Exhibit 4.30
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of January 11, 2000
among
RITE AID FUNDING LLC
as the Seller
and
CORPORATE ASSET FUNDING COMPANY, INC.
and
CORPORATE RECEIVABLES CORPORATION
as the Investors
and
CITIBANK, N.A.
and
CITICORP NORTH AMERICA, INC.
as the Agent
and
RITE AID CORPORATION
as Collection Agent
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENTS....................................................1
ARTICLE I
DEFINITIONS.........................................................2
SECTION 1.01. Certain Defined Terms................................2
SECTION 1.02. Other Terms.........................................28
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES.................................28
SECTION 2.01.Purchase Facility.....................................28
SECTION 2.02.Making Purchases......................................29
SECTION 2.03.Receivable Interest Computation.......................30
SECTION 2.04.Settlement Procedures.................................31
SECTION 2.05.Fees..................................................33
SECTION 2.06.Payments and Computations, Etc........................34
SECTION 2.07.Dividing or Combining Receivable Interests............34
SECTION 2.08.Increased Costs.......................................34
SECTION 2.09.Additional Yield on Receivable Interests Bearing a
Eurodollar Rate..............................................35
SECTION 0.00.Xxxxxxxx Interest.....................................36
ARTICLE III
CONDITIONS OF PURCHASES............................................37
SECTION 3.01.Conditions Precedent to Initial Purchase on
Original Closing Date......................37
SECTION 3.02.Conditions Precedent to Initial Purchase on
New Closing Date...........................37
SECTION 3.03.Conditions Precedent to the Amendment Closing Date....38
SECTION 3.04.Conditions Precedent to All Purchases
and Reinvestments..........................40
ARTICLE IV
REPRESENTATIONS AND WARRANTIES.....................................41
SECTION 4.01.Representations and Warranties of the Seller..........41
ARTICLE V
COVENANTS..........................................................45
SECTION 5.01.Covenants of the Seller...............................45
SECTION 5.02.Covenant of the Parent, the Seller and each Originator52
ARTICLE VI
ADMINISTRATION AND COLLECTION
OF POOL RECEIVABLES ...............................................53
SECTION 6.01.Designation of Collection Agent.......................53
SECTION 6.02.Duties of Collection Agent............................53
SECTION 6.03.Certain Rights of the Agent...........................54
SECTION 6.04.Rights and Remedies...................................55
SECTION 6.05.Further Actions Evidencing Purchases..................56
SECTION 6.06.Covenants of the Collection Agent and the Originator..56
SECTION 6.06A. Representations of the Collection Agent..........58
SECTION 6.07.Indemnities by the Collection Agent...................58
SECTION 6.08.Establishment of Deposit Accounts.....................60
ARTICLE VII
EVENTS OF TERMINATION..............................................62
SECTION 0.00.Xxxxxx of Termination.................................62
ARTICLE VIII
THE AGENT .........................................................66
SECTION 8.01.Authorization and Action..............................66
SECTION 8.02.Agent's Reliance, Etc.................................66
SECTION 8.03.CNAI and Affiliates...................................67
SECTION 0.00.Xxxx's Purchase Decision..............................67
ARTICLE IX
INDEMNIFICATION....................................................67
SECTION 9.01.Indemnities by the Seller.............................67
ARTICLE X
MISCELLANEOUS......................................................69
SECTION 10.01. Amendments, Etc..................................69
SECTION 10.02. Notices, Etc.....................................70
SECTION 10.03. Assignability....................................70
SECTION 10.04. Costs, Expenses and Taxes........................71
SECTION 10.05. No Proceedings...................................71
SECTION 10.06. Confidentiality..................................72
SECTION 10.07. Patient Confidentiality..........................72
SECTION 10.08. GOVERNING LAW....................................73
SECTION 10.09. No Novation......................................73
SECTION 10.10. Execution in Counterparts........................73
SECTION 10.11. Survival of Termination..........................73
SCHEDULES
SCHEDULE I - Deposit Account Banks; Lock-Boxes; Deposit Accounts
SCHEDULE II - Special Concentration Limits
ANNEXES
ANNEX A - Form of Seller Report
ANNEX B-1 - Form of Originator Deposit Account Agreement
ANNEX B-2 - Form of Purchaser Deposit Account Agreement
ANNEX C - Form of Opinion of Counsel to the Seller
ANNEX D - [Intentionally Omitted]
ANNEX E - Form of Confirmation of Parent Guaranty
ANNEX F - Form of Weekly Report
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
Dated as of January 11, 2000
RITE AID FUNDING LLC, a California limited liability company
(the "Seller"), CORPORATE ASSET FUNDING COMPANY, INC., a Delaware
corporation, CORPORATE RECEIVABLES CORPORATION, a California corporation,
CITIBANK, N.A., and CITICORP NORTH AMERICA, INC., a Delaware corporation
("CNAI"), as agent (the "Agent") for the Investors and the Banks, and RITE
AID CORPORATION, a Delaware corporation, as Collection Agent, agree as
follows:
PRELIMINARY STATEMENTS.
The Collection Agent, the Investors, certain of the Banks, the
Seller and the Agent entered into a Receivables Purchase Agreement, dated
as of November 26, 1997, as amended, and as further amended and restated by
the Amended and Restated Receivables Agreement, dated as of November 24,
1999, as amended by Amendment Agreement No. 1, dated as of December 3, 1999
(the "Original Receivables Purchase Agreement"), pursuant to which the
Seller has sold Receivable Interests to the Investors and the Banks upon
the terms and subject to the conditions set forth in the Original
Receivables Purchase Agreement.
The Collection Agent, the Investors, the Banks, the Seller and
the Agent desire to amend and restate the Original Receivables Purchase
Agreement in its entirety in order to reflect prior amendments to certain
financial covenants, modify eligibility criteria related to PBM's and the
Special Concentration Limits relating thereto (each, as defined below) and
modify certain reserve calculations and requirements.
The Seller has acquired, and may continue to acquire
Receivables from the Originators, either by purchase or by contribution to
the capital of the Seller, as determined from time to time by the Seller
and the Originators. The Seller is prepared to sell undivided fractional
ownership interests (referred to herein as "Receivable Interests") in the
Receivables. CAFCO or CRC (as such terms are hereinafter defined) may, in
their sole discretion, purchase such Receivable Interests, and the Banks
are prepared to purchase such Receivable Interests, in each case on the
terms set forth herein. Accordingly, the parties agree to amend and restate
the Original Receivables Purchase Agreement as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"Adverse Claim" means a lien, security interest or other charge
or encumbrance, or any other type of preferential arrangement.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under
common control with such Person or is a director or officer of such Person.
"Affiliated Obligor" means any Obligor that is an Affiliate of
another Obligor.
"Agent PBM" means each PBM designated by the Agent in a writing
delivered to the Seller in its sole discretion from time to time
(including, as of the Amendment Closing Date, PCS and Diversified
Pharmaceutical Services, Inc.), the payments from whom relate to specified
Originator Receivables and are intended as payments made by such Person in
its capacity as an agent of an Insurer and not as payments made by such
Person based on its assumption of payment obligations relating to such
Originator Receivables in substitution of the payment obligations of an
Insurer.
"Agent's Account" means the special account of the Agent,
account number 00000000 maintained at the office of Citibank at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx.
"Agreement" means this Amended and Restated Receivables
Agreement, dated as of January 11, 2000, as the same may be amended,
modified or restated from time to time.
"Alternate Base Rate" means a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall be at all
times equal to one-half of 1% per annum above the highest of:
(a) the rate of interest announced publicly by Citibank
in New York, New York, from time to time as Citibank's base
rate;
(b) 1/2 of one percent above the latest three-week moving
average of secondary market morning offering rates in the
United States for three-month certificates of deposit of major
United States money market banks, such three-week moving
average being determined weekly on each Monday (or, if such day
is not a Business Day, on the next succeeding Business Day) for
the three-week period ending on the previous Friday by Citibank
on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New
York or, if such publication shall be suspended or terminated,
on the basis of quotations for such rates received by Citibank
from three New York certificate of deposit dealers of
recognized standing selected by Citibank, in either case
adjusted to the nearest 1/4 of one percent or, if there is no
nearest 1/4 of one percent, to the next higher 1/4 of one
percent; and
(c) the Federal Funds Rate.
"Amended Credit Agreement" means that certain Amended and
Restated Credit Agreement dated as of October 25, 1999, as amended, among
the Parent, as the borrower, the banks party thereto and Xxxxxx Guaranty
Trust Company of New York, as agent or under the Term Loan Agreement, as
amended, dated as of October 25, 1999 among the Parent, as the borrower,
the banks party thereto and Xxxxxx Guaranty Trust Company of New York, as
agent.
"Amendment Closing Date" means the date and time of the
fulfillment of the conditions set forth in Section 3.03 hereof, anticipated
to occur on January 11, 2000.
"Applicable Spread" means, for any day, the percentage set
forth below in the applicable row under the column corresponding to the
Status that exists on such day:
STATUS LEVEL I LEVEL II LEVEL III
------ ------- -------- ---------
Alternative Base Rate 1.00% 1.50% 2.00%
Eurodollar Rate 2.00% 2.50% 3.00%
"Asset Purchase Agreement" means, in the case of any Bank other
than Citibank, the asset purchase agreement entered into by such Bank
concurrently with the Assignment and Acceptance pursuant to which it became
party to this Agreement.
"Assignee Rate" for any Settlement Period for any Receivable
Interest means an interest rate per annum equal to the Applicable
Spread plus the Eurodollar Rate for such Settlement Period; provided,
however, that in case of:
(i) any Settlement Period on or prior to the first day of which
an Investor or Bank shall have notified the Agent that the
introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or any central bank or
other governmental authority asserts that it is unlawful, for
such Investor or Bank to fund such Receivable Interest at the
Assignee Rate set forth above (and such Investor or Bank shall
not have subsequently notified the Agent that such
circumstances no longer exist),
(ii) any Settlement Period of one to (and including) 29 days
(other than a Settlement Period which corresponds to the month
of February or which begins on a day in the month of February
and runs to the numerically corresponding day of the following
month),
(iii) any Settlement Period as to which the Agent does not
receive notice, by no later than 12:00 noon (New York City
time) on the third Business Day preceding the first day of such
Settlement Period, that the related Receivable Interest will
not be funded by issuance of commercial paper, or
(iv) any Settlement Period for a Receivable Interest the
Capital of which allocated to the Investors or the Banks is
less than $500,000,
then, the "Assignee Rate" for such Settlement Period shall be an
interest rate per annum equal to the Alternate Base Rate plus the
Applicable Spread, in each case, in effect on the first day of such
Settlement Period; provided, further, that the Agent and the Seller
may agree in writing from time to time upon a different "Assignee
Rate".
"Assignment and Acceptance" means an assignment and acceptance
agreement entered into by a Bank, an Eligible Assignee and the Agent,
pursuant to which such Eligible Assignee may become a party to this
Agreement, in form and substance satisfactory to the Agent.
"Average Dilution Ratio" means for any Month the average of the
Dilution Ratios for the 12 most recently ended Months of the Seller.
"Average Maturity" means at any time that period of days equal
to the average maturity of the Pool Receivables calculated by the
Collection Agent in the then most recent Seller Report; provided, however,
if the Agent shall reasonably disagree with any such calculation, the Agent
may recalculate such Average Maturity.
"Bank Commitment" of any Bank means, (a) with respect to
Citibank, $300,000,000 or such amount as reduced by any Assignment and
Acceptance entered into between Citibank and other Banks; or (b) with
respect to a Bank that has entered into an Assignment and Acceptance, the
amount set forth therein as such Bank's Bank Commitment, in each case as
such amount may be reduced by an Assignment and Acceptance entered into
between such Bank and an Eligible Assignee, and, with respect to each of
(a) and (b) above, as the same may be further reduced (or terminated)
pursuant to the next sentence or, with the consent of such Bank, increased
in connection with an increase in the Purchase Limit pursuant to Section
2.01(b) . Any reduction (or termination) of the Purchase Limit pursuant to
the terms of this Agreement shall reduce ratably (or terminate) each Bank's
Bank Commitment.
"Banks" means Citibank and each Eligible Assignee that shall
become a party to this Agreement pursuant to Section 10.03.
"Beneficiary" means, as of any date of determination, any of the
Investors, the Banks and the Agent.
"Business Day" means any day on which (i) banks are not
authorized or required to close in New York City, and (ii) if this
definition of "Business Day" is utilized in connection with the Eurodollar
Rate, dealings are carried out in the London interbank market.
"CAFCO" means Corporate Asset Funding Company, Inc. and any
successor or assign of CAFCO that is a receivables investment company which
in the ordinary course of its business issues commercial paper or other
securities to fund its acquisition and maintenance of receivables.
"Capital" of any Receivable Interest means the original amount
paid to the Seller for such Receivable Interest at the time of its purchase
by an Investor or a Bank pursuant to this Agreement, or such amount divided
or combined in accordance with Section 2.07, in each case reduced from time
to time by Collections distributed on account of such Capital pursuant to
Section 2.04(d); provided, that if such Capital shall have been reduced by
any distribution and thereafter all or a portion of such distribution is
rescinded or must otherwise be returned for any reason, such Capital shall
be increased by the amount of such rescinded or returned distribution, as
though it had not been made.
"CHAMPUS" means the Civilian Health and Medical Program of the
Uniformed Service, a program of medical benefits covering former and active
members of the uniformed services and certain of their dependents, financed
and administered by the Unites States Departments of Defense, Health and
Human Services and Transportation and established pursuant to 10 U.S.C.
xx.xx. 1071-1106, and all regulations promulgated thereunder including
without limitation (a) all federal statutes (whether set forth in 10 U.S.C.
xx.xx. 1071-1106 or elsewhere) affecting CHAMPUS and (b) all rules,
regulations (including 32 CFR 199), manuals, orders and administrative,
reimbursement and other guidelines of all Governmental Entities (including,
without limitation, the Department of Health and Human Services, the
Department of Defense, the Department of Transportation, the Assistant
Secretary of Defense (Health Affairs) and the Office of CHAMPUS, or any
Person or entity succeeding to the functions of any of the foregoing)
promulgated pursuant to or in connection with any of the foregoing (whether
or not having the force of law) in each case, as amended, supplemented or
otherwise modified from time to time.
"Citibank" means Citibank, N.A., a national banking association.
"Collection Agent" means at any time the Person then authorized
pursuant to Section 6.01 to administer and collect Pool Receivables.
"Collection Agent Fee" has the meaning specified in
Section 2.05(a).
"Collection Agent Fee Reserve" for any Receivable Interest at
any time means the sum of (i) the unpaid Collection Agent Fee relating to
such Receivable Interest accrued to such time plus (ii) an amount equal to
(a) the Capital of such Receivable Interest on such date multiplied by (b)
the product of (x) the sum of (A) the percentage per annum at which the
Collection Agent Fee is accruing on such date and (B) the percentage per
annum at which the Program Fee (as such term is defined in the Fee
Agreement) is accruing on such date and (y) a fraction having the sum of
the Average Maturity plus the Collection Delay Period (each as in effect at
such date) as its numerator and 360 as its denominator.
"Collection Delay Period" means 10 days or such other number of
days as the Agent may select upon three Business Days' notice to the
Seller.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all cash proceeds of Related Security with respect to such
Receivable, and any Collection of such Receivable deemed to have been
received pursuant to Section 2.04.
"Commitment Termination Date" means the earliest of (a)
November 1, 2000, unless, prior to such date (or the date so extended
pursuant to this clause), upon the Seller's request, made not less than 45
days prior to the then Commitment Termination Date, one or more Banks
having 100% of the Purchase Limit shall in their sole discretion consent,
which consent shall be given not more than 30 days prior to the then
Commitment Termination Date, to the extension of the Commitment Termination
Date to the date occurring 360 days after the then Commitment Termination
Date; provided, however, that any failure of any Bank to respond to the
Seller's request for such extension shall be deemed a denial of such
request by such Bank, (b) the Facility Termination Date, (c) the date
determined pursuant to Section 7.01, and (d) the date (not earlier than
November 1, 2002) the Purchase Limit reduces to zero.
"Concentration Limit" for any Obligor (including each Non-Agent
PBM but excluding each Agent PBM) means at any time, 4% and for each Agent
PBM at any time, means 25%, or, in each case, such other percentage
("Special Concentration Limit") for such Obligor designated by the Agent in
a writing delivered to the Seller (initially, the Special Concentration
Limits shall be as specified on Schedule II hereto) ; provided, that in the
case of an Obligor with any Affiliated Obligor, the Concentration Limit
shall be calculated as if such Obligor and such Affiliated Obligor are one
Obligor; provided, further, that the Agent may cancel any Special
Concentration Limit upon three Business Days' notice to the Seller.
"Confirmation of Parent Guaranty" means the Confirmation of
Parent Guarantee, dated as of the New Closing Date, substantially in the
form of Annex E attached hereto, made by the Parent in favor of the Agent,
for the benefit of the Investors and the Banks, whereby the Parent confirms
its obligations under the Parent Guaranty.
"Consolidated Capital Expenditures" means, for any period, the
aggregate amount of expenditures by the Parent and its Consolidated
Subsidiaries for plant, property and equipment during such period
(including any such expenditure by way of acquisition of a Person or by way
of assumption of indebtedness or other obligations of a Person, to the
extent reflected as plant, property and equipment), but excluding any such
expenditures made (i) for the replacement or restoration of assets to the
extent financed by condemnation awards or proceeds of insurance received
with respect to the loss or taking of or damage to the asset or assets
being replaced or restored and (ii) for assets acquired to the extent
financed by a Sale and Leaseback Transaction.
"Consolidated Debt" means at any date the Debt of the Parent
and its Consolidated Subsidiaries, determined on a consolidated basis as of
such date.
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period, plus (a), to the extent deducted in determining
Consolidated Net Income for such period, the aggregate amount of (i)
Consolidated Interest Charges, (ii) provision for income taxes, (iii)
depreciation and amortization, (iv) LIFO Adjustments, (v) store closing
expenses and (vi) any other nonrecurring charge to the extent such
nonrecurring charge does not involve any cash expenditure during such
period, less (b), to the extent not deducted in determining Consolidated
Net Income for such period, the aggregate amount of (i) any cash
expenditure during such period in connection with which a nonrecurring
charge was taken in any prior period and (ii) LIFO Adjustments.
"Consolidated Interest Charges" means, for any period, the
aggregate amount of interest charges, whether expensed or capitalized,
incurred or accrued by the Parent and its Consolidated Subsidiaries during
such period.
"Consolidated Net Income" means, for any period, the net income
(or loss) of the Parent and its Consolidated Subsidiaries (exclusive of (a)
extraordinary items of gain or loss, (b) any gain or loss in connection
with any sale of assets other than sales of inventory in the ordinary
course of business, but in the case of loss only to the extent that such
loss does not involve any cash expenditure during such period and (c) the
Parent's share of the net income (or loss) of xxxxxxxxx.xxx), determined on
a consolidated basis for such period.
