptcy
and (C) is otherwise acceptable to the Purchasers and the
Administrative Agent, and one of whom is employed by a
nationally-recognized firm, satisfactory to the Purchasers and the
Administrative Agent, which specializes in providing independent
directors or managers for special purpose corporations or companies;
and
(xi) the bylaws or the certificate or articles of
incorporation of the Seller will require (A) the affirmative vote of
each independent director before a voluntary petition under Section 301
of the Bankruptcy Code may be filed by the Seller, and (B) the Seller
to maintain (1) correct and complete books and records of account and
(2) minutes of the meetings and other proceedings of its Stockholders
and board of directors.
(l) Performance and Enforcement of the Sale Agreement. The Seller will
and will require Holding to, perform its obligations and undertakings under and
pursuant to the Sale Agreement, will purchase Transferred Receivables in strict
compliance with the terms thereof and will enforce the rights and remedies
accorded to the Seller under the Sale Agreement. The Seller will take all
actions to perfect and enforce its rights and interests (and the rights and
interests of the Administrative Agent, as the Seller's assignee) under the Sale
Agreement, as the Administrative Agent may from time to time reasonably request,
including, without limitation, making claims to which it may be entitled under
any indemnity, reimbursement or similar provision contained in the Sale
Agreement.
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(m) Ownership. The Seller will (or will cause the Originator to) take
all necessary action to (i) vest legal and equitable title to the Transferred
Receivables purchased under the Sale Agreement irrevocably in the Seller, free
and clear of Adverse Claims (other than Adverse Claims in favor of the
Administrative Agent, for the benefit of the Purchasers) including, without
limitation, the filing of all financing statements or other similar instruments
or documents necessary under the UCC (or comparable law) of all appropriate
jurisdictions to perfect, protect or more fully evidence the interest of the
Seller therein as the Administrative Agent may reasonably request, and (ii)
establish and maintain, in favor of the Administrative Agent for the benefit of
the Purchasers, a valid and perfected first priority security interest in all
Transferred Receivables, free and clear of any Adverse Claims, including,
without limitation, the filing of all financing statements or other similar
instruments or documents necessary under the UCC (or comparable law) of all
appropriate jurisdictions to perfect the Administrative Agent's (for the benefit
of the Purchasers) security interest in the Transferred Assets and such other
action to perfect, protect or more fully evidence the interest of the
Administrative Agent for the benefit of the Purchasers as the Administrative
Agent may reasonably request.
SECTION 5.2 REPORTING REQUIREMENTS OF THE SELLER.
(a) The Seller hereby agrees that, from and after the Closing Date and
until the Termination Date, it shall deliver or cause to be delivered to the
Purchasers, the Administrative Agent and, in the case of paragraph (f) therein
only, to the Rating Agencies, the financial statements, notices and other
information at the times, to the Persons and in the manner set forth in Annex
5.2(a).
(b) The Seller hereby agrees that, from and after the Closing Date and
until the Termination Date, it shall deliver or cause to be delivered to any
Purchaser, the Administrative Agent or the Collateral Agent such other reports,
statements, reconciliations and other information with respect to the Investment
Base or the Seller Collateral as any Purchaser, the Administrative Agent or the
Collateral Agent (as the case may be) may reasonably request from time to time.
SECTION 5.3 NEGATIVE COVENANTS.
The Seller covenants and agrees that, without the prior written consent
of the Purchasers and the Administrative Agent, from and after the Closing Date
until the Termination Date:
(a) Sale of Stock and Assets. The Seller shall not sell, transfer,
convey, assign or otherwise dispose of, or assign any right to receive income in
respect of, any of its properties or other assets, including its capital Stock
(whether in a public or a private offering or otherwise), any Transferred
Receivable or Contract therefor or any of its rights with respect to any Lockbox
or any Lockbox Account, the Collection Account, the Retention Account or any
other deposit account in which any Collections of any Transferred Receivable are
deposited except as otherwise expressly permitted by this Agreement or any of
the other Related Documents.
(b) Liens. The Seller shall not create, incur, assume or permit to
exist (i) any Adverse Claim on or with respect to its Transferred Receivables or
(ii) any Adverse Claim on or with respect to its other properties or assets
(whether now owned or hereafter acquired) except for the Liens
24
set forth in Schedule 5.3(b). In addition, the Seller shall not become a party
to any agreement, note, indenture or instrument or take any other action that
would prohibit the creation of a Lien on any of its properties or other assets
in favor of the Purchasers as additional collateral for the Seller Secured
Obligations, except as otherwise expressly permitted by this Agreement or any of
the other Related Documents.
(c) Modifications of Transferred Receivables, Contracts or Credit and
Collection Policies. The Seller shall not, without the prior written consent of
the Administrative Agent, (i) extend, amend, forgive, discharge, compromise,
waive, cancel or otherwise modify the terms of any Transferred Receivable or
amend, modify or waive any term or condition of any Contract related thereto,
provided, that the Seller may authorize the Servicer to take such actions as are
expressly permitted by the terms of any Related Document or the Credit and
Collection Policies, or (ii) amend, modify or waive any term or provision of the
Credit and Collection Policies.
(d) Changes in Instructions to Obligors. The Seller shall not make any
change in its instructions to Obligors regarding the deposit of Collections with
respect to the Transferred Receivables without the prior written consent of the
Administrative Agent.
(e) Capital Structure and Business. The Seller shall not (i) make any
changes in any of its business objectives, purposes or operations that could
have or result in a Material Adverse Effect, (ii) make any change in its capital
structure as described on Schedule 4.1(h), including the issuance of any shares
of Stock, warrants or other securities convertible into Stock or any revision of
the terms of its outstanding Stock, or (iii) amend its certificate or articles
of incorporation or bylaws. The Seller shall not engage in any business other
than as provided in its organizational documents and the Related Documents.
(f) Mergers, Subsidiaries, Etc. The Seller shall not directly or
indirectly, by operation of law or otherwise, (i) form or acquire any
Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially
all of the assets or capital Stock of, or otherwise combine with or acquire, any
Person.
(g) Sale Characterization; Sale Agreement. The Seller shall not make
statements or disclosures, prepare any financial statements or in any other
respect account for or treat the transactions contemplated by the Sale Agreement
(including for accounting, tax and reporting purposes) in any manner other than
(i) with respect to each Sale of each Sold Receivable effected pursuant to the
Sale Agreement, as a true sale and absolute assignment of the title to and sole
record and beneficial ownership interest of the Transferred Receivables by
Holding to the Seller and (ii) with respect to each contribution of Contributed
Receivables thereunder, as an increase in the stated capital of the Seller.
(h) Restricted Payments. The Seller shall not enter into any lending
transaction with any other Person. The Seller shall not at any time (i) advance
credit to any Person or (ii) declare any dividends, repurchase any Stock, return
any capital, or make any other payment or distribution of cash or other property
or assets in respect of the Seller's Stock if, after giving effect to any such
advance or distribution, a Purchase Excess, Incipient Termination Event or
Termination Event would exist or otherwise result therefrom.
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(i) Indebtedness. The Seller shall not create, incur, assume or permit
to exist any Debt, except (i) Debt of the Seller to any Affected Party,
Indemnified Person, the Servicer or any other Person expressly permitted by this
Agreement or any other Related Document, (ii) deferred taxes, (iii) unfunded
pension fund and other employee benefit plan obligations and liabilities to the
extent they are permitted to remain unfunded under applicable law, and (iv)
indorser liability in connection with the indorsement of negotiable instruments
for deposit or collection in the ordinary course of business.
(j) Prohibited Transactions. The Seller shall not enter into, or be a
party to, any transaction with any Person except as expressly permitted
hereunder or under any other Related Document.
(k) Investments. Except as otherwise expressly permitted hereunder or
under the other Related Documents, the Seller shall not make any investment in,
or make or accrue loans or advances of money to, any Person, including any
Stockholder, director, officer or employee of the Seller or any member of the
Parent Group through the direct or indirect lending of money, holding of
securities or otherwise, except with respect to Transferred Receivables and
Permitted Investments.
(l) Commingling. The Seller shall not deposit or permit the deposit of
any funds that do not constitute Collections of Transferred Receivables into any
Lockbox Account. If such funds are nonetheless deposited into a Lockbox Account
and the Seller so notifies the Administrative Agent, the Administrative Agent
shall promptly remit any such amounts to the applicable Originator. The Seller
shall not commingle and shall not permit the commingling of Transferred
Receivables with its other assets or the assets of any other Person.
(m) ERISA. The Seller shall not, and shall not cause or permit any of
its ERISA Affiliates to, cause or permit to occur an event that could result in
the imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA.
(n) Related Documents. The Seller shall not amend, modify or waive any
term or provision of any Related Document without the prior written consent of
the Administrative Agent.
(o) Board Policies. The Seller shall not modify the terms of any policy
or resolutions of its board of directors if such modification could have or
result in a Material Adverse Effect.
(p) Purchase of Transferred Receivables. The Seller shall not purchase
any accounts receivable, directly or indirectly, from any Person other than
Holding, without the express written consent of the Administrative Agent.
(q) Modifications to Included Obligor Schedule. The Seller shall not,
and shall not permit any Person to amend, supplement, restate or otherwise
modify the Included Obligor Schedule without the prior written consent of the
Administrative Agent.
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ARTICLE VI
COLLECTIONS AND DISBURSEMENTS
SECTION 6.1 ESTABLISHMENT OF ACCOUNTS.
(a) The Lockbox Accounts.
(i) The Seller has established with each Lockbox Account Bank
one or more Lockbox Accounts. The Seller agrees that the Administrative
Agent shall have exclusive dominion and control of each Lockbox Account
and all monies, instruments and other property from time to time on
deposit therein. The Seller shall not make or cause to be made, or have
any ability to make or cause to be made, any withdrawals from any
Lockbox Account except as provided in Section 6.1(b)(ii).
(ii) The Seller and the Servicer have instructed all existing
Obligors of Transferred Receivables, and shall instruct all future
Obligors of any Transferred Receivables, to make payments in respect
thereof only (A) by check or money order mailed to one or more
lockboxes or post office boxes under the control of the Administrative
Agent (each a "Lockbox" and collectively the "Lockboxes") or (B) by
wire transfer or moneygram directly to a Lockbox Account. Schedule
4.1(r) lists all Lockboxes and all Lockbox Account Banks at which the
Seller maintains Lockbox Accounts as of the Closing Date, and such
schedule correctly identifies (1) with respect to each such Lockbox
Account Bank, the name, address and telephone number thereof, (2) with
respect to each Lockbox Account, the name in which such account is held
and the complete account number therefor, and (3) with respect to each
Lockbox, the lockbox number and address thereof. The Seller and the
Servicer shall endorse, to the extent necessary, all checks or other
instruments received in any Lockbox so that the same can be deposited
in the Lockbox Account, in the form so received (with all necessary
endorsements), within one (1) Business Day after the date of receipt
thereof. In addition, each of the Seller and the Servicer shall deposit
or cause to be deposited into a Lockbox Account all cash, checks, money
orders or other proceeds of Transferred Receivables or Seller
Collateral received by it other than in a Lockbox or a Lockbox Account,
in the form so received (with all necessary endorsements), not later
than the close of business on the first (1st) Business Day following
the date of receipt thereof, and until so deposited all such items or
other proceeds shall be held in trust for the benefit of the Collateral
Agent. Neither the Seller nor the Servicer shall make any deposits into
a Lockbox or any Lockbox Account except in accordance with the terms of
this Agreement or any other Related Document.
(iii) If, for any reason, a Lockbox Account Agreement
terminates or any Lockbox Account Bank fails to comply with its
obligations under the Lockbox Account Agreement to which it is a party,
then the Seller shall promptly notify all Obligors of Transferred
Receivables who had previously been instructed to make wire payments to
a Lockbox Account maintained at any such Lockbox Account Bank to make
all future payments to a new Lockbox Account in accordance with this
Section 6.1(a)(iii). The Seller shall not close any such Lockbox
Account unless it shall have (A) received the prior written consent of
the Administrative Agent, (B) established a new account with the same
Lockbox Account Bank or with a new depositary institution satisfactory
to the Administrative Agent, (C) entered into an agreement covering
such new account with such
27
Lockbox Account Bank or with such new depositary institution
substantially in the form of such Lockbox Account Agreement or that is
satisfactory in all respects to the Administrative Agent (whereupon,
for all purposes of this Agreement and the other Related Documents,
such new account shall become a Lockbox Account, such new agreement
shall become a Lockbox Account Agreement and any new depositary
institution shall become a Lockbox Account Bank), and (D) taken all
such actions as the Administrative Agent shall require to grant and
perfect a first priority Lien in such new Lockbox Account to the
Purchaser under Section 8.1 of this Agreement. Except as permitted by
this Section 6.1(a), neither the Seller nor the Servicer shall open any
new Lockbox or Lockbox Account without the prior written consent of the
Administrative Agent.
(b) Collection Account.
(i) The Purchasers have established and shall maintain the
Collection Account with the Depositary. The Collection Account shall be
registered in the name of the Administrative Agent and the
Administrative Agent shall, subject to the terms of this Agreement,
have exclusive dominion and control thereof and of all monies,
instruments and other property from time to time on deposit therein.
(ii) Pursuant to Section 6.2, the Seller shall instruct each
Lockbox Account Bank to transfer, and the Seller hereby grants the
Administrative Agent the authority to instruct each such Lockbox
Account Bank to transfer, on each Business Day in same day funds, all
available funds in each Lockbox Account to the Collection Account. The
Purchasers and the Administrative Agent may deposit into the Collection
Account from time to time all monies, instruments and other property
received by any of them as proceeds of the Transferred Receivables. On
each Business Day prior to the Facility Termination Date the
Administrative Agent shall instruct and cause the Depositary (which
instruction may be in writing or by telephone confirmed promptly
thereafter in writing) to release funds on deposit in the Collection
Account in the order of priority set forth in Section 6.3. On each
Business Day from and after the Facility Termination Date the
Administrative Agent shall apply all amounts when received in the
Collection Account in the order of priority set forth in Section 6.5.
(iii) If, for any reason, the Depositary wishes to resign as
depositary of the Collection Account or fails to carry out the
instructions of the Administrative Agent, then the Administrative Agent
shall promptly notify the Purchasers. Neither the Purchasers nor the
Administrative Agent shall close the Collection Account unless (A) a
new deposit account has been established with the Depositary, (B) the
Purchasers and the Administrative Agent have entered into an agreement
covering such new account with such new depositary institution
satisfactory in all respects to the Administrative Agent (whereupon
such new account shall become the Collection Account for all purposes
of this Agreement and the other Related Documents), and (C) the
Purchasers and the Administrative Agent have taken all such action as
the Administrative Agent shall require to grant and perfect a first
priority Lien in such new Collection Account to the
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Administrative Agent on behalf of the Purchasers and to the Collateral
Agent on behalf of the Conduit Purchaser under the Collateral Agent
Agreement.
(c) Retention Account. The Administrative Agent has established and
shall maintain the Retention Account with the Depositary for the benefit of
Redwood. The Retention Account shall be registered in the name of the
Administrative Agent and the Administrative Agent shall, subject to the terms of
this Agreement, have exclusive dominion and control thereof and of all monies,
instruments and other property from time to time on deposit therein.
SECTION 6.2 FUNDING OF COLLECTION ACCOUNT.
(a) As soon as practicable, and in any event no later than 12:00 noon
(
New York time) on each Business Day:
(i) the Administrative Agent shall transfer or cause to be
transferred all Collections deposited in any Lockbox Account prior to
such Business Day to the Collection Account;
(ii) the Applicable Purchaser or the Administrative Agent
shall deposit in the Collection Account the amount, if any, required
pursuant to Section 2.4(b)(i);
(iii) if, on the immediately preceding Business Day, the
Administrative Agent shall have notified the Seller of any Purchase
Excess, then the Seller shall deposit cash in the amount of such
Purchase Excess in the Collection Account;
(iv) if on such Business Day the Seller is required to make
other payments under this Agreement not previously retained out of
Collections (including Additional Amounts and Indemnified Amounts not
previously paid), then the Seller shall deposit an amount equal to such
payments in the Collection Account;
(v) if, on the immediately preceding Business Day, (A) Holding
made a capital contribution or repurchased a Transferred Receivable
pursuant to Section 4.4 of the Sale Agreement or made a payment as a
result of any Dilution Factors pursuant to Section 4.2(o) of the Sale
Agreement, or (B) Originator made a capital contribution or repurchased
a Transferred Receivable pursuant to Section 4.4 of the Contribution
Agreement or made a payment as a result of any Dilution Factors
pursuant to Section 4.2(o) of the Contribution Agreement, then the
Seller or Holding, as applicable shall deposit in the Collection
Account cash in the amount so received from the Originator or Holding,
as applicable for such contribution or for such repurchase or payment;
(vi) the Servicer shall deposit in the Collection Account the
Outstanding Balance of any Transferred Receivable the Servicer elects
to pay pursuant to Section 7.4; and
(vii) the Seller shall deposit in the Collection Account the
Outstanding Balance of any Transferred Receivable the Seller elects to
pay pursuant to Section 8.6(d).
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(b) If, on or before the second (2nd) Business Day immediately
preceding any Settlement Date that occurs prior to the earlier of the occurrence
of the Redwood Transfer Date or a Committed Purchaser Funding Event, the
Administrative Agent shall have notified the Seller of any Retention Account
Deficiency pursuant to Section 6.4(b), then the Seller shall deposit cash in the
amount of such deficiency in the Collection Account no later than 12:00 noon
(
New York time) on such Settlement Date. If, on or before 4:00 p.m. (
New York
time) on any Business Day on or after the earlier of the occurrence of the
Redwood Transfer Date or a Committed Purchaser Funding Event, the Administrative
Agent shall have notified the Seller of any Retention Account Deficiency
pursuant to Section 6.4(b), then the Seller shall deposit cash in the amount of
such deficiency in the Collection Account no later than 12:00 noon (
New York
time) on the immediately following Business Day.
(c) From and after the Facility Termination Date, the Administrative
Agent shall transfer all amounts on deposit in the Retention Account as of that
date to the Collection Account.
SECTION 6.3 DAILY DISBURSEMENTS FROM THE COLLECTION ACCOUNT; REVOLVING
PERIOD.
On each Business Day no later than 1:00 p.m. (New York time) during the
Revolving Period, and following the transfers made pursuant to Section 6.2, the
Administrative Agent shall disburse an amount equal to the product of (a) the
Purchaser Interest times (b) the amount of all Collections then on deposit in
the Collection Account and its related subaccounts in the following priority:
(a) prior to the earlier of the occurrence of the Redwood Transfer Date
or a Committed Purchaser Funding Event, to the Retention Account, and after the
earlier of the occurrence of the Redwood Transfer Date or a Committed Purchaser
Funding Event, to the Administrative Agent:
(i) the amount of any Retention Account Deficiency deposited
pursuant to Section 6.2(b); and
(ii) an amount equal to the sum of:
(A) Daily Yield;
(B) the Yield Shortfall as of the close of business
on the immediately preceding Business Day;
(C) the Investor Portion of the Servicing Fee
(calculated assuming that the Servicing Fee Rate is the
applicable rate); provided, however, that if ADVP Management
L.P. is the Servicer and no Servicer Termination Event or
Termination Event has occurred, then such amount will not be
deposited in the Retention Account on such day but the Seller
shall pay the Servicing Fee in accordance with Section 7.5(b);
(D) the Investor Portion of the Servicing Fee
Shortfall as of the close of business on the immediately
preceding Business Day;
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(E) the Unused Facility Fee;
(F) the Unused Facility Fee Shortfall as of the
immediately preceding Business Day; and
(G) any Additional Amounts or Indemnified Amounts
then due;
(b) to the Purchasers:
(i) an amount equal to the deposits made in the Collection
Account pursuant to Section 6.2(a)(iv) and not otherwise disbursed
pursuant to Section 6.3(a)(ii)(G) to be disbursed ratably based on the
amounts owed to the applicable Purchasers;
(ii) an amount equal to any Purchase Excess to be applied in
reduction of Capital Investment, to the Purchasers ratably based on the
amount of their respective Capital Investments;
(iii) if, pursuant to a Repayment Notice, the Seller has
requested a reduction of the Capital Investment of the Purchasers, then
to the Purchasers, ratably based on the amount of their respective
Capital Investments, the lesser of (A) the amount of such requested
reduction of Capital Investment and (B) such balance; and
(c) to the Seller Account, the balance of any amounts remaining after
making the foregoing disbursements.
SECTION 6.4 DISBURSEMENTS FROM THE RETENTION ACCOUNT; SETTLEMENT DATE
PROCEDURES; REVOLVING PERIOD.