"Consolidated Net Worth" means at any date the consolidated
stockholders' equity of the Parent and its Consolidated Subsidiaries
determined as of such date; provided that such consolidated stockholders'
equity shall be adjusted to exclude the effects of items which have been
excluded from Consolidated Net Income for any period commencing after
August 28, 1999 by reason of the parenthetical phrase contained in the
definition of such term. Consolidated Net Worth includes the Parent's 8%
Convertible Pay- In-Kind Preferred Stock.
"Consolidated Rent" means, for any period, the consolidated
rental expense of the Parent and its Consolidated Subsidiaries for such
period, and including in any event rental costs of closed stores for such
period whether or not reflected as an expense in the determination of
Consolidated Net Income for such period.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of the
Parent in its consolidated financial statements if such statements were
prepared as of such date.
"Contract" means the agreement, insurance policy or other
instrument obligating an Obligor to pay for merchandise, insurance or
services from time to time.
"Cure Period" means the period beginning on and including a
Pool Noncompliance Date and ending on but excluding the earlier of (a) the
first date thereafter on which the Net Receivables Pool Balance equals or
exceeds the Required Weekly Net Receivables Pool Balance and (b) the second
consecutive Business Day following the occurrence of such Pool
Non-compliance Date.
"CRC" means Corporate Receivables Corporation and any successor
or assign of CRC that is a receivables investment company which in the
ordinary course of its business issues commercial paper or other securities
to fund its acquisition and maintenance of receivables.
"Credit and Collection Policy" means those receivables credit
and collection policies and practices of PCS (with respect to
PCS-originated Receivables), the Parent or the Collection Agent (if the
Parent is not the Collection Agent) in effect on the New Closing Date, as
modified in compliance with this Agreement.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally
accepted accounting principles, (v) all noncontingent obligations of such
Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, (vi) all Debt secured by a
Lien on any asset of such Person, whether or not such Debt is otherwise an
obligation of such Person, and (vii) all Debt of others Guaranteed by such
Person.
"Default Ratio" means, for any Month, the ratio (expressed as a
percentage) computed as of the last day of such Month by dividing (i) the
aggregate Outstanding Balance of all Originator Receivables that became
Defaulted Receivables during such Month, by (ii) the aggregate Outstanding
Balance of all Originator Receivables generated in the fifth Month
immediately preceding such Month.
"Defaulted Receivable" means an Originator Receivable:
(i) as to which any payment, or part thereof, remains
unpaid for 121 days from the date of service relating to such
Receivable;
(ii) as to which the Obligor thereof or any other Person
obligated thereon or owning any Related Security in respect
thereof has taken any action, or suffered any event to occur,
of the type described in Section 7.01(g); or
(iii) which, consistent with the Credit and Collection
Policy, has been written off the Parent, the Seller's or the
applicable Originator's books as uncollectible.
"Deposit Account" means the Originator Deposit Account and the
Purchaser Deposit Account.
"Deposit Account Agreement" means, collectively, the Originator
Deposit Account Agreement and the Purchaser Deposit Account Agreement.
"Deposit Account Bank" initially means Mellon Bank, N.A. and
shall means any bank holding a Deposit Account, from time to time.
"Deposit Date" means each Business Day on which any Collections
are deposited in the Purchaser Deposit Account.
"Designated Obligor" means, at any time, each Obligor;
provided, however, that any Obligor shall cease to be a Designated Obligor
upon three Business Days' notice by the Agent to the Seller.
"Designated Percentage" means, with respect to aggregate
Outstanding Balance of Rejected Accounts, the percentage designated by the
Agent in a writing delivered to the Seller in its sole discretion from time
to time, reflecting historical actual final Collections received by the
Originators with respect to Rejected Accounts.
"Diluted Receivable" means an Originator Receivable as to which
Dilution has occurred.
"Dilution" means any reduction in the Outstanding Balance of
any Receivable, except for reductions resulting from payments or writeoffs
with respect to such Receivable.
"Dilution Discount Amount" means (i) prior to the occurrence
and continuance of a Special Event, an amount determined from time to time
by the Agent based on its continuing review of the Receivables Pool, and
initially established at $7,000,000, and (ii) following the occurrence and
continuance of a Special Event, zero.
"Dilution Horizon Factor" means the ratio (expressed as
percentage) computed by dividing (i) the aggregate Outstanding Balance of
all Originator Receivables created during the most recently ended Month by
(ii) the Eligible Receivables Pool Balance as of the last day of the most
recently ended Month.
"Dilution Percentage" means for any Month, the sum of (A) the
product of (i) the Average Dilution Ratio for the most recently ended
Month, (ii) 1.5, and (iii) the Dilution Horizon Factor as of the most
recently ended Month plus (B) the product of (i) the Dilution Volatility
Factor as of the last day of the most recently ended Month and (ii) the
Dilution Horizon Factor as of the last day of the most recently ended
Month.
"Dilution Ratio" means, for any Month, the ratio (expressed as
a percentage) computed as of the last day of such Month by dividing (i) the
aggregate amount of Dilution with respect to the Receivables during such
Month by (ii) the aggregate Outstanding Balance of all Receivables created
during the Month immediately preceding the most recently ended Month.
"Dilution Reserve" means, for any Receivable Interest on any
date (in each case as of the close of business of the Collection Agent as
of such date), (i) if on such date a Special Event shall have occurred and
be continuing, the sum of (A) the sum of Capital, the Yield Reserve and the
Collection Agent Fee Reserve for Receivable Interests on such date
multiplied by the greater of (x) an amount equal to the Dilution Percentage
and (y) the product of (1) the Dilution Horizon Factor on such date and (2)
the Average Dilution Ratio on such date, plus (B) Receivable Interests with
respect to Receivables attributable to PCS's obligors on such date
multiplied by 0.133 and (ii) on any other date, zero.
"Dilution Volatility Factor" means, as of the last day of each
Month, the product (expressed as a percentage) of (i) the amount by which
(A) the highest Dilution Ratio for any of the twelve most recently ended
Month exceeds (B) the Average Dilution Ratio for the most recently ended
Month and (ii) a fraction equal to (A) the highest Dilution Ratio for any
of the twelve most recently ended Months divided by (B) the Average
Dilution Ratio for the most recently ended Month.
"E-Mail Report" has the meaning specified in Section 6.02 hereof.
"Eligible Assignee" means CNAI, any of its Affiliates, any
Person managed by Citibank, CNAI or any of their Affiliates, or any
financial or other institution acceptable to the Agent.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which is a United States resident
and is not an Affiliate of any of the parties hereto;
(ii) the Obligor of which, at the time of the initial
creation of an interest therein under this Agreement, is a
Designated Obligor and is not the Obligor of any Defaulted
Receivables which in the aggregate constitute 10% or more of
the aggregate Outstanding Balance of all Receivables of such
Obligor;
(iii) which at the time of the initial creation of an
interest therein under this Agreement is not a Defaulted
Receivable or subject to Dilution (provided, however, that,
that portion of such Receivable which is not subject to
Dilution may, in the Agent's sole discretion, be deemed an
'Eligible Receivable');
(iv) which is a Rejected Account, but only to the extent
that when the Outstanding Balance of such Rejected Account is
combined with the Outstanding Balance of all other Rejected
Accounts then included in the Receivables Pool, such amount
does not exceed the Designated Percentage for outstanding
Rejected Accounts as of such date;
(v) which is not past, or within 60 days of, the
statutory limit for collection applicable to the Obligor;
(vi) which is an obligation representing all or part of
the sales price of merchandise, insurance or services within
the meaning of Section 3(c)(5) of the Investment Company Act of
1940, as amended, and the nature of which is such that its
purchase with the proceeds of notes would constitute a "current
transaction" within the meaning of Section 3(a)(3) of the
Securities Act of 1933, as amended;
(vii) which is an "account" or a "general intangible"
within the meaning of Section 9-106 of the UCC of the
applicable jurisdictions governing the perfection of the
interest created by a Receivable Interest;
(viii)which is denominated and payable only in United
States dollars in the United States;
(ix) which arises under a Contract which, together with
such Receivable, is in full force and effect and constitutes
the legal, valid and binding obligation of the Obligor of such
Receivable and is not subject to any dispute, (and other than
PCS-originated Receivables) offset (including, without
limitation, any offset arising by virtue of such Obligor
providing health insurance to the employees of any Originator),
counterclaim or defense whatsoever (except the potential discharge
in bankruptcy of such Obligor);
(x) which, together with the Contract related thereto,
does not contravene in any material respect any laws, rules or
regulations applicable thereto (including, without limitation,
laws, rules and regulations relating to usury, consumer
protection, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which none of the
Parent, the Seller, the applicable Originator or the Obligor is
in violation of any such law, rule or regulation in any
material respect;
(xi) which arises under a Contract which (A) does not
require the Obligor thereunder to consent to the transfer, sale
or assignment of the rights and duties of the Parent, the
Seller or the applicable Originator thereunder, (B) except to
the extent addressed in the opinion of counsel delivered
pursuant to Section 3.02(g), does not contain a confidentiality
provision that purports to restrict the ability of the
Investors or the Banks to exercise their rights under this
Agreement, including, without limitation, their right to review
the Contract and (C) except to the extent addressed in the
opinion of counsel delivered pursuant to Section 3.02(g), does
not contain any provision prohibiting the transfer, sale or
assignment of the Obligor's payment obligation to the
applicable Originator;
(xii) which (A) satisfies all applicable requirements of
the Credit and Collection Policy and (B) complies with such
other criteria and requirements (other than those relating to
the collectibility of such Receivable) as the Agent may from
time to time specify to the Seller upon 30 days' notice;
(xiii)as to which, at or prior to the time of the initial
creation of an interest therein under this Agreement, the Agent
has not notified the Seller that such Receivable (or class of
Receivables) is no longer acceptable for purchase by an
Investor and the Banks hereunder;
(xiv) as to which, at or prior to the time of the initial
creation of an interest therein under this Agreement, the
information provided by the Seller with respect thereto is
complete and correct, and the applicable Originator has billed
the applicable Obligor and has delivered to such Obligor all
requested supporting claim documents with respect to such
Receivable;
(xv) as to which, the applicable Originator has, or has
the right to use, valid provider identification numbers and
licenses to generate valid Receivables. All information set
forth in the xxxx and supporting claim documents with respect
to such Receivable is true, complete and correct; if
additional information is requested by the Obligor, the
applicable Originator or the Parent has or will promptly
provide the same, and if any error has been made with respect
to such information, the applicable Originator or the Parent
will promptly correct the same and, if necessary, rebill such
Receivable;
(xvi) as to which, the applicable Originator has, or has
the right to use, valid provider identification numbers and
licenses to generate valid Medicare and Medicaid cost reports
with respect to such Receivable for all cost reporting periods
ending on or before the date of the last audited cost report
have been examined and audited by (i), as to Medicaid, the
applicable state agency or other HCFA-designated agents or
agents of such state agency, charged with such responsibility
or (ii), as to Medicare, the Medicare intermediary or other
HCFA-designated agents charged with such responsibility; and
there is no basis for any Governmental Entity to assert an
offset against any Originator;
(xvii)which, according to the Contract related thereto,
is required to be paid in full not more than 90 days from the
date the Originator of such Receivable performed the service
related thereto; and
(xviiiwhich, in the case of PCS-originated Receivables,
has been approved by the Agent, in its sole discretion, as
"Eligible Receivables" based on the Agent's due diligence
regarding such Receivables.
"Eligible Receivables Pool Balance" means as of any date the
Outstanding Balance of Eligible Receivables then in the Receivables Pool
reduced by the sum of (without duplication) (i) the Outstanding Balance of
Eligible Receivables that are then Defaulted Receivables, (ii) the Dilution
Discount Amount, (iii) Unapplied Cash, (iv) Unbilled Accounts, (v) 1.00
minus the Designated Percentage (expressed as a decimal) of Rejected
Accounts and (vi) any offset risk attributable to PCS-originated
Receivables, as determined by the Agent.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Rate" means, for any Settlement Period, an interest
rate per annum equal to the rate per annum at which deposits in U.S.
dollars are offered by the principal office of Citibank in London, England
to prime banks in the London interbank market at 11:00 A.M. (London Time)
two Business Days before the first day of such Settlement Period in an
amount substantially equal to the Capital associated with such Settlement
Period on such first day and for a period equal to such Settlement Period.
"Eurodollar Rate Reserve Percentage" of any Investor or Bank
for any Settlement Period in respect of which Yield is computed by
reference to the Eurodollar Rate means the reserve percentage applicable
two Business Days before the first day of such Settlement Period under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) (or if more than one such
percentage shall be applicable, the daily average of such percentages for
those days in such Settlement Period during which any such percentage shall
be so applicable) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Investor or Bank with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
(or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurocurrency
Liabilities is determined) having a term equal to such Settlement Period.
"Event of Termination" has the meaning specified in Section 7.01.
"Expected Net Value" means, with respect to any Receivable
Interest, the gross unpaid amount of such Receivable Interest on the
purchase date thereof multiplied by the Net Value Factor.
"Facility Termination Date" means the earliest of (a) November
1, 2002, (b) the date determined pursuant to Section 7.01, (c) the date the
Purchase Limit reduces to zero pursuant to Section 2.01(b) or (d) the
Commitment Termination Date.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by
it.
"Fee Agreement" means the agreement of even date between the
Seller and the Agent, as the same may be amended or restated from time to
time, with respect to the fees to be paid by or on behalf of the Seller in
connection with this Agreement.
"Fees" means all fees payable to the Agent pursuant to the Fee
Agreement.
"Fixed Charge Coverage Ratio" means at any date, the ratio of
(i) Consolidated EBITDA plus Consolidated Rent to (ii) Consolidated
Interest Charges plus Consolidated Rent, in each case for the period of
four consecutive fiscal quarters most recently ended on or prior to such
date.
"Funds Transfer Letter" means the letter executed and delivered
by the Seller to the Agent on the Original Closing Date.
"Governmental Entity" means the United States of America, any
state, any political subdivision of a state and any agency or
instrumentality of the United States of America or any state or political
subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government. Payments from Governmental Entities shall be deemed to include
payments governed under the Social Security Act (42 U.S.C. ss.1395, et
seq.), including payments under Medicare, Medicaid and CHAMPUS, and
payments administered or regulated by HCFA.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt of
any other Person; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
"HCFA" means the Health Care Financing Administration of the
United States Department of Health and Human Services.
"Incipient Event of Termination" means an event that but for
notice or lapse of time or both would constitute an Event of Termination.
"Information" has the meaning specified in Section 10.06(b).
"Insurer" means any Person which in the ordinary course of its
business or activities agrees to pay for healthcare goods and services
received by individuals, including commercial insurance companies,
nonprofit insurance companies (such as Blue Cross, Blue Shield entities),
employers or unions which self-insure for employee or member health
insurance, prepaid health care organizations, preferred provider
organizations and health maintenance organizations. "Insurer" includes
insurance companies issuing health, personal injury, workers' compensation
or other types of insurance but does not include any individual guarantors.
"Investment Grade" means, a rating of at least BBB- by S&P and
at least Baa3 by Moody's; provided, that if the Parent does not have rated
long-term public senior unsecured debt securities outstanding, "Investment
Grade" shall mean the rating determined by the Agent, in its sole
discretion, that would be assigned to the Parent's long-term public senior
unsecured debt securities if the Parent did have such rated securities.
"Investor" means CAFCO or CRC and all other owners by
assignment or otherwise of a Receivable Interest originally purchased by
CAFCO or CRC, as the case may be, and, to the extent of the undivided
interests so purchased, shall include any participants.
"Investor Rate" means, to the extent CAFCO or CRC funds such
Receivable Interest by issuing commercial paper, the weighted average per
annum rate equivalent to daily rates paid or payable by CAFCO or CRC, as
the case may be, from time to time as interest on or otherwise (by means of
interest rate xxxxxx or otherwise) in respect of those promissory notes
issued by CAFCO or CRC, as the case may be, that are allocated, in whole or
in part, by the Agent (on behalf of CAFCO or CRC, as the case may be) to
fund the purchase or maintenance of such Receivable Interest during such
Settlement Period as determined by the Agent (on behalf of CAFCO or CRC, as
the case may be) and reported to the Seller from time to time on a weighted
average basis for such Settlement Period, which rates shall reflect and
give effect to the commissions of placement agents and dealers in respect
of such commercial paper notes, to the extent such commissions are
allocated, in whole or in part, to such commercial paper notes by the Agent
(on behalf of CAFCO or CRC, as the case may be); provided, however, that if
any component of such rate is a discount rate, in calculating the 'Investor
Rate' for such Settlement Period the Agent shall for such component use the
rate resulting from converting such discount rate to an interest bearing
equivalent rate per annum.
"Level I Status" exists at any date if (i) such date is on or
after May 1, 2000, and (ii) Parent's long-term unsecured debt (without
third party credit enhancement) is rated BBB- or higher by S&P and Baa3 or
higher by Moody's.
"Level II Status" exists at any date if (a) Parent's long-term
unsecured debt (without third party credit enhancement) is rated BB+ or
higher by S&P and Ba1 or higher by Moody's and (b) Level I Status does not
exist.
"Level III Status" exists at any date if, at such date, no
other Status exists.
"LIFO Adjustments" means, for any period, the net adjustment to
costs of goods sold for such period required by the Parent's LIFO inventory
method, determined in accordance with generally accepted accounting
principles.
"Liquidation Day" means, for any Receivable Interest, (i) each
day during a Settlement Period for such Receivable Interest on which the
conditions set forth in Section 3.02 are not satisfied, and (ii) each day
which occurs on or after the Termination Date for such Receivable Interest.
"Liquidation Fee" means, for any Settlement Period during which
a Liquidation Day occurs, the amount, if any, by which (i) the additional
Yield (calculated without taking into account any Liquidation Fee or any
shortened duration of such Settlement Period pursuant to clause (iv) of the
definition thereof) which would have accrued during such Settlement Period
on the reductions of Capital of the Receivable Interest relating to such
Settlement Period had such reductions remained as Capital, exceeds (ii) the
income, if any, received by the Investors' investing the proceeds of such
reductions of Capital.
"Lock-Box" means the Originator Lock-Box and the Purchaser
Lock-Box.
"Loss Horizon Factor" means, for any date, the ratio (expressed
as a percentage) computed as of the last day of the most recently ended
Month by dividing (i) the aggregate Outstanding Balance of all Originator
Receivables created during the five (5) Month period ending on such date by
(ii) the Eligible Receivables Pool Balance as of such date.
"Loss-to-Liquidation Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each Month by dividing (i) the
aggregate Outstanding Balance of all Originator Receivables written off by
the Parent, applicable Originator or the Seller, or which should have been
written off by the Parent, the Seller or the applicable Originator in
accordance with the Credit and Collection Policy, during the one Month
period ending on such last day by (ii) the aggregate amount of Collections
of Originator Receivables actually received during such period.
"Loss Percentage" means, for any Month, the product of (w) the
highest Default Ratio for any Month for the twelve most recently ended
Months, (x) the difference between (a) one and (b) the Recovery Rate then
in effect, (y) the Loss Horizon Factor as of the last day of the most
recently ended Month and (z) 1.5.
"Loss Reserve" means, for any Receivable Interest on any date,
the greatest of (i) 10%, (ii) three (3) times the Concentration Limit, and
(iii) an amount equal to the Loss Percentage on such date multiplied by the
sum of Capital, the Yield Reserve and the Collection Agent Fee Reserve for
such Receivable Interest, in each case, as of the close of business of the
Collection Agent on such date.
"Month" means the fiscal month maintained on the books and
records of the Seller and the Parent in accordance with generally accepted
accounting practices, consistently applied.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Receivables Pool Balance" means, at any date, the Eligible
Receivables Pool Balance reduced by the aggregate amount by which the
Outstanding Balance of Eligible Receivables (other than Defaulted
Receivables) of each Obligor then in the Receivables Pool then exceeds the
product of (A) the Concentration Limit for such Obligor multiplied by (B)
the Capital of all Receivable Interests.
"Net Value Factor" with respect to any Receivable Interest,
means the historical actual final Collections received from the applicable
Obligor within the past 121 days of the purchase date of such Receivable
Interest, divided by the gross face value of such Receivable Interest.
"New Closing Date" means November 24, 1999.
"Non-Agent PBM" means each PBM, the payments from whom relate
to specified Originator Receivables and are intended to constitute payments
of direct obligations of such Person and in full substitution of any
payment obligation of an Insurer with respect to such Originator
Receivables, and not merely as payments in a capacity as an agent of such
Insurers.
"Notice to Insurer" means a notice, in substantially the form
of Annex F hereto, from the Seller to each Insurer and PBM, relating to the
payment of Collections from such Insurer or PBM, as the case may be.
"Obligor" means an Insurer, PBM or Governmental Entity, as
applicable, obligated to make payments pursuant to a Contract.
"Obligor Notification Date" means the earliest of (i) April 1,
2000, (ii) such time that the Purchaser Deposit Account has a data
automation system which permits the tracking of Collections and (iii) such
time as the Agent shall decide to send a Notice to Insurers to each Obligor
who is not a Governmental Entity instructing all such Obligors to send all
Collections to the Purchaser Lock-Box or the Purchaser Deposit Account.
"Original Closing Date" means November 26, 1997.
"Original Receivables Purchase Agreement" has the meaning
assigned to such term in the preliminary statement of this Agreement.
"Original Originator Purchase Agreement" means the Purchase and
Contribution Agreement dated the Original Closing Date between the
Originators, as sellers, and the Seller, as purchaser, as the same may have
be amended, modified or restated from time to time.
"Originator Deposit Account" has the meaning specified in
Section 6.08(b).
"Originator Deposit Account Bank" shall initially be Mellon
Bank, N.A. and has the meaning specified in Section 6.08(b).
"Originator Deposit Account Agreement" means an agreement, in
substantially the form of Annex B-1, among Seller, Originator Deposit
Account Bank, the Agent and the Originators.
"Originator Lock-Box" shall have the meaning specified in 6.08(b).
"Originator Purchase Agreement" means the Amended and Restated
Purchase and Contribution Agreement dated the New Closing Date between the
Originators, as sellers, and the Seller, as purchaser, as the same may be
amended, modified or restated from time to time.
"Originator Receivable" means the accounts and general
intangibles (within the meaning of Section 9-106 of the UCC) relating to
the indebtedness of any Obligor resulting from the provision or sale of
merchandise, insurance or services by an Originator, and, if pursuant to a
Contract, such related Contract, and including the right to payment of any
interest or finance charges and other obligations of such Obligor with
respect thereto.
"Originators" means the Persons designated as "Originators"
from time to time in the Originator Purchase Agreement.
"Other Corporations" means the Parent, the Originator and all
of their respective Subsidiaries except the Seller.
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal balance thereof.
"Parent" means Rite Aid Corporation, a Delaware corporation.
"Parent Guaranty" means the Guarantee, dated as of the Original
Closing Date, made by the Parent in favor of the Agent, for the benefit of
the Investors and the Banks, as confirmed pursuant to the Confirmation of
Parent Guaranty and as amended, modified or supplemented from time to time
in accordance with its terms.
"PCS" means PCS Health Systems, Inc.
"PCS-originated Receivables" means any Receivables the
Originator of which is a PCS Pharmacy Entity.
"PCS Pharmacy Entity" means PCS Mail Services of Ft. Worth,
Inc., a Delaware corporation and PCS Mail Services of Birmingham, Inc., a
Delaware corporation, together with their respective successors and
assigns, and any other subsidiary of PCS approved by the Agent whose
principal business is the sale of pharmaceutical products by mail order.
"Percentage" of any Bank means, (a) with respect to Citibank,
the percentage set forth on the signature page to this Agreement, or such
amount as reduced by any Assignment and Acceptance entered into with an
Eligible Assignee, or (b) with respect to a Bank that has entered into an
Assignment and Acceptance, the amount set forth therein as such Bank's
Percentage, or such amount as reduced by an Assignment and Acceptance
entered into between such Bank and an Eligible Assignee.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, limited liability
company, trust, unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency thereof.
"PBM" means a Person conducting business as pharmacy benefit
manager (including, as of the Amendment Closing Date, PCS) that processes
coverage information, applies payment and reimbursement criteria and makes
payment on behalf of certain Insurers to Originators for amounts due and
payment under Originator Receivables.
"Pool Non-compliance Date" means any day on which the Weekly
Report due on such date discloses that the Net Receivables Pool Balance as
of the end of the previous week was below the Required Daily Net
Receivables Pool Balance.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Public Debt" means debt securities of the Parent issued
pursuant to an indenture qualified under (or in form suitable for
qualification under) the Trust Indenture Act of 1939, as amended.
"Purchase Limit" means $300,000,000, as such amount may be
increased or reduced pursuant to Section 2.01(b). References to the unused
portion of the Purchase Limit shall mean, at any time, the Purchase Limit,
as then reduced pursuant to Section 2.01(b), minus the then outstanding
Capital of Receivable Interests under this Agreement.
"Purchaser Deposit Account" has the meaning specified in
Section 6.08(a).
"Purchaser Deposit Account Agreement" means an agreement, in
substantially the form of Annex B-2, among the Seller, the Purchaser
Deposit Account Bank, the Agent and the Orignators.
"Purchaser Deposit Account Bank" shall initially be Mellon
Bank, N.A. and has the meaning specified in Section 6.08(a).
"Purchaser Lock-Box" has the meaning specified in Section 6.08(a).
"Receivable" means any Originator Receivable which has been
acquired by the Seller from an Originator by purchase or by capital
contribution pursuant to the Originator Purchase Agreement.
"Receivable Interest" means, at any time, an undivided
percentage ownership interest in (i) all then outstanding Pool Receivables
arising prior to the time of the most recent computation or recomputation
of such undivided percentage interest pursuant to Section 2.03, (ii) all
Related Security with respect to such Pool Receivables, and (iii) all
Collections with respect to, and other proceeds of, such Pool Receivables.
Such undivided percentage interest shall be computed as
C + R
-----
NRPB
where:
C = the Capital of such Receivable Interest at
the time of computation.
R = the Reserves of such Receivable Interest at
the time of computation.
NRPB = the Net Receivables Pool Balance at the time of
computation.
Each Receivable Interest shall be determined from time to time pursuant to
the provisions of Section 2.03.
"Receivables Pool" means at any time the aggregation of each
then outstanding Receivable in respect of which the Obligor is a Designated
Obligor at such time or was a Designated Obligor on the date of the initial
creation of an interest in such Receivable under this Agreement.
"Recovery Rate" means, an amount from time to time determined
by the Agent and initially, 10%.
"Rejected Accounts" means any Eligible Account which either (i)
has been rejected by the Obligor of such Receivable for the failure of the
Originator of such Receivable to (A) comply with the terms and provisions
of the relevant Contract or (B) successfully transmit any claim or other
information regarding such Receivable to such Obligor or (ii) has been
rejected by such Originator as a result of its inability to xxxx the
Obligor of such Receivable electronically.
"Related Security" means with respect to any Receivable:
(i) all of the Seller's interest in any merchandise
(including returned merchandise) relating to any sale giving
rise to such Receivable;
(ii) all security interests or liens and property subject
thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such
Receivable or otherwise, together with all financing statements
signed by an Obligor describing any collateral securing such
Receivable;
(iii) all guaranties, insurance and other agreements or
arrangements of whatever character from time to time supporting
or securing payment of such Receivable whether pursuant to the
Contract related to such Receivable or otherwise; and
(iv) the Contract and all other books, records and other
information (including, without limitation, computer programs,
tapes, discs, punch cards, data processing software and related
property and rights) relating to such Receivable and the
related Obligor.
"Reporting Extension Period" means the period commencing on the
Amendment Closing Date and terminating on the earlier of (x) July 11, 2000
or (y) the date that is 10 days prior to the earliest date on which any
holder of Public Debt or any trustee or other representative of any such
holder had a right, on the Amendment Closing Date, to accelerate the
maturity thereof by reason of any default waived under the Amended Credit
Agreement pursuant to Waiver No. 1 thereto, dated as of January 11, 2000.
"Required Weekly Net Receivables Pool Balance" means, as of any
day of determination, the sum of (i) the aggregate of the Reserves for all
Receivable Interests, plus (ii) the aggregate of all Capital for all
Receivable Interests.
"Reserves" means, with respect to any Receivable Interest as of
any day, the sum of the Yield Reserve, Collection Agent Fee Reserve, Loss
Reserve and Dilution Reserve for such Receivable Interest as of such day.
"Revolving Period" means the period beginning on the New
Closing Date and terminating on the close of business on the Business Day
immediately preceding the Termination Date for any Receivable Interest.
"S&P" means Standard & Poor's Rating Services, a division of
XxXxxx-Xxxx Companies, Inc.
"Sale and Leaseback Transaction" shall mean the sale or
transfer of any manufacturing plant, warehouse, retail store or equipment
now or hereafter owned and operated by the Parent or any of its
Subsidiaries, with the intention that the Parent or any Subsidiary of the
Parent take back a lease thereof, except a lease for a period, including
renewals, not exceeding 24 months, by the end of which period it is
intended that the use of such property or equipment by the lessee will be
discontinued. "Sale and Leaseback Transactions" shall not include the sale
or transfer by a Subsidiary to the Parent or a Wholly-Owned Consolidated
Subsidiary.
"SEC" means the Securities and Exchange Commission.
"Seller Report" means a report in substantially the form of
Annex A (as the same may be modified from time to time upon the request and
with the consent of the Agent) hereto and containing such additional
information as the Agent may reasonably request from time to time,
furnished by the Collection Agent to the Agent pursuant to Section 6.02(g).
"Seller's Account" means account number 9102750222 at The Chase
Manhattan Bank, New York, ABA # 000000000.
"Settlement Date" means the first Business Day after the end of
each Month during the term of this Agreement; provided that with respect to
any Settlement Period for which Yield is computed by reference to the
Assignee Rate, the Settlement Date shall be the last day of the Settlement
Period.
"Settlement Period" means:
(a) initially the period commencing on the date of
purchase of such Receivable Interest and ending such number of
days as the Seller shall select and the Agent shall approve
pursuant to Section 2.02, up to 270 days from such date; and
(b) thereafter each period commencing on the last day of
the immediately preceding Settlement Period for such Receivable
Interest and ending such number of days (not to exceed 270
days) as the Seller shall select and the Agent shall approve on
notice by the Seller received by the Agent (including notice by
telephone, confirmed in writing) not later than 11:00 A.M. (New
York City time) on such last day, except that if the Agent
shall not have received such notice or approved such period on
or before 11:00 A.M. (New York City time) on such last day,
such period shall be one day;
provided, that (i) any Settlement Period in respect of which Yield is
computed by reference to the Assignee Rate based on the Eurodollar Rate
shall be of such duration (and may include two tranches of durations) as
shall be selected by the Seller (including one week and one, two or three
months) as the Agent may approve on two Business Days' prior notice by the
Seller received by the Agent (including notice by telephone, confirmed in
writing) not later than 11:00 A.M. (New York City time) and notified to the
Seller; (ii) any Settlement Period (other than of one day) which would
otherwise end on a day which is not a Business Day shall be extended to the
next succeeding Business Day (provided, however, if Yield in respect of
such Settlement Period is computed by reference to the Eurodollar Rate, and
such Settlement Period would otherwise end on a day which is not a Business
Day, and there is no subsequent Business Day in the same calendar month
as such day, such Settlement Period shall end on the next preceding
Business Day); (iii) in the case of any Settlement Period of one day, (A)
if such Settlement Period is the initial Settlement Period for a Receivable
Interest, such Settlement Period shall be the day of purchase of such
Receivable Interest; (B) any subsequently occurring Settlement Period which
is one day shall, if the immediately preceding Settlement Period is more
than one day, be the last day of such immediately preceding Settlement
Period, and, if the immediately preceding Settlement Period is one day, be
the day next following such immediately preceding Settlement Period; and
(C) if such Settlement Period occurs on a day immediately preceding a day
which is not a Business Day, such Settlement Period shall be extended to
the next succeeding Business Day; and (iv) in the case of any Settlement
Period for any Receivable Interest which commences before the Termination
Date for such Receivable Interest and would otherwise end on a date
occurring after such Termination Date, such Settlement Period shall end on
such Termination Date and the duration of each Settlement Period which
commences on or after the Termination Date for such Receivable Interest
shall be of such duration as shall be selected by the Agent.
(c) in the case of any Settlement Period in respect of which
Yield is computed by reference to the Alternate Base Rate, such Settlement
Period shall be of such duration as shall be selected by the Agent and
notified to the Seller.
"Special Event" means (i) the occurrence of an Event of
Termination or (ii) the date on which the Parent's long-term public
unsecured senior debt securities shall have been withdrawn or downgraded
below Investment Grade.
"Status" refers to the determination of whether Level I Status,
Level II Status or Level III Status exists at any time.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by the
Parent, the Seller or an Originator, as the case may be, or one or more
Subsidiaries.
"Tangible Net Worth" means at any time the excess of (i) the
Outstanding Balance of all Receivables plus cash and cash equivalents of
the Seller, minus (ii) the sum of (a) the product of (x) one minus the
Recovery Rate and (y) the Outstanding Balance of such Receivables which
have become Defaulted Receivables (other than Receivables which, consistent
with the Credit and Collection Policy, has been written off the Parent, the
Seller's or the applicable Originator's books as uncollectible), plus (b)
Capital of such Receivables, plus (c) aggregate Reserves, plus (d) the
Outstanding Balance of such Receivables which, consistent with the Credit
and Collection Policy, has been written off the Parent, the Seller's or the
applicable Originator's books as uncollectible.
"Termination Date" for any Receivable Interest means (i) in the
case of a Receivable Interest owned by an Investor, the earlier of (a) the
Business Day which the Seller or the Agent so designates by notice to the
other at least one Business Day in advance for such Receivable Interest and
(b) the Facility Termination Date and (ii) in the case of a Receivable
Interest owned by a Bank, the earlier of (a) the Business Day which the
Seller so designates by notice to the Agent at least one Business Day in
advance for such Receivable Interest and (b) the Commitment Termination
Date.
"Total Capital" means, at any date, the sum of Consolidated
Debt and Consolidated Net Worth, each determined as of such date.
"Transaction Document" means any of this Agreement, the
Originator Purchase Agreement, the Parent Guaranty, and all other
agreements and documents delivered or related hereto or thereto.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
"Unapplied Cash" means (i) as of any day prior to the
occurrence and continuance of a Special Event, zero and (ii) on any other
day, the actual amount of unapplied Collections held by the Seller as of
such day.
"Unbilled Accounts" means Eligible Receivables the Obligor of
which is not billed on a daily basis by the relevant Originator.
"Weekly Report" means an Officer's Certificate of the
Collection Agent substantially in the form of Annex F hereto.
"Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests
of which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Parent.
"Yield" means:
(i) for each Receivable Interest for any Settlement
Period to the extent CAFCO or CRC will be funding such
Receivable Interest during such Settlement Period through the
issuance of commercial paper,
IR x C x ED + LF
--
360
(ii) for each Receivable Interest for any Settlement
Period to the extent (x) the Investors will not be funding such
Receivable Interest during such Settlement Period through the
issuance of commercial paper or (y) the Banks will be funding
such Receivable Interest,
AR x C x ED + LF
--
360
where:
AR = the Assignee Rate for such Receivable Interest
for such Settlement Period
C = the Capital of such Receivable Interest
during such Settlement Period
IR = the Investor Rate for such Receivable
Interest for such Settlement Period
ED = the actual number of days elapsed during such
Settlement Period
LF = the Liquidation Fee, if any, for such
Receivable Interest for such Settlement
Period
provided, that no provision of this Agreement shall require the payment or
permit the collection of Yield in excess of the maximum permitted by
applicable law; and provided, further that Yield for any Receivable
Interest shall not be considered paid by any distribution to the extent
that at any time all or a portion of such distribution is rescinded or must
otherwise be returned for any reason.
"Yield Reserve" for any Receivable Interest at any time means
the sum of (i) the Liquidation Yield at such time for such Receivable
Interest, and (ii) the then accrued and unpaid Yield for such Receivable
Interest. For purposes of this definition,
(a) "Liquidation Yield" means, for any Receivable Interest on any
date, an amount equal to the Rate Variance Factor on such date
multiplied by the product of (i) the Capital of such Receivable
Interest on such date and (ii) the product of (a) the Alternate Base
Rate for such Receivable Interest for a 30-day period deemed to
commence on such date and (b) a fraction having the sum of the Average
Maturity plus the Collection Delay Period (each as in effect at such
date) as its numerator and 360 as its denominator; and
(b) "Rate Variance Factor" means 1.2 or such other factor
determined by the Agent from time to time greater than one that
reflects the potential variance in selected interest rates over a
period of time designated by the Agent, as computed by the Collection
Agent each month and set forth in the Seller Report in accordance with
the provisions thereof; provided, that the factors used in computing
the "Rate Variance Factor" may be changed from time to time upon at
least five days' prior notice to the Collection Agent.
SECTION 1.02. Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles. All terms used in Article 9 of the UCC in the State
of New York, and not specifically defined herein, are used herein as
defined in such Article 9.
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Purchase Facility. (a) On the terms and conditions
hereinafter set forth, CAFCO or CRC may, in their sole discretion, and the
Banks shall, ratably in accordance with their respective Bank Commitments,
purchase Receivable Interests from the Seller from time to time during the
period from the Original Closing Date to the Facility Termination Date (in
the case of CAFCO and CRC) and to the Commitment Termination Date (in the
case of the Banks). Under no circumstances shall CAFCO or CRC make any such
purchase, or the Banks be obligated to make any such purchase, if after
giving effect to such purchase the aggregate outstanding Capital of
Receivable Interests would exceed the Purchase Limit.