(a) During the Revolving Period (x) on each Settlement Date prior to
the earlier of the occurrence of the Redwood Transfer Date or a Committed
Purchaser Funding Event and (y) on each Business Day on and after the earlier of
the occurrence of the Redwood Transfer Date or a Committed Purchaser Funding
Event, the amounts on deposit in the Retention Account or transferred to the
Administrative Agent pursuant to Section 6.3(a) shall be disbursed or retained
by the Administrative Agent in the following priority:
(i) to the applicable Purchasers (or, if applicable, any
Indemnified Person or Affected Party):
(A) if such Settlement Date occurs on or prior to the
earlier of the occurrence of the Redwood Transfer Date or a
Committed Purchaser Funding Event, an amount equal to:
(1) the Accrued Monthly Yield as of the end
of the immediately preceding Settlement Period;
(2) the Accrued Unused Facility Fee as of
the end of the immediately preceding Settlement
Period;
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(3) all Additional Amounts incurred and
payable to any Affected Party as of the end of the
immediately preceding Settlement Period;
(4) all other amounts accrued and payable
under this Agreement (including Indemnified Amounts
incurred and payable to any Indemnified Person) as of
the end of the immediately preceding Settlement
Period to the extent not already transferred pursuant
to Section 6.3(a)(i)(G); and
(5) if a Purchase Excess exists on such
date, an amount equal to such excess to the extent
not already transferred pursuant to Section
6.3(b)(ii), to be applied in reduction of Capital
Investment;
(B) if such Business Day occurs after the earlier of
the occurrence of the Redwood Transfer Date or a Committed
Purchaser Funding Event, an amount equal to:
(1) the accrued and unpaid Daily Yield as of
such date;
(2) the accrued and unpaid Unused Facility
Fee as of such date;
(3) all Additional Amounts incurred and
payable to any Affected Party as of such date;
(4) all other amounts accrued and payable
under this Agreement (including Indemnified Amounts
incurred and payable to any Indemnified Person) as of
such date to the extent not already transferred
pursuant to Section 6.3(a)(i)(G); and
(5) if a Purchase Excess exists on such
date, an amount equal to such excess to the extent
not already transferred pursuant to Section
6.3(b)(ii), to be applied in reduction of Capital
Investment;
(ii) to the extent any funds have been deposited in the
Retention Account in accordance with Section 6.3(a)(ii)(C) and (D), to
the Servicer on behalf of the Seller, an amount equal to the accrued
and unpaid Investor Portion of the Servicing Fee as of (x) the end of
the immediately preceding Settlement Period if such Settlement Date
occurs on or prior to the earlier of the occurrence of the Redwood
Transfer Date or a Committed Purchaser Funding Event or (y) to such
date if such date occurs after the earlier of the occurrence of the
Redwood Transfer Date or a Committed Purchaser Funding Event; provided,
however, that any such amount shall be paid net of any amounts paid, or
that should have been paid, for such period pursuant to Section 7.5(b);
(iii) to be retained in the Retention Account if such
Settlement Date occurs prior to the earlier of the occurrence of the
Redwood Transfer Date or a Committed Purchaser Funding Event, an amount
equal to the Accrued Monthly Yield, Accrued Unused Facility Fee and to
the extent any funds have been deposited in the Retention
32
Account in accordance with Section 6.3(a)(ii)(C) and (D), the Investor
Portion of Accrued Servicing Fee as of such Settlement Date; and
(iv) to the Seller Account, the balance of any funds remaining
after retaining or disbursing the foregoing amounts (and, prior to the
Redwood Termination Date or the Redwood Transfer Date, the
Administrative Agent shall also transfer to the Seller Account on such
date any and all interest earned on, and paid by the Depositary with
respect to, any funds on deposit in the Retention Account during the
preceding Settlement Period).
(b) No later than the second (2nd) Business Day immediately preceding
each Settlement Date that occurs prior to the earlier of the occurrence of the
Redwood Transfer Date or a Committed Purchaser Funding Event, the Administrative
Agent shall determine and notify the Seller of any Retention Account Deficiency
for the preceding Settlement Period, and the Seller shall deposit cash in the
amount of such Retention Account Deficiency to the Collection Account pursuant
to Section 6.2(b). No later than 4:00 p.m. (New York time) on each Business Day
on and after the earlier of the occurrence of the Redwood Transfer Date or a
Committed Purchaser Funding Event, the Administrative Agent shall determine and
notify the Seller of any Retention Account Deficiency as of such Business Day,
and the Seller shall deposit cash in the amount of such Retention Account
Deficiency to the Collection Account pursuant to Section 6.2(b).
SECTION 6.5 LIQUIDATION SETTLEMENT PROCEDURES.
On each Business Day from and after the Facility Termination Date until
the Termination Date, the Administrative Agent shall, as soon as practicable,
transfer all amounts then on deposit in the Retention Account to the Collection
Account and shall transfer all amounts in the Collection Account (including
amounts transferred from the Retention Account pursuant to Section 6.2(c) and
amounts which are not allocable to the Purchaser Interests) in the following
priority:
(a) if a Servicer Termination Event has occurred and a Successor
Servicer has assumed the responsibilities and obligations of the Servicer in
accordance with Section 11.2, then to the Successor Servicer an amount equal to
its accrued and unpaid Successor Servicing Fees and Expenses;
(b) to the Purchasers, ratably, an amount equal to accrued and unpaid
Daily Yield through and including the date of maturity (if any) of the
Commercial Paper (or other funding source) maintaining the Capital Investment;
(c) to the Purchasers, an amount equal to the unpaid Capital
Investment;
(d) to the Administrative Agent, for the account of the Purchasers, an
amount equal to accrued and unpaid Unused Facility Fees;
(e) all Additional Amounts and Indemnified Amounts incurred and payable
to any Indemnified Person;
33
(f) if a Servicer Termination Event shall not have occurred, to the
Servicer in an amount equal to the accrued and unpaid Servicing Fee; and
(g) to the Seller Account, the balance of any funds remaining after
payment in full of all amounts set forth in this Section 6.5 (and, prior to the
occurrence of the Redwood Termination Date or the Redwood Transfer Date, the
Administrative Agent shall also transfer to the Seller Account on such date any
and all interest earned on, and paid by the Depositary with respect to, the
funds on deposit in the Retention Account during the preceding Settlement
Period).
SECTION 6.6 INVESTMENT OF FUNDS IN ACCOUNTS.
To the extent uninvested amounts are on deposit in the Retention
Account on any given day during the Revolving Period, the Administrative Agent
shall invest all such amounts in Permitted Investments selected by the
Administrative Agent that mature no later than the immediately succeeding
Settlement Date. From and after the Facility Termination Date, any investment of
such amounts shall be solely at the discretion of the Administrative Agent,
subject to the restrictions described above. All proceeds of any such investment
shall be deposited upon receipt into the Retention Account.
SECTION 6.7 TERMINATION PROCEDURES.
(a) On the earlier of (i) the first (1st) Business Day after the
Facility Termination Date on which the Capital Investment has been reduced to
zero or (ii) the Final Purchase Date, if the obligations to be paid pursuant to
Section 6.5 have not been paid in full, the Seller shall immediately deposit in
the Collection Account an amount sufficient to make such payments in full.
(b) On the Termination Date, all amounts on deposit in the Collection
Account and the Retention Account shall be disbursed to the Seller and all
ownership interests or Liens of the Purchasers in and to all Transferred
Receivables and all Liens of the Purchasers and the Administrative Agent in and
to the Seller Collateral shall be released by each Purchaser and the
Administrative Agent. Such disbursement shall constitute the final payment to
which the Seller is entitled pursuant to the terms of this Agreement.
ARTICLE VII
SERVICER PROVISIONS
SECTION 7.1 APPOINTMENT OF THE SERVICER.
Each of the Conduit Purchaser and the Committed Purchaser hereby
appoints the Servicer as its agent, and the Seller hereby acknowledges such
appointment, to service the Transferred Receivables and enforce its rights and
interests in and under each Transferred Receivable and Contract therefor and to
serve in such capacity until the termination of its responsibilities pursuant to
Sections 9.2 or 11.1. In connection therewith, the Servicer hereby accepts such
appointment and agrees to perform the duties and obligations set forth herein.
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SECTION 7.2 DUTIES AND RESPONSIBILITIES OF THE SERVICER.
Subject to the provisions of this Agreement, the Servicer shall conduct
the servicing, administration and collection of the Transferred Receivables and
shall take, or cause to be taken, all actions that (a) may be necessary or
advisable to service, administer and collect each Transferred Receivable from
time to time, (b) the Servicer would take if the Transferred Receivables were
owned by the Servicer, and (c) are consistent with industry practice for the
servicing of such Transferred Receivables. In addition to the servicing
obligations set forth herein, the Servicer agrees to perform all accounting
services necessary for the Seller.
SECTION 7.3 COLLECTIONS ON TRANSFERRED RECEIVABLES.
(a) In the event that the Servicer is unable to determine the specific
Transferred Receivables on which Collections have been received from the Obligor
thereunder, the parties agree for purposes of this Agreement only that such
Collections shall be deemed to have been received on such Transferred
Receivables in the order in which they were originated with respect to such
Obligor. In the event that the Servicer is unable to determine the specific
Transferred Receivables on which discounts, offsets or other non-cash reductions
have been granted or made with respect to the Obligor thereunder, the parties
agree for purposes of this Agreement only that such reductions shall be deemed
to have been granted or made (i) prior to a Termination Event, on such
Transferred Receivables as determined by the Servicer, and (ii) from and after
the occurrence of a Termination Event, in the reverse order in which they were
originated with respect to such Obligor.
(b) If the Servicer determines that amounts unrelated to the
Transferred Receivables (the "Unrelated Amounts") have been deposited in the
Collection Account, then the Servicer shall provide written evidence thereof to
the Purchasers and the Administrative Agent no later than the first (1st)
Business Day following the day on which the Servicer had actual knowledge
thereof, which evidence shall be provided in writing and shall be otherwise
satisfactory to each such Affected Party. Upon receipt of any such notice, the
Administrative Agent shall segregate the Unrelated Amounts and the same shall
not be deemed to constitute Collections on Transferred Receivables and shall not
be subject to the provisions of Article VI.
SECTION 7.4 AUTHORIZATION OF THE SERVICER.
Each of the Conduit Purchaser and the Committed Purchasers hereby
authorizes the Servicer, and the Seller acknowledges such authorization, to take
any and all reasonable steps in its name and on its behalf necessary or
desirable and not inconsistent with the ownership of the Purchaser Interests
purchased by such Purchaser hereunder and the pledge of the Conduit's Purchaser
Interest by the Conduit Purchaser to the Collateral Agent pursuant to the
Collateral Agent Agreement, in the determination of the Servicer, to (a) collect
all amounts due under any Transferred Receivable, including endorsing its name
on checks and other instruments representing Collections on such Transferred
Receivable, and execute and deliver any and all instruments of satisfaction or
cancellation or of partial or full release or discharge and all other comparable
instruments with respect to any such Transferred Receivable and (b) after any
Transferred Receivable becomes a Defaulted Receivable and to the extent
permitted under and in compliance with applicable law and regulations, commence
proceedings with respect to the
35
enforcement of payment of any such Transferred Receivable and the Contract
therefor and adjust, settle or compromise any payments due thereunder, in each
case to the same extent as the Originator could have done if it had continued to
own such Transferred Receivable. The Originator, Holding, the Seller, the
Administrative Agent and each Purchaser shall furnish the Servicer with any
powers of attorney and other documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder.
Notwithstanding anything to the contrary contained herein, the Purchasers and
the Administrative Agent shall have the absolute and unlimited right to direct
the Servicer (whether the Servicer is the Originator or otherwise) (i) to
commence or settle any legal action to enforce collection of any Transferred
Receivable or (ii) to foreclose upon, repossess or take any other action that
the Administrative Agent deems necessary or advisable with respect thereto;
provided, that in lieu of commencing any such action or taking other enforcement
action, the Servicer may, at its option, elect to pay to the Applicable
Purchaser, the Capital Investment with respect to its Purchaser Interest in such
Transferred Receivable. In no event shall the Servicer be entitled to make any
Affected Party a party to any Litigation without such Affected Party's express
prior written consent, or to make the Seller a party to any Litigation without
the Administrative Agent's consent.
SECTION 7.5 SERVICING FEES.
(a) As compensation for its servicing activities and as reimbursement
for its reasonable expenses in connection therewith, the Servicer shall be
entitled to receive the Servicing Fees. The Servicer shall be required to pay
for all expenses incurred by it in connection with its activities hereunder
(including any payments to accountants, counsel or any other Person) and shall
not be entitled to any payment therefor other than the Servicing Fees.
(b) For any period that ADVP Management L.P. is the Servicer, so long
as no Servicer Termination Event or Termination Event has occurred, the Seller
agrees that it shall pay to the Servicer on each Business Day, the applicable
Servicing Fee, to the extent of funds available to the Seller on such day. The
Seller agrees that it will pay the Servicing Fee to the Servicer prior to using
any funds available to it on any day for any other purpose, including, without
limitation, the purchase of additional Transferred Receivables. If the Seller
does not have sufficient available funds to pay, in full, the Servicing Fee on
any Business Day, the shortfall shall be payable on the next Business Day on
which the Seller has available funds, but only to the extent of such available
funds after paying such day's Servicing Fee. The Servicer waives any right it
has or may at any time have to demand payment and/or take any action to or in
furtherance of payment of any shortfall in the payment of the Servicing Fee and
agrees that it shall not have a "claim" under Section 101(5) of the Bankruptcy
Code for the payment of any such shortfall, except for, and only to the extent
of, any excess available funds, as described above.
(c) The Administrative Agent shall have no duty or obligation to
confirm that the Servicer receives any portion or all of the Servicing Fee and
may conclusively assume that the Servicer has received payment of the Servicing
Fee in accordance with the provisions of this Agreement.
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SECTION 7.6 REPRESENTATIONS AND WARRANTIES OF THE SERVICER.
To induce the Purchasers to purchase the Purchaser Interests and the
Administrative Agent to take any action required to be performed by it
hereunder, the Servicer represents and warrants to the Purchasers and the
Administrative Agent, which representation and warranty shall survive the
execution and delivery of this Agreement:
(a) Corporate Existence; Compliance with Law. The Servicer (i) is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware; (ii) is duly qualified to conduct business
and is in good standing in each other jurisdiction where its ownership or lease
of property or the conduct of its business requires such qualification; (iii)
has the requisite limited partnership power and authority and the legal right to
own and operate its properties, to lease the property it operates under lease,
and to conduct its business as now, heretofore and proposed to be conducted;
(iv) has all licenses, permits, consents or approvals from or by, and has made
all filings with, and has given all notices to, all Governmental Authorities
having jurisdiction, to the extent required for such ownership, operation and
conduct; (v) is in compliance with its charter and limited partnership
agreement; and (vi) subject to specific representations set forth herein
regarding ERISA, tax and other laws, is in compliance with all applicable
provisions of law, except where the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(b) Jurisdiction of Formation; Executive Offices; Collateral Locations;
Corporate or Other Names; FEIN. The Servicer's Formation Jurisdiction is
Delaware and the Servicer is a "registered organization" (as defined in the UCC)
in such Formation Jurisdiction. As of the Closing Date, the current location of
the Servicer's chief executive office, jurisdiction of formation, principal
place of business, other offices, the warehouses and premises within which any
Seller Collateral is stored or located, and the locations of all records
concerning the Seller Collateral are set forth in Schedule 7.6(b) and none of
such locations have changed within the past twelve (12) months. During the prior
five (5) years, except as set forth in Schedule 7.6(b), the Servicer has not
been known as or used any corporate, fictitious or trade name. In addition,
Schedule 7.6(b) lists the federal employer identification number of the
Servicer.
(c) Limited Partnership Power, Authorization, Enforceable Obligations.
The execution, delivery and performance by the Servicer of this Agreement and
the other Related Documents to which it is a party and, solely with respect to
clause (vii) below, the exercise by each of the Seller, Holding, the Purchasers
or the Administrative Agent (with respect to the Purchasers and the
Administrative Agent, any consent or approval for which information is publicly
available or any consent or approval which the Servicer can be expected to have
knowledge of) of any of its rights and remedies under any Related Document to
which it is a party: (i) are within the Servicer's limited partnership power;
(ii) have been duly authorized by all necessary or proper limited partnership
and shareholder action; (iii) do not contravene any provision of the Servicer's
charter or limited partnership agreement; (iv) do not violate any law or
regulation, or any order or decree of any court or Governmental Authority; (v)
do not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which the Servicer is a party or by which the Servicer or any of
the property of the Servicer is bound; (vi) do not result in the creation or
imposition of any Adverse Claim upon any of the property of the Servicer; and
(vii) do not require the consent or approval of any Governmental
37
Authority or any other Person, except those referred to in Section 3.1(b), all
of which will have been duly obtained, made or complied with prior to the
Closing Date. On or prior to the Closing Date, each of the Related Documents to
which the Servicer is a party shall have been duly executed and delivered by the
Servicer and each such Related Document shall then constitute a legal, valid and
binding obligation of the Servicer enforceable against it in accordance with its
terms.
(d) No Litigation. No Litigation is now pending or, to the knowledge of
the Servicer, threatened against the Servicer that (i) challenges the Servicer's
right or power to enter into or perform any of its obligations under the Related
Documents to which it is a party, or the validity or enforceability of any
Related Document or any action taken thereunder, (ii) seeks to prevent the
transfer, sale, pledge or contribution of any Receivable or the consummation of
any of the transactions contemplated under this Agreement or the other Related
Documents, or (iii) has a reasonable risk of being determined adversely to the
Servicer and that, if so determined, could have a Material Adverse Effect.
(e) Solvency. Both before and after giving effect to (i) the
transactions contemplated by this Agreement and the other Related Documents and
(ii) the payment and accrual of all transaction costs in connection with the
foregoing, the Servicer is and will be Solvent.
(f) Material Adverse Effect. Since the date of the Servicer's
organization, (i) the Servicer has not incurred any obligations, contingent or
non-contingent liabilities, liabilities for charges, long-term leases or unusual
forward or long-term commitments that, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, (ii) no contract,
lease or other agreement or instrument has been entered into by the Servicer or
has become binding upon the Servicer's assets and no law or regulation
applicable to the Servicer has been adopted that has had or could reasonably be
expected to have a Material Adverse Effect and (iii) the Servicer is not in
default and no third party is in default under any material contract, lease or
other agreement or instrument to which the Servicer is a party that alone or in
the aggregate could reasonably be expected to have a Material Adverse Effect.
Since the date of the Servicer's organization, no event has occurred that alone
or together with other events could reasonably be expected to have a Material
Adverse Effect.
(g) Ownership of Property; Liens. None of the properties and assets of
the Servicer are subject to any Adverse Claims, and there are no facts,
circumstances or conditions known to the Servicer that may result in (i) with
respect to the Transferred Receivables, any Adverse Claims (including Adverse
Claims arising under Environmental Laws) and (ii) with respect to its other
properties and assets, any Adverse Claims (including Adverse Claims arising
under Environmental Laws). The Servicer has received all assignments, bills of
sale and other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect the Servicer's right,
title and interest in and to its properties and assets.
(h) Ventures, Subsidiaries and Affiliates; Partnership Interest. Except
as set forth in Schedule 7.6(h), the Servicer has no Subsidiaries, is not
engaged in any joint venture or partnership with any other Person, and is not an
Affiliate of any other Person. All of the issued and outstanding partnership
interests of the Servicer are owned by each of the partners in the amounts set
forth on Schedule 7.6(h). There are no outstanding rights to acquire partnership
38
interests or agreements pursuant to which the Servicer may be required to issue,
sell, repurchase or redeem any of the partnership interests or other equity
securities.
(i) Taxes. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by the
Servicer and each of its Affiliates included in the Parent Group have been filed
with the appropriate Governmental Authority and all charges have been paid prior
to the date on which any fine, penalty, interest or late charge may be added
thereto for nonpayment thereof (or any such fine, penalty, interest, late charge
or loss has been paid), excluding charges or other amounts being contested in
accordance with Section 7.7(j)(ii). Proper and accurate amounts have been
withheld by the Servicer or such Affiliate from its respective employees for all
periods in full and complete compliance with all applicable federal, state,
local and foreign laws and such withholdings have been timely paid to the
respective Governmental Authorities. Schedule 7.6(i) sets forth as of the
Closing Date (i) those taxable years for which the Servicer's or such
Affiliates' tax returns are currently being audited by the IRS or any other
applicable Governmental Authority and (ii) any assessments or threatened
assessments in connection with any such audit or otherwise currently
outstanding. Except as described on Schedule 7.6(i), neither the Servicer nor
any such Affiliate has executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any charges. The Servicer
is not liable for any charges: (A) under any agreement (including any tax
sharing agreements) or (B) to the best of the Servicer's knowledge, as a
transferee. As of the Closing Date, neither the Servicer nor any of its
Affiliates included in the Parent Group has agreed or been requested to make any
adjustment under IRC Section 481(a), by reason of a change in accounting method
or otherwise, that would have a Material Adverse Effect.
(j) Intellectual Property. The Servicer owns or has rights to use all
intellectual property necessary to continue to conduct its business as now or
heretofore conducted by it or proposed to be conducted by it. The Servicer
conducts its business and affairs without infringement of or interference with
any intellectual property of any other Person. Except as set forth in Schedule
7.6(j), the Servicer is not aware of any infringement or claim of infringement
by others on any its intellectual property
(k) Full Disclosure. All information contained in this Agreement, any
Investment Base Certificate or any of the other Related Documents, or any
written statement furnished by or on behalf of the Servicer to either Purchaser
or the Administrative Agent pursuant to the terms of this Agreement or any of
the other Related Documents is true and accurate in every material respect, and
none of this Agreement, any Investment Base Certificate or any other Related
Documents, or any written statement furnished by or on behalf of the Servicer to
any Purchaser or the Administrative Agent pursuant to this Agreement or any of
the other Related Documents omits a material fact necessary to make the
statements contained herein or therein not misleading in light of the
circumstances under which they were made.
(l) Notices to Obligors. The Servicer has directed or has caused the
Originator to direct all Obligors of Transferred Receivables originated by the
Originator to remit all payments with respect to such Transferred Receivables
for deposit in a Lockbox or Lockbox Account.
39
(m) ERISA.
(i) Schedule 7.6(m) lists all Plans and separately identifies
all Pension Plans, including all Title IV Plans, Multiemployer Plans,
ESOPs and Welfare Plans, including all Retiree Welfare Plans. Each
Qualified Plan has been determined by the IRS to qualify under Section
401 of the IRC, the trusts created thereunder have been determined to
be exempt from tax under the provisions of Section 501 of the IRC, and
nothing has occurred that would cause the loss of such qualification or
tax-exempt status. Except as otherwise provided in Schedule 7.6(m), (A)
each Plan is in compliance with the applicable provisions of ERISA and
the IRC, including the timely filing of all reports required under the
IRC or ERISA, (B) neither the Servicer nor any ERISA Affiliate has
failed to make any contribution or pay any amount due as required by
either Section 412 of the IRC or Section 302 of ERISA or the terms of
any such Plan and (C) neither the Servicer nor any ERISA Affiliate has
engaged in a "prohibited transaction," as defined in Section 4975 of
the IRC, in connection with any Plan that would subject the Servicer to
a material tax on prohibited transactions imposed by Section 4975 of
the IRC.