(b) The Seller may, upon at least thirty Business Days' notice to
the Agent, terminate the facility provided for in this Agreement in whole
or, from time to time, reduce in part the unused portion of the Purchase
Limit; provided, that each partial reduction shall be in the amount of at
least $1,000,000 or an integral multiple thereof. The Seller may, upon 30
days written notice to the Agent, request that the Purchase Limit be
increased. The Agent shall notify the Seller within 15 days of the receipt
of such request whether one or more of the Investors have agreed to the
increase in the Purchase Limit; provided, however, that, no such increase
shall become effective unless one or more Banks shall agree to increase
their respective Bank Commitments such that the aggregate amount of all
Bank Commitments equals the increased Purchase Limit.
(c) Until the Agent gives the Seller the notice provided in
Section 3.02(c)(iii), the Agent, on behalf of the Investors which own
Receivable Interests, may have the Collections attributable to such
Receivable Interests automatically reinvested pursuant to Section 2.04 in
additional undivided percentage interests in the Pool Receivables by making
an appropriate readjustment of such Receivable Interests. The Agent, on
behalf of the Banks which own Receivable Interests, shall have the
Collections attributable to such Receivable Interests automatically
reinvested pursuant to Section 2.04 in additional undivided percentage
interests in the Pool Receivables by making an appropriate readjustment of
such Receivable Interests.
SECTION 2.02. Making Purchases. (a) Each purchase by CAFCO, CRC
or the Banks shall be made on at least three Business Days' notice from the
Seller to the Agent. Each such notice of a purchase shall specify (i) the
amount requested to be paid to the Seller (such amount, which shall not be
less than $5,000,000, being referred to herein as the initial "Capital" of
the Receivable Interest then being purchased) and (ii) the date of such
purchase (which shall be a Business Day). The Agent shall promptly
thereafter notify the Seller that CAFCO or CRC has determined to make a
purchase and, if so, whether all of the terms specified by the Seller are
acceptable to CAFCO or CRC, as the case may be.
If CAFCO or CRC has determined not to make a proposed purchase,
the Agent shall promptly send notice of the proposed purchase to all of the
Banks concurrently by telecopier, telex or cable specifying the date of
such purchase, each Bank's Percentage multiplied by the aggregate amount of
Capital of Receivable Interest being purchased and whether the Yield for
such Receivable Interest is calculated based on the Eurodollar Rate (which
may be selected only if such notice is given at least two Business Days
prior to the purchase date) or the Alternate Base Rate.
(b) On the date of each such purchase of a Receivable Interest,
CAFCO, CRC or the Banks, as the case may be, shall, upon satisfaction of
the applicable conditions set forth in Article III, make available to the
Seller in same day funds an amount equal to the initial Capital of such
Receivable Interest, at the account set forth in the Funds Transfer Letter.
Calculation of Capital shall take into account the Expected Net Value with
respect to each Receivable Interest.
(c) Effective on the date of each purchase pursuant to this
Section 2.02 and each reinvestment pursuant to Section 2.04, the Seller
hereby sells and assigns to the Agent, for the benefit of the parties
making such purchase, an undivided percentage ownership interest, to the
extent of the Receivable Interest then being purchased, in each Pool
Receivable then existing and in the Related Security and Collections with
respect thereto.
(d) Notwithstanding the foregoing, a Bank shall not be obligated
to make purchases under this Section 2.02 at any time in an amount which
would exceed such Bank's Bank Commitment less (in the case of any Bank
other than Citibank) the outstanding and unpaid amount of any purchases
made by such Bank under the Asset Purchase Agreement. Each Bank's
obligation shall be several, such that the failure of any Bank to make
available to the Seller any funds in connection with any purchase shall not
relieve any other Bank of its obligation, if any, hereunder to make funds
available on the date of such purchase, but no Bank shall be responsible
for the failure of any other Bank to make funds available in connection
with any purchase.
SECTION 2.03. Receivable Interest Computation. (a) Each
Receivable Interest shall be initially computed on its date of purchase.
Thereafter until the Termination Date for such Receivable Interest, such
Receivable Interest shall be automatically recomputed (or deemed to be
recomputed) on each day other than a Liquidation Day. Any Receivable
Interest, as computed (or deemed recomputed) as of the day immediately
preceding the Termination Date for such Receivable Interest, shall
thereafter remain constant. Such Receivable Interest shall become zero when
Capital thereof and Yield thereon shall have been paid in full, and all
other amounts owed by the Seller hereunder to the Investors, the Banks or
the Agent are paid and the Collection Agent shall have received the accrued
Collection Agent Fee thereon.
(b) If any Receivable Interest would otherwise be reduced on any
day on account of newly arising Pool Receivables, the parties who hold such
Receivable Interest may prevent such reduction by notifying the Collection
Agent on such day that the Receivables Pool and the Net Receivables Pool
Balance for such Receivable Interest will include, with respect to
Receivables arising as Pool Receivables on such day, only such number or
portion of such Receivables as shall cause such Receivable Interest to
remain constant. The remainder of such Receivables or portion thereof shall
be treated as Receivables arising on the next succeeding Business Day
(subject to reapplication of this subsection (b)).
SECTION 2.04. Settlement Procedures. (a) Collection of Pool
Receivables shall be administered by a Collection Agent, in accordance with
the terms of Article VI of this Agreement. On and after the New Closing
Date on each Deposit Date during each Settlement Period during the
Revolving Period the Collection Agent shall, by no later than 11:00 a.m.
New York time, and in the following order:
(i) deposit in the Agent's Account an amount equal to the
sum of (x) Reserves plus (y) Yield for each
Settlement Period commencing on or before such
Deposit Date to the extent such amount has not been
previously so deposited;
(ii) if such Deposit Day is a Tuesday (or if such day is
not a Business Day, the next Business Day), deliver
to the Agent the Weekly Report and remit to the
Agent's Account the amount, if any, necessary to make
the Net Receivables Pool Balance equal the Required
Weekly Net Receivables Pool Balance; and
(iii) deposit the remainder of such Collections to the
Seller's Account to be reinvested by the Seller in
Receivables; provided that, if immediately following
any such deposit such Deposit Date would be a Pool
Non-compliance Date, the Collection Agent shall
retain all such remaining Collections in the
Purchaser Deposit Account to be applied pursuant to
Section 2.04(b)(ii).
(b) On each Deposit Date if and so long as a Cure Period shall
have occurred and be continuing, the Collection Agent shall, by no later
than 11:00 a.m. New York time, and in the following order:
(i) deposit in the Agent's Account an amount equal to the
sum of (x) Reserves plus (y) Yield for each
Settlement Period commencing on or before such
Deposit Date to the extent such amount has not been
previously so allocated;
(ii) deposit, out of the remainder of such Collections, to
the Agent's Account an amount sufficient to make the
Net Receivables Pool Balance equal the Required
Weekly Net Receivables Pool Balance; provided,
however, if such Deposit Date is second Business Day
after a Cure Period has commenced and is continuing
and Collections are insufficient to make the Net
Receivables Pool Balance equal the Required Weekly
Net Receivables Pool Balance, the Seller shall, from
its own funds, deposit into the Agent's Account an
amount sufficient to make the Net Receivables Pool
Balance equal the Required Weekly Net Receivables
Pool Balance; and
(iii) deposit the remainder of such Collections to the
Seller's Account to be reinvested by the Seller in
Receivables; provided that, if immediately following
any such deposit such Deposit Date would be a Pool
Non-compliance Date, the Collection Agent shall
retain all such remaining Collections in the
Purchaser Deposit Account to be applied pursuant to
Section 2.04(b)(ii).
(c) Upon receipt of funds deposited into the Agent's Account, the
Agent shall distribute them as follows:
(i) if such distribution occurs on a day that is not a
Liquidation Day, first to the Investors or the Banks that hold
the relevant Receivable Interest in payment in full of all
accrued Yield and then to the Collection Agent in payment in full
of all accrued Collection Agent Fee.
(ii) if such distribution occurs on a Liquidation Day,
first to the Investors or the Banks that hold the relevant
Receivable Interest in payment in full of all accrued Yield,
second to such Investors or Banks in reduction to zero of all
Capital, third to such Investors, Banks or the Agent in payment
of any other amounts owed by the Seller hereunder, and fourth to
the Collection Agent in payment in full of all accrued Collection
Agent Fee.
After the Capital and Yield and Collection Agent Fee with respect
to a Receivable Interest, and any other amounts payable by the Seller to
the Investors, the Banks or the Agent hereunder, have been paid in full,
all additional Collections with respect to such Receivable Interest shall
be paid to the Seller for its own account.
(d) For the purposes of this Section 2.04:
(i) if on any day the Outstanding Balance of any Pool
Receivable is reduced or adjusted as a result of any defective,
rejected, returned, repossessed, cancelled or foreclosed
merchandise or services, or any cash discount or other adjustment
made by the Parent, the Seller or the Originator, or any setoff,
the Seller shall be deemed to have received on such day a
Collection of such Pool Receivable in the amount of such
reduction or adjustment;
(ii) if on any day any of the representations or warranties
contained in Section 4.01(g) is no longer true with respect to
any Pool Receivable, the Seller shall be deemed to have received
on such day a Collection of such Pool Receivable in full;
(iii) except as provided in subsection (i) or (ii) of this
Section 2.04(d), or as otherwise required by applicable law or
the relevant Contract, all Collections received from an Obligor
of any Receivables shall be applied to the Receivables of such
Obligor in the order of the age of such Receivables, starting
with the oldest such Receivable, unless such Obligor designates
its payment for application to specific Receivables; and
(iv) if and to the extent the Agent, the Investors or the
Banks shall be required for any reason to pay over to an Obligor
any amount received on its behalf hereunder, such amount shall be
deemed not to have been so received but rather to have been
retained by the Seller and, accordingly, the Agent, the Investors
or the Banks, as the case may be, shall have a claim against the
Seller for such amount, payable when and to the extent that any
distribution from or on behalf of such Obligor is made in respect
thereof.
(e) To the extent that the amounts deposited to the Agent's
Account with respect to any Settlement Period are insufficient to pay all
then accrued but unpaid Yield, Fees and (if payable to a Collection Agent
other than Rite Aid Corporation), Collection Agent Fee, the Seller shall be
obligated to pay to the Agent, on the last day of such Settlement Period,
for the account of the Investors, the Banks and the Agent (and the
Collection Agent, if applicable), an amount sufficient to pay fully all
such amounts, by depositing such amount to the Agent's Account. The Agent
shall distribute such funds as set forth 2.04(c) above.
SECTION 2.05. Fees. (a) Each Investor and Bank shall pay to the
Collection Agent a fee (the "Collection Agent Fee") of 1/4 of 1% per annum
on the average daily Capital of each Receivable Interest owned by such
Investor or Bank, from the date of purchase of such Receivable Interest
until the later of the Termination Date for such Receivable Interest or the
date on which such Capital is reduced to zero, payable on the Settlement
Date. Upon three Business Days' notice to the Agent, the Collection Agent
(if not the Parent, the Seller or an Originator, or any of their respective
designees) may elect to be paid, as such fee, another percentage per annum
on the average daily Capital of such Receivable Interest, but in no event
in excess for all Receivable Interests relating to a single Receivables
Pool of 110% of the reasonable costs and expenses of the Collection Agent
in administering and collecting the Receivables in such Receivables Pool.
The Collection Agent Fee shall be payable only from Collections pursuant
to, and subject to the priority of payment set forth in, Section 2.04. So
long as the Parent (or any Originator) is acting as the Collection Agent
hereunder, amounts paid as the Collection Agent Fee pursuant to this
Section 2.05(a) shall reduce, on a dollar-for-dollar basis, the obligation
of the Seller to pay the "Collection Agent Fee" pursuant to Section 6.03 of
the Originator Purchase Agreement, provided, that such obligation of the
Seller shall in no event be reduced below zero.
(b) The Seller shall pay to the Agent certain fees in the amounts
and on the dates set forth in the Fee Agreement.
SECTION 2.06. Payments and Computations, Etc. (a) All amounts to
be paid or deposited by the Seller or the Collection Agent hereunder shall
be paid or deposited no later than 11:00 A.M. (New York City time) on the
day when due in same day funds to the Agent's Account.
(b) The Seller shall, to the extent permitted by law, pay
interest on any amount not paid or deposited by the Seller (whether as
Collection Agent or otherwise) when due hereunder, at an interest rate per
annum equal to 2% per annum above the Alternate Base Rate, payable on
demand.
(c) All computations of interest under subsection (b) above and
all computations of Yield, fees, and other amounts hereunder shall be made
on the basis of a year of 360 days for the actual number of days elapsed.
Whenever any payment or deposit to be made hereunder shall be due on a day
other than a Business Day, such payment or deposit shall be made on the
next succeeding Business Day and such extension of time shall be included
in the computation of such payment or deposit.
SECTION 2.07. Dividing or Combining Receivable Interests. Either
the Seller or the Agent may, upon notice to the other party received at
least three Business Days prior to the last day of any Settlement Period in
the case of the Seller giving notice, or up to the last day of such
Settlement Period in the case of the Agent giving notice, either (i) divide
any Receivable Interest into two or more Receivable Interests having
aggregate Capital equal to the Capital of such divided Receivable Interest,
or (ii) combine any two or more Receivable Interests originating on such
last day or having Settlement Periods ending on such last day into a single
Receivable Interest having Capital equal to the aggregate of the Capital of
such Receivable Interests; provided, however, that no Receivable Interest
owned by CAFCO or CRC may be combined with a Receivable Interest owned by
any Bank.
SECTION 2.08. Increased Costs. (a) If CNAI, any Investor, any
Bank, any entity which enters into a commitment to purchase Receivable
Interests or interests therein, or any of their respective Affiliates (each
an "Affected Person") determines that compliance with any law or regulation
or any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) affects or would affect
the amount of the capital required or expected to be maintained by such
Affected Person and such Affected Person determines that the amount of such
capital is increased by or based upon the existence of any commitment to
make purchases of or otherwise to maintain the investment in Pool
Receivables or interests therein related to this Agreement or to the
funding thereof and other commitments of the same type, then, upon demand
by such Affected Person (with a copy to the Agent), the Seller shall
immediately pay to the Agent for the account of such Affected Person (as a
third-party beneficiary), from time to time as specified by such Affected
Person, additional amounts sufficient to compensate such Affected Person in
the light of such circumstances, to the extent that such Affected Person
reasonably determines such increase in capital to be allocable to the
existence of any of such commitments. A certificate as to such amounts
submitted to the Seller and the Agent by such Affected Person shall be
conclusive and binding for all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve
requirements referred to in Section 2.09) in or in the interpretation of
any law or regulation or (ii) compliance with any guideline or request from
any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase (other than an increase in
income or franchise taxes) in the cost to any Investor or Bank of agreeing
to purchase or purchasing, or maintaining the ownership of Receivable
Interests in respect of which Yield is computed by reference to the
Eurodollar Rate, then, upon demand by such Investor or Bank (with a copy to
the Agent), the Seller shall immediately pay to the Agent, for the account
of such Investor or Bank (as a third-party beneficiary), from time to time
as specified by such Investor or Bank, additional amounts sufficient to
compensate such Investor or Bank for such increased costs. A certificate as
to such amounts submitted to the Seller and the Agent by such Investor or
Bank shall be conclusive and binding for all purposes, absent manifest
error.
(c) Notwithstanding the generality of the foregoing provisions
and not in derogation of the obligation of the Seller to pay to any
Affected Person compensation which is duly requested and payable to such
Person pursuant to the provisions of this Section 2.08, if any Affected
Person shall request compensation pursuant to this Section 2.08, the Seller
shall be entitled to request that reasonable efforts be taken to assign
such Affected Person's interest hereunder to another Person that does not
require similar compensation and is otherwise acceptable to the Agent and
the Seller. In order to exercise the foregoing option, the Seller shall
direct the applicable Affected Person in writing to take all necessary
actions to give effect to the foregoing provision.
SECTION 2.09. Additional Yield on Receivable Interests Bearing a
Eurodollar Rate.(a) The Seller shall pay to any Investor or Bank, so long
as such Investor or Bank shall be required under regulations of the Board
of Governors of the Federal Reserve System to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional Yield on the unpaid Capital of each Receivable
Interest of such Investor or Bank during each Settlement Period in respect
of which Yield is computed by reference to the Eurodollar Rate, for such
Settlement Period, at a rate per annum equal at all times during such
Settlement Period to the remainder obtained by subtracting (i) the
Eurodollar Rate for such Settlement Period from (ii) the rate obtained by
dividing such Eurodollar Rate referred to in clause (i) above by that
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of
such Investor or Bank for such Settlement Period. Such additional Yield
shall be determined by such Investor or Bank and notice thereof given to
the Seller through the Agent within 30 days after any Yield payment is made
with respect to which such additional Yield is requested and shall be paid
on the next Settlement Date. A certificate as to such additional Yield
submitted to the Seller and the Agent by such Investor or Bank shall be
conclusive and binding for all purposes, absent manifest error.
(b) Notwithstanding the generality of the foregoing provision and
not in derogation of the obligation of the Seller to pay to any Investor or
any Bank compensation which is duly requested and payable to such Person
pursuant to the provisions of this Section 2.09, if any Investor or any
Bank shall request compensation pursuant to this Section 2.09, the Seller
shall be entitled to request that such Investor or such Bank utilize
reasonable efforts to assign its interest hereunder to another Person that
does not require similar compensation and is otherwise acceptable to the
Agent and the Seller. In order to exercise the foregoing option, the Seller
shall direct the relevant Person in writing to take all necessary actions
to give effect to the foregoing provision.
SECTION 2.10. Security Interest. As collateral security for the
performance by the Seller of all the terms, covenants and agreements on the
part of the Seller (whether as Seller or otherwise) to be performed under
this Agreement or any document delivered in connection with this Agreement
in accordance with the terms thereof, including the punctual payment when
due of all obligations of the Seller hereunder or thereunder, whether for
indemnification payments, fees, expenses or otherwise, the Seller hereby
assigns to the Agent for its benefit and the ratable benefit of the
Investors and the Banks, and hereby grants to the Agent for its benefit and
the ratable benefit of the Investors and the Banks, a security interest in,
all of the Seller's right, title and interest in and to (A) the Originator
Purchase Agreement, including, without limitation, (i) all rights of the
Seller to receive moneys due or to become due under or pursuant to the
Originator Purchase Agreement, (ii) all security interests and property
subject thereto from time to time purporting to secure payment of monies
due or to become due under or pursuant to the Originator Purchase
Agreement, (iii) all rights of the Seller to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Originator
Purchase Agreement, (iv) claims of the Seller for damages arising out of or
for breach of or default under the Originator Purchase Agreement, and (v)
the right of the Seller to compel performance and otherwise exercise all
remedies thereunder, and (B) all Receivables, the Related Security with
respect thereto and the Collections and all other assets, including,
without limitation, accounts, instruments and general intangibles (as those
terms are defined in the UCC) owned by the Seller and not otherwise
purchased or scheduled to be purchased under this Agreement, and (C) to the
extent not included in the foregoing, all proceeds of any and all of the
foregoing.
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase on
Original Closing Date. Intentionally omitted.
SECTION 3.02. Conditions Precedent to Initial Purchase on New
Closing Date. The initial purchase of a Receivable Interest under this
Agreement is subject to the conditions precedent that the Agent shall have
received on or before the date of such purchase the following, each (unless
otherwise indicated) dated such date, in form and substance satisfactory to
the Agent:
(a) Certified copies of the resolutions of the Board of Directors
of the Parent, the Seller and each Originator approving each of the
Transaction Documents to which it is a party and certified copies of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and the Originator
Purchase Agreement.
(b) A certificate of the Secretary or Assistant Secretary of the
Parent, the Seller and each Originator certifying the names and true
signatures of the officers of the Parent, the Seller and each Originator
authorized to sign the Originator Purchase Agreement and this Agreement and
the other documents to be delivered by it hereunder and thereunder.
(c) Intentionally omitted.
(d) Intentionally omitted.
(e) Intentionally omitted.
(f) The Lock-Boxes and the Deposit Accounts shall have been
established and any Obligors who have previously delivered Collections
(other than Collections arising from PCS-originated Receivables) to any
Originator, the Seller or the Collection Agent to any location other than
into an Originator Lock-Box or an Originator Deposit Account shall have
received a Notice to Insurers instructing all such Obligors to remit all
Collections to either an Originator Lock-Box or an Originator Deposit
Account and the Agent shall be satisfied with the foregoing in all
respects.
(g) A favorable opinion of Xxxxxx, Xxxxx & Xxxxxxx, LLP, counsel
for the Parent, the Seller and the Originators, substantially in the form
of Annex C hereto and as to such other matters as the Agent may reasonably
request.
(h) The Fee Agreement referred to in Section 2.05(b).
(i) An executed copy of the Originator Purchase Agreement.
(j) Intentionally omitted.
(k) A copy of the articles of organization of the Seller,
certified as of a recent date by the Secretary of State or other
appropriate official of the state of its organization, and a certificate as
to the good standing of the Seller from such Secretary of State or other
official, dated as of a recent date.
(l) A favorable opinion of Xxxx, Scholer, Fierman, Xxxx &
Handler, LLP, counsel for the Agent, as to such matters as the Agent may
reasonably request.
(m) A favorable opinion of Xxxx, Scholer, Fierman, Xxxx &
Handler, LLP, counsel for the Agent, addressed to CAFCO and the dealer for
the commercial paper of CAFCO, as to the correctness of the representation
and warranty of the Seller set forth in Section 4.01(l), substantially in
the form previously delivered by such counsel to the Agent.
(n) The Agent shall have had the opportunity, if it so chooses,
to review the Collection Agent's billing, collection and reporting systems,
and the results of such review shall have been satisfactory to the Agent in
all respects.
(o) The Confirmation of Parent Guaranty, duly executed by the
Parent.
(p) The Agent shall have received the Agreed Upon Procedures
Report from KPMG Peat Marwick LLP.
SECTION 3.03. Conditions Precedent to the Amendment Closing Date.
The effectiveness of the restatement and amendment of the Original
Receivables Purchase Agreement as contemplated by this Agreement is subject
to the conditions precedent that the Agent shall have received on or before
the date of such purchase the following, each (unless otherwise indicated)
dated such date, in form and substance satisfactory to the Agent:
(a) counterparts of this Agreement executed by each of the
parties hereto;
(b) evidence that all representations and warranties contained in
this Agreement or otherwise made in writing to the Agent in connection
herewith are true and correct in all material respects;
(c) evidence that no Incipient Event of Termination or Event of
Termination has occurred and is continuing;
(d) a certificate of an officer of the Seller, stating and
certifying that:
(i) the execution, delivery and performance by the
Seller of this Agreement, as amended and restated on the
Amendment Closing Date, is within the Seller's corporate
powers and has been duly authorized by all necessary
corporate action, based on certificates and evidence
attached to such officer's certificate;
(ii) all representations and warranties contained in
this Agreement or otherwise made in writing to the Agent in
connection herewith are true and correct in all material
respects; and
(iii) no Incipient Event of Termination or Event of
Termination has occurred and is continuing;
(e) payment of the amendment fee, in immediately available funds,
in the amount set forth in the fee letter dated January 11, 2000;
(f) [Intentionally Omitted]
(g) evidence that (i) the Lock-Boxes and the Deposit Accounts
previously established with Mellon Bank are operating in accordance with
the terms and procedures established in the Deposit Account Agreement, and
(ii) the Collection Agent has established a data automation system which
permits the tracking and segregation of Collections in the manner described
in Section 6.06(f) hereof;
(h) a fully executed copy, dated the Amendment Closing Date, of
(i) the amendment to Originator Purchase Agreement, and (ii) the amendments
to the Deposit Account Agreement to include each PCS Pharmacy Entity as an
"Originator" thereunder, and evidence that the conditions precedent to the
effectiveness of such agreements have been fulfilled in full; and
(i) such other approvals, opinions or documents as the Agent may
reasonably request.
SECTION 3.04. Conditions Precedent to All Purchases and
Reinvestments. Each purchase (including the initial purchase) and each
reinvestment shall be subject to the further conditions precedent that (a)
in the case of each purchase, the Collection Agent shall have delivered to
the Agent at least one Business Day prior to such purchase, in form and
substance satisfactory to the Agent, a completed Seller Report containing
information covering the most recently ended reporting period for which
information is required pursuant to Section 6.02(g) and demonstrating that
after giving effect to such purchase no Event of Termination or Incipient
Event of Termination under Section 7.01(j) would occur, (b) in the case of
each reinvestment, the Collection Agent shall have delivered to the Agent
on or prior to the date of such reinvestment, in form and substance
satisfactory to the Agent, a completed Seller Report containing information
covering the most recently ended reporting period for which information is
required pursuant to Section 6.02(g), (c) on the date of such purchase or
reinvestment the following statements shall be true, except that the
statement in clause (iii) below is required to be true only if such
purchase or reinvestment is by an Investor (and acceptance of the proceeds
of such purchase or reinvestment shall be deemed a representation and
warranty by the Seller that such statements are then true):
(i) The representations and warranties contained in Section 4.01
are correct on and as of the date of such purchase or reinvestment as
though made on and as of such date,
(ii) No event has occurred and is continuing, or would result
from such purchase or reinvestment, that constitutes an Event of
Termination or an Incipient Event of Termination, and
(iii) The Agent shall not have given the Seller at least one
Business Day's notice that the Investors have terminated the
reinvestment of Collections in Receivable Interests, and
(iv) The applicable Originator shall have sold or contributed to
the Seller, pursuant to the Originator Purchase Agreement, all
Originator Receivables arising on or prior to such date, and
(v) The Lock-Boxes and the Deposit Accounts shall be operating as
set forth herein to the satisfaction of the Agent; and
(d) the Agent shall have received a favorable opinion of counsel
for the Seller, substantially in the form of Annex C hereto; provided, that
such opinion shall not be required under this Section 3.02(d) if (x) the
opinions most recently delivered pursuant to Section 3.02(g) or this
Section 3.02(d) are dated a date no more than 12 months before the
applicable purchase date and such opinions shall not have been revoked,
withdrawn or suspended by the Person delivering it, or (y) counsel
delivering the opinions most recently delivered pursuant to Section 3.02(g)
or this Section 3.02(d) shall have delivered to the Agent a letter, in form
and substance satisfactory to the Agent and dated a date not more than 12
months before the applicable purchase date, confirming such opinions as of
the date of such letter, and such opinions shall not have been revoked,
withdrawn or suspended by the Person delivering it, and (e) the Agent shall
have received such other approvals, opinions or documents as it may
reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller. The
Seller hereby represents and warrants as follows:
(a) The Seller is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
California, and is duly qualified to do business, and is in good standing,
in every jurisdiction where the nature of its business requires it to be so
qualified.
(b) The execution, delivery and performance by the Seller of the
Transaction Documents (including, without limitation, this Agreement as
amended and restated and the Originator Purchase Agreement as amended and
restated) and the other documents to be delivered by it hereunder,
including the Seller's use of the proceeds of purchases and reinvestments,
(i) are within the Seller's corporate powers, (ii) have been duly
authorized by all necessary corporate action, (iii) do not contravene (1)
the Seller's articles of organization or operating agreement, (2) any law,
rule or regulation applicable to the Seller, (3) any contractual
restriction binding on or affecting the Seller or its property or (4) any
order, writ, judgment, award, injunction or decree binding on or affecting
the Seller or its property, and (iv) do not result in or require the
creation of any lien, security interest or other charge or encumbrance upon
or with respect to any of its properties (except for the interest created
pursuant to this Agreement). Each of the Transaction Documents has been
duly executed and delivered by the Seller.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Seller of
the Transaction Documents or any other document to be delivered thereunder,
except for the filing of UCC financing statements which are referred to
therein.
(d) Each of the Transaction Documents (including, without
limitation, this Agreement as amended and restated and the Originator
Purchase Agreement as amended and restated) constitutes the legal, valid
and binding obligation of the Seller enforceable against the Seller in
accordance with its terms.
(e) The financial statements of the Parent and its consolidated
Subsidiaries as set forth in the Form 10-Q of the Parent filed with the SEC
on November 2, 1999, fairly present the financial condition and the results
of the operations of the Parent and its consolidated Subsidiaries as at
such dates as set forth therein, all in accordance with generally accepted
accounting principles consistently applied, and since August 28, 1999 there
has been no material adverse change in the business, operations, property
or financial or other condition of the Parent or any Originator. The
balance sheet of the Seller dated as of October 23, 1999, a copy of which
has been furnished to the Agent, fairly presents the financial condition of
the Seller as at such date, in accordance with generally accepted
accounting principles, and since August 28, 1999 there has been no material
adverse change in the business, operations, property or financial or other
condition of the Seller.
(f) Other than as set forth in the Form 10-Q of the Parent filed
with the SEC on November 2, 1999 there is no pending or threatened action
or proceeding affecting the Parent, any Originator or any of their
respective Subsidiaries before any court, governmental agency or arbitrator
which may materially adversely affect the financial condition or operations
of the Parent, any Originator or any of their respective Subsidiaries or
the ability of the Parent, the Seller or any Originator to perform their
respective obligations under the Transaction Documents, or which purports
to affect the legality, validity or enforceability of the Transaction
Documents; none of the Parent, any Originator nor any of their respective
Subsidiaries is in default with respect to any order of any court,
arbitration or governmental body except for defaults with respect to orders
of governmental agencies which defaults are not material to the business or
operations of the Parent or any Originator.
(g) No proceeds of any purchase or reinvestment will be used to
acquire any equity security of a class which is registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended.
(h) The Seller is the legal and beneficial owner of the Pool
Receivables and Related Security free and clear of any Adverse Claim; upon
each purchase or reinvestment, the Investors or the Banks, as the case may
be, shall acquire a valid and perfected first priority undivided percentage
ownership interest to the extent of the pertinent Receivable Interest in
each Pool Receivable then existing or thereafter arising and in the Related
Security and Collections with respect thereto. No notices to Obligors are
required to be delivered in order to create or perfect a valid and
perfected first priority undivided percentage ownership interest to the
extent of the pertinent Receivable Interest in each Pool Receivable. No
effective financing statement or other instrument similar in effect
covering any Contract or any Pool Receivable or the Related Security or
Collections with respect thereto is on file in any recording office, except
those filed in favor of the Agent relating to this Agreement and those
filed by the Seller pursuant to the Originator Purchase Agreement.
(i) Each Seller Report (if prepared by the Seller or one of its
Affiliates, or to the extent that information contained therein is supplied
by the Seller or an Affiliate), information, exhibit, financial statement,
document, book, record or report (including each Weekly Report and E-Mail
Report) furnished or to be furnished at any time by or on behalf of the
Seller to the Agent, the Investors or the Banks in connection with this
Agreement is or will be accurate in all material respects as of its date or
(except as otherwise disclosed to the Agent, Investors or the Banks, as the
case may be, at such time) as of the date so furnished, and no such
document contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary in order to make
the statements contained therein, in the light of the circumstances under
which they were made, not misleading.
(j) The principal place of business and chief executive office of
the Seller and the office where the Seller keeps its records concerning the
Pool Receivables are located at the address or addresses referred to in
Section 5.01(b).
(k) The Deposit Account Banks are the only institutions holding
Deposit Accounts for the receipt of payments from Lock-Boxes in respect of
Receivables and (i) as of the Obligor Notification Date all Obligors who
are not Governmental Entities, and only such Obligors, shall have been
instructed or, upon the creation of Receivables owed by them after the
Obligor Notification Date, will be instructed to make all payments directly
to the Purchaser Deposit Account and the corresponding Lock-Box and (ii)
all Governmental Entity Obligors, and only such Obligors, have been
instructed or, upon the creation of Receivables owed by them, will be
instructed to make all payments directly to the Originator Deposit Account
and Governmental Entity Lock-Boxes, and all such instructions have not been
modified or revoked by the Seller and all such instructions that have been
given are in full force and effect.
(l) Each purchase of a Receivable Interest and each reinvestment
of Collections in Pool Receivables will constitute (i) a "current
transaction" within the meaning of Section 3(a)(3) of the Securities Act of
1933, as amended, and (ii) a purchase or other acquisition of notes,
drafts, acceptances, open accounts receivable or other obligations
representing part or all of the sales price of merchandise, insurance or
services within the meaning of Section 3(c)(5) of the Investment Company
Act of 1940, as amended.
(m) The Seller is not known by and does not use any tradename or
doing- business-as name.
(n) The Seller was organized on November 14, 1997, and the Seller
did not engage in any business activities prior to the Original Closing
Date and has not engaged in any business activities other than performing
under the Original Originator Purchase Agreement and the Original
Receivables Purchase Agreement. The Seller has no Subsidiaries.
(o) (i) The fair value of the property of the Seller is greater
than the total amount of liabilities, including contingent liabilities, of
the Seller, (ii) the present fair salable value of the assets of the Seller
is not less than the amount that will be required to pay all probable
liabilities of the Seller on its debts as they become absolute and matured,
(iii) the Seller does not intend to, and does not believe that it will,
incur debts or liabilities beyond the Seller's abilities to pay such debts
and liabilities as they mature and (iv) the Seller is not engaged in a
business or a transaction, and is not about to engage in a business or a
transaction, for which the Seller's property would constitute unreasonably
small capital.
(p) With respect to each Pool Receivable, the Seller (i) shall
have received such Pool Receivable as a contribution to the capital of the
Seller by the applicable Originator or (ii) shall have purchased such Pool
Receivable from the applicable Originator in exchange for payment (made by
the Seller to the applicable Originator in accordance with the provisions
of the Originator Purchase Agreement) of cash in an amount which
constitutes fair consideration and reasonably equivalent value. Each such
sale referred to in clause (ii) of the preceding sentence shall not have
been made for or on account of an antecedent debt owed by the applicable
Originator to the Seller and no such sale is or may be voidable or subject
to avoidance under any section of the Federal Bankruptcy Code.
(q) The Seller is implementing a comprehensive, detailed program
to address on a timely basis the "Year 2000 Problem" (i.e., the risk that
computer applications used by the Seller may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999); the Seller reasonably anticipates
that it will on a timely basis successfully resolve the "Year 2000 Problem"
for all material computer applications used by it; and such program shall
be in full operation by no later than June 30, 1999.
ARTICLE V
COVENANTS
SECTION 5.01. Covenants of the Seller. Until the latest of the
Facility Termination Date or the date on which no Capital of or Yield on
any Receivable Interest shall be outstanding or the date all other amounts
owed by the Seller hereunder to the Investors, the Banks or the Agent are
paid in full:
(a) Compliance with Laws, Etc. The Seller will comply in all
material respects with all applicable laws, rules, regulations and orders
and preserve and maintain its corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve
and maintain such existence, rights, franchises, qualifications, and
privileges would not materially adversely affect the collectibility of the
Pool Receivables or the ability of the Seller to perform its obligations
under the Transaction Documents.
(b) Offices, Records and Books of Account. The Seller will keep
its principal place of business and chief executive office and the office
where it keeps its records concerning the Pool Receivables at the address
of the Seller set forth under its name on the signature pages to this
Agreement or, upon 30 days' prior written notice to the Agent, at any other
locations in jurisdictions where all actions reasonably requested by the
Agent to protect and perfect the interest in the Pool Receivables have been
taken and completed. The Seller also will maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Pool Receivables and related
Contracts 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 Pool
Receivables (including, without limitation, records adequate to permit the
daily identification of each Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable).
(c) Performance and Compliance with Contracts and Credit and
Collection Policy. The Seller will, at its expense, timely and fully
perform and comply with all material provisions, covenants and other
promises required to be observed by it under the Contracts related to the
Pool Receivables, and timely and fully comply in all material respects with
the Credit and Collection Policy in regard to each Pool Receivable and the
related Contract. The Seller shall immediately inform the Agent of any
changes in the payment procedures under a Contract relating to an Agent
PBM.
(d) Sales, Liens, Etc. The Seller will not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Adverse Claim upon or with respect to, the Seller's undivided
interest in any Pool Receivable, Related Security, related Contract or
Collections, or upon or with respect to any account to which any
Collections of any Pool Receivable are sent, or assign any right to receive
income in respect thereof.
(e) Extension or Amendment of Receivables. Except as provided in
Section 6.02(c), the Seller will not extend, amend or otherwise modify the
terms of any Pool Receivable, or amend, modify or waive any term or
condition of any Contract related thereto, without the prior written
consent of the Agent.
(f) Change in Business or Credit and Collection Policy. The
Seller will not, without the prior written consent of the Agent, make any
change in the character of its business or in the Credit and Collection
Policy that would, in either case, materially adversely affect the
collectibility of the Pool Receivables or the ability of the Seller to
perform its obligations under this Agreement.
(g) Change in Payment Instructions to Obligors. The Seller will
not add or terminate any bank as a Deposit Account Bank from those listed
in Schedule I to this Agreement, or make any change in its instructions to
Obligors regarding payments to be made to the Seller or payments to be made
to any Deposit Account Bank without the prior written consent of the Agent.
(h) Deposits to Deposit Accounts. The Seller will deposit, or
cause to be deposited, all Collections of Pool Receivables into Deposit
Accounts. The Seller will not deposit or otherwise credit, or cause or
permit to be so deposited or credited, to any LockBox Account cash or cash
proceeds other than Collections of Pool Receivables. If and to the extent
that funds that are not Collections are deposited into a Deposit Account,
the Collection Agent shall withdraw such funds from such Deposit Account
and deposit them in the Seller's Account.