(ii) Except as set forth in Schedule 7.6(m): (A) no Title IV
Plan has any Unfunded Pension Liability; (B) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan
has occurred or is reasonably expected to occur; (C) there are no
pending or, to the knowledge of the Servicer, threatened claims (other
than claims for benefits in the normal course), sanctions, actions or
lawsuits, asserted or instituted against any Plan or any Person as
fiduciary or sponsor of any Plan; (D) neither the Servicer nor any
ERISA Affiliate has incurred or reasonably expects to incur any
liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (E) within the last five (5) years no Title IV Plan
with Unfunded Pension Liabilities has been transferred outside of the
"controlled group" (within the meaning of Section 4001(a)(14) of ERISA)
of the Servicer or ERISA Affiliate; (F) Stock of the Servicer and its
ERISA Affiliates makes up, in the aggregate, no more than 10% of the
assets of any Plan, measured on the basis of fair market value as of
the last valuation date of any Plan; and (G) no liability under any
Title IV Plan has been satisfied with the purchase of a contract from
an insurance company that is not rated AAA by S&P or an equivalent
rating by another nationally recognized rating agency.
(n) Brokers. No broker or finder acting on behalf of the Servicer was
employed or utilized in connection with this Agreement or the other Related
Documents or the transactions contemplated hereby or thereby and the Servicer
does not have any obligation to any Person in respect of any finder's or
brokerage fees in connection therewith.
(o) Margin Regulations. The Servicer is not engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
security" as such terms are defined in Regulation U of the Federal Reserve Board
as now and from time to time hereafter in effect (such securities being referred
to herein as "Margin Stock"). The Originator owns no Margin Stock, and no
portion of the proceeds received by the Servicer hereunder will be used,
directly or indirectly, for the purpose of purchasing or carrying any Margin
Stock, for the purpose of reducing or retiring any Debt that was originally
incurred to purchase or carry any Margin Stock or for any other purpose
40
that might cause any portion of such proceeds to be considered a "purpose
credit" within the meaning of Regulations T, U or X of the Federal Reserve
Board. The Servicer will not take or permit to be taken any action that might
cause any Related Document to violate any regulation of the Federal Reserve
Board.
(p) Nonapplicability of Bulk Sales Laws. No transaction contemplated by
this Agreement or any of the other Related Documents requires compliance with
any bulk sales act or similar law.
(q) Securities Act and Investment Company Act Exemptions. Each purchase
of Purchaser Interests under this Agreement will constitute (i) a "current
transaction" within the meaning of Section 3(a)(3) of the Securities Act 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.
(r) Government Regulation. The Servicer is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act.
The Purchase of Purchaser Interests by the Purchasers hereunder, the application
of the application of the proceeds thereof and the consummation of the
transactions contemplated by this Agreement and the other Related Documents will
not violate any provision of any such statute or any rule, regulation or order
issued by the Securities and Exchange Commission.
(s) Books and Records; Minutes. The Servicer's limited partnership
agreement requires the Servicer to maintain (i) its own books and records of
account and (ii) minutes of the meetings and other proceedings of its partners
and/or members.
(t) No Servicer Termination Event. No event has occurred and no
condition exists which constitutes a Servicer Termination Event or an Incipient
Servicer Termination Event.
(u) Credit and Collection Policy. Since December 30, 2000, there have
been no changes to the Credit and Collection Policy.
(v) Ownership of Receivables. The Servicer has no ownership interest in
the Receivables and the Servicer has not made any statements or disclosures or
prepared any financial statements for any purpose, including federal income tax,
reporting or accounting purposes, that indicates in any way that it has any
interest in any of the Receivables.
SECTION 7.7 AFFIRMATIVE COVENANTS OF THE SERVICER.
The Servicer covenants and agrees that from and after the Closing Date
and until the Termination Date:
(a) Compliance with Credit and Collection Policies. The Servicer shall
comply in all material respects with the Credit and Collection Policies
applicable to each Transferred Receivable and the Contract therefor. The
Servicer shall not amend, waive or modify any term
41
or provision of the Credit and Collection Policies without the prior written
consent of the Administrative Agent.
(b) Compliance with Agreements and Applicable Laws. The Servicer shall
perform each of its obligations under this Agreement and the other Related
Documents and comply with all federal, state and local laws and regulations
applicable to it and the Transferred Receivables, including those relating to
truth in lending, retail installment sales, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices, privacy,
licensing, taxation, ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to so comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(c) Maintenance of Existence and Conduct of Business. The Servicer
shall: (i) do or cause to be done all things necessary to preserve and keep in
full force and effect its limited partnership existence and its rights and
franchises; (ii) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder and in accordance with the terms of its
certificate of formation and limited partnership agreement; (iii) at all times
maintain, preserve and protect all of its assets and properties used or useful
in the conduct of its business, including all licenses, permits, charters and
registrations, and keep the same in good repair, working order and condition in
all material respects (taking into consideration ordinary wear and tear) and
from time to time make, or cause to be made, all necessary or appropriate
repairs, replacements and improvements thereto consistent with industry
practices; and (iv) transact business only in such limited partnership and trade
names as are set forth in Schedule 7.6(b) or, upon thirty (30) days' prior
written notice to Buyer, the Administrative Agent and each Rating Agency, in
such other limited partnership or trade names with respect to which all action
requested by Buyer, any Purchaser or the Administrative Agent pursuant to
Section 14.15 shall have been taken with respect to the Transferred Receivables.
The Servicer shall not change its Formation Jurisdiction except upon thirty (30)
days' prior written notice to Buyer and the Administrative Agent, and with
respect to which jurisdiction all action requested by Buyer, any Purchaser or
the Administrative Agent pursuant to Section 14.15 shall have been taken with
respect to the Transferred Receivables.
(d) [Reserved].
(e) ERISA. The Servicer shall give Buyer and the Administrative Agent
prompt written notice of any event that could result in the imposition of a Lien
under Section 412 of the IRC or Section 302 or 4068 of ERISA.
(f) Payment, Performance and Discharge of Obligations.
(i) Subject to Section 7.7(j)(ii), the Servicer shall pay,
perform and discharge or cause to be paid, performed and discharged all
of its obligations and liabilities, including all taxes, assessments
and governmental charges upon its income and properties and all lawful
claims for labor, materials, supplies and services, promptly when due.
(ii) The Servicer may in good faith contest, by appropriate
proceedings, the validity or amount of any charges or claims described
in Section 7.7(j)(i); provided, that (A)
42
adequate reserves with respect to such contest are maintained on the
books of the Servicer, in accordance with GAAP, (B) such contest is
maintained and prosecuted continuously and with diligence, (C) none of
the Seller Collateral may become subject to forfeiture or loss as a
result of such contest, (D) no Lien may be imposed to secure payment of
such charges or claims other than inchoate tax liens and (E) Buyer has
affirmatively advised the Servicer in writing that Buyer reasonably
believes that nonpayment or nondischarge thereof could not reasonably
be expected to have or result in a Material Adverse Effect.
(g) Deposit of Collections. The Servicer shall deposit or cause to be
deposited promptly into a Lockbox Account, and in any event no later than one
(1) Business Day after receipt thereof, all Collections it may receive in
respect of the Transferred Receivables.
(h) Accounting Changes. If any Accounting Changes occur and such
changes result in a change in the standards or terms used herein, then the
parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such Accounting Changes with the desired
result that the criteria for evaluating the financial condition of such Persons
and their Subsidiaries shall be the same after such Accounting Changes as if
such Accounting Changes had not been made. If the parties hereto agree upon the
required amendments to this Agreement, then after appropriate amendments have
been executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained herein shall, only to the extent of
such Accounting Change, refer to GAAP consistently applied after giving effect
to the implementation of such Accounting Change. If such parties cannot agree
upon the required amendments within thirty (30) days following the date of
implementation of any Accounting Change, then all financial statements delivered
and all standards and terms used herein shall be prepared, delivered and used
without regard to the underlying Accounting Change.
(i) Ownership of Transferred Receivables. The Servicer shall identify
the Transferred Receivables clearly and unambiguously in its Servicing Records
to reflect that such Transferred Receivables are owned solely by the Seller and,
following the Purchase of Purchaser Interests in such Transferred Receivables
under this Agreement, are owned by the Conduit Purchaser or Committed Purchaser,
as applicable.
SECTION 7.8 NEGATIVE COVENANTS OF THE SERVICER.
The Servicer covenants and agrees that, without the prior written
consent of the Purchasers and the Administrative Agent, from and after the
Closing Date until the Termination Date:
(a) Liens. The Servicer shall not create, incur, assume or permit to
exist any Adverse Claim on or with respect to the Transferred Receivables or any
other Seller Collateral (whether now owned or hereafter acquired) except for the
Liens set forth in Schedule 7.8(a).
(b) Modifications of Receivables or Contracts. Except as expressly
permitted by the terms of the Credit and Collection Policy, the Servicer shall
not extend, amend, forgive, discharge, compromise, cancel or otherwise modify
the terms of any Transferred Receivable, or
43
amend, modify or waive any term or condition of any Contract therefor without
the prior written consent of the Administrative Agent.
(c) Sale Characterization. The Servicer shall not make any statements
or disclosures or prepare any financial statements for any purpose, including
for federal income tax, reporting or accounting purposes, that shall indicate in
any way that it has any interest in any of the Receivables other than the
requirement to service such Receivables.
(d) Capital Structure and Business. The Servicer shall not (i) make any
changes in any of its business objectives, purposes or operations that could
have or result in a Material Adverse Effect or (ii) make any change in its
capital structure as described on Schedule 7.6(h), including the issuance or any
revision of the terms of its outstanding partnership interests or (iii) amend,
supplement or otherwise modify its certificate of formation or partnership
agreement, in a manner that could have or result in a Material Adverse Effect.
(e) Actions Affecting Rights. The Servicer shall not (i) take any
action, or fail to take any action, if such action or failure to take action may
interfere with the enforcement of any rights hereunder or under the other
Related Documents, including rights with respect to the Transferred Receivables;
or (ii) waive or alter any rights with respect to the Transferred Receivables
(or any agreement or instrument relating thereto).
(f) ERISA. The Servicer shall not, nor shall cause or permit any ERISA
Affiliate to, cause or permit to occur an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA.
(g) Adverse Tax Consequences. The Servicer shall not take or permit to
be taken any action (other than with respect to actions taken or to be taken
solely by a Governmental Authority), or fail or neglect to perform, keep or
observe any of its obligations hereunder or under the other Related Documents,
that would have the effect, directly or indirectly, of subjecting any payment to
Buyer, any Purchaser or holders of the Commercial Paper who are residents of the
United States of America to withholding taxation.
(h) No Proceedings. From and after the Closing Date and until the date
one year plus one day following the date on which the Commercial Paper with the
latest maturity has been indefeasibly paid in full in cash, the Servicer shall
not, directly or indirectly, institute or cause to be instituted against Buyer,
Receivables Purchaser or Conduit Purchaser any proceeding of the type referred
to in Sections 9.1(c) and 9.1(d) of this Agreement.
(i) Commingling. The Servicer shall not deposit or permit the deposit
of any funds that do not constitute Collections of Transferred Receivables into
any Lockbox Account. If such funds are nonetheless deposited into a Lockbox
Account and the Servicer so notifies the Administrative Agent, then the
Administrative Agent shall promptly remit any such amounts as directed by the
Servicer or in accordance with the Intercreditor Agreement. The Servicer shall
not commingle and shall not permit the commingling of Transferred Receivables
with other assets of the Servicer or the assets of any other Person.
44
SECTION 7.9 REPORTING REQUIREMENTS OF THE SERVICER.
The Servicer hereby agrees that, from and after the Closing Date and
until the Termination Date, it shall deliver or cause to be delivered to the
Purchasers and the Administrative Agent the financial statements, notices, and
other information at the times, to the Persons and in the manner set forth in
Annex 7.9.
ARTICLE VIII
GRANT OF SECURITY INTERESTS
SECTION 8.1 SELLER'S GRANT OF SECURITY INTEREST.
The parties hereto intend that each Purchase of Purchaser Interests to
be made hereunder shall constitute a purchase and sale of undivided percentage
ownership interests in the Transferred Receivables and not a loan.
Notwithstanding the foregoing, in addition to and not in derogation of any
rights now or hereafter acquired by any Purchaser or the Administrative Agent
hereunder, the parties hereto intend that this Agreement shall constitute a
security agreement under applicable law. In such regard and, in any event, to
secure the prompt and complete payment, performance and observance of all Seller
Secured Obligations, and to induce the Conduit Purchaser and the Committed
Purchaser to enter into this Agreement and perform the obligations required to
be performed by it hereunder in accordance with the terms and conditions
thereof, the Seller hereby grants, assigns, conveys, pledges, hypothecates and
transfers to the Administrative Agent, for the benefit of itself, the Conduit
Purchaser and the Committed Purchaser, a Lien upon and security interest in all
of its right, title and interest in, to and under, but none of its obligations
arising from, the following property, whether now owned by or owing to, or
hereafter acquired by or arising in favor of, the Seller (including under any
trade names, styles or derivations of the Seller), and regardless of where
located (all of which being hereinafter collectively referred to as the "Seller
Collateral"):
(a) all Transferred Receivables, Contracts therefor and Collections
thereon;
(b) the rights of the Seller, but none of the duties or obligations of
the Seller in, to and under the Sale Agreement, the Contribution Agreement, the
Subordinated Originator Note, the Subordinated Note, the Parent Note, the
Intercompany Note, all Lockbox Account Agreements and all other Related
Documents now or hereafter in effect relating to the purchase, servicing or
processing of Transferred Receivables (collectively, the "Seller Assigned
Agreements"), including (i) all rights of the Seller to receive moneys due and
to become due thereunder or pursuant thereto, (ii) all rights of the Seller to
receive proceeds of any insurance, indemnity, warranty or guaranty with respect
thereto, (iii) all claims of the Seller for damages or breach with respect
thereto or for default thereunder and (iv) the right of the Seller to amend,
waive or terminate the same and to perform and to compel performance and
otherwise exercise all remedies thereunder;
(c) all of the following (collectively, the "Seller Account
Collateral"):
(i) the Lockbox Accounts, the Lockboxes, and all funds on
deposit therein and all certificates and instruments, if any, from time
to time representing or evidencing the Lockbox Accounts, the Lockboxes
or such funds,
45
(ii) the Collection Account, the Retention Account and all
funds on deposit therein and all certificates and instruments, if any,
from time to time representing or evidencing the Collection Account,
the Retention Account or such funds,
(iii) all Investments from time to time of amounts in the
Collection Account and the Retention Account, and all certificates,
instruments and investment property, if any, from time to time
representing or evidencing such Investments,
(iv) all notes, certificates of deposit and other instruments
from time to time delivered to or otherwise possessed by any Purchaser
or any assignee or agent on behalf of any Purchaser in substitution for
or in addition to any of the then existing Seller Account Collateral,
and
(v) all interest, dividends, cash, instruments, investment
property and other property from time to time received, receivable or
otherwise distributed with respect to or in exchange for any and all of
the then existing Seller Account Collateral;
(d) all other property that may from time to time hereafter be granted
and pledged by the Seller or by any Person on its behalf under this Agreement,
including any deposit with any Purchaser or the Administrative Agent of
additional funds by the Seller; and
(e) to the extent not otherwise included, all proceeds and products of
the foregoing and all accessions to, substitutions and replacements for, and
profits of, each of the foregoing Seller Collateral (including proceeds that
constitute property of the types described in Sections 8.1(a) through (d).
SECTION 8.2 SELLER'S CERTIFICATION.
The Seller hereby certifies that (a) the benefits of the
representations, warranties and covenants made by Holding to the Seller under
the Sale Agreement have been assigned by the Seller to the Administrative Agent
on behalf of the Purchasers hereunder; (b) the rights of the Seller to require a
capital contribution from Holding or to require payment of a Rejected Amount
from Holding under the Sale Agreement may be enforced by the Purchasers and the
Administrative Agent; and (c) the Sale Agreement provides that the
representations, warranties and covenants described in Sections 4.1, 4.2 and 4.3
thereof, the indemnification and payment provisions of Article V thereof and the
provisions of Sections 4.3(j), 8.3 and 8.14 thereof shall survive the sale of
the Transferred Receivables (and undivided percentage ownership interests
therein) and the termination of the Sale Agreement and this Agreement. The
Seller hereby acknowledges that the Conduit Purchaser has assigned to the
Collateral Agent under the Collateral Agent Agreement the benefits of the
representations, warranties and covenants certified this in Section 8.2 to have
been assigned to the Conduit Purchaser.
SECTION 8.3 CONSENT TO ASSIGNMENT.
Each of the Seller and the Servicer acknowledges and consents to the
grant by the Conduit Purchaser to the Collateral Agent pursuant to the
Collateral Agent Agreement of a Lien upon all of the Conduit Purchaser's rights,
title and interest in, to and under the Seller Collateral and acknowledges the
rights of the Collateral Agent thereunder and the covenants made by the
46
Conduit Purchaser in favor of the Collateral Agent set forth therein, and
further acknowledges and consents that, upon the occurrence and during the
continuance of an Incipient Termination Event or a Termination Event prior to a
Committed Purchaser Funding Event, the Collateral Agent shall be entitled to
enforce the provisions of the Seller Assigned Agreements and shall be entitled
to all the rights and remedies of the Conduit Purchaser thereunder. In addition,
each of the Seller and the Servicer hereby authorizes the Collateral Agent to
rely on the representations and warranties made by it in the Seller Assigned
Agreements to which it is a party and in any other certificates or documents
furnished by it to any party in connection therewith.
SECTION 8.4 DELIVERY OF COLLATERAL.
All certificates or instruments representing or evidencing the Seller
Collateral shall be delivered to and held by or on behalf of the Administrative
Agent and shall be in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Administrative Agent. The
Administrative Agent shall have the right (a) at any time to exchange
certificates or instruments representing or evidencing Seller Collateral for
certificates or instruments of smaller or larger denominations and (b) at any
time in its discretion following the occurrence and during the continuation of a
Termination Event and without notice to the Seller, to transfer to or to
register in the name of the Administrative Agent or its nominee any or all of
the Seller Collateral.
SECTION 8.5 SELLER REMAINS LIABLE.
It is expressly agreed by the Seller that, anything herein to the
contrary notwithstanding, the Seller shall remain liable under any and all of
the Transferred Receivables, the Contracts therefor, the Seller Assigned
Agreements and any other agreements constituting the Seller Collateral to which
it is a party to observe and perform all the conditions and obligations to be
observed and performed by it thereunder. The Purchasers, the Administrative
Agent, the Collateral Agent and the other Conduit Purchaser Secured Parties
shall not have any obligation or liability under any such Transferred
Receivables, Contracts or agreements by reason of or arising out of this
Agreement or the Collateral Agent Agreement or the granting herein or therein of
a Lien thereon or the receipt by the Administrative Agent, Purchasers, the
Collateral Agent or any Purchaser Secured Party of any payment relating thereto
pursuant hereto or thereto. The exercise by any Purchaser or the Administrative
Agent of any of its respective rights under this Agreement shall not release the
Originator, Holding, the Seller or the Servicer from any of their respective
duties or obligations under any such Transferred Receivables, Contracts or
agreements. None of the Purchasers, the Administrative Agent, the Collateral
Agent or any of the Conduit Purchaser Secured Parties shall be required or
obligated in any manner to perform or fulfill any of the obligations of the
Originator, Holding, the Seller or the Servicer under or pursuant to any such
Receivable, Contract or agreement, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any such Receivable, Contract
or agreement, or to present or file any claims, or to take any action to collect
or enforce any performance or the payment of any amounts that may have been
assigned to it or to which it may be entitled at any time or times.
47
SECTION 8.6 COVENANTS OF THE SELLER AND THE SERVICER REGARDING THE
SELLER COLLATERAL.
(a) Offices and Records. The Seller shall maintain its jurisdiction of
formation, principal place of business and chief executive office and the office
at which it stores its Records at the respective locations specified in Schedule
4.1(b) or, upon thirty (30) days' prior written notice to the Administrative
Agent, at such other location in a jurisdiction where all action requested by
the Administrative Agent pursuant to Section 14.15 shall have been taken with
respect to the Seller Collateral. Each of the Seller and the Servicer shall, at
its own cost and expense, maintain adequate and complete records of the
Transferred Receivables and the Seller Collateral, including records of any and
all payments received, credits granted and merchandise returned with respect
thereto and all other dealings therewith. Each of the Seller and the Servicer
shall xxxx conspicuously with a legend, in form and substance satisfactory to
the Administrative Agent, including, without limitation, its books and records,
and credit files pertaining to the Seller Collateral, and its file cabinets or
other storage facilities where it maintains information pertaining thereto, to
evidence this Agreement and the assignment and Liens granted pursuant to this
Article VIII. Upon the occurrence and during the continuance of a Termination
Event, the Seller and the Servicer shall deliver and turn over such books and
records to the Administrative Agent or its representatives at any time on demand
of the Administrative Agent. Prior to the occurrence of a Termination Event and
upon notice from the Administrative Agent, the Seller and the Servicer shall
permit any representative of the Administrative Agent to inspect such books and
records and shall provide photocopies thereof to the Administrative Agent as
more specifically set forth in Section 8.6(b).