(i) Marking of Records. At its expense, the Seller will xxxx its
master data processing records evidencing Pool Receivables and related
Contracts with a legend evidencing that Receivable Interests related to
such Pool Receivables and related Contracts have been sold in accordance
with this Agreement.
(j) Further Assurances. (i) The Seller agrees from time to time,
at its expense, promptly to execute and deliver all further instruments and
documents, and to take all further actions, that may be necessary or
desirable, or that the Agent may reasonably request, to perfect, protect or
more fully evidence the Receivable Interests purchased under this
Agreement, or to enable the Investors, the Banks or the Agent to exercise
and enforce their respective rights and remedies under this Agreement.
Without limiting the foregoing, the Seller will, upon the request of the
Agent, execute and file such financing or continuation statements, or
amendments thereto, and such other instruments and documents, that may be
necessary or desirable, or that the Agent may reasonably request, to
perfect, protect or evidence such Receivable Interests.
(ii) The Seller authorizes the Agent to file financing or
continuation statements, and amendments thereto and assignments thereof,
relating to the Pool Receivables and the Related Security, the related
Contracts and the Collections with respect thereto without the signature of
the Seller where permitted by law. A photocopy or other reproduction of
this Agreement shall be sufficient as a financing statement where permitted
by law.
(iii) The Seller and the Parent shall utilize their
respective best efforts to cause the delivery of the final Agreed Upon
Procedures Report from KPMG Peat Marwick LLP in form and substance
acceptable to the Agent within 10 Business Days of the Amendment Closing
Date.
(iv) The Seller shall deliver UCC search reports in form and
substance satisfactory to the Agent with respect to each PCS Pharmacy
Entity by no later than January 14, 2000.
(v) The Seller shall cause each PCS Pharmacy Entity to
deliver to the Agent fully executed UCC-1 financing statements prepared by
the Agent with respect to such PCS Pharmacy Entities by no later than
January 14, 2000.
(k) Reporting Requirements. The Seller will provide to the Agent
(in multiple copies, if requested by the Agent) the following; provided,
the Seller shall not have to provide copies of the following to the Agent
to the extent that the same is available in a filing made through XXXXX and
Seller has promptly notified the Agent of such filing:
(i) as soon as available and in any event within 45 days
after the end of the first three quarters of each fiscal year of
the Parent and each Originator (except during the Reporting
Extension Period), balance sheets of the Parent and its
consolidated Subsidiaries as of the end of such quarter and
statements of income and retained earnings of the Parent and its
consolidated Subsidiaries for the period commencing at the end of
the previous fiscal year and ending with the end of such quarter,
certified by the chief financial officer of the Parent;
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Parent and each
Originator (except during the Reporting Extension Period), a copy
of the annual report for such year for the Parent and its
consolidated Subsidiaries, containing financial statements for
such year audited by Deloitte & Touche LLP or other independent
public accountants reasonably acceptable to the Agent;
(iii) during the Reporting Extension Period, as soon as
available and in any event no later than the first day of each
Month in respect of such forecast (or, in the reasonable
discretion of the Agent, no later than 5 days thereafter), a
monthly forecast of cash receipts and disbursements, commencing
with February, 2000;
(iv) during the Reporting Extension Period, as soon as
available and in any event no later than the 25th day of the next
succeeding Month (or, in the reasonable discretion of the Agent,
no later than 5 days thereafter), a monthly reconciliation of
actual cash receipts and disbursements to the forecast for such
month delivered pursuant to clause (iii) above;
(v) during the Reporting Extension Period, as soon as
available and in any event no later than the 4th day following
the last day of the week in respect of which such sales report is
to be delivered (or, in the reasonable discretion of the Agent,
no later than 5 days thereafter), a weekly sales report for each
week;
(vi) during the Reporting Extension Period, as soon as
available and in any event no later than March 31, 2000 (or, in
the reasonable discretion of the Agent, no later than 5 days
thereafter), an operating forecast for each month in the fiscal
year ending on or closest to February 28, 2001;
(vii) during the Reporting Extension Period, as soon as
available and in any event no later than the 30th day of the next
succeeding Month (or, in the reasonable discretion of the Agent,
no later than 5 days thereafter), a monthly reconciliation of
actual operating results for each month specified in the
operating forecast delivered pursuant to clause (vi) above to the
budget for such Month;
(viii)as soon as possible and in any event within five days
after the occurrence of each Event of Termination or Incipient
Event of Termination, a statement of the chief financial officer
of the Seller setting forth details of such Event of Termination
or event and the action that the Seller has taken and proposes to
take with respect thereto;
(ix) promptly after the sending or filing thereof, copies of
all reports and registration statements that the Parent or any of
its Subsidiaries files with the SEC or any national securities
exchange;
(x) promptly after the filing or receiving thereof, copies of
all reports and notices that the Seller or any Affiliate files
under ERISA with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor or
that the Seller or any Affiliate receives from any of the
foregoing or from any multiemployer plan (within the meaning of
Section 4001(a)(3) of ERISA) to which the Seller or any Affiliate
is or was, within the preceding five years, a contributing
employer, in each case in respect of the assessment of withdrawal
liability or an event or condition which could, in the aggregate,
result in the imposition of liability on the Seller and/or any
such Affiliate in excess of $5,000,000;
(xi) at least ten Business Days prior to any change in the
name of the Parent, any Originator or the Seller, a notice
setting forth the new name and the effective date thereof;
(xii) promptly after the Seller obtains knowledge thereof,
notice of any "Event of Termination" or "Facility Termination
Date" under the Originator Purchase Agreement;
(xiii)so long as any Capital shall be outstanding, as soon as
possible and in any event no later than the day of occurrence
thereof, notice that any Originator has stopped selling or
contributing to the Seller, pursuant to the Originator Purchase
Agreement, all newly arising Originator Receivables;
(xiv) at the time of the delivery of the financial statements
provided for in clauses (i) and (ii) of this paragraph (except
during the Reporting Extension Period), a certificate of the
chief financial officer or the treasurer of the Seller to the
effect that, to the best of such officer's knowledge, no Event of
Termination has occurred and is continuing or, if any Event of
Termination has occurred and is continuing, specifying the nature
and extent thereof;
(xv) promptly after receipt thereof, copies of all notices
received by the Seller from the Parent or any Originator under
the Originator Purchase Agreement;
(xvi) upon the request of the Agent, an aging of Pool
Receivables in which the Investors and/or the Banks have
purchased Receivables Interests hereunder; and
(xvii)such other information respecting the Receivables or
the condition or operations, financial or otherwise, of the
Seller as the Agent may from time to time reasonably request.
(l) Corporate Separateness. (i) The Seller shall at all times
maintain at least two independent members each of whom (x) is not currently
and has not been during the five years preceding the Original Closing Date
an officer, director or employee of an Affiliate of the Seller or any Other
Corporation, (y) is not a current or former officer or employee of the
Seller and (z) is not a stockholder of any Other Corporation or any of
their respective Affiliates.
(ii) The Seller shall not direct or participate in the
management of any of the Other Corporations' operations.
(iii) The Seller shall conduct its business from an office
separate from that of the Other Corporations (but which may be
located in the same facility as one or more of the Other
Corporations). The Seller shall have stationery and other
business forms and a mailing address and a telephone number
separate from that of the Other Corporations.
(iv) The Seller shall at all times be adequately capitalized
in light of its contemplated business.
(v) The Seller shall at all times provide for its own
operating expenses and liabilities from its own funds.
(vi) The Seller shall maintain its assets and transactions
separately from those of the Other Corporations and reflect such
assets and transactions in financial statements separate and
distinct from those of the Other Corporations and evidence such
assets and transactions by appropriate entries in books and
records separate and distinct from those of the Other
Corporations. The Seller shall hold itself out to the public
under the Seller's own name as a legal entity separate and
distinct from the Other Corporations. The Seller shall not hold
itself out as having agreed to pay, or as being liable, primarily
or secondarily, for, any obligations of the Other Corporations.
(vii) The Seller shall not maintain any joint account with
any Other Corporation or become liable as a guarantor or
otherwise with respect to any Debt or contractual obligation of
any Other Corporation.
(viii)The Seller shall not make any payment or distribution
of assets with respect to any obligation of any Other Corporation
or grant an Adverse Claim on any of its assets to secure any
obligation of any Other Corporation.
(ix) The Seller shall not make loans, advances or otherwise
extend credit to any of the Other Corporations.
(x) The Seller shall hold regular duly noticed meetings of
its Board of Directors and make and retain minutes of such
meetings.
(xi) The Seller shall have bills of sale (or similar
instruments of assignment) and, if appropriate, UCC-1 financing
statements, with respect to all assets purchased from any of the
Other Corporations.
(xii) The Seller shall not engage in any transaction with any
of the Other Corporations, except as permitted by this Agreement
and as contemplated by the Originator Purchase Agreement.
(xiii)The Seller shall comply with (and cause to be true and
correct) each of the facts and assumptions listed on pages 3
through 7 of the opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP delivered
pursuant to Section 3.02(g) and designated as Annex C to this
Agreement.
(m) Originator Purchase Agreement. The Seller will not amend,
waive or modify any provision of the Originator Purchase Agreement or waive
the occurrence of any "Event of Termination" under the Originator Purchase
Agreement, without in each case the prior written consent of the Agent. The
Seller will perform all of its obligations under the Originator Purchase
Agreement in all material respects and will enforce the Originator Purchase
Agreement in accordance with its terms in all material respects.
(n) Nature of Business. The Seller will not engage in any
business other than the purchase of Receivables, Related Security and
Collections from the Originators and the transactions contemplated by this
Agreement. The Seller will not create or form any Subsidiary.
(o) Mergers, Etc. The Seller will not merge with or into or
consolidate with or into, or convey, transfer, lease or otherwise dispose
of (whether in one transaction or in a series of transactions), all or
substantially all of its assets (whether now owned or hereafter acquired)
to, or acquire all or substantially all of the assets or capital stock or
other ownership interest of, or enter into any joint venture or partnership
agreement with, any Person, other than as contemplated by this Agreement
and the Originator Purchase Agreement.
(p) Distributions, Etc. The Seller will not declare or make any
dividend payment or other distribution of assets, properties, cash, rights
or obligations to its members, or return any capital to its members as
such, or purchase, retire, defease, redeem or otherwise acquire for value
or make any payment in respect of any membership interest of the Seller or
any warrants, rights or options to acquire any such interests, now or
hereafter outstanding; provided, however, that the Seller may declare and
pay dividends to its members so long as (i) no Event of Termination shall
then exist or would occur as a result thereof, (ii) such dividends are in
compliance with all applicable law including the law of the State of
California, and (iii) such dividends have been approved by all necessary
and appropriate corporate action of the Seller.
(q) Debt. The Seller will not incur any Debt, other than any Debt
incurred pursuant to this Agreement.
(r) Operating Agreement. The Seller will not amend or delete
Sections 1.05, 2.06, 4.03, 7.01, 8.08 and 8.11 of its Operating Agreement.
(s) Tangible Net Worth. The Seller will maintain Tangible Net
Worth at all times equal to at least 5% of the Outstanding Balance of the
Receivables at such time.
(t) Notices to Insurer Within 30 days of the New Closing Date
with respect to non-Governmental Entity Obligors the Collections from whom
comprise 70% of Collections from all non-Governmental Entity Obligors at
such time, and within 60 days of the New Closing Date with respect to all
other non-Governmental Entity Obligors, the Seller shall deliver, or cause
to be delivered, to the Agent completed Notices to Insurers (including
addressed stamped envelopes) for each such non-Governmental Entity Obligor,
to be delivered by the Agent to each such Obligor on the Obligor
Notification Date, in a manner satisfactory to the Agent in all respects.
SECTION 5.02. Covenant of the Parent, the Seller and each
Originator. Until the latest of the Facility Termination Date or the date
on which no Capital of or Yield on any Receivable Interest shall be
outstanding or the date all other amounts owed by the Seller hereunder to
the Investors, the Banks or the Agent are paid in full, each of the Parent,
the Seller and each Originator will, at their respective expense, from time
to time during regular business hours as requested by the Agent, permit the
Agent or its agents or representatives (including independent public
accountants, which may be the Parent, the Seller's or any Originator's
independent public accountants), (i) to conduct periodic audits of the
Receivables, the Related Security and the related books and records and
collections systems of the Parent, the Seller or any Originator, as the
case may be (provided, that, the Agent may, in lieu of performing such
audit, accept the special procedures report of the Seller's independent
public accountants to the extent (i) the Agent and such accountants agree
upon the scope of such special procedures report and (ii) the results of
such special procedures report are reasonably satisfactory to the Agent,
otherwise the Agent shall have the right to audit not more often than twice
during any 12- month period (unless an Incipient Event of Termination or
Event of Termination has occurred and is continuing, in which case the
foregoing limitation shall not apply)), (ii) to examine and make copies of
and abstracts from all books, records and documents (including, without
limitation, computer tapes and disks) in the possession or under the
control of the Parent, the Seller or any Originator, as the case may be,
relating to Pool Receivables and the Related Security, including, without
limitation, the Contracts, and (iii) to visit the offices and properties of
the Parent, the Seller or any Originator, as the case may be, for the
purpose of examining such materials described in clause (ii) above, and to
discuss matters relating to Pool Receivables and the Related Security or
the Parent's the Seller's or any Originator's performance under the
Transaction Documents or under the Contracts with any of the officers or
employees of the Parent, the Seller or any Originator, as the case may be,
having knowledge of such matters. In addition, upon the Agent's request at
least once per year, the Seller will, at its expense, appoint independent
public accountants (which may, with the consent of the Agent, be the
Seller's regular independent public accountants), or utilize the Agent's
representatives or auditors, to prepare and deliver to the Agent a written
report with respect to the Receivables and the Credit and Collection Policy
(including, in each case, the systems, procedures and records relating
thereto) on a scope and in a form reasonably requested by the Agent.
ARTICLE VI
ADMINISTRATION AND COLLECTION
OF POOL RECEIVABLES
SECTION 6.01. Designation of Collection Agent. The servicing,
administration and collection of the Pool Receivables shall be conducted by
the Collection Agent so designated hereunder from time to time. Until the
Agent gives notice to the Seller of the designation of a new Collection
Agent in accordance with the next sentence, the Parent is hereby designated
as, and hereby agrees to perform the duties and obligations of, the
Collection Agent pursuant to the terms hereof. The Agent at any time after
the occurrence of a Special Event may designate as Collection Agent any
Person (including itself) to succeed the Parent or any successor Collection
Agent, if such Person shall consent and agree to the terms hereof. If the
Agent designates itself as Collection Agent, the Agent shall implement such
procedures as it deems necessary and appropriate to maximize collection of
the Receivables, subject to reasonable industry standards for the
collection of healthcare receivables. The Collection Agent may subcontract
with Rite Aid HDQTRS Corp or may, with the prior consent of the Agent,
subcontract with any other Person, for the servicing, administration or
collection of the Pool Receivables. Any such subcontract shall not affect
the Collection Agent's liability for performance of its duties and
obligations pursuant to the terms hereof.
SECTION 6.02. Duties of Collection Agent.
(a) The Collection Agent shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Pool Receivable
from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy. The Seller and the Agent hereby appoint the
Collection Agent, from time to time designated pursuant to Section 6.01, as
agent for themselves and for the Investors and the Banks to enforce their
respective rights and interests in the Pool Receivables, the Related
Security and the related Contracts. In performing its duties as Collection
Agent, the Collection Agent shall exercise the same care and apply the same
policies as it would exercise and apply if it owned such Receivables and
shall act in the best interests of the Seller, the Investors and the Banks.
(b) The Collection Agent shall administer the Collections in
accordance with the procedures described in Section 2.04.
(c) If no Event of Termination or Incipient Event of Termination
shall have occurred and be continuing, the Parent, while it is the
Collection Agent, may, in accordance with the Credit and Collection Policy,
extend the maturity or adjust the Outstanding Balance of any Receivable as
the Parent deems appropriate to maximize Collections thereof.
(d) The Collection Agent shall hold in trust for the Seller and
each Investor and Bank, in accordance with their respective interests, all
documents, instruments and records (including, without limitation, computer
tapes or disks) which evidence or relate to Pool Receivables. At the
request of the Agent, the Collection Agent shall xxxx the Seller's master
data processing records evidencing such Pool Receivables and related
Contracts with such a legend.
(e) The Collection Agent shall, as soon as practicable following
receipt, turn over to the Seller any cash collections or other cash
proceeds received with respect to Receivables not constituting Pool
Receivables.
(f) On each Tuesday (or if such day is not a Business Day the
next Business Day), by no later than 5:00 p.m. (New York City time), the
Collection Agent shall provide by telecopy to the Agent, the Weekly Report
for the weekly period ending the previous Saturday.
(g) Prior to the 10th Business Day of each month, the Collection
Agent shall prepare and forward to the Agent a Seller Report relating to
the Receivable Interests outstanding on the last day of the immediately
preceding Month.
The Collection Agent may elect (by written notice to the Agent)
to transmit Weekly Reports and Seller Reports to the Agent by electronic
mail (each an "E-Mail Report") provided, that (i) the Collection Agent
shall (A) make arrangements with VeriSign, Inc. (or another authenticating
organization acceptable to the Agent) to enable the Collection Agent to
generate digital signatures and (B) safeguard the keys, access codes or
other means of generating its digital signature, (ii) each E-Mail Report
shall be (A) formatted as the Agent may designate from time to time and
shall be digitally signed and (B) sent to the Agent at an electronic mail
address designated by the Agent, and (iii) the Agent (A) shall be
authorized to rely upon such E-Mail Report for purposes of this Agreement
to the same extent as if the contents thereof had been otherwise delivered
to the Agent in accordance with the terms of this Agreement and (B) may,
upon notice in writing to the Collection Agent and the Seller, terminate
the right of the Collection Agent to transmit E-Mail Reports.
SECTION 6.03. Certain Rights of the Agent. (a) The Agent may
notify the Obligors of Pool Receivables, at any time and at the Seller's
expense, of the ownership of Receivable Interests under this Agreement. On
or after the Obligor Notification Date, the Agent may deliver the Notice to
Insurers to be delivered to the Agent pursuant to Section 5.01(t) hereof.
(b) At any time following the designation of a Collection Agent
other than the Parent or any Originator pursuant to Section 6.01 or
following an Event of Termination or an Incipient Event of Termination:
(i) The Agent may direct, to the extent permitted under
applicable law, the Obligors of Pool Receivables that all
payments thereunder be made directly to the Agent or its
designee.
(ii) At the Agent's request and at the Seller's expense,
the Seller shall notify each Obligor of Pool Receivables of the
ownership of Receivable Interests under this Agreement and
direct, to the extent permitted under applicable law, that
payments be made directly to the Agent or its designee.
(iii) At the Agent's request and at the Seller's expense,
the Seller and the Collection Agent shall (A) assemble all of the
documents, instruments and other records (including, without
limitation, computer tapes and disks) that evidence or relate to
the Pool Receivables and the related Contracts and Related
Security, or that are otherwise necessary or desirable to collect
the Pool Receivables and, to the extent permitted under
applicable law, shall make the same available to the Agent at a
place selected by the Agent or its designee, and (B) segregate
all cash, checks and other instruments received by it from time
to time constituting Collections of Pool Receivables in a manner
acceptable to the Agent and, promptly upon receipt, remit all
such cash, checks and instruments, duly indorsed or with duly
executed instruments of transfer, to the Agent or its designee.
(iv) The Seller authorizes the Agent to take any and all
steps in the Seller's name and on behalf of the Seller that are
necessary or desirable, in the determination of the Agent and
otherwise permitted under applicable law, to collect amounts due
under the Pool Receivables, including, without limitation,
endorsing the Seller's name on checks and other instruments
representing Collections of Pool Receivables and enforcing the
Pool Receivables and the Related Security and related Contracts.
SECTION 6.04. Rights and Remedies. (a) If the Collection Agent
fails to perform any of its obligations under this Agreement, the Agent may
(but shall not be required to) itself perform, or cause performance of,
such obligation; and the Agent's costs and expenses incurred in connection
therewith shall be payable by the Seller (if the Collection Agent that
fails to so perform is the Seller or its designee).
(b) The Parent, the Seller and the applicable Originator shall
perform their respective obligations under the Contracts related to the
Pool Receivables to the same extent as if Receivable Interests had not been
sold and the exercise by the Agent on behalf of the Investors and the Banks
of their rights under this Agreement shall not release the Collection Agent
or the Seller from any of their duties or obligations with respect to any
Pool Receivables or related Contracts. Neither the Agent, the Investors nor
the Banks shall have any obligation or liability with respect to any Pool
Receivables or related Contracts, nor shall any of them be obligated to
perform the obligations of the Seller thereunder.
(c) In the event of any conflict between the provisions of
Article VI of this Agreement and Article VI of the Originator Purchase
Agreement, the provisions of this Agreement shall control.
SECTION 6.05. Further Actions Evidencing Purchases. The Parent,
the Seller and each Originator agrees from time to time, at its expense, to
promptly execute and deliver all further instruments and documents, and to
take all further actions, that may be reasonably necessary or desirable, or
that the Agent may reasonably request, to perfect, protect or more fully
evidence the Receivable Interests purchased hereunder, or to enable the
Investors, the Banks or the Agent to exercise and enforce their respective
rights and remedies hereunder. Without limiting the foregoing, the Parent
and each Originator will upon the request of the Agent (i) execute and file
such financing or continuation statements, or amendments thereto, and such
other instruments and documents, that may be reasonably necessary or
desirable, or that the Agent may reasonably request, to perfect, protect or
evidence such Receivable Interests; and (ii) xxxx its master data
processing records evidencing such Pool Receivables with such a legend.
SECTION 6.06. Covenants of the Collection Agent and the
Originator.
(a) Audits. The Collection Agent will, from time to time during
regular business hours as requested by the Agent, permit the Agent, or its
agents or representatives (including independent public accountants, which
may be the Collection Agent's independent public accountants), (i) to
conduct periodic audits of the Receivables, the Related Security and the
related books and records and collections systems of the Collection Agent
(provided, that, the Agent may, in lieu of performing such audit, accept
the special procedures report of the Seller's independent public
accountants to the extent (i) the Agent and such accountants agree upon the
scope of such special procedures report and (ii) the results of such
special procedures report are reasonably satisfactory to the Agent,
otherwise the Agent shall have the right to audit not more often than twice
during any 12-month period (unless an Incipient Event of Termination or
Event of Termination has occurred and is continuing, in which case the
foregoing limitation shall not apply)), (ii) to examine and make copies of
and abstracts from all books, records and documents (including, without
limitation, computer tapes and disks) in the possession or under the
control of the Collection Agent relating to Pool Receivables and the
Related Security, including, without limitation, the Contracts, and (iii)
to visit the offices and properties of the Collection Agent for the purpose
of examining such materials described in clause (ii) above, and to discuss
matters relating to Pool Receivables and the Related Security or the
Collection Agent's performance hereunder with any of the officers or
employees of the Collection Agent having knowledge of such matters.
(b) Change in Credit and Collection Policy. No Originator (nor
the Parent) will, without the prior written consent of the Agent, make any
change in the Credit and Collection Policy that would impair the
collectibility of any Pool Receivable or the ability of the Parent or any
Originator (if it is acting as Collection Agent) to perform its obligations
under this Agreement.
(c) Change in Accounts. Neither the Collection Agent nor the
Originator will (i) make any changes to Schedule I hereto or (ii) amend any
instruction to any Obligor (other than to provide a Notice to Insurers, in
form and substance acceptable to the Agent, to all Obligors who are not
Governmental Entities on or before the Obligor Notification Date) or any
Deposit Account Bank with respect to any Deposit Account without the prior
written consent of the Agent.
(d) Collections. (i) In the event that the Collection Agent or
any Originator receives any Collections, the Collection Agent or the
Originator, as the case may be, agrees to hold all such Collections in
trust and to deliver (via overnight courier or wire transfer, as the case
may be) such Collections to the Purchaser Lock-Box or deposit such
Collections to the Purchaser Deposit Account as soon as practicable, but in
no event later than one Business Day after receipt thereof.
(ii) In the event that any Affiliate of the Originator
receives any Collections, the Originator agrees to cause such
Affiliate to hold all such Collections in trust and to cause such
Affiliate to deliver (via overnight courier or wire transfer, as
the case may be) such Collections the to Purchaser Lock-Box or
deposit such Collections to the Purchaser Deposit Account as soon
as practicable, but in no event later than one Business Day after
receipt thereof.
(e) Deposits to Lock-Boxes or Deposit Accounts. Neither the
Collection Agent nor the Originator will deposit or otherwise credit, or
cause to be so deposited or credited, or consent or fail to object to any
such deposit or credit known to it, cash or cash proceeds other than
Collections to any Lock-Box or Deposit Account.
(f) Collections from PCS-originated Receivables. The Collection
Agent and the Originator shall segregate, or cause to be segregated, within
two Business Days of receipt thereof by PCS, all Collections from
PCS-originated Receivables which have been purchased by the Seller pursuant
to the Originator Purchase Agreement, from any other funds collected or
held by PCS, and shall deposit, or cause to be deposited, all such
Collections in the Purchaser Deposit Account on the day such Collections
are so segregated, all in a manner approved by the Agent in its sole
discretion.
SECTION 6.06A. Representations of the Collection Agent. The
Collection Agent hereby represents and warrants as follows:
(a) Lock Boxes, Deposit Accounts. Specified on Schedule I hereto
(as amended by the Collection Agent from time to time upon the prior
written consent of the Agent) are (i) the Lock Box numbers and (ii) the
names, addresses and ABA numbers of all the Deposit Account Banks, together
with the account numbers of the Deposit Accounts and the name of a contact
person at each Deposit Account Bank.
(b) Payment Instructions. The Collection Agent or the Seller has
instructed (i) on or before the New Closing Date, all Obligors to make all
payments to the Originator Deposit Account and the Originator Lock-Box and
(ii) on or before the Obligor Notification Date, all Obligors who are not
Governmental Entities, and only such Obligors to make all payments to the
Purchaser Deposit Account and the Purchaser Lock-Box, and all such
instructions have not been modified or revoked by the Seller (other than
the modification described in clause (ii) of this paragraph) and all such
instructions that have been given are in full force and effect.
(c) Weekly Reports and Seller Reports. Each Weekly Report, Seller
Report and E-Mail Report delivered by the Collection Agent pursuant to this
Agreement shall be true and correct in all material respects as of the date
such report or certificate is delivered.
SECTION 6.07. Indemnities by the Collection Agent. Without
limiting any other rights that the Agent, any Investor, any Bank or any of
their respective Affiliates (each, a "Special Indemnified Party") may have
hereunder or under applicable law, and in consideration of its appointment
as Collection Agent, the Collection Agent hereby agrees to indemnify each
Special Indemnified Party from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees) (all of the foregoing
being collectively referred to as "Special Indemnified Amounts") arising
out of or resulting from any of the following (excluding, however, (a)
Special Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of such Special Indemnified Party, (b)
recourse for uncollectible Receivables or (c) any income or franchise taxes
or any other tax or fee measured by income incurred by such Special
Indemnified Party arising out of or as a result of this Agreement or the
ownership of Receivable Interests or in respect of any Receivable or any
Contract):
(i) any representation or warranty or statement made
or deemed made by the Collection Agent under or in connection with this
Agreement which shall have been incorrect in any material respect when
made;
(ii) the failure by the Collection Agent to comply
with any applicable law, rule or regulation with respect to any Pool
Receivable or Contract; or the failure of any Pool Receivable or
Contract to conform to any such applicable law, rule or regulation;
(iii) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other applicable laws
with respect to any Receivables in, or purporting to be in, the
Receivables Pool, the Contracts and the Related Security and
Collections in respect thereof, whether at the time of any purchase or
reinvestment or at any subsequent time;
(iv) any failure of the Collection Agent to perform
its duties or obligations in accordance with the provisions of this
Agreement;
(v) the commingling of Collections of Pool
Receivables at any time by the Collection Agent with other funds;
(vi) any action or omission by the Collection Agent
reducing or impairing the rights of the Investors or the Banks with
respect to any Pool Receivable or the value of any Pool Receivable;
(vii) any Collection Agent Fees or other costs and
expenses payable to any replacement Collection Agent, to the extent in
excess of the Collection Agent Fees payable to the Collection Agent
hereunder; or
(viii)any claim brought by any Person other than a
Special Indemnified Party arising from any activity by the Collection
Agent or its Affiliates in servicing, administering or collecting any
Receivable.
SECTION 6.08. Establishment of Deposit Accounts.
(a) Purchaser Deposit Account. On or prior to the New Closing
Date, the Collection Agent, for the benefit of the Beneficiaries, shall
establish and maintain or cause to be established and maintained in the
name of the Seller, for the benefit, and under the sole dominion and
control of the Agent, with a financial institution acceptable to the Agent
a segregated non-interest bearing deposit account and a corresponding
lock-box (such lock-box being the "Purchaser Lock-Box", such account being
the "Purchaser Deposit Account" and such institution holding such account
being the "Purchaser Deposit Account Bank"), such account bearing a
designation clearly indicating that the funds deposited therein are held by
the Agent for the benefit of the Beneficiaries and entitled "Citicorp North
America, Inc., as Agent - Purchaser Deposit Account for the Rite Aid
Receivables Purchase Agreement". All Collections received in the Purchaser
Lock-Box shall immediately be deposited into the Purchaser Deposit Account.
The Agent shall possess all right, title and interest in and to all funds
from time to time on deposit in the Purchaser Deposit Account and in all
proceeds thereof. The Purchaser Deposit Account shall be under the sole
dominion and control of the Agent for the benefit of the Beneficiaries, and
neither the Seller, nor any Person claiming by, through or under the
Seller, shall have any right, title or interest in, or any right to
withdraw any amount from, the Purchaser Deposit Account. Except as
expressly provided in this Agreement, the Collection Agent agrees that it
shall have no right of set-off or banker's lien against, and no right to
otherwise deduct from, any funds held in the Purchaser Deposit Account for
any amount owed to it by any Beneficiary. After the Obligor Notification
Date, the Collection Agent shall cause Collections from Persons other than
Governmental Entities to be deposited directly into the Purchaser Deposit
Account on each Business Day. The Collection Agent shall cause all
Collections in the Originator Deposit Account to be deposited to the
Purchaser Deposit Account as promptly as possible and in any event no later
than the day on which such Collections become available funds in the
Originator Deposit Account. The Seller will require each Originator to
deliver (via overnight courier or wire transfer, as the case may be) any
Collections received by it to the Purchaser Lock-Box or deposit any
Collections received by it into the Purchaser Deposit Account, within one
Business Day following the Business Day on which such Collections are so
received. Notwithstanding the foregoing, if and to the extent that funds
that are not Collections are deposited into the Purchaser Deposit Account,
the Collection Agent shall direct in writing the Agent to withdraw such
funds from the Purchaser Deposit Account and deposit them in the Seller's
Account.
If, at any time, the institution holding the Purchaser Deposit
Account ceases to be acceptable to the Agent, the Collection Agent, upon
receiving such notice from the Agent, for the benefit of the Beneficiaries
shall within 15 Business Days (i) establish a new Purchaser Deposit Account
meeting the conditions specified above with a financial institution
acceptable to the Agent, (ii) transfer any cash and/or any investments held
therein or with respect thereto to such new Purchaser Deposit Account and
(iii) in the case of any new Purchaser Deposit Account, deliver to all
Deposit Account Banks instructions directing such Deposit Account Banks to
deposit all Collections into such new Purchaser Deposit Account, and from
the date such new Purchaser Deposit Account is established, it shall be the
"Purchaser Deposit Account".
(b) Collection Accounts for Collections from Governmental
Entities. On or prior to the New Closing Date, the Collection Agent shall
establish and maintain or cause to be established and maintained (i) a
lock-box to which (A) from the New Closing Date through the Obligor
Notification Date, all Obligors (other than Obligors of PCS- originated
Receivables ) and (B) from and after the Obligor Notification Date,
Obligors who are Governmental Entities, and only such Obligors, shall remit
payments with respect to any Receivable (such lock-box being a "Originator
Lock-Box") and (ii) in the name of the Seller, with an financial
institution acceptable to the Agent, an account ("Originator Deposit
Account") into which all Collections from received in such Originator
Lock-Box shall be deposited. From the New Closing Date through the Obligor
Notification Date all Obligors and from and after the Obligor Notification
Date Obligors who are Governmental Entities, shall be directed to remit
payments with respect to their Receivables to the Originator LockBox or
deposited into the Originator Deposit Account. The Originator Deposit
Account shall be under the sole dominion and control of the Seller. The
Seller shall give each Originator Deposit Account Bank a revocable
instruction to remit all Collections received in such account to the
Purchaser Deposit Account. The Collection Agent shall transfer Collections
received in the Originator Deposit Account to the Purchaser Deposit Account
in the manner set forth in Section 6.08(a). The Originator Deposit Account
shall be maintained with documentation and instructions in form and
substance satisfactory to the Agent. Such documentation shall provide,
among other things, that available amounts shall be immediately transferred
to the Purchaser Deposit Account.
(c) Changes to Deposit Accounts or Lock-Boxes. The Collection
Agent will neither (i) make any change in any Lock-Box numbers, the name,
address or ABA number of any Deposit Account Bank or the account number of
any Deposit Account from that set forth in Schedule I hereto nor (ii) amend
any instruction to any Obligor (other than the modification described in
clause (ii) of paragraph (b) of Section 6.06A) or any instruction to or
agreement with any Deposit Account Bank with respect to any Lock-Box or
Deposit Account unless the Agent shall have given its prior written consent
to such change or amendment.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01. Events of Termination. If any of the following
events ("Events of Termination") shall occur and be continuing:
(a) The Collection Agent (if the Parent, any Originator or any of
their respective Affiliates) (i) shall fail to perform or observe any term,
covenant or agreement under this Agreement (other than as referred to in
clause (ii) of this subsection (a)) and such failure shall remain
unremedied for twenty Business Days or (ii) shall fail to make when due any
payment or deposit to be made by it under this Agreement; or
(b) The Parent, the Seller or any Originator shall fail (i) to
transfer to the Agent when requested any rights, pursuant to this
Agreement, which the Parent, the Seller or any Originator then has as
Collection Agent, or (ii) to make any payment required under Section 2.04;
or
(c) Any representation or warranty made or deemed made by the
Seller, the Parent or the Collection Agent (or any of their respective
officers) under or in connection with this Agreement or any other
Transaction Document or any information or report (including, without
limitation, the Weekly Report, the Seller Report and the E-Mail Report)
delivered by the Seller or the Collection Agent pursuant to this Agreement
or any other Transaction Document shall prove to have been incorrect or
untrue in any material respect when made or deemed made or delivered and,
if capable of remedy, shall remain unremedied for 10 days after the date on
which any officer of the Seller, the Parent or the Collection Agent, as
applicable, shall have knowledge thereof; or
(d) (1) The Parent, the Seller or any Originator shall fail to
perform or observe any other term, covenant (other than Section 5.01(s)) or
agreement contained in this Agreement or any other Transaction Document on
its part to be performed or observed and such failure shall remain
unremedied for a period of twenty Business Days; provided, however, that,
the failure of the Seller to comply with Xxxxxxxx 0.00(x), (x), (x), (x),
(x), (x), (x), (x), (x), (x) and (r) hereof shall not be subject to the
foregoing cure period; or (2) The Seller shall fail to observe the covenant
contained in Section 5.01(s) and such failure to comply shall remain
unremedied by the earlier to occur of (x) the Business Day immediately
following the delivery of the Seller Report in accordance with the
provisions of this Agreement and (y) twenty Business Days; or
(e) The Seller or the Originator shall fail to pay any principal
of or premium or interest on any of its Debt which is outstanding in a
principal amount of at least $25,000,000 in the aggregate when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument (except, during the
Reporting Extension Period, if such event occurs or condition exists under
any Public Debt as a result of the failure of the Parent to file or deliver
financial statements or reports substantially the same as those described
in Sections 5.01(k)(i), 5.01(k)(ii) and 5.01(k)(xiv) above), if the effect
of such event or condition is to accelerate, or to permit the acceleration
of, the maturity of such Debt; or any such Debt shall be declared to be due
and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), redeemed, purchased or defeased, or an offer to
repay, redeem, purchase or defease such Debt shall be required to be made,
in each case prior to the stated maturity thereof; or
(f) Any purchase or any reinvestment pursuant to this Agreement
shall for any reason (other than pursuant to the terms hereof) cease to
create, or any Receivable Interest shall for any reason cease to be, a
valid and perfected first priority undivided percentage ownership interest
to the extent of the pertinent Receivable Interest in each applicable Pool
Receivable and the Related Security and Collections with respect thereto;
or the security interest created pursuant to Section 2.10 shall for any
reason cease to be a valid and perfected first priority security interest
in the collateral security referred to in that section; or
(g) The Parent, Seller or any Originator shall generally not pay
its respective debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Seller or the Originator seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not instituted
by it), either such proceeding shall remain undismissed or unstayed for a
period of 45 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur;
or the Parent, Seller or any Originator shall take any corporate action to
authorize any of the actions set forth above in this subsection (g); or
(h) The Parent shall directly or indirectly, make or agree to
make any payment to or for the account of any holder of Public Debt, or any
trustee or other representative of any such holder, on account of principal
of, interest on or fees in respect of such Public Debt, except as required
by the terms of such Public Debt as in effect on the Amendment Closing
Date; or
(i) Either (x) the average of the Default Ratio for any
consecutive three Month period shall exceed 6%, (y) the average of the
Dilution Ratio for any consecutive three Month period shall exceed 5% or
(z) the average of the Loss-to-Liquidation Ratio for any consecutive three
Month period shall exceed 1.5%; or
(j) The Net Receivables Pool Balance shall be less than the Required
Weekly Net Receivables Pool Balance upon the termination of a Cure Period; or
(k) There shall have occurred any material adverse change in the
financial condition or operations of the Parent, the Seller or any
Originator since August 28, 1999; or there shall have occurred any event
which may materially adversely affect the collectibility of the Receivables
Pool or the ability of the Seller or the Collection Agent to collect Pool
Receivables or otherwise perform its obligations under this Agreement; or
(l) An "Event of Termination" or "Facility Termination Date"
shall occur under the Originator Purchase Agreement, or the Originator
Purchase Agreement shall cease to be in full force and effect; or
(m) All of the outstanding equity interests of the Seller shall
cease to be owned, directly or indirectly, by the Originators; or
(n) The Parent shall (i) allow aggregate amount of Consolidated
Capital Expenditures for any period set forth below to exceed the amount
set forth below opposite such period:
FISCAL YEAR ENDING ON OR
CLOSEST TO AMOUNT
February 29, 2000 $620,000,000
February 28, 2001 $295,000,000
(ii) at no time shall the ratio of (a) Consolidated Debt at
such time to (b) Total Capital at such time, exceed 0.695; provided
that upon any sale of the capital stock of PCS, such maximum ratio
shall be reset at the level which produces the result that the amount
of additional Debt that the Parent may incur within the limits of this
ratio immediately after giving effect to such sale and the repayment of
any Debt required in connection therewith is equal to the amount of
additional Debt that the Parent could incur within the limits of this
ratio immediately before giving effect to such sale and the repayment
of any Debt required in connection therewith;
(iii) the Parent will not, and will not permit any of its
Subsidiaries to, incur or at any time be liable with respect to any
Debt except:
(A) Debt under the Amended Credit Agreement;
(B) Debt outstanding on December 2, 1999;
(C) Debt incurred to refinance Debt referred to in clause
(A) or clause (B) above, provided that the amount thereof that is
at the time outstanding or committed is not increased and the
maturity thereof is not shortened; and
(D) Debt not permitted by clauses (A), (B) or (C) above in
an aggregate principal amount at any time outstanding not to
exceed $25,000,000;
(iv) at no time during any period set forth below shall the
Fixed Charge Coverage Ratio be less than the ratio set forth below
opposite such period:
FISCAL QUARTER ENDING
ON OR CLOSEST TO RATIO
November 30, 1999 1.35
February 29, 2000 1.30
May 31, 2000 and
thereafter 1.25
; or
(o) The Parent Guaranty shall cease to be in full force and
effect;
then, and in any such event, any or all of the following actions may be
taken by notice to the Seller: (x) the Investors holding a majority of the
outstanding Receivable Interests at such time or the Agent may declare the
Facility Termination Date to have occurred (in which case the Facility
Termination Date shall be deemed to have occurred), (y) the Agent may
declare the Commitment Termination Date to have occurred (in which case the
Commitment Termination Date shall be deemed to have occurred), and (z)
without limiting any right under this Agreement to replace the Collection
Agent, the Agent may designate another Person to succeed the Parent as the
Collection Agent; provided, that, automatically upon the occurrence of any
event (without any requirement for the passage of time or the giving of
notice) described in paragraph (g) of this Section 7.01, the Facility
Termination Date and the Commitment Termination Date shall occur, the
Parent (if it is then serving as the Collection Agent) shall cease to be
the Collection Agent, and the Agent or its designee shall become the
Collection Agent. Upon any such declaration or designation or upon such
automatic termination, the Investors, the Banks and the Agent shall have,
in addition to the rights and remedies which they may have under this
Agreement, all other rights and remedies provided after default under the
UCC and under other applicable law, which rights and remedies shall be
cumulative.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action. Each Investor and each
Bank hereby appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers as
are reasonably incidental thereto.