(b) Access. Each of the Seller and the Servicer shall, at its own
expense, during normal business hours, from time to time upon five (5) Business
Days' prior notice as frequently as the Administrative Agent determines to be
appropriate: (i) provide the Purchasers, the Administrative Agent and any of
their respective officers, employees and agents access to its properties
(including properties utilized in connection with the collection, processing or
servicing of the Transferred Receivables), facilities, advisors and employees
(including officers) and to the Seller Collateral, (ii) permit the Purchasers,
the Administrative Agent and any of their respective officers, employees and
agents to inspect, audit and make extracts from its books and records, including
all Records, (iii) permit the Purchasers or the Administrative Agent and their
respective officers, employees and agents to inspect, review and evaluate the
Transferred Receivables and the Seller Collateral and (iv) permit the Purchasers
or the Administrative Agent and their respective officers, employees and agents
to discuss matters relating to the Transferred Receivables or its performance
under this Agreement or the other Related Documents or its affairs, finances and
accounts with any of its officers, directors, employees, representatives or
agents (in each case, with those persons having knowledge of such matters) and
with its independent certified public accountants. If (A) an Incipient
Termination Event or a Termination Event shall have occurred and be continuing
or (B) the Administrative Agent, in good faith, believes that an Incipient
Termination Event or a Termination Event is imminent or deems any Purchaser's
rights or interests in the Transferred Receivables, the Seller Assigned
Agreements or any other Seller Collateral insecure, then each of the Seller and
the Servicer shall, at its own expense, provide such access at all times and
without advance notice and provide the Purchasers or the Administrative Agent
with access to its customers upon notice by the Administrative Agent to the
Seller and the Servicer. Each of the Seller and the Servicer shall make
available to the Administrative Agent and its counsel, as
48
quickly as is possible under the circumstances, originals or copies of all books
and records, including Records, that the Administrative Agent may request. Each
of the Seller and the Servicer shall deliver any document or instrument
necessary for the Administrative Agent, as the Administrative Agent may from
time to time request, to obtain records from any service bureau or other Person
that maintains records for the Seller or the Servicer, and shall maintain
duplicate records or supporting documentation on media, including computer tapes
and discs owned by the Seller or the Servicer.
(c) Communication with Accountants. Each of the Seller and the Servicer
authorizes the Purchasers and the Administrative Agent to communicate directly
with its independent certified public accountants and authorizes and shall
instruct those accountants and advisors to disclose and make available to the
Purchasers and the Administrative Agent any and all financial statements and
other supporting financial documents, schedules and information relating to the
Seller or the Servicer (including copies of any issued management letters) with
respect to its business, financial condition and other affairs; provided, that
the Administrative Agent shall provide the Servicer with notice and a general
description of its intended communication with the independent certified public
accountants.
(d) Collection of Transferred Receivables. Except as otherwise provided
in this Section 8.6(d), the Servicer shall continue to collect or cause to be
collected, at its sole cost and expense, all amounts due or to become due to the
Seller under the Transferred Receivables, the Seller Assigned Agreements and any
other Seller Collateral. In connection therewith, the Seller and the Servicer
shall take such action as it, and from and after the occurrence and during the
continuance of a Termination Event, the Administrative Agent, may deem necessary
or desirable to enforce collection of the Transferred Receivables, the Seller
Assigned Agreements and the other Seller Collateral; provided, that the Seller
or the Servicer may, rather than commencing any such action or taking any other
enforcement action, at its option, elect to pay to the Administrative Agent, for
the account of the Applicable Purchaser (in accordance with its Purchaser
Interests), the Outstanding Balance of any such Transferred Receivable; provided
further, that if (i) an Incipient Termination Event or a Termination Event shall
have occurred and be continuing or (ii) the Administrative Agent, in good faith
believes that an Incipient Termination Event or a Termination Event is imminent
or deems any Purchaser's rights or interests in the Transferred Receivables, the
Seller Assigned Agreements or any other Seller Collateral insecure, then the
Administrative Agent may, without prior notice to the Seller or the Servicer,
notify any Obligor under any Transferred Receivable or obligors under the Seller
Assigned Agreements of the assignment of such Transferred Receivables or Seller
Assigned Agreements, as the case may be, to the Administrative Agent on behalf
of the Purchasers hereunder and direct that payments of all amounts due or to
become due to the Seller thereunder be made directly to the Administrative Agent
or any servicer, collection agent or lockbox or other account designated by the
Administrative Agent and, upon such notification and at the sole cost and
expense of the Seller and the Servicer, the Administrative Agent may enforce
collection of any such Transferred Receivable or the Seller Assigned Agreements
and adjust, settle or compromise the amount or payment thereof.
(e) Performance of Seller Assigned Agreements. Each of the Seller and
the Servicer shall (i) perform and observe all the terms and provisions of the
Seller Assigned Agreements to be performed or observed by it, maintain the
Seller Assigned Agreements in full force and effect,
49
enforce the Seller Assigned Agreements in accordance with their terms and take
all action as may from time to time be requested by the Administrative Agent in
order to accomplish the foregoing, and (ii) upon the request of and as directed
by the Administrative Agent, make such demands and requests to any other party
to the Seller Assigned Agreements as are permitted to be made by the Seller or
the Servicer thereunder.
ARTICLE IX
TERMINATION EVENTS
SECTION 9.1 TERMINATION EVENTS.
If any of the following events (each, a "Termination Event") shall
occur (regardless of the reason therefor):
(a) the Seller shall (i) fail to make any payment of any Seller Secured
Obligation when due and payable and the same shall remain unremedied for one (1)
Business Day (or two (2) Business Days in the case of any violation of Section
6.1(a)(ii)'s requirement that proceeds of Transferred Receivables and Seller
Collateral be deposited to a Lockbox Account within one (1) Business Day after
receipt thereof) or more, or (ii) fail or neglect to perform, keep or observe
any other provision of this Agreement or the other Related Documents (other than
any provision embodied in or covered by any other clause of this Section 9.1)
and the same shall remain unremedied for two (2) Business Days or more after
written notice thereof shall have been given by the Administrative Agent to the
Seller; or
(b) a default or breach shall occur under any other agreement, document
or instrument to which the Parent, the Originator, Holding or the Seller is a
party or by which any such Person or its property is bound, and (i) such default
or breach has not been waived in writing by the holder or holders of such Debt
or cured to the satisfaction of the Administrative Agent and (ii) such default
or breach (A) involves the failure to make any payment when due in respect of
any Debt (other than the Seller Secured Obligations) of any such Person due and
owing to GE Capital or any of its affiliates, or (B) permits any holder of such
Debt or a trustee or agent to cause Debt or a portion thereof which, except with
respect to the Seller, is in excess of a principal amount of $10,000,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or (C) causes Debt or a portion thereof which,
except with respect to the Seller, is in excess of a principal amount of
$10,000,000 in the aggregate to become due prior to its stated maturity or prior
to its regularly scheduled dates of payment; or
(c) a case or proceeding shall have been commenced against the Seller
or any member of the Parent Group seeking a decree or order in respect of any
such Person (i) under the Bankruptcy Code or any other applicable federal, state
or foreign bankruptcy or other similar law, (ii) appointing a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for any such Person or for any substantial part of such Person's assets, or
(iii) ordering the winding-up or liquidation of the affairs of any such Person;
or
(d) the Seller or any member of the Parent Group shall (i) file a
petition seeking relief under the Bankruptcy Code or any other applicable
federal, state or foreign bankruptcy or other
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similar law, (ii) consent or fail to object in a timely and appropriate manner
to the institution of proceedings thereunder or to the filing of any such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for any such
Person or for any substantial part of such Person's assets, (iii) make an
assignment for the benefit of creditors, or (iv) take any corporate or limited
partnership action, as applicable, in furtherance of any of the foregoing; or
(e) (i) the Originator, Holding, the Seller or the Servicer generally
does not pay its debts as such debts become due or admits in writing its
inability to, or is generally unable to, pay its Debts as such Debts become due
or (ii) the fair market value of any member of the Parent Group's liabilities
exceeds the fair market value of its assets; or
(f) a judgment or order for the payment of money in excess of
$10,000,000 (or in excess of $20,000,000 with respect to any judgment or order
for the payment of money resulting from the matter disclosed as item 8 on
Schedule 4.1(d) to the Contribution Agreement) individually or in the aggregate
at any time outstanding shall be rendered against any member of the Parent Group
and the same shall not, within thirty (30) days after the entry thereof, have
been discharged or execution thereof stayed or bonded pending appeal, or shall
not have been discharged prior to the expiration of any such stay; or
(g) a judgment or order for the payment of money shall be rendered
against the Seller or Holding; or
(h) (i) any information contained in any Investment Base Certificate is
untrue or incorrect in any respect, or (ii) any representation or warranty of
the Originator, the Parent, Holding or the Seller herein or in any other Related
Document or in any written statement, report, financial statement or certificate
(other than an Investment Base Certificate) made or delivered by or on behalf of
the Originator, the Parent, Holding or the Seller to any Affected Party hereto
or thereto is untrue or incorrect in any material respect as of the date when
made or deemed made; or
(i) any Governmental Authority (including the IRS or the PBGC) shall
file notice of a Lien with regard to any assets of the Originator, Holding or
the Seller (other than a Lien (i) limited by its terms to assets other than
Transferred Receivables and (ii) not materially adversely affecting the
financial condition of the Originator or the ability of the Originator to
perform as Servicer hereunder); or
(j) any Governmental Authority (including the IRS or the PBGC) shall
file notice of a Lien with regard to any of the assets of the Seller; or
(k) [reserved]; or
(l) (i) a breach by the Seller, Holding or the Originator in any
material respect of any of its representations or warranties herein or in any
Related Document, (ii) any other violation, default or breach by the Seller,
Holding or the Originator of any of its covenants or agreements herein or in any
Related Document and the same shall remain unremedied for five (5) Business Days
or (iii) the Sale Agreement for any reason shall cease to evidence the transfer
to the Seller of the legal and equitable title to, and ownership of, the
Transferred Receivables; or
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(m) except as otherwise expressly provided herein, any Lockbox Account
Agreement, the Contribution Agreement or the Sale Agreement shall have been
modified, amended or terminated without the prior written consent of the
Purchasers and the Administrative Agent; or
(n) a Servicer Termination Event shall have occurred and be continuing;
or
(o) (i) with respect to the Transferred Receivables, (A) prior to the
Purchase of Purchaser Interests therein hereunder, the Seller shall cease to
hold valid and properly perfected title to and sole record and beneficial
ownership in such Transferred Receivables or (B) after the Purchase of Purchaser
Interests hereunder, (1) the Administrative Agent (on behalf of the Purchasers)
shall cease to hold either (a) valid and properly perfected title to and sole
record and beneficial ownership in the related Transferred Receivables or (b) a
first priority, perfected Lien in the related Transferred Receivables or any of
the Seller Collateral; or
(p) a Change of Control shall occur with respect to the Parent, the
Originator, Holding or the Seller; or
(q) the Seller shall amend its bylaws or its certificate or articles of
incorporation without the express prior written consent of the Purchasers and
the Administrative Agent; or
(r) (i) Holding shall have received a Notice of Election pursuant to
Section 2.1(d) of the Contribution Agreement; or (ii) the Seller shall have
received an Election Notice pursuant to Section 2.1(d) of the Sale Agreement; or
(s) (i) the Default Ratio shall exceed 3.5%; (A) the Delinquency Ratio
shall exceed 2.5%; (B) the Dilution Trigger Ratio shall exceed 5.0%; (C) the
Receivables Collection Turnover shall exceed 22 days; (D) the Seller's Net Worth
Percentage shall be less than 5.0%; or (ii) Holding's Net Worth Percentage shall
be less than 15.0%; or
(t) any material provision of any Related Document shall for any reason
cease to be valid, binding and enforceable in accordance with its terms (or the
Parent, the Originator, Holding or the Seller shall challenge the enforceability
of any Related Document or shall assert in writing, or engage in any action or
inaction based on any such assertion, that any provision of any of the Related
Documents has ceased to be or otherwise is not valid, binding and enforceable in
accordance with its terms); or
(u) an "Event of Default", as such term is defined in the Senior Credit
Facility, shall have occurred and shall not have been waived in writing by the
Senior Credit Facility Lenders in accordance with the terms and conditions of
the Senior Debt Facility or cured to the satisfaction of the Administrative
Agent; or
(v) the Parent or any PBM Subsidiary of the Parent shall become the
target of, or a defendant in, any governmental suit, action, investigation or
proceeding alleging material civil or criminal wrongdoing on the part of the
Parent or such Subsidiary in connection with the conduct of its business, or
which questions the validity, enforceability or collectibility of the
Transferred Receivables, and the Administrative Agent shall determine after
reasonable inquiry that there exists a reasonable possibility of an adverse
determination in such suit, action, investigation or proceeding which could have
a Material Adverse Effect; or
52
(w) a material adverse change in the financial condition or operation
of the Parent (and its Subsidiaries), the Originator, the Seller, Holding or the
Servicer, from the Closing Date, or in the collectibility of receivables; or
(x) in excess of one (1) Excluded Receivable is transferred to the
Seller in any calendar quarter; or
(y) (i) the Seller shall cease to be a direct wholly-owned subsidiary
of Holding; or (ii) Holding shall cease to be an indirect wholly-owned
subsidiary of the Originator; or
(z) on or before August 15, 2005, the Senior Credit Facility shall not
be either extended or replaced with a facility of similar amount and similar
terms, in either case with a termination date that is later then the Final
Purchase Date; or
(aa) any Collections or any other monies related to Receivables that do
not constitute Transferred Receivables shall be deposited in the Lockbox Account
or the Collection Account, and such Collections or other monies are not removed
from the Lockbox Account or the Collection Account, as the case may be, within
one (1) Business Day after knowledge of deposit thereof;
then, and in any such event, the Administrative Agent shall, at the request of,
or may, with the consent of, the Purchaser or the Administrative Agent, by
notice to the Seller, declare the Facility Termination Date to have occurred
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Seller; provided, that the Facility Termination Date
shall automatically occur (i) upon the occurrence of any of the Termination
Events described in Sections 9.1(c), (d), (e) or (r) or (ii) three (3) days
after the occurrence of the Termination Event described in Section 9.1(a)(i) if
the same shall not have been remedied by such time, in each case without demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Seller.
SECTION 9.2 SERVICER TERMINATION EVENTS.
If any of the following events (each, a "Servicer Termination Event")
shall occur (regardless of the reason therefor):
(a) the Servicer shall fail or neglect to perform, keep or observe any
provision of this Agreement or the other Related Documents (whether in its
capacity as the Originator or as Servicer); or
(b) any representation or warranty of the Servicer herein or in any
other Related Document or in any written statement, report, financial statement
or certificate made or delivered by the Servicer to the Purchasers or the
Administrative Agent hereto or thereto is untrue or incorrect in any material
respect as of the date when made or deemed made; or
(c) a default or breach shall occur under any other agreement, document
or instrument to which the Originator or the Servicer is a party or by which any
such Person or its property is bound, and (i) such default or breach has not
been waived in writing by the holder or holders of such Debt or cured to the
satisfaction of the Administrative Agent and (ii) such default or
53
breach (A) involves the failure to make any payment when due in respect of any
Debt (other than the Seller Secured Obligations) of any such Person due and
owing to GE Capital or any of its affiliates, or (B) permits any holder of such
Debt or a trustee or agent to cause Debt or a portion thereof which, except with
respect to the Seller, is in excess of a principal amount of $10,000,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or (C) causes Debt or a portion thereof which,
except with respect to the Seller, is in excess of a principal amount of
$10,000,000 in the aggregate to become due prior to its stated maturity or prior
to its regularly scheduled dates of payment; or
(d) a case or proceeding shall have been commenced against the Servicer
seeking a decree or order in respect of any such Person (i) under the Bankruptcy
Code or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for any such Person or for any
substantial part of such Person's assets, or (iii) ordering the winding-up or
liquidation of the affairs of any such Person; or
(e) the Servicer shall (i) file a petition seeking relief under the
Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) consent or fail to object in a timely and appropriate
manner to the institution of proceedings thereunder or to the filing of any such
petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for any such
Person or for any substantial part of such Person's assets, (iii) make an
assignment for the benefit of creditors, or (iv) take any corporate action in
furtherance of any of the foregoing; or
(f) (i) the Servicer generally does not pay its debts as such debts
become due or admits in writing its inability to, or is generally unable to, pay
its Debts as such Debts become due or (ii) the fair market value of the
Servicer's liabilities exceeds the fair market value of its assets; or
(g) a final judgment or judgments for the payment of money in excess of
$10,000,000 in the aggregate at any time outstanding shall be rendered against
the Servicer and the same shall not, within thirty (30) days after the entry
thereof, have been discharged or execution thereof stayed or bonded pending
appeal, or shall not have been discharged prior to the expiration of any such
stay; or
(h) (i) any information contained in any Investment Base Certificate is
untrue or incorrect in any respect, or (ii) any representation or warranty of
the Servicer herein or in any other Related Document or in any written
statement, report, financial statement or certificate (other than an Investment
Base Certificate) made or delivered by the Servicer to any Affected Party hereto
or thereto is untrue or incorrect in any material respect as of the date when
made or deemed made; or
(i) the Administrative Agent shall have determined that any event or
condition that materially adversely affects the ability of the Servicer to
collect the Receivables or to otherwise perform hereunder has occurred; or
(j) a Termination Event shall have occurred and be continuing or this
Agreement shall have been terminated; or
54
(k) a deterioration has taken place in the quality of servicing of
Transferred Receivables or other Receivables serviced by the Servicer that the
Administrative Agent, in its sole discretion, determines to be material, and
such material deterioration has not been eliminated within forty five (45) days
after written notice thereof shall have been given by the Administrative Agent
to the Servicer; or
(l) the Originator shall, or the Servicer shall, assign or purport to
assign any of their respective obligations hereunder or under any Related
Document without the prior written consent of the Administrative Agent; or
(m) a default or breach of any of the covenants set forth in Section
5.04(a) of the Senior Credit Facility (as in effect on the Closing Date) shall
have occurred; or
(n) a Change of Control shall occur with respect to the Servicer; or
(o) the Servicer shall become insolvent; or
(p) the Seller's board of directors shall have determined that it is in
the best interests of the Seller to terminate the duties of the Servicer
hereunder and shall have given the Servicer, the Purchasers and the
Administrative Agent at least forty-five (45) days' written notice thereof;
then, and in any such event, the Administrative Agent shall, at the request of,
or may, with the consent of, the Purchasers or the Administrative Agent, by
delivery of a Servicer Termination Notice to the Seller and the Servicer,
terminate some or all of the servicing responsibilities of the Servicer
hereunder, without demand, protest or further notice of any kind, all of which
are hereby waived by the Servicer. Upon the delivery of any such notice, all
authority and power of the Servicer under this Agreement and the Related
Documents shall pass to and be vested in the Successor Servicer acting pursuant
to Section 11.2; provided, that notwithstanding anything to the contrary herein,
the Servicer agrees to continue to follow the procedures set forth in Section
7.2 with respect to Collections on the Transferred Receivables until a Successor
Servicer has assumed the responsibilities and obligations of the Servicer in
accordance with Section 11.2.
ARTICLE X
REMEDIES
SECTION 10.1 ACTIONS UPON TERMINATION EVENT.
If any Termination Event shall have occurred and be continuing and the
Administrative Agent shall have declared the Facility Termination Date to have
occurred or the Facility Termination Date shall be deemed to have occurred
pursuant to Section 9.1, then the Administrative Agent may exercise in respect
of the Seller Collateral, in addition to any and all other rights and remedies
granted to it hereunder, under any other Related Document or under any other
instrument or agreement securing, evidencing or relating to the Seller Secured
Obligations or otherwise available to it, all of the rights and remedies of a
secured party upon default under the UCC (such rights and remedies to be
cumulative and nonexclusive), and, in addition, may take the following actions:
55
(a) The Administrative Agent may, without notice to the Seller except
as required by law and at any time or from time to time, charge, offset or
otherwise apply amounts payable to the Seller from the Collection Account, any
Lockbox Account, the Retention Account or any part of such accounts in
accordance with the priorities set forth in Sections 6.5 and 6.7 against all or
any part of the Seller Secured Obligations.
(b) The Administrative Agent may, without notice except as specified
below, solicit and accept bids for and sell the Seller Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or any of the Purchasers', or Administrative Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as the Administrative Agent may deem commercially reasonable. The Administrative
Agent shall have the right to conduct such sales on the Seller's premises or
elsewhere and shall have the right to use any of the Seller's premises without
charge for such sales at such time or times as the Administrative Agent deems
necessary or advisable. The Seller agrees that, to the extent notice of sale
shall be required by law, at least ten (10) Business Days' notice to the Seller
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Administrative
Agent shall not be obligated to make any sale of Seller Collateral regardless of
notice of sale having been given. The Administrative Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed for such sale, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Every such sale shall operate to
divest all right, title, interest, claim and demand whatsoever of the Seller in
and to the Seller Collateral so sold, and shall be a perpetual bar, both at law
and in equity, against the Originator, Holding, the Seller, any Person claiming
the Seller Collateral sold through the Originator, Holding or the Seller, and
their respective successors or assigns. The Administrative Agent shall deposit
the net proceeds of any such sale in the Collection Account and such proceeds
shall be disbursed in accordance with Section 6.5.
(c) Upon the completion of any sale under Section 10.1(b), the Seller
or the Servicer shall deliver or cause to be delivered to the purchaser or
purchasers at such sale on the date thereof, or within a reasonable time
thereafter if it shall be impracticable to make immediate delivery, all of the
Seller Collateral sold on such date, but in any event full title and right of
possession to such property shall vest in such purchaser or purchasers upon the
completion of such sale. Nevertheless, if so requested by the Administrative
Agent or by any such purchaser, the Seller shall confirm any such sale or
transfer by executing and delivering to such purchaser all proper instruments of
conveyance and transfer and releases as may be designated in any such request.
(d) At any sale under Section 10.1(b), the Purchasers, the
Administrative Agent or any other Purchaser Secured Party may bid for and
purchase the property offered for sale and, upon compliance with the terms of
sale, may hold, retain and dispose of such property without further
accountability therefor.
(e) The Administrative Agent may exercise, at the sole cost and expense
of the Seller, any and all rights and remedies of the Seller under or in
connection with the Seller Assigned Agreements or the other Seller Collateral,
including any and all rights of the Seller to demand or
56
otherwise require payment of any amount under, or performance of any provisions
of, the Seller Assigned Agreements.
SECTION 10.2 EXERCISE OF REMEDIES.
No failure or delay on the part of the Administrative Agent in
exercising any right, power or privilege under this Agreement and no course of
dealing between the Originator, Holding, the Seller or the Servicer, on the one
hand, and the Administrative Agent, on the other hand, shall operate as a waiver
of such right, power or privilege, nor shall any single or partial exercise of
any right, power or privilege under this Agreement preclude any other or further
exercise of such right, power or privilege or the exercise of any other right,
power or privilege. The rights and remedies under this Agreement are cumulative,
may be exercised singly or concurrently, and are not exclusive of any rights or
remedies that the Administrative Agent would otherwise have at law or in equity.
No notice to or demand on any party hereto shall entitle such party to any other
or further notice or demand in similar or other circumstances, or constitute a
waiver of the right of the party providing such notice or making such demand to
any other or further action in any circumstances without notice or demand.
SECTION 10.3 POWER OF ATTORNEY.
On the Closing Date, each of the Seller and the Servicer shall execute
and deliver a power of attorney substantially in the form attached hereto as
Exhibit 10.3 (each, a "Power of Attorney"). The power of attorney granted
pursuant to each Power of Attorney is a power coupled with an interest and shall
be irrevocable until all of the Seller Secured Obligations are indefeasibly paid
or otherwise satisfied in full. The powers conferred on the Administrative Agent
under each Power of Attorney are solely to protect the Purchaser's Liens upon
and interests in the Seller Collateral and shall not impose any duty upon the
Administrative Agent to exercise any such powers. The Administrative Agent shall
not be accountable for any amount other than amounts that it actually receives
as a result of the exercise of such powers and none of the Administrative
Agent's officers, directors, employees, agents or representatives shall be
responsible to the Seller or the Servicer for any act or failure to act, except
in respect of damages attributable solely to their own gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
SECTION 10.4 CONTINUING SECURITY INTEREST.
This Agreement shall create a continuing Lien in the Seller Collateral
until the conditions to the release of the Liens of the Purchaser and the
Administrative Agent thereon set forth in Section 6.7(b) have been satisfied.
ARTICLE XI
SUCCESSOR SERVICER PROVISIONS
SECTION 11.1 SERVICER NOT TO RESIGN.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon a determination that (a) the performance of its duties
hereunder has become impermissible
57
under applicable law or regulation and (b) there is no reasonable action that
the Servicer could take to make the performance of its duties hereunder become
permissible under applicable law. Any such determination shall (i) with respect
to clause (a) above, be evidenced by an opinion of counsel to such effect and
(ii) with respect to clause (b) above, be evidenced by an Officer's Certificate
to such effect, in each case delivered to the Purchaser and the Administrative
Agent. No such resignation shall become effective until a Successor Servicer
shall have assumed the responsibilities and obligations of the Servicer in
accordance with Section 11.2.
SECTION 11.2 APPOINTMENT OF THE SUCCESSOR SERVICER.
In connection with the termination of the Servicer's responsibilities
or the resignation by the Servicer under this Agreement pursuant to Sections 9.2
or 11.1, the Administrative Agent shall (a) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations as Servicer (but not
in any other capacity, including specifically not the obligations of the
Servicer set forth in Section 12.2) under this Agreement (and except that the
Administrative Agent makes no representations and warranties pursuant to Section
4.2) and (b) may at any time appoint a successor servicer to the Servicer that
shall be acceptable to the Administrative Agent and shall succeed to all rights
and assume all of the responsibilities, duties and liabilities of the Servicer
under this Agreement (the Administrative Agent, in such capacity, or such
successor servicer being referred to as the "Successor Servicer"); provided,
that the Successor Servicer shall have no responsibility for any actions of the
Servicer prior to the date of its appointment or assumption of duties as
Successor Servicer. In selecting a Successor Servicer, the Administrative Agent
may obtain bids from any potential Successor Servicer and may agree to any bid
it deems appropriate. The Successor Servicer shall accept its appointment by
executing, acknowledging and delivering to the Administrative Agent an
instrument in form and substance acceptable to the Administrative Agent.
SECTION 11.3 DUTIES OF THE SERVICER.
The Servicer covenants and agrees that, following the appointment of,
or assumption of duties by, a Successor Servicer, the Servicer shall terminate
its activities as Servicer hereunder in a manner that facilitates the transfer
of servicing duties to the Successor Servicer and is otherwise acceptable to
each Purchaser and the Administrative Agent and, without limiting the generality
of the foregoing, shall timely deliver (a) any funds to the Administrative Agent
that were required to be remitted to the Administrative Agent for deposit in the
Collection Account and (b) all Servicing Records and other information with
respect to the Transferred Receivables to the Successor Servicer at a place
selected by the Successor Servicer. The Servicer shall account for all funds and
shall execute and deliver such instruments and do such other things as may be
required to vest and confirm in the Successor Servicer all rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer.
SECTION 11.4 EFFECT OF TERMINATION OR RESIGNATION.
Any termination of or resignation by the Servicer hereunder shall not
affect any claims that the Seller, the Purchasers, or the Administrative Agent
may have against the Servicer for events or actions taken or not taken by the
Servicer arising prior to any such termination or resignation.
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ARTICLE XII
INDEMNIFICATION
SECTION 12.1 INDEMNITIES BY THE SELLER.
(a) Without limiting any other rights that the Conduit Purchaser, the
Committed Purchaser, the Administrative Agent, the Collateral Agent, the
Liquidity Agent, any Liquidity Lender, the Letter of Credit Agent or any Letter
of Credit Provider or any of their respective officers, directors, employees,
attorneys, agents or representatives (each, an "Indemnified Person") may have
hereunder or under applicable law, the Seller hereby agrees to indemnify and
hold harmless each Indemnified Person from and against any and all Indemnified
Amounts that may be claimed or asserted against or incurred by any such
Indemnified Person in connection with or arising out of the transactions
contemplated under this Agreement or under any other Related Document or any
actions or failures to act in connection therewith, including any and all legal
costs and expenses arising out of or incurred in connection with disputes
between or among any parties to any of the Related Documents; provided, that the
Seller shall not be liable for any indemnification to a Indemnified Person to
the extent that any such Indemnified Amount (i) results from (A) with respect to
any Indemnified Person other than the Conduit Purchaser, such Indemnified
Person's gross negligence or (B) with respect to any Indemnified Person, such
Indemnified Person's willful misconduct, in each case as finally determined by a
court of competent jurisdiction or (ii) constitutes recourse for uncollectible
or uncollected Transferred Receivables. Without limiting the generality of the
foregoing, the Seller shall pay on demand to each Indemnified Person any and all
Indemnified Amounts relating to or resulting from:
(A) 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 or any other Related
Document or on any other information delivered by the Seller
pursuant hereto or thereto that shall have been incorrect in
any material respect when made or deemed made or delivered;
(B) the failure by the Seller to comply with any
term, provision or covenant contained in this Agreement, any
other Related Document or any agreement executed in connection
herewith or therewith, any applicable law, rule or regulation
with respect to any Transferred Receivable or the Contract
therefor, or the nonconformity of any Transferred Receivable
or the Contract therefor with any such applicable law, rule or
regulation; or
(C) (1) the failure to vest and maintain vested in
the Seller or the Purchaser valid and properly perfected title
to and sole record and beneficial ownership of the Receivables
that constitute Transferred Receivables, together with all
Collections in respect thereof, free and clear of any Adverse
Claim, (2) the failure to maintain or transfer to the
Purchaser a first, priority, perfected Lien in the Seller
Collateral and (3) the failure to maintain or transfer to the
Administrative Agent a first priority, perfected Lien therein;
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(D) any dispute, claim, offset or defense of any
Obligor (other than its discharge in bankruptcy to the payment
of any Transferred Receivable that is the subject of a
Purchase hereunder (including a defense based on such
Transferred Receivable or the Contract therefor not being a
legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the merchandise or
services giving rise to such Transferred Receivable or the
furnishing of or failure to furnish such merchandise or
services or relating to collection activities with respect to
such Transferred Receivable (if such collection activities
were performed by any of its Affiliates acting as Servicer),
except to the extent that such dispute, claim, offset or
defense results solely from any action or inaction on the part
of any Indemnified Person;
(E) any products liability claim or other claim
arising out of or in connection with merchandise, insurance or
services that is the subject of any Contract with respect to
any Transferred Receivable;
(F) the commingling of Collections with respect to
Transferred Receivables by the Seller at any time with its
other funds or the funds of any other Person or the
commingling of the Transferred Receivables with its other
assets or the assets of any other Person;
(G) any failure by the Seller to cause the filing of,
or any delay in filing, financing statements or other similar
instruments or documents under the UCC of any applicable
jurisdiction or any other applicable laws with respect to any
Transferred Receivable that is the subject of a Purchase
hereunder, whether at the time of any such Purchase or at any
subsequent time; or
(H) any failure of a Lockbox Account Bank to comply
with the terms of the applicable Lockbox Account Agreement.
(I) any Indemnified Amounts subject to the
indemnification provisions of this Section 12.1 not paid in
accordance with Article VI shall be paid by the Seller to the
Indemnified Person entitled thereto within five (5) Business
Days following demand therefor.
SECTION 12.2 INDEMNITIES BY THE SERVICER.
(a) Without limiting any other rights that an Indemnified Person may
have hereunder or under applicable law, the Servicer hereby agrees to indemnify
and hold harmless each Indemnified Person from and against any and all
Indemnified Amounts that may be claimed or asserted against or incurred by any
such Indemnified Person in connection with or arising out of any breach by the
Servicer of its obligations hereunder or under any other Related Document;
provided, that the Servicer shall not be liable for any indemnification to an
Indemnified Person to the extent that any such Indemnified Amount (i) results
solely from (A) with respect to any Indemnified Person other than the Conduit
Purchaser, such Indemnified Person's gross negligence or (B) with respect to any
Indemnified Person, such Indemnified Person's willful misconduct, in each case
as finally determined by a court of competent jurisdiction, or (ii)
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constitutes recourse for uncollectible or uncollected Transferred Receivables.
Without limiting the generality of the foregoing, the Servicer shall pay on
demand to each Indemnified Person any and all Indemnified Amounts relating to or
resulting from:
(A) reliance on any representation or warranty made
or deemed made by the Servicer (or any of its officers) under
or in connection with this Agreement or any other Related
Document or on any other information delivered by the Servicer
pursuant hereto or thereto that shall have been incorrect in
any material respect when made or deemed made or delivered;
(B) the failure by the Servicer to comply with any
term, provision or covenant contained in this Agreement, any
other Related Document or any agreement executed in connection
herewith or therewith, any applicable law, rule or regulation
with respect to any Transferred Receivable or the Contract
therefor, or the nonconformity of any Transferred Receivable
or the Contract therefor with any such applicable law, rule or
regulation;
(C) the imposition of any Adverse Claim with respect
to any Transferred Receivable or the Seller Collateral as a
result of any action taken by the Servicer; or
(D) the commingling of Collections with respect to
Transferred Receivables by the Servicer at any time with its
other funds or the funds of any other Person.
(b) Any Indemnified Amounts subject to the indemnification provisions
of this Section 12.2 not paid in accordance with Article VI shall be paid by the
Servicer to the Indemnified Person entitled thereto within five (5) Business
Days following demand therefor.
SECTION 12.3 LIMITATION OF DAMAGES; INDEMNIFIED PERSONS.
NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY
TO THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR
THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
ARTICLE XIII
ADMINISTRATIVE AGENT
SECTION 13.1 AUTHORIZATION AND ACTION.
(a) The Administrative Agent may take such action and carry out such
functions under this Agreement as are authorized to be performed by it pursuant
to the terms of this Agreement, any other Related Document or otherwise
contemplated hereby or thereby or are
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reasonably incidental thereto; provided, that the duties of the Administrative
Agent hereunder shall be determined solely by the express provisions of this
Agreement, and, other than the duties set forth in Section 13.2, any permissive
right of the Administrative Agent hereunder shall not be construed as a duty.
SECTION 13.2 RELIANCE.
None of the Administrative Agent, any of its Affiliates or any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by any of them under or in connection with
this Agreement or the other Related Documents, except for damages solely caused
by its or their own gross negligence or willful misconduct as finally determined
by a court of competent jurisdiction. Without limiting the generality of the
foregoing, and notwithstanding any term or provision hereof to the contrary, the
Seller, the Servicer, the Conduit Purchaser and the Committed Purchaser hereby
acknowledge and agree that the Administrative Agent (a) acts as agent hereunder
for the Conduit Purchaser and the Committed Purchaser and has no duties or
obligations to, shall incur no liabilities or obligations to, and does not act
as an agent in any capacity for, the Seller (other than, with respect to the
Administrative Agent, under the Power of Attorney with respect to remedial
actions) or the Originator, (b) may consult with legal counsel, independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts, (c) makes no representation
or warranty hereunder to any Affected Party and shall not be responsible to any
such Person for any statements, representations or warranties made in or in
connection with this Agreement or the other Related Documents, (d) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement, or the other
Related Documents on the part of the Seller, the Servicer, the Conduit Purchaser
or the Committed Purchaser or to inspect the property (including the books and
records) of the Seller, the Servicer, the Conduit Purchaser or the Committed
Purchaser, (e) shall not be responsible to the Seller, the Servicer or any
Purchaser for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the other Related
Documents or any other instrument or document furnished pursuant hereto or
thereto, (f) shall incur no liability under or in respect of this Agreement or
the other Related Documents by acting upon any notice, consent, certificate or
other instrument or writing believed by it to be genuine and signed, sent or
communicated by the proper party or parties and (g) shall not be bound to make
any investigation into the facts or matters stated in any notice or other
communication hereunder and may rely on the accuracy of such facts or matters.
Notwithstanding the foregoing, the Administrative Agent acknowledges that it has
a duty to transfer funds between and among the Accounts and the Collection
Account, and make investments of funds on deposit in the Retention Account, in
accordance with Article VI and the instructions of the Servicer.
SECTION 13.3 GE CAPITAL AND AFFILIATES.
GE Capital and its Affiliates may generally engage in any kind of
business with any Obligor, the Originator, Holding, the Seller, the Servicer,
the Conduit Purchaser or the Committed Purchaser, any of their respective
Affiliates and any Person who may do business with or own securities of such
Persons or any of their respective Affiliates, all as if GE Capital
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were not the Administrative Agent and without the duty to account therefor to
any Obligor, the Originator, the Seller, the Servicer, any Purchaser or any
other Person.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES.
Except as otherwise provided herein, whenever it is provided herein
that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or serve upon any
other parties any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or
delivered (a) upon the earlier of actual receipt and three (3) Business Days
after deposit in the United States Mail, registered or certified mail, return
receipt requested, with proper postage prepaid, (b) upon transmission, when sent
by facsimile (with such facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
14.1), (c) one (1) Business Day after deposit with a reputable overnight courier
with all charges prepaid or (d) when delivered, if hand-delivered by messenger,
all of which shall be addressed to the party to be notified and sent to the
address or facsimile number set forth under its name on the signature page
hereof or to such other address (or facsimile number) as may be substituted by
notice given as herein provided. The giving of any notice required hereunder may
be waived in writing by the party entitled to receive such notice. Failure or
delay in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than the Conduit
Purchaser, the Committed Purchaser and the Administrative Agent) designated in
any written notice provided hereunder to receive copies shall in no way
adversely affect the effectiveness of such notice, demand, request, consent,
approval, declaration or other communication. Notwithstanding the foregoing,
whenever it is provided herein that a notice is to be given to any other party
hereto by a specific time, such notice shall only be effective if actually
received by such party prior to such time, and if such notice is received after
such time or on a day other than a Business Day, such notice shall only be
effective on the immediately succeeding Business Day.
SECTION 14.2 BINDING EFFECT; ASSIGNABILITY.
(a) This Agreement shall be binding upon and inure to the benefit of
the Seller, the Servicer, the Conduit Purchaser, the Committed Purchaser and the
Administrative Agent and their respective successors and permitted assigns.
Neither the Seller nor the Servicer may assign, transfer, hypothecate or
otherwise convey any of their respective rights or obligations hereunder or
interests herein without the express prior written consent of the Conduit
Purchaser, the Committed Purchaser and the Administrative Agent and unless the
Rating Agency Condition shall have been satisfied with respect to any such
assignment. Any such purported assignment, transfer, hypothecation or other
conveyance by the Seller or the Servicer without the prior express written
consent of the Conduit Purchaser, the Committed Purchaser and the Administrative
Agent shall be void.
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(b) The Conduit Purchaser, the Committed Purchaser or the
Administrative Agent may, at any time, assign any of its rights and obligations
hereunder or interests herein to any Person which has a short-term debt rating
of at least A-1 by S&P and P-1 by Xxxxx'x, and any such assignee may further
assign at any time its rights and obligations hereunder or interests herein
(including any rights it may have in and to the Purchaser Interests and the
Seller Collateral and any rights it may have to exercise remedies hereunder) to
any Person which has a short-term debt rating of at least A-1 by S&P and P-1 by
Xxxxx'x, in each case without the consent of the Originator, Holding, the Seller
or the Servicer; provided, however, at any time after the occurrence of a
Termination Event, any such party may assign any portion or all of its rights
hereunder to any Person. The Seller acknowledges and agrees that, upon any such
assignment, the assignee thereof may enforce directly, without joinder of any
Purchaser, all of the obligations of the Seller hereunder.
(c) The Seller hereby acknowledges that in accordance with the
provisions of the LAPA, on the day of the Committed Purchaser Funding Event, (A)
the Committed Purchaser may purchase from the Conduit Purchaser all or any part
of the Purchaser Interests sold by the Seller hereunder on each Purchase Date
prior to the Committed Purchaser Funding Event, and (B) the Conduit Purchaser
may assign all or any part of its rights and interest in the Seller Collateral
to the Committed Purchaser.
SECTION 14.3 TERMINATION; SURVIVAL OF SELLER SECURED OBLIGATIONS UPON
FACILITY TERMINATION DATE.
(a) 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 the Termination Date.
(b) Except as otherwise expressly provided herein or in any other
Related Document, no termination or cancellation (regardless of cause or
procedure) of any commitment made by any Affected Party under this Agreement
shall in any way affect or impair the obligations, duties and liabilities of the
Seller or the rights of any Affected Party relating to any unpaid portion of the
Seller Secured Obligations, due or not due, liquidated, contingent or
unliquidated or any transaction or event occurring prior to such termination, or
any transaction or event, the performance of which is required after the
Facility Termination Date. Except as otherwise expressly provided herein or in
any other Related Document, all undertakings, agreements, covenants, warranties
and representations of or binding upon the Seller or the Servicer, and all
rights of any Affected Party hereunder, all as contained in the Related
Documents, shall not terminate or expire, but rather shall survive any such
termination or cancellation and shall continue in full force and effect until
the Termination Date; provided, that the rights and remedies provided for herein
with respect to any breach of any representation or warranty made by the Seller
or the Servicer pursuant to Article IV, the indemnification and payment
provisions of Article XII and Sections 14.4, 14.5 and 14.6 shall be continuing
and shall survive the Termination Date.
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SECTION 14.4 COSTS, EXPENSES AND TAXES.
(a) The Seller shall reimburse each Purchaser and the Administrative
Agent (collectively) for all out-of-pocket expenses incurred in connection with
the negotiation and preparation of this Agreement and the other Related
Documents (including the reasonable fees and expenses of all of its special
counsel, advisors, consultants and auditors retained in connection with the
transactions contemplated thereby and advice in connection therewith). The
Seller shall reimburse the Conduit Purchaser, the Committed Purchaser and the
Administrative Agent for all fees, costs and expenses, including the fees, costs
and expenses of counsel or other advisors (including environmental and
management consultants and appraisers) for advice, assistance, or other
representation in connection with:
(i) the forwarding to the Seller or any other Person on behalf
of the Seller by any Purchaser of any payments for Purchases made by it
hereunder;
(ii) any amendment, modification or waiver of, consent with
respect to, or termination of this Agreement or any of the other
Related Documents or advice in connection with the administration
thereof or their respective rights hereunder or thereunder;
(iii) any Litigation, contest or dispute (whether instituted
by the Seller, the Conduit Purchaser, the Committed Purchaser, the
Administrative Agent or any other Person as a party, witness, or
otherwise) in any way relating to the Seller Collateral, any of the
Related Documents or any other agreement to be executed or delivered in
connection herewith or therewith, including any Litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against the Seller
or any other Person that may be obligated to the Purchaser or the
Administrative Agent by virtue of the Related Documents, including any
such Litigation, contest, dispute, suit, proceeding or action arising
in connection with any work-out or restructuring of the transactions
contemplated hereby during the pendency of one or more Termination
Events;
(iv) any attempt to enforce any remedies of the Conduit
Purchaser, the Committed Purchaser or the Administrative Agent against
the Seller or any other Person that may be obligated to them by virtue
of any of the Related Documents, including any such attempt to enforce
any such remedies in the course of any work-out or restructuring of the
transactions contemplated hereby during the pendency of one or more
Termination Events;
(v) any work-out or restructuring of the transactions
contemplated hereby during the pendency of one or more Termination
Events; and
(vi) efforts to (A) monitor the Purchases or any of the Seller
Secured Obligations, (B) evaluate, observe, audit or assess (1) the
Originator, Holding, the Seller or the Servicer or their respective
affairs or (2) compliance with the terms of any of the Related
Documents, and (C) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Seller
Collateral;
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including all attorneys' and other professional and service providers' fees
arising from such services, including those in connection with any appellate
proceedings, and all expenses, costs, charges and other fees incurred by such
counsel and others in connection with or relating to any of the events or
actions described in this Section 14.4, all of which shall be payable, on
demand, by the Seller to the Conduit Purchaser, the Committed Purchaser or the
Administrative Agent, as applicable. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include: fees, costs and
expenses of accountants, environmental advisors, appraisers, investment bankers,
management and other consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram or facsimile
charges; secretarial overtime charges; and expenses for travel, lodging and food
paid or incurred in connection with the performance of such legal or other
advisory services.
(b) In addition, the Seller shall pay on demand any and all stamp,
sales, excise and other taxes (excluding income taxes) and fees payable or
determined to be payable in connection with the execution, delivery, filing or
recording of this Agreement or any other Related Document, and the Seller agrees
to indemnify and save each Indemnified Person harmless from and against any and
all liabilities with respect to or resulting from any delay or failure to pay
such taxes and fees.
SECTION 14.5 CONFIDENTIALITY.
(a) Except to the extent otherwise required by applicable law, as
required to be filed publicly with the Securities and Exchange Commission, or
unless the Administrative Agent shall otherwise consent in writing, the Seller
and the Servicer each agrees to maintain the confidentiality of this Agreement
(and all drafts hereof and documents ancillary hereto) in its communications
with third parties other than any Affected Party or any Indemnified Person and
otherwise and not to disclose, deliver or otherwise make available to any third
party (other than its directors, officers, employees, accountants or counsel)
the original or any copy of all or any part of this Agreement (or any draft
hereof and documents ancillary hereto) except to an Affected Party or an
Indemnified Person.
(b) The Seller and the Servicer each agrees that it shall not (and
shall not permit any of its Subsidiaries to) issue any news release or make any
public announcement pertaining to the transactions contemplated by this
Agreement and the other Related Documents without the prior written consent of
the Conduit Purchaser, the Committed Purchaser and the Administrative Agent
(which consent shall not be unreasonably withheld) unless such news release or
public announcement is required by law, in which case the Seller or the
Servicer, as applicable, shall consult with the Conduit Purchaser, the Committed
Purchaser and the Administrative Agent prior to the issuance of such news
release or public announcement. The Seller may, however, disclose the general
terms of the transactions contemplated by this Agreement and the other Related
Documents to trade creditors, suppliers and other similarly-situated Persons so
long as such disclosure is not in the form of a news release or public
announcement.
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SECTION 14.6 NO PROCEEDINGS.
Each of the Seller and the Servicer hereby agrees that, from and after
the Closing Date and until the date one year plus one day following the date on
which the Commercial Paper with the latest maturity has been indefeasibly paid
in full in cash, it will not, directly or indirectly, institute or cause to be
instituted against the Conduit Purchaser or the Committed Purchaser any
proceeding of the type referred to in Sections 9.1(c) and 9.1(d).
SECTION 14.7 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT.
This Agreement and the other Related Documents constitute the complete
agreement among the parties hereto with respect to the subject matter here of
and thereof, supersede all prior agreements and understandings relating to the
subject matter hereof and thereof, and may not be modified, altered or amended
except as set forth in Section 14.8.
SECTION 14.8 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Agreement or any of the other Related Documents, or any consent to any
departure by the Seller or the Servicer therefrom, shall in any event be
effective unless the same shall be in writing and signed by each of the parties
hereto or thereto and by the Collateral Agent; provided, that (a) the
Administrative Agent shall notify each of the Rating Agencies concurrently with
the execution of any amendment to any provision of this Agreement or any of the
other Related Documents, and (b) it shall be a condition precedent to the
effectiveness of any material amendment to any provision of this Agreement or
any of the other Related Documents that the Rating Agency Condition shall have
been satisfied in respect thereof.
SECTION 14.9 NO WAIVER; REMEDIES.
The failure by the Conduit Purchaser, the Committed Purchaser or the
Administrative Agent, at any time or times, to require strict performance by the
Seller or the Servicer of any provision of this Agreement or any Purchase
Assignment shall not waive, affect or diminish any right of any Purchaser or the
Administrative Agent thereafter to demand strict compliance and performance
herewith or therewith. Any suspension or waiver of any breach or default
hereunder shall not suspend, waive or affect any other breach or default whether
the same is prior or subsequent thereto and whether the same or of a different
type. None of the undertakings, agreements, warranties, covenants and
representations of the Seller or the Servicer contained in this Agreement or any
Purchase Assignment, and no breach or default by the Seller or the Servicer
hereunder or thereunder, shall be deemed to have been suspended or waived by any
Purchaser or the Administrative Agent unless such waiver or suspension is by an
instrument in writing signed by an officer of or other duly authorized signatory
of the Conduit Purchaser, the Committed Purchaser, the Collateral Agent and the
Administrative Agent and directed to the Seller or the Servicer, as applicable,
specifying such suspension or waiver. The rights and remedies of the Conduit
Purchaser, the Committed Purchaser, the Collateral Agent and the Administrative
Agent under this Agreement shall be cumulative and nonexclusive of any other
rights and remedies that the Conduit Purchaser, the Committed Purchaser, the
Collateral Agent and the Administrative Agent may have under any other
agreement, including the other Related Documents, by operation of law or
otherwise. Recourse to the Seller Collateral shall not be required.
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SECTION 14.10 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL.
(a) THIS AGREEMENT AND EACH OTHER RELATED DOCUMENT (EXCEPT TO THE
EXTENT THAT ANY RELATED DOCUMENT EXPRESSLY PROVIDES TO THE CONTRARY) AND THE
OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL IN ALL RESPECTS, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES) EXCEPT TO THE EXTENT THAT THE PERFECTION,
EFFECT OF PERFECTION OR PRIORITY OF THE INTERESTS OF THE ADMINISTRATIVE AGENT IN
THE RECEIVABLES OR REMEDIES HEREUNDER OR THEREUNDER, IN RESPECT THEREOF, ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
(b) EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER RELATED DOCUMENT; PROVIDED, THAT EACH PARTY HERETO
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY; PROVIDED FURTHER,
THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE ANY
PURCHASER OR THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL
ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE SELLER COLLATERAL OR ANY
OTHER SECURITY FOR THE SELLER SECURED OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF THE CONDUIT PURCHASER, THE COMMITTED PURCHASER OR
THE ADMINISTRATIVE AGENT. EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON
LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS SET FORTH
BENEATH ITS NAME ON THE SIGNATURE PAGES HEREOF AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR
THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL, PROPER POSTAGE PREPAID.
NOTHING IN THIS SECTION SHALL
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AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.
(c) BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER RELATED DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 14.11 COUNTERPARTS.
This Agreement may be executed in any number of separate counterparts,
each of which shall collectively and separately constitute one agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile shall be as effective as delivery of a manually executed counterpart
of a signature page to this Agreement.
SECTION 14.12 SEVERABILITY.
Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
SECTION 14.13 SECTION TITLES.
The section titles and table of contents contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
SECTION 14.14 LIMITED RECOURSE.
The obligations of the Conduit Purchaser and the Committed Purchaser
under this Agreement and all Related Documents are solely the corporate
obligations of each such Purchaser. No recourse shall be had for the payment of
any amount owing in respect of Purchases or for the payment of any fee hereunder
or any other obligation or claim arising out of or based upon this Agreement or
any other Related Document against any Stockholder, employee, officer, director,
agent or incorporator of such Purchaser. Any accrued obligations owing by the
Conduit Purchaser or the Committed Purchaser under this Agreement shall be
69
payable by such Purchaser solely to the extent that funds are available therefor
from time to time in accordance with the provisions of Article VI of this
Agreement, and, with respect to the Conduit Purchaser, in accordance with
Article VI of the Collateral Agent Agreement (and such accrued obligations shall
not be extinguished until paid in full).
SECTION 14.15 FURTHER ASSURANCES.
(a) Each of the Seller and the Servicer shall, at its sole cost and
expense, upon request of the Conduit Purchaser, the Committed Purchaser or the
Administrative Agent, promptly and duly execute and deliver any and all further
instruments and documents and take such further action that may be necessary or
desirable or that the Conduit Purchaser, the Committed Purchaser or the
Administrative Agent may request to (i) perfect, protect, preserve, continue and
maintain fully the Purchases made and the right, title and interests (including
Liens) granted to such Purchaser under this Agreement, (ii) enable the Conduit
Purchaser, the Committed Purchaser or the Administrative Agent to exercise and
enforce its rights under this Agreement or any of the other Related Documents or
(iii) otherwise carry out more effectively the provisions and purposes of this
Agreement or any other Related Document. Without limiting the generality of the
foregoing, the Seller shall, upon request of the Conduit Purchaser and the
Committed Purchaser or the Administrative Agent, (A) execute and file such
financing or continuation statements, or amendments thereto or assignments
thereof, and such other instruments or notices that may be necessary or
desirable or that the Purchasers or the Administrative Agent may request to
perfect, protect and preserve the Purchases made and the Liens granted pursuant
to this Agreement, free and clear of all Adverse Claims, (B) xxxx, or cause the
Servicer to xxxx, each Contract evidencing each Transferred Receivable with a
legend, acceptable to each Purchaser and the Administrative Agent evidencing
that the Conduit Purchaser or the Committed Purchaser, as applicable, has
purchased an undivided percentage ownership interest in all right and title
thereto and interest therein as provided herein, (C) xxxx, or cause the Servicer
to xxxx, its master data processing records evidencing such Transferred
Receivables with such a legend and (D) notify or cause the Servicer to notify
Obligors of the sale of undivided percentage ownership interests in the
Transferred Receivables effected hereunder.
(b) Without limiting the generality of the foregoing, the Seller hereby
authorizes the Conduit Purchaser, the Committed Purchaser and the Administrative
Agent, and each of the Conduit Purchaser and the Committed Purchaser hereby
authorizes the Administrative Agent, to file one or more financing or
continuation statements, or amendments thereto or assignments thereof, relating
to all or any part of the Transferred Receivables, including Collections with
respect thereto, or the Seller Collateral without the signature of the Seller
or, as applicable, the Conduit Purchaser or the Committed Purchaser, as
applicable, to the extent permitted by applicable law. A carbon, photographic or
other reproduction of this Agreement or of any notice or financing statement
covering the Transferred Receivables, the Seller Collateral or any part thereof
shall be sufficient as a notice or financing statement where permitted by law.
[Remainder of Page Intentionally Left Blank]
70
IN WITNESS WHEREOF, the parties have caused this
Receivables Purchase
and Servicing Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
ADVANCED FUNDING CORPORATION, as the Seller
By
-----------------------------------------
Name
---------------------------------------
Title
--------------------------------------
Address:
-------------------------------------------
-------------------------------------------
-------------------------------------------
Attention:
---------------------------------
Telephone:
---------------------------------
Facsimile:
---------------------------------
ADVP MANAGEMENT L.P., as the Servicer
By
-----------------------------------------
Name
---------------------------------------
Title
--------------------------------------
Address:
-------------------------------------------
-------------------------------------------
-------------------------------------------
Attention:
---------------------------------
Telephone:
---------------------------------
Facsimile:
---------------------------------
REDWOOD RECEIVABLES CORPORATION, as the Conduit
Purchaser
By
-----------------------------------------
Name
---------------------------------------
Assistant Secretary: Xxxxx Xxxxxxx
Address:
c/o General Electric Capital Corporation
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
GENERAL ELECTRIC CAPITAL CORPORATION,
as Committed Purchaser
By
-----------------------------------------
Name
---------------------------------------
Duly Authorized Signatory: Xxxxx Xxxxxxx
Address:
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Vice President - Portfolio/Advance
Funding Corporation
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
By
-----------------------------------------
Name
---------------------------------------
Duly Authorized Signatory
Address:
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Vice President - Portfolio/Advance
Funding Corporation
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
ACKNOWLEDGED AND AGREED:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Collateral Agent
By
-----------------------------------------
Name
---------------------------------------
Duly Authorized Signatory
Address:
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Exhibit 2.2(a) to Purchase Agreement
FORM OF COMMITMENT REDUCTION NOTICE
[INSERT DATE]
Redwood Receivables Corporation
c/o General Electric Capital Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Redwood Administrator
General Electric Capital Corporation,
as Administrative Agent
c/o General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Vice President - Portfolio/Advance Funding Corporation
Re:
Receivables Purchase and Servicing Agreement dated as of December
10, 2001
Ladies and Gentlemen:
This notice is given pursuant to Section 2.2(a) of that certain
Receivables
Purchase and Servicing Agreement dated as of December 10, 2001 (the "Purchase
Agreement"), by and among Advance Funding Corporation (the "Seller"), Redwood
Receivables Corporation (the "Conduit Purchaser"), ADVP Management L.P. (the
"Servicer") and General Electric Capital Corporation, as committed purchaser (in
such capacity, the "Committed Purchaser") and as administrative agent for the
Purchasers (in such capacity, the "Administrative Agent"). Capitalized terms
used and not otherwise defined herein shall have the respective meanings
ascribed to them in the Purchase Agreement.
Pursuant to Section 2.2(a) of the Purchase Agreement, the Seller hereby
irrevocably notifies the Purchasers and the Administrative Agent of its election
to permanently reduce the Maximum Purchase Limit to [$_____], effective as of
[_____ __], [___] (which is a Business Day). This reduction is the
[FIRST/SECOND] reduction [FOR THE CURRENT CALENDAR YEAR] permitted by Section
2.2(a) of the Purchase Agreement. After such reduction, the Maximum Purchase
Limit will not be less than the Capital Investment.
Very truly yours,
ADVANCE FUNDING CORPORATION
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 2.2(b) to Purchase Agreement
FORM OF COMMITMENT TERMINATION NOTICE
[INSERT DATE]
Redwood Receivables Corporation
c/o General Electric Capital Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Redwood Administrator
General Electric Capital Corporation,
as Administrative Agent
c/o General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Vice President - Portfolio/Advance Funding Corporation
Re:
Receivables Purchase and Servicing Agreement dated as of December
10, 2001
Ladies and Gentlemen:
This notice is given pursuant to Section 2.2(b) of that certain
Receivables
Purchase and Servicing Agreement dated as of December 10, 2001 (the "Purchase
Agreement"), by and among Advance Funding Corporation (the "Seller"), Redwood
Receivables Corporation (the "Conduit Purchaser"), ADVP Management L.P., (the
"Servicer") and General Electric Capital Corporation, as committed purchaser (in
such capacity, the "Committed Purchaser") and as administrative agent for the
Purchasers (in such capacity, the "Administrative Agent"). Capitalized terms
used and not otherwise defined herein shall have the respective meanings
ascribed to them in the Purchase Agreement.
Pursuant to Section 2.2(b) of the Purchase Agreement, the Seller hereby
irrevocably notifies the Purchasers and the Administrative Agent of its election
to terminate the Maximum Purchase Limit effective as of [_____ __], [___] (which
is a Business Day at least 10 days after the date this notice is given). In
connection therewith, the Seller shall reduce the Capital Investment to zero on
or prior to such date and make all other payments required by Section 2.3(c) and
pay any other fees that are due and payable pursuant to the Fee Letter at the
time and in the manner specified therein.
Very truly yours,
ADVANCE FUNDING CORPORATION
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 2.3(a) to Purchase Agreement
FORM OF INVESTMENT BASE CERTIFICATE
[to come]
Exhibit 2.3(b) to Purchase Agreement
FORM OF PURCHASE REQUEST
[INSERT DATE]
Redwood Receivables Corporation
c/o General Electric Capital Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Redwood Administrator
General Electric Capital Corporation,
as Administrative Agent
c/o General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Vice President - Portfolio/Advance Funding Corporation
Re:
Receivables Purchase and Servicing Agreement dated as of December
10, 2001
Ladies and Gentlemen:
This notice is given pursuant to Section 2.3(b) of that certain
Receivables
Purchase and Servicing Agreement dated as of December 10, 2001 (the "Purchase
Agreement"), by and among Advance Funding Corporation (the "Seller"), Redwood
Receivables Corporation (the "Conduit Purchaser"), ADVP Management L.P., (the
"Servicer") and General Electric Capital Corporation, as committed purchaser (in
such capacity, the "Committed Purchaser") and as administrative agent for the
Purchasers (in such capacity, the "Administrative Agent"). Capitalized terms
used and not otherwise defined herein shall have the respective meanings
ascribed to them in the Purchase Agreement.
Pursuant to Section 2.1 of the Purchase Agreement, the Seller hereby requests
that a Purchase be made from the Seller on [_____ __], [____] (which is a day at
least two (2) Business Days after the date hereof), in the amount of [$_____],
to be disbursed to the Seller in accordance with Section 2.4(b) of the Purchase
Agreement. The Seller hereby confirms that the conditions set forth in Section
3.2 of the Purchase Agreement have been satisfied.
Very truly yours,
ADVANCE FUNDING CORPORATION
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 2.3(c) to Purchase Agreement
FORM OF REPAYMENT NOTICE
[INSERT DATE]
Redwood Receivables Corporation
c/o General Electric Capital Corporation
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Redwood Administrator
General Electric Capital Corporation,
as Administrative Agent
c/o General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Vice President - Portfolio/Advance Funding Corporation
Re:
Receivables Purchase and Servicing Agreement dated as of December
10, 2001
Ladies and Gentlemen:
This notice is given pursuant to Section 2.3(c) of that certain Receivables
Purchase and Servicing Agreement dated as of December10, 2001 (the "Purchase
Agreement"), by and among Advance Funding Corporation (the "Seller"), Redwood
Receivables Corporation (the "Conduit Purchaser"), ADVP Management L.P., (the
"Servicer") and General Electric Capital Corporation, as committed purchaser (in
such capacity, the "Committed Purchaser") and as administrative agent for the
Purchasers (in such capacity, the "Administrative Agent"). Capitalized terms
used and not otherwise defined herein shall have the respective meanings
ascribed to them in the Purchase Agreement.
Pursuant to Section 2.3(c) of the Purchase Agreement, the Seller hereby notifies
the Purchasers and the Administrative Agent of its request to reduce the Capital
Investment by [$_____] effective as of [_____ __], [___] (which is a Business
Day), from [COLLECTIONS/BORROWINGS UNDER THE CREDIT FACILITY/OTHER SOURCES]. In
connection therewith, the Seller will pay to the Administrative Agent (1) all
Redwood Yield accrued on the Capital Investment being reduced through but
excluding the date of such reduction and (2) any and all Breakage Costs payable
under Section 2.10 of the Purchase Agreement by virtue thereof.
Very truly yours,
ADVANCE FUNDING CORPORATION
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 2.4(a)
FORM OF PURCHASE ASSIGNMENT
THIS PURCHASE ASSIGNMENT (the "Purchase Assignment") is entered into as of
December 10, 2001, by and between ADVANCE FUNDING CORPORATION ("Seller") and
GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent under the Purchase
Agreement described below.
1. We refer to that certain Receivables Purchase and Servicing
Agreement (the "Purchase Agreement") of even date herewith among the Seller, the
Servicer, the Purchasers and the Administrative Agent. All of the terms,
covenants and conditions of the Purchase Agreement are hereby made a part of
this Purchase Assignment and are deemed incorporated herein in full. Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Purchase Agreement.
2. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Seller hereby sells to each Purchaser,
without recourse, except as provided in Section 12.1 of the Purchase Agreement,
all of the Seller's right, title and interest in, under and to all Transferred
Receivables (including all Collections, Records and proceeds with respect
thereto) sold from time to time by the Seller to such Purchaser under the
Purchase Agreement.
3. The Seller hereby covenants and agrees to sign, sell or execute and
deliver, or cause to be signed, sold or executed and delivered, and to do or
make, or cause to be done or made, upon request of each Purchaser and at the
Seller's expense, any and all agreements, instruments, papers, deeds, acts or
things, supplemental, confirmatory or otherwise, as may be reasonably required
by such Purchaser for the purpose of or in connection with acquiring or more
effectively vesting in such Purchaser or evidencing the vesting in such
Purchaser of the property, rights, title and interests of the Seller sold
hereunder or intended to be sold hereunder to such Purchaser.
4. Wherever possible, each provision of this Purchase Assignment shall
be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Purchase Assignment shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Purchase Assignment.
5. BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH
THIS PURCHASE ASSIGNMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
6. THIS PURCHASE ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICT OF LAWS, AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
IN WITNESS WHEREOF, the parties have caused this Purchase Assignment to
be executed by their respective officers thereunto duly authorized, as of the
day and year first above written.
ADVANCE FUNDING CORPORATION
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 3.1(a)(i) to Purchase Agreement
FORM OF OFFICER'S CERTIFICATE AS TO SOLVENCY
ADVANCE FUNDING CORPORATION
Officer's Certificate
I, [NAME OF OFFICER], the duly elected [INSERT TITLE] of Advance
Funding Corporation (the "Seller"), hereby certify in connection with that
certain Receivables Purchase and Servicing Agreement (the "Purchase Agreement")
dated as of December 10, 2001, by and among the Seller, Redwood Receivables
Corporation ("Conduit Purchaser"), ADVP Management L.P., (the "Servicer") and
General Electric Capital Corporation, as committed purchaser (in such capacity,
the "Committed Purchaser") and as administrative agent for the Purchasers (in
such capacity, the "Administrative Agent"), and for the benefit of the
Purchasers and the Administrative Agent, as follows:
1. Capitalized terms herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.
2. Both before and after giving effect to (a) the transactions
contemplated by the Purchase Agreement and the other Related Documents and (b)
the payment and accrual of all transaction costs in connection with the
foregoing, the Seller is and will be Solvent. The Seller has no Debt to any
Person other than pursuant to the transactions expressly permitted by the
Purchase Agreement and the other Related Documents.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this ______ day of _____, 2001.
ADVANCE FUNDING CORPORATION
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 3.1(a)(ii)(A) to Purchase Agreement
FORM OF OFFICER'S CLOSING CERTIFICATE OF SELLER
ADVANCE FUNDING CORPORATION
Officer's Certificate
I, [NAME OF OFFICER], the duly elected [INSERT TITLE] of Advance
Funding Corporation (the "Seller"), hereby certify in connection with that
certain Receivables Purchase and Servicing Agreement (the "Purchase Agreement")
dated as of December 10, 2001, by and among the Seller, Redwood Receivables
Corporation ("Conduit Purchaser"), ADVP Management L.P. (the "Servicer") and
General Electric Capital Corporation, as committed purchaser (in such capacity,
the "Committed Purchaser") and as administrative agent for the Purchasers (in
such capacity, the "Administrative Agent"), and for the benefit of the
Purchasers and the Administrative Agent, as follows:
1. Capitalized terms herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.
2. Since the date of the Seller's formation, (a) the Seller has not
incurred any obligations, contingent or non-contingent liabilities, liabilities
for charges, long-term leases or unusual forward or long-term commitments that,
alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (b) no contract, lease or other agreement or instrument has been
entered into by the Seller or has become binding upon the Seller's assets and no
law or regulation applicable to the Seller has been adopted that has had or
could reasonably be expected to have a Material Adverse Effect, and (c) the
Seller is not in default and no third party is in default under any material
contract, lease or other agreement or instrument to which the Seller is a party
that alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect. Since the date of the Seller's formation, no event has occurred
that alone or together with other events could reasonably be expected to have a
Material Adverse Effect.
3. Each of the representations and warranties of the Seller contained
in any of the Related Documents are correct on and as of the Closing Date as
though made on and as of such date (except to the extent any such representation
and warranty relates solely to an earlier date), and no event has occurred and
is continuing, or would result from the transactions effected pursuant thereto
as of the Closing Date, that constitutes or would constitute an Incipient
Termination Event or a Termination Event.
4. The Seller is in material compliance with all federal, state, and
local laws and regulations, including those relating to labor and environmental
matters and ERISA.
5. Except as otherwise indicated on a schedule to a Related Document or
another schedule delivered pursuant to the Schedule of Documents, or as
otherwise consented to by the Purchasers and the Administrative Agent, the
Seller has delivered to the Purchasers and the Administrative Agent true and
correct copies of all documents required to be delivered to such
Persons pursuant to the Schedule of Documents, all such documents are complete
and correct in all material respects on and as of the Closing Date, and each and
every other contingency to the closing of the transactions contemplated by the
Related Documents has been performed.
6. No Adverse Claims have arisen or been granted with respect to the
Seller Collateral.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this ______ day of _____, 2001.
ADVANCE FUNDING CORPORATION
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 3.1(a)(ii)(B) to Purchase Agreement
FORM OF OFFICER'S POST-CLOSING CERTIFICATE OF SELLER
ADVANCE FUNDING CORPORATION
Officer's Certificate
I, [NAME OF OFFICER], the duly elected [INSERT TITLE] of Advance
Funding Corporation (the "Seller"), hereby certify in connection with that
certain Receivables Purchase and Servicing Agreement (the "Purchase Agreement")
dated as of December 10, 2001 by and among the Seller, Redwood Receivables
Corporation ("Conduit Purchaser"), ADVP Management L.P., (the "Servicer") and
General Electric Capital Corporation, as committed purchaser (in such capacity,
the "Committed Purchaser") and as administrative agent for the Purchasers (in
such capacity, the "Administrative Agent"), and for the benefit of the
Purchasers and the Administrative Agent, as follows:
1. Capitalized terms herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.
2. Each of the representations and warranties of the Seller contained
in any of the Related Documents are correct on and as of the date hereof as
though made on and as of such date (except to the extent any such representation
and warranty relates solely to an earlier date), and no event has occurred and
is continuing, or would result from the transactions effected pursuant thereto
as of the date hereof, that constitutes or would constitute an Incipient
Termination Event or a Termination Event.
3. The Seller is in material compliance with all federal, state, and
local laws and regulations, including those relating to labor and environmental
matters and ERISA.
4. No Adverse Claims have arisen or been granted with respect to the
Seller Collateral.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of ___________, ____.
ADVANCED FUNDING CORPORATION
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 3.1(a)(iii)(A) to Purchase Agreement
FORM OF OFFICER'S CLOSING CERTIFICATE OF SERVICER
ADVP MANAGEMENT L.P.
Officer's Certificate
I, [NAME OF OFFICER], the duly elected [INSERT TITLE] of ADVP
Management L.P. (the "Servicer"), hereby certify in connection with that certain
Receivables Purchase and Servicing Agreement (the "Purchase Agreement") dated as
of December 10, 2001 by and among the Servicer, Redwood Receivables Corporation
("Conduit Purchaser"), Advance Funding Corporation (the "Seller") and General
Electric Capital Corporation, as committed purchaser (in such capacity, the
"Committed Purchaser") and as administrative agent for the Purchasers (in such
capacity, the "Administrative Agent"), and for the benefit of the Purchasers and
the Administrative Agent, as follows:
1. Capitalized terms herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.
2. Since December 31, 2000, and the Closing Date (a) the Servicer has
not incurred any obligations, contingent or non-contingent liabilities,
liabilities for charges, long-term leases or unusual forward or long-term
commitments that, alone or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, (b) no contract, lease or other agreement or
instrument has been entered into by the Servicer or has become binding upon the
Servicer's assets and no law or regulation applicable to the Servicer has been
adopted that has had or could reasonably be expected to have a Material Adverse
Effect, and (c) the Servicer is not in default and no third party is in default
under any material contract, lease or other agreement or instrument to which the
Servicer is a party that alone or in the aggregate could reasonably be expected
to have a Material Adverse Effect. Between December 31, 2000 and the Closing
Date no event has occurred that alone or together with other events could
reasonably be expected to have a Material Adverse Effect.
3. Both before and after giving effect to (i) the transactions
contemplated by the Purchase Agreement and the other Related Documents and (ii)
the payment and accrual of all transaction costs in connection with the
foregoing, the Servicer is and will be Solvent.
4. Each of the representations and warranties of the Servicer contained
in any of the Related Documents are correct on and as of the Closing Date as
though made on and as of such date (except to the extent any such representation
and warranty relates solely to an earlier date), and no event has occurred and
is continuing, or would result from the transactions effected pursuant thereto
as of the Closing Date, that constitutes or would constitute an Incipient
Servicer Termination Event or a Servicer Termination Event.
5. The Servicer is in material compliance with all federal, state, and
local laws and regulations, including those relating to labor and environmental
matters and ERISA.
6. Except as otherwise indicated on a schedule to a Related Document or
another schedule delivered pursuant to the Schedule of Documents, or as
otherwise consented to by the Purchasers and the Administrative Agent, the
Servicer has delivered to the Purchasers and the Administrative Agent true and
correct copies of all documents required to be delivered to such Persons
pursuant to the Schedule of Documents, all such documents are complete and
correct in all material respects on and as of the Closing Date, and each and
every other contingency to the closing of the transactions contemplated by the
Related Documents has been performed.
7. No Adverse Claims have arisen or been granted with respect to the
property of the Servicer.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of _____, 2001.
ADVP MANAGEMENT L.P.
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 3.1(a)(iii)(B) to Purchase Agreement
FORM OF OFFICER'S POST-CLOSING CERTIFICATE OF SERVICER
ADVP MANAGEMENT L.P.
Officer's Certificate
I, [NAME OF OFFICER], the duly elected [INSERT TITLE] of ADVP
Management L.P. (the "Servicer"), hereby certify in connection with that certain
Receivables Purchase and Servicing Agreement (the "Purchase Agreement") dated as
of December 10, 2001 by and among the Servicer, Redwood Receivables Corporation
("Conduit Purchaser"), Advance Funding Corporation (the "Seller") and General
Electric Capital Corporation, as committed purchaser (in such capacity, the
"Committed Purchaser") and as administrative agent for the Purchasers (in such
capacity, the "Administrative Agent"), and for the benefit of the Purchasers and
the Administrative Agent, as follows:
1. Capitalized terms herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.
2. Each of the representations and warranties of the Servicer contained
in any of the Related Documents are correct on and as of the date hereof as
though made on and as of such date (except to the extent any such representation
and warranty relates solely to an earlier date), and no event has occurred and
is continuing, or would result from the transactions effected pursuant thereto
as of the date hereof, that constitutes or would constitute an Incipient
Servicer Termination Event or a Servicer Termination Event.
3. The Servicer is in material compliance with all federal, state, and
local laws and regulations, including those relating to labor and environmental
matters and ERISA.
4. No Adverse Claims have arisen or been granted with respect to the
property of the Servicer.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of _____, 2001.
ADVP MANAGEMENT L.P.
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 3.1(a)(iv) to Purchase Agreement
Form of Monthly Report
ADVANCE FUNDING CORPORATION
[SEE ATTACHED]
Exhibit 3.1(a)(iv)
to
Purchase Agreement
FORM OF MONTHLY REPORTING
Exhibit 3.01(a)(iv)-I - Consolidated Sales and Receivables Analysis
Exhibit 3.01(a)(iv)-II - Consolidated Aging
Exhibit 3.01(a)(iv)-III - Accounts Receivable Reconciliation
Exhibit 3.01(a)(iv)-IV - Overcollateralization Summary
Exhibit 3.01(a)(iv)-V - Trigger Calculations
Exhibit 3.01(a)(iv)-IV - Seller Financial Statements
Exhibit 3.01(a)(v)-V - Holding Financial Statements
Exhibit 3.01(a)(vi)-VI - Blue Cross & Blue Shield Association Breakout
Exhibit 3.01(a)(vii)-(VII) - Unbilled Detail
Exhibit 3.1(a)(v)(A)
to
Purchase Agreement
FORM OF OFFICER'S CLOSING CERTIFICATE OF PARENT
ADVANCEPCS
Officer's Certificate
I, [NAME OF OFFICER], the duly elected [INSERT TITLE] of
AdvancePCS
(the "Parent"), hereby certify in connection with that certain Receivables
Purchase and Servicing Agreement (the "Purchase Agreement") dated as of December
10, 2001 by and among ADVP Management L.P., as servicer (the "Servicer") Redwood
Receivables Corporation ("Conduit Purchaser"), Advance Funding Corporation (the
"Seller") and General Electric Capital Corporation, as committed purchaser (in
such capacity, the "Committed Purchaser") and as administrative agent for the
Purchasers (in such capacity, the "Administrative Agent"), and for the benefit
of the Purchasers and the Administrative Agent, as follows:
1. Capitalized terms herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.
2. Since December 31, 2000, and the Closing Date (a) the Parent has not
incurred any obligations, contingent or non-contingent liabilities, liabilities
for charges, long-term leases or unusual forward or long-term commitments that,
alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (b) no contract, lease or other agreement or instrument has been
entered into by the Parent or has become binding upon the Parent's assets and no
law or regulation applicable to the Parent has been adopted that has had or
could reasonably be expected to have a Material Adverse Effect, and (c) the
Parent is not in default and no third party is in default under any material
contract, lease or other agreement or instrument to which the Parent is a party
that alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect. Between December 31, 2000 and the Closing Date no event has
occurred that alone or together with other events could reasonably be expected
to have a Material Adverse Effect.
3. Both before and after giving effect to (i) the transactions
contemplated by the Purchase Agreement and the other Related Documents and (ii)
the payment and accrual of all transaction costs in connection with the
foregoing, the Parent is and will be Solvent.
4. Each of the representations and warranties of the Parent contained
in any of the Related Documents are correct on and as of the Closing Date as
though made on and as of such date (except to the extent any such representation
and warranty relates solely to an earlier date), and no event has occurred and
is continuing, or would result from the transactions effected pursuant thereto
as of the Closing Date, that constitutes or would constitute an Incipient
Termination Event or a Termination Event.
5. The Parent is in material compliance with all federal, state, and
local laws and regulations, including those relating to labor and environmental
matters and ERISA.
6. Except as otherwise indicated on a schedule to a Related Document or
another schedule delivered pursuant to the Schedule of Documents, or as
otherwise consented to by the Purchasers and the Administrative Agent, the
Parent has delivered to the Purchasers and the Administrative Agent true and
correct copies of all documents required to be delivered to such Persons
pursuant to the Schedule of Documents, all such documents are complete and
correct in all material respects on and as of the Closing Date, and each and
every other contingency to the closing of the transactions contemplated by the
Related Documents has been performed.
7. No Adverse Claims have arisen or been granted with respect to the
property of the Parent.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of _____, 2001.
ADVANCEPCS
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 3.1(a)(v)(B) to Purchase Agreement
FORM OF OFFICER'S POST-CLOSING CERTIFICATE OF PARENT
ADVANCEPCS
Officer's Certificate
I, [NAME OF OFFICER], the duly elected [INSERT TITLE] of
AdvancePCS
(the "Parent"), hereby certify in connection with that certain Receivables
Purchase and Servicing Agreement (the "Purchase Agreement") dated as of December
10, 2001 by and among the ADVP Management L.P. (the "Servicer"), Redwood
Receivables Corporation ("Conduit Purchaser"), Advance Funding Corporation (the
"Seller") and General Electric Capital Corporation, as committed purchaser (in
such capacity, the "Committed Purchaser") and as administrative agent for the
Purchasers (in such capacity, the "Administrative Agent"), and for the benefit
of the Purchasers and the Administrative Agent, as follows:
1. Capitalized terms herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.
2. Each of the representations and warranties of the Parent contained
in any of the Related Documents are correct on and as of the date hereof as
though made on and as of such date (except to the extent any such representation
and warranty relates solely to an earlier date), and no event has occurred and
is continuing, or would result from the transactions effected pursuant thereto
as of the date hereof, that constitutes or would constitute an Incipient
Termination Event or a Termination Event.
3. The Parent is in material compliance with all federal, state, and
local laws and regulations, including those relating to labor and environmental
matters and ERISA.
4. No Adverse Claims have arisen or been granted with respect to the
property of the Parent.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of _____, 2001.
ADVANCEPCS
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 3.1(a)(vi)(A)
to
Purchase Agreement
FORM OF OFFICER'S CLOSING CERTIFICATE OF RECEIVABLES SELLER
AFC RECEIVABLES HOLDING CORPORATION
Officer's Certificate
I, [NAME OF OFFICER], the duly elected [INSERT TITLE] of AFC
Receivables Holding Corporation (the "Receivables Seller"), hereby certify in
connection with that certain Receivables Purchase and Servicing Agreement (the
"Purchase Agreement") dated as of December 10, 2001 by and among ADVP Management
L.P., as servicer (the "Servicer") Redwood Receivables Corporation ("Conduit
Purchaser"), Advance Funding Corporation (the "Seller") and General Electric
Capital Corporation, as committed purchaser (in such capacity, the "Committed
Purchaser") and as administrative agent for the Purchasers (in such capacity,
the "Administrative Agent"), and for the benefit of the Purchasers and the
Administrative Agent, as follows:
1. Capitalized terms herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.
2. Since December 31, 2000, and the Closing Date (a) the Receivables
Seller has not incurred any obligations, contingent or non-contingent
liabilities, liabilities for charges, long-term leases or unusual forward or
long-term commitments that, alone or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, (b) no contract, lease or other
agreement or instrument has been entered into by the Receivables Seller or has
become binding upon the Receivables Seller's assets and no law or regulation
applicable to the Receivables Seller has been adopted that has had or could
reasonably be expected to have a Material Adverse Effect, and (c) the
Receivables Seller is not in default and no third party is in default under any
material contract, lease or other agreement or instrument to which the
Receivables Seller is a party that alone or in the aggregate could reasonably be
expected to have a Material Adverse Effect. Between December 31, 2000 and the
Closing Date no event has occurred that alone or together with other events
could reasonably be expected to have a Material Adverse Effect.
3. Both before and after giving effect to (i) the transactions
contemplated by the Purchase Agreement and the other Related Documents and (ii)
the payment and accrual of all transaction costs in connection with the
foregoing, the Receivables Seller is and will be Solvent.
4. Each of the representations and warranties of the Receivables Seller
contained in any of the Related Documents are correct on and as of the Closing
Date as though made on and as of such date (except to the extent any such
representation and warranty relates solely to an earlier date), and no event has
occurred and is continuing, or would result from the transactions effected
pursuant thereto as of the Closing Date, that constitutes or would constitute an
Incipient Termination Event or a Termination Event.
5. The Receivables Seller is in material compliance with all federal,
state, and local laws and regulations, including those relating to labor and
environmental matters and ERISA.
6. Except as otherwise indicated on a schedule to a Related Document or
another schedule delivered pursuant to the Schedule of Documents, or as
otherwise consented to by the Purchasers and the Administrative Agent, the
Receivables Seller has delivered to the Purchasers and the Administrative Agent
true and correct copies of all documents required to be delivered to such
Persons pursuant to the Schedule of Documents, all such documents are complete
and correct in all material respects on and as of the Closing Date, and each and
every other contingency to the closing of the transactions contemplated by the
Related Documents has been performed.
7. No Adverse Claims have arisen or been granted with respect to the
property of the Receivables Seller.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of _____, 2001.
AFC RECEIVABLES HOLDING CORPORATION
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 3.1(a)(vi)(B) to Purchase Agreement
FORM OF OFFICER'S POST-CLOSING CERTIFICATE OF RECEIVABLES SELLER
AFC RECEIVABLES HOLDING CORPORATION
Officer's Certificate
I, [NAME OF OFFICER], the duly elected [INSERT TITLE] of AFC
Receivables Holding Corporation (the "Receivables Seller"), hereby certify in
connection with that certain Receivables Purchase and Servicing Agreement (the
"Purchase Agreement") dated as of December 10, 2001 by and among the ADVP
Management L.P. (the "Servicer"), Redwood Receivables Corporation ("Conduit
Purchaser"), Advance Funding Corporation (the "Seller") and General Electric
Capital Corporation, as committed purchaser (in such capacity, the "Committed
Purchaser") and as administrative agent for the Purchasers (in such capacity,
the "Administrative Agent"), and for the benefit of the Purchasers and the
Administrative Agent, as follows:
1. Capitalized terms herein and not otherwise defined shall have the
respective meanings ascribed to them in the Purchase Agreement.
2. Each of the representations and warranties of the Receivables Seller
contained in any of the Related Documents are correct on and as of the date
hereof as though made on and as of such date (except to the extent any such
representation and warranty relates solely to an earlier date), and no event has
occurred and is continuing, or would result from the transactions effected
pursuant thereto as of the date hereof, that constitutes or would constitute an
Incipient Termination Event or a Termination Event.
3. The Receivables Seller is in material compliance with all federal,
state, and local laws and regulations, including those relating to labor and
environmental matters and ERISA.
4. No Adverse Claims have arisen or been granted with respect to the
property of the Receivables Seller.
IN WITNESS WHEREOF, I have signed and delivered this Officer's
Certificate this __________ day of _____, 2001.
AFC RECEIVABLES HOLDING CORPORATION
By
-----------------------------------------
Name
---------------------------------------
Title:
-------------------------------------
Exhibit 10.3
Form of
POWER OF ATTORNEY
This Power of Attorney is executed and delivered by [Advance Funding
Corporation or ADVP Management L.P. ("XYZ"), as the [SELLER/SERVICER] under the
Purchase Agreement (each as defined below), to General Electric Capital
Corporation, as Administrative Agent under the Purchase Agreement (hereinafter
referred to as "Attorney"), pursuant to that certain Receivables Purchase and
Servicing Agreement dated as of December 10, 2001 (the "Purchase Agreement"), by
and among XYZ, the other parties thereto and Attorney and the other Related
Documents. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Purchase Agreement. No person to whom this
Power of Attorney is presented, as authority for Attorney to take any action or
actions contemplated hereby, shall inquire into or seek confirmation from XYZ as
to the authority of Attorney to take any action described below, or as to the
existence of or fulfillment of any condition to this Power of Attorney, which is
intended to grant to Attorney unconditionally the authority to take and perform
the actions contemplated herein, and XYZ irrevocably waives any right to
commence any suit or action, in law or equity, against any person or entity that
acts in reliance upon or acknowledges the authority granted under this Power of
Attorney. The power of attorney granted hereby is coupled with an interest and
may not be revoked or cancelled by XYZ until all Seller Secured Obligations
under the Related Documents have been indefeasibly paid in full and Attorney has
provided its written consent thereto.
XYZ hereby irrevocably constitutes and appoints Attorney (and all
officers, employees or agents designated by Attorney), with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in its place and stead and in its name or in Attorney's own
name, from time to time in Attorney's discretion, to take any and all
appropriate action and to execute and deliver any and all documents and
instruments that may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, hereby
grants to Attorney the power and right, on its behalf, without notice to or
assent by it, upon the occurrence and during the continuance of any Termination
Event, to do the following: (a) open mail for it, and ask, demand, collect, give
acquittances and receipts for, take possession of, or endorse and receive
payment of, any checks, drafts, notes, acceptances, or other instruments for the
payment of moneys due, and sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, and notices in connection with any of its property;
(b) effect any repairs to any of its assets, or continue or obtain any insurance
and pay all or any part of the premiums therefor and costs thereof, and make,
settle and adjust all claims under such policies of insurance, and make all
determinations and decisions with respect to such policies; (c) pay or discharge
any taxes, Liens, or other encumbrances levied or placed on or threatened
against it or its property; (d) defend any suit, action or proceeding brought
against it if it does not defend such suit, action or proceeding or if Attorney
believes that it is not pursuing such defense in a manner that will maximize the
recovery to Attorney, and settle, compromise or adjust any suit, action, or
proceeding described above and, in connection therewith, give such discharges or
releases as Attorney may deem appropriate; (e) file or prosecute any claim,
Litigation, suit or proceeding in any court of competent jurisdiction or before
any arbitrator, or take any other action otherwise
deemed appropriate by Attorney for the purpose of collecting any and all such
moneys due to it whenever payable and to enforce any other right in respect of
its property; (f) sell, transfer, pledge, make any agreement with respect to, or
otherwise deal with, any of its property, and execute, in connection with such
sale or action, any endorsements, assignments or other instruments of conveyance
or transfer in connection therewith; and (g) cause the certified public
accountants then engaged by it to prepare and deliver to Attorney at any time
and from time to time, promptly upon Attorney's request, any and all financial
statements or other reports required to be delivered by or on behalf of XYZ
under the Related Documents, all as though Attorney were the absolute owner of
its property for all purposes, and to do, at Attorney's option and its expense,
at any time or from time to time, all acts and other things that Attorney
reasonably deems necessary to perfect, preserve, or realize upon its property or
assets and the Purchaser's Liens thereon, all as fully and effectively as it
might do. XYZ hereby ratifies, to the extent permitted by law, all that said
attorneys shall lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, this Power of Attorney is executed by XYZ, and XYZ
has caused its seal to be affixed pursuant to the authority of its board of
directors this ____ day of _____, 2001.
XYZ
ATTEST:
-------------------------
By: (SEAL)
-------------------------
Title:
----------------------
[NOTARIZATION IN APPROPRIATE FORM FOR THE STATE OF EXECUTION IS REQUIRED.]
Exhibit A
Credit and Collection Policy
Schedule 4.1(b)
to Purchase Agreement
Formation Jurisdiction of Seller; Executive Offices; Collateral Locations;
Corporate or Other Names; FEIN
Jurisdiction of incorporation: Delaware.
The Seller's chief executive office and principal place of business are located
at 000 Xxxxx Xx., Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000.
Locations of Seller's offices, the warehouses and premises within which any
Seller Collateral has been stored or located, and the locations of all records
concerning Seller Collateral over the past 12 months and names in which Seller
Collateral at such locations has been held over the past 12 months are as
follows:
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 X. X'Xxxxxx Xxxx., Xxxxx 0000
Xxxxxx, XX 00000*
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 X. Xxxx Xxxx.
Xxxxxxxxxx, XX 00000*
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 X. Xxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
Cardinal Tech Park
0000 X. Xxxxx Xx.
Xxxxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxx Xxx Xxxxx Xxxx.
Xxxxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
92 Mountain View Office Complex
00000 X. 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxx Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 XxXxxxxxx Xx., Xxxxx 0000
Xxxx Xxxxxx, XX 00000*
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, X.X.
Xxxxxx Center IV
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000*
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 Xxxxxx Xx.
Xxxx Xxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 Xxxxxxxxx Xx.
Xxxxxxxxx, XX 00000
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 Xxxxxxxxx Xx.
Xxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
000 Xxx Xxxx Xx.
Xxxxxxx, XX 00000
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxxxxx Xxxx.
Xxxxxxxx Xxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
000 Xxxxxx Xxxxx Xx.
Xxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxxx Xxxx
Xxxxx Xxxxx, XX 00000
AdvancePCS Health, L.P.
000 Xxx Xxxxxx Xxxxxx Xx.
Xxxxxxxxxxx, XX 00000
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0 Xxxxx Xxxxxx Xx.
Xxxxxxx Xxxxxxxx, XX 00000
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
*Locations where Seller Collateral has been stored or located over the past
twelve (12) months.
Trade names: none.
FEIN: 00-0000000.
Schedule 4.1(d)
to Purchase Agreement
Litigation
None.
Schedule 4.1(h)
to Purchase Agreement
Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness/Seller
Subsidiaries: none.
The following entities are Affiliates of the Seller:
AdvancePCS
AdvancePCS Health Systems, LLC
ADVP Consolidation, L.L.C.
AdvancePCS Research, L.L.C.
AdvancePCS Health, L.P.
ADVP Management, L.P.
XxxxxxxXx.xxx, X.X.
Xxxxxx-Xxxxxx Neuromedical Institute, Inc.
First Florida International Holdings, Inc.
FFI Rx Managed Care, Inc.
Ambulatory Care Review Services, Inc.
HMN Health Services, Inc.
AdvancePCS Holding Corporation
AdvancePCS Puerto Rico, Inc.
AdvancePCS SpecialtyRx, LLC
AdvancePriority SpecialtyRx LLC
Xxxxxxx-Xxxxxxx, Inc.
TheraCom, Inc.
Consumer Health Interactive, Inc.
AdvancePCS Mail Services of Birmingham, Inc.
AFC Receivables Holding Corporation
Ownership: 100% of the stock of the Seller is owned by AFC Receivables Holding
Corporation.
Schedule 4.1(i)
to Purchase Agreement
Tax Matters/Seller
None.
Schedule 4.1(r)
to Purchase Agreement
Deposit and Disbursement Accounts/Seller
As of the Closing Date, the following accounts will be in the name of Advance
Funding Corporation:
1. Bank of America
0000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
Telephone # (000) 000-0000
Account # 1233518737
This account currently receives ACH and wire transfers for securitized
receivables.
The address for the lockbox assigned to this account is:
AdvancePCS
X.X. Xxx 000000
Xxxxxx, XX 00000-0000
This lockbox will have been established, but will not yet be in use on
the Closing Date. Post-closing checks from securitized clients will be
sent to this lockbox and the Xxxxxx account will be closed.
2. Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx XX 00000
Telephone # (000) 000-0000
Account # 0000000 This account has three lockboxes attached to it.
This account is currently set up to receive checks from securitized
clients. Post-closing this activity will be transferred to the new Bank
of America lockbox 847830.
The addresses for the lockbox assigned to this account for securitized
clients are:
PCS Health Systems, Inc. PCS Health Systems, Inc.
X.X. Xxx 00000 X.X. Xxx 00000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
The third lockbox assigned to this account is for FEP refund recovery.
Post-closing this process will be transferred to the Bank of America
lockbox 847857.
Service Benefit Plan
X.X. Xxx 00000
Xxxxxxx, XX 00000
Schedule 5.1(b)
To Purchase Agreement
Trade Names/Seller
Advance Funding Corporation
Schedule 5.3(b)
to Purchase Agreement
Existing Liens/Seller
None.
Schedule 7.6(b)
to Purchase Agreement
Formation Jurisdiction of Servicer, Executive Offices, Collateral Locations;
Corporate or Other Names; FEIN
The Servicer's chief executive office and principal place of business are
located at 0000 X. X'Xxxxxx Xxxx., Xxxxx 0000, Xxxxxx, XX 00000. ADVP
Management, L.P. was formed on May 30, 2000. Prior to its formation, all assets
held by ADVP Management, L.P. were held by Advance Paradigm, Inc., now known as
AdvancePCS.
Locations of Seller's offices, the warehouses and premises within which any
Seller Collateral has been stored or located, and the locations of all records
concerning Seller Collateral over the past 12 months and names in which Seller
Collateral at such locations has been held over the past 12 months are as
follows:
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 X. X'Xxxxxx Xxxx., Xxxxx 0000
Xxxxxx, XX 00000*
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 X. Xxxx Xxxx.
Xxxxxxxxxx, XX 00000*
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 X. Xxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
Cardinal Tech Park
0000 X. Xxxxx Xx.
Xxxxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxx Xxx Xxxxx Xxxx.
Xxxxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
92 Mountain View Office Complex
00000 X. 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxx Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 XxXxxxxxx Xx., Xxxxx 0000
Xxxx Xxxxxx, XX 00000*
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, X.X.
Xxxxxx Center IV
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000*
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 Xxxxxx Xx.
Xxxx Xxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 Xxxxxxxxx Xx.
Xxxxxxxxx, XX 00000
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 Xxxxxxxxx Xx.
Xxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
000 Xxx Xxxx Xx.
Xxxxxxx, XX 00000
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxxxxx Xxxx.
Xxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxxxxx Xxxx.
Xxxxxxxx Xxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
000 Xxxxxx Xxxxx Xx.
Xxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
PCS Health Systems, Inc.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0000 Xxxxx Xxxx
Xxxxx Xxxxx, XX 00000
AdvancePCS Health, L.P.
000 Xxx Xxxxxx Xxxxxx Xx.
Xxxxxxxxxxx, XX 00000
ADVP Operations, L.P.
AdvancePCS, L.P.
AdvancePCS Health, L.P.
0 Xxxxx Xxxxxx Xx.
Xxxxxxx Xxxxxxxx, XX 00000
AdvancePCS, L.P.
AdvancePCS Health, L.P.
00000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
*Locations where Seller Collateral has been stored or located over the past
twelve (12) months.
Trade names: none.
Jurisdiction of incorporation: Delaware.
FEIN: 00-0000000
Schedule 7.6(h)
to Purchase Agreement
Ventures, Subsidiaries and Affiliates;
Outstanding Stock and Indebtedness/Servicer
Subsidiaries: none.
The following entities are Affiliates of the Servicer:
AdvancePCS
AdvancePCS Health Systems, LLC
ADVP Consolidation, L.L.C.
AdvancePCS Research, L.L.C.
AdvancePCS Health, L.P.
XxxxxxxXx.xxx, X.X.
Xxxxxx-Xxxxxx Neuromedical Institute, Inc.
First Florida International Holdings, Inc.
FFI Rx Managed Care, Inc.
Ambulatory Care Review Services, Inc.
HMN Health Services, Inc.
AdvancePCS Holding Corporation
AdvancePCS Puerto Rico, Inc.
AdvancePCS SpecialtyRx, LLC
AdvancePriority SpecialtyRx LLC
Xxxxxxx-Xxxxxxx, Inc.
TheraCom, Inc.
Consumer Health Interactive, Inc.
AdvancePCS Mail Services of Birmingham, Inc.
AFC Receivables Holding Corporation
Advance Funding Corporation
Ownership: AdvancePCS Health Systems, LLC is the 1% general partner of the
Servicer and ADVP Consolidation, L.L.C. is the 99% limited partner of the
Servicer.
Schedule 7.6(i)
to Purchase Agreement
Tax Matters/Servicer
None.
Schedule 7.6(j)
to Purchase Agreement
Intellectual Property Matters/Servicer
Servicer is currently trying to informally settle an allegation of infringement
against a company called PCS Plan out of Oregon. Servicer wrote a cease and
desist letter claiming that PCS Plan is infringing Servicer's registered
trademark PCS and has offered them a minimal amount to change their materials.
No formal complaint or filing has been made at this time.
Schedule 7.6(m)
to Purchase Agreement
ERISA Matters/Servicer
The Plans are as follows:
AdvancePCS Health Plan
AdvancePCS Short Term Disability Plan
AdvancePCS Long Term Disability Plan
AdvancePCS Excess Savings Plan
AdvancePCS Excess Retirement Plan
AdvancePCS Flexible Benefits Plan
AdvancePCS Health Care Flexible Spending Plan
AdvancePCS Dependent Day Care Spending Plan
AdvancePCS Employee Savings Plan
AdvancePCS Retirement Plan
AdvancePCS Limited Term Deferred Compensation Plan
AdvancePCS Deferred Compensation Plan
AdvancePCS Holiday and Vacation Plan
AdvancePCS Educational Assistance Plan
Schedule 7.8(a)
to Purchase Agreement
Existing Liens/Servicer
All Liens imposed pursuant to the terms and conditions of the Senior Credit
Facility.
ANNEX 5.2(a)
to
PURCHASE AGREEMENT
REPORTING REQUIREMENTS OF THE SELLER
The Seller shall furnish, or cause to be furnished, to the Purchaser,
the Administrative Agent, the Collateral Agent and (in the case of paragraph (f)
below only) the Rating Agencies:
(a) Monthly Report. As soon as available, and in any event no later
than 11:00 a.m. (New York time) on the fifteenth day of each calendar month, a
Monthly Report in the form of Exhibit 3.1(a)(iv) prepared by the Seller as of
the last day of the previous calendar month.
(b) Annual Audited Financials. As soon as available, and in any event
within ninety (90) days after the end of each fiscal year, (i) a copy of the
audited consolidated financial statements for such year for the Seller and the
Parent Group, certified in each case in a manner satisfactory to the
Administrative Agent and the Collateral Agent by Xxxxxx Xxxxxxxx (or its
successor) or other nationally recognized independent public accountants
acceptable to the Administrative Agent and the Collateral Agent, with such
financial statements being prepared in accordance with GAAP applied consistently
throughout the period involved (except as approved by such accountants and
disclosed therein), and (ii) a report from Xxxxxx Xxxxxxxx (or its successor) or
other nationally recognized independent public accountants acceptable to the
Administrative Agent and the Collateral Agent (upon which report the
Administrative Agent and the Collateral Agent shall be entitled to rely) to the
effect that such firm has caused this Agreement to be reviewed and that in the
course of their audit of the Parent and its Subsidiaries no facts have come to
their attention to cause them to believe that any Termination Event or Incipient
Termination Event exists and in particular that they have no knowledge of any
failure on the part of the Parent to comply with any financial covenant set
forth in Section 5.04(a) of the Senior Credit Facility as in effect on the
Closing Date (the "Financial Covenant") or any failure on the part of the Seller
to comply with this Agreement in the preparation of the Monthly Reports or the
Investment Base Certificates delivered during the previous fiscal year, or if
such is not the case, specifying any exception and the nature thereof.
(c) Quarterly Financials. Within forty five (45) days after the end of
each fiscal quarter, consolidated financial information regarding Parent and its
Subsidiaries, certified by the Chief Financial Officer of Parent, including (i)
unaudited balance sheets as of the close of such fiscal quarter and the related
statements of income and cash flow for that portion of the fiscal year ending as
of the close of such fiscal quarter and (ii) unaudited statements of income and
cash flows for such fiscal quarter, in each case setting forth in comparative
form the figures for the corresponding period in the prior year and the figures
contained in the Projections for such fiscal year, all prepared in accordance
with GAAP (subject to normal year-end adjustments). Such financial information
shall be accompanied by (A) a statement in reasonable detail (each, a
"Compliance Certificate") in respect of the Financial Covenant and (B) the
certification of the Chief Financial Officer of Parent that (i) such financial
information presents fairly in accordance with GAAP (subject to normal year-end
adjustments) the financial position, results of operations and statements of
cash flows of Parent and its Subsidiaries, on a consolidated basis, as at the
end of such fiscal quarter and for that portion of the fiscal year then ended,
(ii) any other information
presented is true, correct and complete in all material respects and that there
was no Termination Event or Incipient Termination Event in existence as of such
time or, if a Termination Event or Incipient Termination Event has occurred and
is continuing, describing the nature thereof and all efforts undertaken to cure
such Termination Event or Incipient Termination Event. In addition, Parent shall
deliver to Administrative Agent, within forty five (45) days after the end of
each fiscal quarter, a management discussion and analysis that includes a
comparison to budget for that fiscal quarter and a comparison of performance for
that fiscal quarter to the corresponding period in the prior year.
(d) Operating Plan. As soon as available, but not later than thirty
(30) days after the beginning of each fiscal year, an annual operating plan for
the Parent and its Subsidiaries, approved by the Board of Directors of the
Parent, for the following year, which will (i) include a statement of all of the
material assumptions on which such plan is based, (ii) include quarterly balance
sheets and a monthly budget for the following year and (iii) integrate sales,
gross profits, operating expenses, operating profit, cash flow projections and
Availability projections, all prepared on the same basis and in similar detail
as that on which operating results are reported (and in the case of cash flow
projections, representing management's good faith estimates of future financial
performance based on historical performance), and including plans for capital
expenditures and facilities.
(e) Management Letters. Within five (5) Business Days after receipt
thereof by the Parent or any of its Subsidiaries, copies of all management
letters, exception reports or similar letters or reports received by the Parent
from its independent certified public accountants.
(f) Default Notices. As soon as practicable, and in any event within
five (5) Business Days after an Authorized Officer of the Seller has actual
knowledge of the existence thereof, telephonic or telecopied notice of each of
the following events, in each case specifying the nature and anticipated effect
thereof and what action, if any, the Seller proposes to take with respect
thereto, which notice, if given telephonically, shall be promptly confirmed in
writing on the next Business Day:
(i) any Incipient Termination Event or Termination Event;
(ii) any Adverse Claim made or asserted against any of the
Seller Collateral of which it becomes aware;
(iii) the occurrence of any event that would have a material
adverse effect on the aggregate value of the Seller Collateral or on
the assignments and Liens granted by the Seller pursuant to this
Agreement;
(iv) the commencement of a case or proceeding by or against
the Seller seeking a decree or order in respect of the Seller (A) under
the Bankruptcy Code or any other applicable federal, state or foreign
bankruptcy or other similar law, (B) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for
the Seller or for any substantial part of its assets, or (C) ordering
the winding-up or liquidation of the affairs of the Seller;
(v) the receipt of notice that (A) the Seller is being placed
under regulatory supervision, (B) any license, permit, charter,
registration or approval necessary for the conduct of the Seller's
business is to be, or may be, suspended or revoked, or (C) the Seller
is to cease and desist any practice, procedure or policy employed by it
in the conduct of its business if such cessation may have a Material
Adverse Effect; or
(vi) any other event, circumstance or condition that has had
or could reasonably be expected to have a Material Adverse Effect.
(g) SEC Filings and Press Releases. Promptly upon their becoming
available, copies of: (i) all financial statements, reports, notices and proxy
statements made publicly available by the Seller or any member of the Parent
Group to its security holders; (ii) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by the Seller or any
member of the Parent Group with any securities exchange or with the Securities
and Exchange Commission or any governmental or private regulatory authority; and
(iii) all press releases and other statements made available by the Seller or
any member of the Parent Group to the public concerning material adverse changes
or developments in the business of any such Person.
(h) Litigation. Promptly upon learning thereof, written notice of any
Litigation affecting the Seller, the Transferred Receivables or the Seller
Collateral, whether or not fully covered by insurance, and regardless of the
subject matter thereof that (i) seeks damages in excess of $2,500,000, (ii)
seeks injunctive relief, (iii) is asserted or instituted against any Plan, its
fiduciaries or its assets or against the Seller or any ERISA Affiliate of the
Seller in connection with any Plan, (iv) alleges criminal misconduct the Seller
or (v) would, if determined adversely, have a Material Adverse Effect.
(i) Other Documents. Such other financial and other information
respecting the Transferred Receivables, the Contracts therefor or the condition
or operations, financial or otherwise, of the Seller, Holding, the Originator or
the Parent or any of its other Subsidiaries as the Purchaser, the Administrative
Agent or the Collateral Agent shall, from time to time, request.
(j) Miscellaneous Certifications. As soon as available, and in any
event within ninety (90) days after the end of each fiscal year, (i) a Bringdown
Certificate and (ii) a Servicer's Certificate.
ANNEX 7.9
to
PURCHASE AGREEMENT
REPORTING REQUIREMENTS OF THE SERVICER
The Servicer shall furnish, or cause to be furnished, to the Purchaser,
the Administrative Agent and the Collateral Agent all of the following (except
if the Servicer is a Subsidiary of Parent, in which case the Servicer shall not
be required to furnish the information required in paragraphs (a) and (b)
below):
(a) Annual Audited Financials. As soon as available and in any event
within 90 days after the end of each fiscal year of the Servicer, a copy of the
audited consolidated financial statements of the Servicer and its Subsidiaries
for such year, certified in each case in a manner satisfactory to the
Administrative Agent and the Collateral Agent by Xxxxxx Xxxxxxxx (or any
successor thereto) or another firm of nationally recognized independent
certified public accountants acceptable to the Administrative Agent and the
Collateral Agent (and accompanied by consolidating financial information) with
such financial statements being prepared in accordance with GAAP applied
consistently throughout the period involved (except as approved by such
accountants and disclosed therein).
(b) Quarterly Officer's Certificate. As soon as available, and in any
event within 45 days after the end of each of the first three fiscal quarters of
each fiscal year and 90 days after the end of each fiscal year, an Officer's
Certificate stating, as to each signer thereof, that (i) a review of the
activities of the Servicer during the preceding fiscal quarter and of its
performance under this Agreement has been made under such officer's supervision,
(ii) to the best of such officer's knowledge, based on such review, the Servicer
has fulfilled all of its obligations under this Agreement throughout such period
or, if there has been a default in the fulfillment of any such obligation,
describing the nature and status thereof and all efforts undertaken to cure such
default, (iii) there was no Event of Servicer Termination in existence as of
such time or, if a Servicer Termination Event shall have occurred and be
continuing, describing the nature and status thereof and all efforts undertaken
to cure such Event of Servicer Termination, (iv) the Servicer has complied with
each of its covenants under the Purchase Agreement and the other Related
Documents, including those covenants set forth in Section 7.6 of the Purchase
Agreement and Section 5.04(a) of the Senior Credit Facility (as in effect on the
Closing Date), and (v) each of the representations and warranties of the
Servicer contained in the Purchase Agreement or in any other Related Document is
true and correct in all respects and with the same force and effect as though
made on and as of the date of such certification, except to the extent that any
such representation or warranty expressly relates to an earlier date and except
for changes therein expressly permitted therein.
(c) Management Letters. Within five Business Days after receipt thereof
by the Servicer, copies of all management letters, exception reports or similar
letters or reports received by the Servicer from its independent certified
public accountants.
(d) Default Notices. As soon as practicable, and in any event within
five (5) Business Days after an Authorized Officer of the Servicer has actual
knowledge of the existence thereof,
telephonic or telecopied notice of each of the following events, in each case
specifying the nature and anticipated effect thereof, which notice, if given
telephonically, shall be promptly confirmed in writing on the next Business Day:
(i) any Incipient Termination Event, Termination Event,
Incipient Servicer Termination Event or Event of Servicer Termination;
(ii) any Adverse Claim made or asserted against any of the
Seller Collateral of which it becomes aware;
(iii) the occurrence of any event that would have a material
adverse effect on the aggregate value of the Seller Collateral or on
the assignments and Liens granted by the Seller pursuant to this
Agreement;
(iv) the occurrence of any event of the type described in
Sections 4.2(h)(i), (ii) or (iii) of the Transfer Agreement involving
any Obligor obligated under Transferred Receivables with an aggregate
Outstanding Balance at such time of $500,000 or more; or
(v) any other event, circumstance or condition that has had or
could reasonably be expected to have a Material Adverse Effect.
(e) SEC Filings and Press Releases. Promptly upon their becoming
available, copies of: (i) all financial statements, reports, notices and proxy
statements made publicly available by the Servicer to its security holders; (ii)
all regular and periodic reports and all registration statements and
prospectuses, if any, filed by the Servicer with any securities exchange or with
the Securities and Exchange Commission or any governmental or private regulatory
authority; and (iii) all press releases and other statements made available by
the Servicer to the public concerning material adverse changes or developments
in the business of any such Person.
(f) Litigation. Promptly upon learning thereof, written notice of any
Litigation affecting the Originator, the Seller, the Servicer, the Transferred
Receivables or the Seller Collateral, whether or not fully covered by insurance,
and regardless of the subject matter thereof that (i) is or is reasonably likely
to be asserted by an Obligor with respect to any Transferred Receivable and with
respect to which the amount in dispute is or may be reasonably expected to be in
excess of $2,500,000, (ii) seeks damages in excess of $2.500,000, (iii) seeks
injunctive relief, (iv) is asserted or instituted against any Plan, its
fiduciaries or its assets or against the Originator, the Servicer or the Seller
or ERISA Affiliate thereof in connection with any Plan, (v) alleges criminal
misconduct by the Originator, the Seller or the Servicer or (vi) would, if
determined adversely, have a Material Adverse Effect.
(g) Servicer Report. On the fifteenth (15th) day of each calendar
month, a report, certifying that the Servicer has received payment in full of
the Servicing Fee and the Non-Transferred Receivables Servicing Fee with respect
to each day of the immediately preceding calendar month.
(h) Other Documents. Such other financial and other information
respecting the Receivables, VENDOR RECEIVABLES, the Contracts therefor or the
condition or operations, financial or otherwise, of the Servicer or any of its
Subsidiaries as the Purchaser, the Administrative Agent or the Collateral Agent
shall, from time to time, request.