SECTION 8.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them as Agent under or in connection
with this Agreement (including, without limitation, the Agent's servicing,
administering or collecting Pool Receivables as Collection Agent), except
for its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, the Agent: (a) may consult with
legal counsel (including counsel for the Seller and the Collection Agent),
independent certified public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (b) makes no warranty or representation to any Investor or Bank
(whether written or oral) and shall not be responsible to any Investor or
Bank for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (c) 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 on the part of the
Seller or the Collection Agent or to inspect the property (including the
books and records) of the Seller or the Collection Agent; (d) shall not be
responsible to any Investor or Bank for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other instrument or document furnished pursuant hereto;
and (e) shall incur no liability under or in respect of this Agreement by
acting upon any notice (including notice by telephone), consent,
certificate or other instrument or writing (which may be by telecopier or
telex) believed by it to be genuine and signed or sent by the proper party
or parties.
SECTION 8.03. CNAI and Affiliates. The obligation of Citibank to
purchase Receivable Interests under this Agreement may be satisfied by CNAI
or any of its Affiliates. With respect to any Receivable Interest or
interest therein owned by it, CNAI shall have the same rights and powers
under this agreement as any Bank and may exercise the same as though it
were not the Agent. CNAI and any of its Affiliates may generally engage in
any kind of business with the Seller, the Collection Agent or any Obligor,
any of their respective Affiliates and any Person who may do business with
or own securities of the Seller, the Collection Agent or any Obligor or any
of their respective Affiliates, all as if CNAI were not the Agent and
without any duty to account therefor to the Investors or the Banks.
SECTION 8.04. Bank's Purchase Decision. Each Bank acknowledges
that it has, independently and without reliance upon the Agent, any of its
Affiliates or any other Bank and based on such documents and information as
it has deemed appropriate, made its own evaluation and decision to enter
into this Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent, any of its Affiliates or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own decisions in taking or
not taking action under this Agreement.
ARTICLE IX
INDEMNIFICATION
SECTION 9.01. Indemnities by the Seller. Without limiting any
other rights that the Agent, the Investors, the Banks or any of their
respective Affiliates (each, an "Indemnified Party") may have hereunder or
under applicable law, the Seller hereby agrees to indemnify each
Indemnified Party from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees) (all of the foregoing
being collectively referred to as "Indemnified Amounts") arising out of or
resulting from this Agreement or the use of proceeds of purchases or
reinvestments or the ownership of Receivable Interests or in respect of any
Receivable or any Contract, excluding, however, (a) Indemnified Amounts to
the extent resulting from gross negligence or willful misconduct on the
part of such Indemnified Party, (b) recourse (except as otherwise
specifically provided in this Agreement) for uncollectible Receivables or
(c) any income or franchise taxes incurred by such Indemnified Party
arising out of or as a result of this Agreement or the ownership of
Receivable Interests or in respect of any Receivable or any Contract.
Without limiting or being limited by the foregoing, the Seller shall pay on
demand to each Indemnified Party any and all amounts necessary to indemnify
such Indemnified Party from and against any and all Indemnified Amounts
relating to or resulting from any of the following:
(i) the creation of an undivided percentage ownership
interest in any Receivable which purports to be part of the Net
Receivables Pool Balance but which is not at the date of the
creation of such interest an Eligible Receivable or which
thereafter ceases to be an Eligible Receivable;
(ii) any representation or warranty or statement made
or deemed made by the Seller (or any of its officers) under or in
connection with this Agreement and the other Transaction
Documents which shall have been incorrect in any material respect
when made;
(iii) the failure by the Parent, the Seller or any
Originator to comply with any applicable law, rule or regulation
with respect to any Pool Receivable or the related Contract; or
the failure of any Pool Receivable or the related Contract to
conform to any such applicable law, rule or regulation;
(iv) the failure to vest in the Investors or the
Banks, as the case may be, (a) a perfected undivided percentage
ownership interest, to the extent of each Receivable Interest, in
the Receivables in, or purporting to be in, the Receivables Pool
and the Related Security and Collections in respect thereof, or
(b) a perfected security interest as provided in Section 2.10, in
each case free and clear of any Adverse Claim;
(v) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Receivables in, or purporting
to be in, the Receivables Pool and the Related Security and
Collections in respect thereof, whether at the time of any
purchase or reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense (other
than discharge in bankruptcy of the Obligor) of the Obligor to
the payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense based
on such Receivable or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable against
it in accordance with its terms), or any other claim resulting
from the sale of the merchandise or services related to such
Receivable or the furnishing or failure to furnish such
merchandise or services or relating to collection activities with
respect to such Receivable (if such collection activities were
performed by the Seller or any of its Affiliates acting as
Collection Agent);
(vii) any failure of the Seller to perform its duties
or obligations in accordance with the provisions hereof or to
perform its duties or obligations under the Contracts;
(viii)any products liability or other claim arising
out of or in connection with merchandise, insurance or services
which are the subject of any Contract;
(ix) the commingling of Collections of Pool Receivables
at any time with other funds;
(x) any investigation, litigation or proceeding
related to this Agreement or the use of proceeds of purchases or
reinvestments or the ownership of Receivable Interests or in
respect of any Receivable or Related Security or Contract;
(xi) any failure of the Seller to comply with its
covenants contained in Section 5.01; or
(xii) any claim brought by any Person other than an
Indemnified Party arising from any activity by the Seller or any
Affiliate of the Seller in servicing, administering or collecting
any Receivable.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or consent to any departure by the Seller
therefrom shall be effective unless in a writing signed by the Agent, as
agent for the Investors and the Banks (and, in the case of any amendment,
also signed by the Seller), and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by the Collection Agent in
addition to the Agent, affect the rights or duties of the Collection Agent
under this Agreement. No failure on the part of the Investors, the Banks or
the Agent to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or
the exercise of any other right.
SECTION 10.02. Notices, Etc. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and faxed or delivered, to each party
hereto, at its address set forth under its name on the signature pages
hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. Notices and communications by
facsimile shall be effective when sent (and shall be followed by hard copy
sent by regular mail), and notices and communications sent by other means
shall be effective when received.
SECTION 10.03. Assignability. (a) This Agreement and the
Investors' rights and obligations herein (including ownership of each
Receivable Interest) shall be assignable by the Investors and their
successors and assigns. Each assignor of a Receivable Interest or any
interest therein shall notify the Agent and the Seller of any such
assignment. Each assignor of a Receivable Interest or any interest therein
may, in connection with the assignment or participation, disclose to the
assignee or participant any information relating to the Seller, including
the Receivables, furnished to such assignor by or on behalf of the Seller
or by the Agent; provided, that, prior to any such disclosure, the
assignee or participant agrees to preserve the confidentiality of any
confidential information relating to the Seller received by it from any of
the foregoing entities.
(b) Each Bank may assign to any Eligible Assignee or to any other
Bank all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Bank Commitment and
any Receivable Interests or interests therein owned by it); provided,
however, a Bank shall not make an assignment hereunder prior to the
occurrence of an Event of Termination if, solely as a result of such
assignment, the assignee would be entitled to request compensation pursuant
to Section 2.08 or 2.09 hereof immediately following such assignment in an
amount greater than that to which the assignor Bank was entitled
immediately prior to such assignment (unless such potential assignee waived
any right with respect to any greater amount available to such Person). The
parties to each such assignment shall execute and deliver to the Agent an
Assignment and Acceptance. In addition, Citibank or any of its Affiliates
may assign any of its rights (including, without limitation, rights to
payment of Capital and Yield) under this Agreement to any Federal Reserve
Bank without notice to or consent of the Seller or the Agent.
(c) This Agreement and the rights and obligations of the Agent
herein shall be assignable by the Agent and its successors and assigns.
(d) The Seller may not assign its rights or obligations hereunder
or any interest herein without the prior written consent of the Agent.
SECTION 10.04. Costs, Expenses and Taxes. (a) In addition to the
rights of indemnification granted under Section 9.01 hereof, the Seller
agrees to pay on demand all costs and expenses in connection with the
preparation, execution, delivery and administration (including periodic
auditing and the other activities contemplated in Section 5.02 of this
Agreement, any Asset Purchase Agreement and the other documents and
agreements to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Agent, CNAI,
CAFCO, CRC, Citibank and their respective Affiliates with respect thereto
and with respect to advising the Agent, CNAI, CAFCO, CRC, Citibank and
their respective Affiliates as to their rights and remedies under this
Agreement, and all costs and expenses, if any (including reasonable counsel
fees and expenses), of the Agent, CNAI, the Investors, the Banks and their
respective Affiliates, in connection with the enforcement of this Agreement
and the other documents and agreements to be delivered hereunder.
(b) In addition, the Seller shall pay (i) any and all commissions
of placement agents and dealers in respect of commercial paper notes issued
to fund the purchase or maintenance of any Receivable Interest, (ii) any
and all costs and expenses of any issuing and paying agent or other Person
responsible for the administration of CAFCO's and CRC's commercial paper
program in connection with the preparation, completion, issuance, delivery
or payment of commercial paper notes issued to fund the purchase or
maintenance of any Receivable Interest, and (iii) any and all stamp and
other taxes and fees payable in connection with the execution, delivery,
filing and recording of this Agreement or the other documents or agreements
to be delivered hereunder, and agrees to save each Indemnified Party
harmless from and against any liabilities with respect to or resulting from
any delay in paying or omission to pay such taxes and fees.
SECTION 10.05. No Proceedings. Each of the Seller, the Agent, the
Collection Agent, each Investor, each Bank, each assignee of a Receivable
Interest or any interest therein and each entity which enters into a
commitment to purchase Receivable Interests or interests therein hereby
agrees that it will not institute against CAFCO or CRC any proceeding of
the type referred to in Section 7.01(g) so long as any commercial paper or
other senior indebtedness issued by CAFCO or CRC, as applicable, shall be
outstanding or there shall not have elapsed one year plus one day since the
last day on which any such commercial paper or other senior indebtedness
shall have been outstanding.
SECTION 10.06. Confidentiality. (a) Unless otherwise required by
applicable law, the Parent, the Seller and each Originator agrees to
maintain the confidentiality (and to cause their respective officers,
directors, employees, agents and representatives to maintain the
confidentiality) of this Agreement in communications with third parties and
otherwise; provided, however, this Agreement may be disclosed to (i) to
such of the Parent's, Seller's and Originators' officers, directors,
employees, agents and representatives as need to know such Information in
connection with its participation in any of the transactions contemplated
by this Agreement or the administration of this Agreement or the other
Transaction Documents (subject to confidentiality obligations equivalent to
those set forth herein), (ii) third parties to the extent such disclosure
is made pursuant to a written agreement of confidentiality in form and
substance reasonably satisfactory to the Agent, and (iii) the Seller's
legal counsel and auditors if they agree to hold it confidential.
(b) Unless otherwise required by applicable law, the Agent, the
Investors and the Banks agree to keep confidential (and to cause their
respective officers, directors, employees, agents and representatives to
keep confidential) all non-public information, materials and documents
furnished to the Agent or any Lender (the "Information"). Notwithstanding
the foregoing, the Agent, each Investor and each Bank shall be permitted to
disclose Information (i) to such of its officers, directors, employees,
agents and representatives as need to know such Information in connection
with its participation in any of the transactions contemplated by this
Agreement or the administration of this Agreement or the other Transaction
Documents (subject to confidentiality obligations equivalent to those set
forth herein); (ii) to the extent required by applicable laws and
regulations or by any subpoena or similar legal process, or requested by
any governmental agency or authority; (iii) to the extent such Information
(A) becomes publicly available other than as a result of a breach of this
Agreement, (B) becomes available to the Agent, such Investor or such Bank
on a non-confidential basis from a source other than the Seller, the
Parent, any Originator or any of their respective subsidiaries or (C) was
available to the Agent, such Investor or such Bank on a non-confidential
basis prior to its disclosure to the Agent, such Investor or such Bank by
the Seller, the Parent, any Originator or any of their respective
subsidiaries; or (iv) to the extent that any of the Seller, the Parent, any
Originator or any of their respective subsidiaries shall have consented to
such disclosure in writing.
SECTION 10.07. Patient Confidentiality. The Agent hereby agrees
on behalf of itself, the Investors and the Banks and any of their designees
or assigns to, and shall take all reasonable steps to, comply with all
applicable state or federal laws or administrative regulations regarding
the confidentiality of patient records and patient medical information it
receives in connection with the transactions described in this Agreement.
SECTION 10.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF), EXCEPT
TO THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF THE INVESTORS AND THE
BANKS IN THE RECEIVABLES, THE ORIGINATOR PURCHASE AGREEMENT, OR REMEDIES
HEREUNDER, IN RESPECT THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK.
SECTION 10.09. No Novation. The parties hereto acknowledge and
agree that the grant of the security interest hereunder shall not affect
the validity of the security interest granted under the Original
Receivables Purchase Agreement, which security interest shall, at all
times, continue to be attached, perfected and enforceable pursuant to the
terms of the Original Receivables Purchase Agreement as amended and
restated herein. The parties hereto further acknowledge and agree that the
execution, delivery or effectiveness of this Agreement shall not extinguish
the obligations of the Seller under the Original Receivables Purchase
Agreement or discharge or release the lien or priority of any security
therefor. Nothing herein contained shall be construed as a substitution or
novation of the obligations outstanding under the Original Receivables
Purchase Agreement, which shall remain in full force and effect, except as
modified hereby.
SECTION 10.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement.
SECTION 10.11. Survival of Termination. The provisions of
Sections 2.08, 2.09, 6.07, 9.01, 10.04, 10.05 and 10.06 shall survive any
termination of this Agreement.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties have caused this Amended and
Restated Receivables Purchase Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.
SELLER: RITE AID FUNDING LLC
By:________________________________
Name:
Title:
00 Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention:
Facsimile No:
INVESTOR: CORPORATE ASSET FUNDING
COMPANY, INC.
By: Citicorp North America, Inc.,
as Attorney-in-Fact
By:____________________________
Name:
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: U.S. Securitization
Facsimile No. 000-000-0000
INVESTOR: CORPORATE RECEIVABLES CORPORATION
By: Citicorp North America, Inc.,
as Attorney-in-Fact
By:________________________
Name:
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: U.S. Securitization
Facsimile No. 000-000-0000
AGENT: CITICORP NORTH AMERICA, INC., as Agent
By:___________________________
Name:
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, X.X. 00000
Attention: U.S. Securitization
Facsimile No. 000-000-0000
BANK: CITIBANK, N.A.
By:___________________________
Name:
Title: Vice President
Percentage Interest: 100%
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, X.X. 00000
Facsimile No. 000-000-0000
PARENT AND RITE AID CORPORATION
COLLECTION AGENT:
By:___________________________
Name:
Title:
00 Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attn:
Facsimile No:
