EXHIBIT 4(b)
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LOAN AND SERVICING AGREEMENT
dated as of February 1, 2006
among
SWC RECEIVABLES FUNDING LLC,
as Borrower
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY,
as Servicer
THE PERSONS FROM TIME TO TIME
PARTY HERETO AS CONDUIT LENDERS,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS COMMITTED LENDERS,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS MANAGING AGENTS,
and
CITICORP NORTH AMERICA, INC.,
as Program Agent
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................................................. 1
SECTION 1.01. Certain Defined Terms............................................................. 1
SECTION 1.02. Other Terms and Constructions..................................................... 30
SECTION 1.03. Computation of Time Periods....................................................... 31
ARTICLE II AMOUNTS AND TERMS OF THE LOANS............................................................. 31
SECTION 2.01. The Loans......................................................................... 31
SECTION 2.02. Borrowing Procedures.............................................................. 33
SECTION 2.03. Tranches.......................................................................... 34
SECTION 2.04. Interest and Fees................................................................. 35
SECTION 2.05. Optional Prepayments.............................................................. 36
SECTION 2.06. Application of Collections Prior to Termination Date.............................. 36
SECTION 2.07. Application of Collections After Termination Date................................. 38
SECTION 2.08. Deemed Collections................................................................ 39
SECTION 2.09. Payments and Computations, Etc. .................................................. 39
SECTION 2.10. [Reserved]........................................................................ 39
SECTION 2.11. Interest Protection............................................................... 39
SECTION 2.12. Increased Capital................................................................. 41
SECTION 2.13. Funding Losses.................................................................... 42
SECTION 2.14. Taxes............................................................................. 42
SECTION 2.15. Security Interest................................................................. 43
SECTION 2.16. Evidence of Debt.................................................................. 44
SECTION 2.17. Interest on Cash Secured Advances................................................. 44
SECTION 2.18. Repayment of Cash Secured Advances................................................ 44
SECTION 2.19. Use of Proceeds; Security Interest in Collateral Advance Account.................. 44
SECTION 2.20. Establishment of Collateral Advance Account....................................... 45
ARTICLE III CONDITIONS OF EFFECTIVENESS AND LOANS..................................................... 46
SECTION 3.01. Conditions Precedent to Effectiveness and Initial Borrowing....................... 46
SECTION 3.02. Conditions Precedent to All Borrowings and Releases............................... 47
ARTICLE IV REPRESENTATIONS AND WARRANTIES............................................................. 48
SECTION 4.01. Representations and Warranties of the Borrower.................................... 48
SECTION 4.02. Representations and Warranties of the Servicer.................................... 51
ARTICLE V GENERAL COVENANTS........................................................................... 53
SECTION 5.01. Affirmative Covenants of the Borrower............................................. 53
SECTION 5.02. Reporting Requirements of the Borrower............................................ 58
SECTION 5.03. Negative Covenants of the Borrower................................................ 60
SECTION 5.04. Affirmative Covenants of the Servicer............................................. 63
SECTION 5.05. Reporting Requirements of the Servicer............................................ 64
SECTION 5.06. Negative Covenants of the Servicer................................................ 65
ARTICLE VI ADMINISTRATION OF RECEIVABLES.............................................................. 66
SECTION 6.01. Designation of Servicer........................................................... 66
SECTION 6.02. Duties of the Servicer............................................................ 67
SECTION 6.03. Rights of the Program Agent....................................................... 68
SECTION 6.04. Responsibilities of the Borrower.................................................. 68
SECTION 6.05. Further Action Evidencing Program Agent's Interest................................ 69
ARTICLE VII EVENTS OF TERMINATION..................................................................... 69
SECTION 7.01. Events of Termination............................................................. 69
ARTICLE VIII INDEMNIFICATION.......................................................................... 72
SECTION 8.01. Indemnities by the Borrower....................................................... 72
SECTION 8.02. Indemnities by the Servicer....................................................... 74
SECTION 8.03. Limited Liability of Parties...................................................... 75
ARTICLE IX THE AGENTS................................................................................. 75
SECTION 9.01. Authorization and Action.......................................................... 75
SECTION 9.02. Agents' Reliance, Etc. ........................................................... 75
SECTION 9.03. Agents and Affiliates............................................................. 76
SECTION 9.04. Lender's Loan Decision............................................................ 76
SECTION 9.05. Delegation of Duties.............................................................. 76
SECTION 9.06. Indemnification................................................................... 76
SECTION 9.07. Successor Agents.................................................................. 77
ARTICLE X MISCELLANEOUS............................................................................... 77
SECTION 10.01. Amendments, Etc. ................................................................ 77
SECTION 10.02. Notices, Etc. ................................................................... 78
SECTION 10.03. Assignability.................................................................... 78
SECTION 10.04. Additional Lender Groups......................................................... 80
SECTION 10.05. Consent to Jurisdiction.......................................................... 81
SECTION 10.06. WAIVER OF JURY TRIAL............................................................. 81
SECTION 10.07. Right of Setoff.................................................................. 81
SECTION 10.08. Ratable Payments................................................................. 82
SECTION 10.09. Limitation of Liability.......................................................... 82
SECTION 10.10. Costs, Expenses and Taxes........................................................ 83
SECTION 10.11. No Proceedings................................................................... 83
SECTION 10.12. Confidentiality.................................................................. 83
SECTION 10.13. No Waiver; Remedies.............................................................. 85
SECTION 10.14. GOVERNING LAW.................................................................... 85
SECTION 10.15. Execution in Counterparts........................................................ 85
SECTION 10.16. Integration; Binding Effect; Survival of Termination............................. 85
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EXHIBITS AND SCHEDULES
EXHIBIT A Credit and Collection Policy
EXHIBIT B Form of Borrowing Request
EXHIBIT C-1 Form of Monthly Report
EXHIBIT C-2 Form of Weekly Report
EXHIBIT D-1 Form of Blocked Account Agreement
EXHIBIT D-2 Form of Lock-Box Processor Agreement
EXHIBIT E List of Offices of Borrower where Records Are Kept
EXHIBIT F List of Alternate Payment Locations; Deposit Account Banks, Deposit Accounts, Lock-Box Processors and Lock-Boxes
EXHIBIT G List of Closing Documents
EXHIBIT H Form of Assignment and Acceptance
EXHIBIT I Form of Joinder Agreement
EXHIBIT J Form of Prepayment Notice
SCHEDULE I Lender Groups
SCHEDULE II Notice Addresses
SCHEDULE III Special Concentration Limits
SCHEDULE IV Approved Sub-servicers
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LOAN AND SERVICING AGREEMENT
This LOAN AND SERVICING AGREEMENT dated as of February 1, 2006 is
among SWC RECEIVABLES FUNDING LLC, a Delaware limited liability company, as
Borrower, THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY, an Ohio corporation, as Servicer,
▇▇▇▇▇▇, LLC as Conduit Lender, THE FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY HERETO, as Committed Lenders, THE FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY HERETO, as Managing Agents, and CITICORP NORTH AMERICA, INC., as Program
Agent for the Conduit Lenders and the Committed Lenders. Capitalized terms used
herein shall have the meanings specified in Section 1.01.
PRELIMINARY STATEMENTS
WHEREAS, the Borrower may from time to time purchase Receivables
from the Originator pursuant to the Purchase Agreement;
WHEREAS, to fund its purchases under the Purchase Agreement, the
Borrower may from time to time request Loans from the Lenders on the terms and
conditions of this Agreement;
WHEREAS, the Conduit Lenders may, in their sole discretion, make
Loans so requested from time to time, and if a Conduit Lender in any Lender
Group elects not to make any such Loan, the Committed Lenders in such Lender
Group have agreed that they shall make such Loan, in each case subject to the
terms and conditions of this Agreement;
NOW THEREFORE, in consideration of the premises, the mutual
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each party agrees as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Adjusted LIBO Rate" means, for any Tranche Period, an interest rate
per annum obtained by dividing (i) the LIBO Rate for such Tranche Period by (ii)
a percentage equal to 100% minus the LIBO Rate Reserve Percentage for such
Tranche Period.
"Administrative Services Agreement" means the Administrative
Services Agreement dated as of the date hereof between the Purchaser and
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇.
"Adverse Claim" means a Lien other than any Permitted Lien.
"Affected Party" means any Lender, CNAI, individually and in its
capacity as Program Agent, any Managing Agent, any Liquidity Provider and, with
respect to each of the foregoing, the parent company that controls such Person.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls or is controlled by or is under common control
with such specified Person.
"Aggregate Commitment" means, at any time, the sum of the
Commitments then in effect. The initial Aggregate Commitment as of the Effective
Date is $500,000,000.
"Aggregate Loss and Dilution Reserve" means, at any time, an amount
equal to the product of (i) the Net Receivables Pool Balance at such time
multiplied by (ii) a percentage equal to the greater of (a) the sum of the
Dynamic Loss Reserve Percentage and the Dilution Reserve Percentage at such time
and (b) the sum of the Loss Reserve Floor Percentage and the Dilution Reserve
Floor Percentage at such time.
"Aggregate Principal Balance" means, at any time, the aggregate
outstanding principal balance of the Loans hereunder at such time.
"Agreement" means this Loan and Servicing Agreement, as amended,
restated, supplemented or otherwise modified from time to time.
"Alternate Payment Location" means each ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ store
location where Obligors are permitted to make payments in respect of the
Receivables.
"Alternative Rate" for any Tranche during any Tranche Period means
an interest rate per annum equal to the sum of the Applicable Margin plus the
Adjusted LIBO Rate for such Tranche Period; provided, however, that in case of:
(i) any Tranche Period with respect to which the Adjusted LIBO Rate
is not available pursuant to Section 2.03,
(ii) any Tranche Period of less than one month,
(iii) any Tranche Period as to which the applicable Lender does not
receive a request, by no later than 1:00 P.M. (New York City time) on the
second Business Day preceding the first day of such Tranche Period, that
the related Tranche be funded at the Adjusted LIBO Rate,
(iv) any Tranche Period for a Tranche, the Principal Balance of
which is less than $500,000, or
(v) any Tranche Period for which the Borrower elects to fund the
related Tranche at the Base Rate,
the Alternative Rate for such Tranche Period shall be an interest rate per annum
equal to the Base Rate in effect from time to time during such Tranche Period.
"Applicable Margin" has the meaning set forth in the Fee Letter.
"Approved Sub-servicer" means each Person (i) appointed by the
Servicer pursuant to Section 6.01(d) to perform certain of the obligations of
the Servicer hereunder, (ii)
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approved by the Borrower, the Servicer, the Program Agent and the Managing
Agents and (iii) identified on Schedule IV hereto, as such, Schedule IV may be
amended from time to time with the consent of the Borrower, the Servicer, the
Program Agent and the Managing Agents.
"Asset Purchase Agreement" means any asset purchase or other
agreements pursuant to which a Conduit Lender may from time to time assign part
or all of the Loans made by such Conduit Lender to a Liquidity Provider, as
amended, restated, supplemented or otherwise modified from time to time.
"Assignment and Acceptance" means an agreement substantially in the
form set forth as Exhibit H hereto pursuant to which a new Conduit Lender or
Committed Lender becomes party to this Agreement.
"Bankruptcy Code" means Title 11 of the United States Code, 11
U.S.C. Section 101 et seq., as amended from time to time, or any successor
thereto.
"Base Rate" means a fluctuating interest rate per annum as shall be
in effect from time to time, which rate shall at all times be equal to the
higher of: (A) the Prime Rate, and (B) the Federal Funds Rate plus 0.50%.
"Base Rate Tranche" has the meaning specified in Section 2.03(b).
"Blocked Account Agreement" means an agreement with respect to a
Deposit Account at a Deposit Account Bank, in substantially the form of Exhibit
D-1 or such other form as may be acceptable to the Program Agent and the
Servicer, in their reasonable discretion, among the Borrower, the Originator,
the Program Agent and such Deposit Account Bank and, if applicable, a Lock-Box
Processor.
"Blocked Account Date" means March 3, 2006.
"Borrower" means SWC Receivables Funding LLC, a Delaware limited
liability company, in its capacity as Borrower hereunder, together with its
successors and permitted assigns.
"Borrower Obligations" means all present and future indebtedness and
other liabilities and obligations (howsoever created or evidenced, whether
direct or indirect, absolute or contingent, or due or to become due) of the
Borrower to the Secured Parties arising under this Agreement or any other
Facility Document or the transactions contemplated hereby or thereby, and shall
include, without limitation, the repayment of the Aggregate Principal Balance
and the payment of Interest, interest and principal on any Cash Secured
Advances, Fees and all other amounts due or to become due from the Borrower
under the Facility Documents (whether in respect of fees, expenses,
indemnifications, breakage costs, increased costs or otherwise), including,
without limitation, interest, fees and other obligations that accrue after the
commencement of any bankruptcy, insolvency or similar proceeding with respect to
any Transaction Party (in each case whether or not allowed as a claim in such
proceeding).
"Borrowing" means a borrowing of Loans under this Agreement.
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"Borrowing Base" means, at any time, an amount equal to (a) the
product of (i) the Borrowing Base Percentage in effect at such time and (ii) the
Net Receivables Pool Balance at such time minus (b) the Required Reserves at
such time.
"Borrowing Base Deficiency" means, at any time, the excess, if any,
of (i) the Aggregate Principal Balance over (ii) the Borrowing Base.
"Borrowing Base Percentage" means (i) during any time that the Debt
Ratings of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ is at least BBB- or higher and at least Baa3 or
higher, 100%, and (ii) at any other time, 97.5%; provided that the percentage in
clause (ii) may be adjusted on each anniversary of the Effective Date by the
Program Agent to reflect (a) the highest Monthly Maximum Principal Amount
Decline during the preceding 12 months divided by (b) four (4).
"Borrowing Date" has the meaning specified in Section 2.02(a)(i).
"Borrowing Request" has the meaning specified in Section 2.02(a)(i).
"Business Day" means any day other than a Saturday, Sunday or public
holiday or the equivalent for banks in New York City, New York and, if the term
"Business Day" is used in connection with the LIBO Rate, any day on which
dealings are carried on in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Secured Advance" means, in respect of any Term-Out Lender,
without duplication, the aggregate amount of the proceeds (a) of (i) an advance,
if any, made by such Lender pursuant to Section 2.01(d) and (ii) such Lender's
Pro Rata Share of any applications of Collections of Receivables during the Term
Period for its related Lender Group to reduce the Principal Balance in respect
of any Loan made by such Lender hereunder and (b) on deposit at such time in the
Collateral Advance Account (including any such proceeds invested by the Program
Agent, at such time in Permitted Investments pursuant to Section 2.20(a), it
being understood that the amount of such Lender's Cash Secured Advance shall be
decreased by such Lender's Pro Rata Share of the funds paid from time to time
from the Collateral Advance Account to the Borrower in connection with a Loan
made from time to time during the Term Period for its related Lender Group).
"Cash Secured Advance Commencement Date" means, with respect to any
Lender Group, the Scheduled Termination Date for such Lender Group (without
giving effect to the proviso within clause (i) of the definition of Scheduled
Termination Date), provided that the Cash Secured Advance Commencement Date
shall occur if, but only if, (i) the Termination Date shall not have occurred on
or prior to such date, (ii) no Event of Termination exists on such date and no
Incipient Event of Termination exists on such date, and (iii) the Borrower has
delivered a
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notice to the Managing Agent, for such Lender Group at least five (5) Business
Days prior to the Scheduled Termination Date that the Cash Secured Advance
Commencement Date should occur.
"Change in Control" means (i) the Originator shall cease to own,
directly or indirectly, 100% of the issued and outstanding Equity Interests of
the Borrower or the Servicer (if the Servicer is an Affiliate of the Originator)
(ii) (a) the acquisition of ownership, directly or indirectly, beneficially or
of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder),
other than an employee benefit or stock ownership plan of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, of
Equity Interests representing more than 40% of the aggregate ordinary voting
power represented by the issued and outstanding Equity Interests of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or (b) occupation of a majority of the seats (other than vacant
seats) on the board of directors of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ by Persons who were neither
(i) nominated by the board of directors of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ nor (ii) appointed
by directors so nominated.
"CNAI" means Citicorp North America, Inc., a Delaware corporation.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" has the meaning set forth in Section 2.15.
"Collateral Advance Account" means the collateral deposit account to
be opened after the date hereof at an Eligible Institution, in the name of the
Program Agent, and under the control of the Program Agent for the ratable
benefit of the Term-Out Lenders, as specified in Section 2.20(a).
"Collateral Advance Account Bank" has the meaning specified in
Section 2.20(a).
"Collateral Advance Account Direction" has the meaning specified in
Section 2.20(b).
"Collection Account" means the account to be maintained at an
Eligible Institution in the name of the Program Agent on behalf of the Lenders,
for the purpose of receiving Collections, or any other account which may be
designated by the Program Agent from time to time upon written notice to the
Servicer and the Borrower.
"Collection Delay Factor" shall mean, for any Monthly Report, ten
(10) days.
"Collections" means, with respect to any Receivable, any and all
cash collections and other cash proceeds of such Receivable, including, without
limitation, all cash proceeds of Related Security with respect to such
Receivable, all finance charges, if any, all amounts collected as interest,
fees, or charges for late payments with respect to such Receivable, all
recoveries with respect to each written off Receivable (net of amounts, if any,
retained by any third party collection agent), and any amounts deemed to have
been received with respect to such Receivable pursuant to Section 2.08 hereof.
"Commitment" of any Committed Lender means the Dollar amount set
forth on Schedule I hereto or, in the case of a Committed Lender that becomes a
party to this Agreement
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pursuant to an Assignment and Acceptance or a Joinder Agreement the amount set
forth therein as such Committed Lender's "Commitment", in each case as such
amount may be (i) reduced or increased by any Assignment and Acceptance entered
into by such Committed Lender and the other parties thereto in accordance with
the terms hereof and (ii) reduced pursuant to Section 2.01(b).
"Commitment Termination Date" has the meaning assigned to that term
in Section 2.01(c).
"Committed Lender" means, as to any Lender Group, each of the
financial institutions listed on Schedule I as a "Committed Lender" for such
Lender Group, together with its respective successors and permitted assigns.
"Concentration Limit" means, for any Obligor at any time, (a) the
Normal Concentration Limit or (b) such other higher percentages (each, a
"Special Concentration Limit") for such Obligors as are set forth on Schedule
III or such other Obligors and percentages as may otherwise be consented to by
all of the Managing Agents in writing from time to time, which Special
Concentration Limit is subject to reduction or cancellation by the Program Agent
or any Managing Agent upon five (5) days' notice to the Borrower, the other
Managing Agents, the Program Agent and the Servicer.
"Conduit Lender" means, collectively, the Persons identified as
"Conduit Lenders" on Schedule I and their respective successors and permitted
assigns.
"Conduit Lending Limit" means, for any Conduit Lender, the maximum
principal amount of the Loans which may be advanced by such Conduit Lender as
set forth on Schedule I (or on the signature pages to the Assignment and
Acceptance or Joinder Agreement pursuant to which such Conduit Lender became a
party hereto), subject to assignment pursuant to Section 10.03, as such amount
may be modified from time to time by notice from the related Managing Agent to
the Borrower and the Program Agent.
"Consolidated EBITDA" means, for any period, for ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
and its Subsidiaries on a consolidated basis, an amount equal to consolidated
net income of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ for such period plus (a) to the extent deducted
in calculating such consolidated net income, (i) consolidated interest expense
of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ for such period, (ii) consolidated income tax expense of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ for such period, (iii) depreciation and amortization expense of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and its Subsidiaries for such period and (iv) any non-cash
expenses or losses of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and its Subsidiaries for such period that
are classified as extraordinary or non-recurring under GAAP; and minus (b) to
the extent included in such consolidated net income, extraordinary gains of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and its Subsidiaries for such period, all computed in
accordance with GAAP.
"Consolidated Net Worth" means, on any date, the shareholders'
equity of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ on such date, determined in accordance with GAAP.
"Contract" means an agreement or other arrangement, including a
purchase order or invoice, an installment sale agreement or a revolving credit
agreement/credit sale contract,
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pursuant to or under which a Person is obligated to pay for goods purchased
from, or services rendered by, the Originator from time to time.
"CP Rate" means, with respect to any Conduit Lender for any Tranche
Period for any Tranche, to the extent such Conduit Lender funds such Tranche by
issuing Promissory Notes, the per annum rate equivalent to the weighted average
cost (as reasonably determined by the related Managing Agent, and which shall
include (without duplication) an administration fee of 2 basis points per annum,
the fees and commissions of placement agents and dealers, incremental carrying
costs incurred with respect to Promissory Notes maturing on dates other than
those on which corresponding funds are received by such Conduit Lender, other
borrowings by such Conduit Lender and any other costs associated with the
issuance of Promissory Notes) to the extent related to the issuance of
Promissory Notes that are allocated, in whole or in part, by such Conduit Lender
or its related Managing Agent to fund or maintain such Tranche during such
Tranche Period; provided, however, that if any component of any such rate is a
discount rate, in calculating the "CP Rate" for such Tranche Period, the related
Managing Agent shall for such component use the rate resulting from converting
such discount rate to an interest bearing equivalent rate per annum.
"Credit and Collection Policy" means, with respect to any
Receivable, the credit and collection policies and practices attached as Exhibit
A hereto relating to such Receivable and the related Obligor as modified from
time to time in accordance with the terms of Section 5.03(c).
"Debt Rating" means, with respect to any Person at any time, the
then current rating by S&P or Moody's of such Person's long-term public senior
unsecured non-credit enhanced debt.
"Default Ratio" means, as of any Monthly Reporting Date and
continuing to (but excluding) the next succeeding Monthly Reporting Date, the
fraction (expressed as a percentage) determined as of the last day of the
immediately preceding Monthly Period by dividing (i) the aggregate Outstanding
Balance of all Receivables on such date that remain unpaid for ninety-one (91)
or more days from such Receivables' original due dates by (ii) the aggregate
Outstanding Balance of all Receivables on such date.
"Defaulted Receivable" means a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for ninety-one (91) or more days from
the original due date thereof; (ii) as to which an Event of Bankruptcy has
occurred and is continuing with respect to the Obligor thereof; (iii) which has
been identified by the Borrower or the Originator as uncollectible; or (iv)
which, consistent with the Originator's Credit and Collection Policy, should be
written off as uncollectible.
"Delinquency Ratio" means, as of any Monthly Reporting Date and
continuing to (but excluding) the next succeeding Monthly Reporting Date, the
fraction (expressed as a percentage) determined as of the last day of the
immediately preceding Monthly Period by dividing (i) the aggregate Outstanding
Balance of all Receivables that are Delinquent Receivables on such date by (ii)
the aggregate Outstanding Balance of all Receivables on such date.
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"Delinquent Receivable" means a Receivable (i) as to which any
payment, or part thereof, remains unpaid between thirty-one (31) and ninety (90)
days from the original due date thereof or (ii) which, consistent with the
Credit and Collection Policy, has been or should be classified as delinquent by
the Originator or the Servicer.
"Deposit Account" means each depositary account, concentration
account or other similar account into which Collections are collected or
deposited.
"Deposit Account Bank" means a financial institution at which a
Deposit Account is maintained.
"Designated Obligor" means any Obligor designated by the Program
Agent as not being eligible.
"Diluted Receivable" means that portion, and only that portion, of
any Receivable which is either (a) reduced or canceled as a result of a Dilution
Factor or (b) subject to any specific dispute, offset, counterclaim or defense
whatsoever (in each case, except any such reduction, cancellation, dispute,
offset, counterclaim or defense due to, or resulting from or relating to, the
financial inability to pay or insolvency of the related Obligor).
"Dilution Factor" means any of the following factors giving rise to
dilution: (i) any defective, rejected or returned merchandise or services, any
cash discount, or any failure by the Originator to deliver any merchandise or
perform any services or otherwise perform as required by the underlying Contract
or invoice, (ii) any chargeback, allowance or cancellation of any terms of such
Contract or invoice or any other discount, rebate or adjustment by the
Originator, the Borrower or the Servicer which reduces the amount payable by the
Obligor on the related Receivable and (iii) any reduction or cancellation as a
result of any specific dispute, offset, counterclaim or defense by the related
Obligor or any of such Obligor's Affiliates (in each case, except any such
reduction, cancellation, dispute, offset, counterclaim or defense due to, or
resulting from or relating to, the financial inability to pay or insolvency of
the related Obligor or any of such Obligor's Affiliates).
"Dilution Horizon Factor" means, as of any Monthly Reporting Date
and continuing to (but excluding) the next succeeding Monthly Reporting Date, a
fraction (expressed as a percentage) determined as of the last day of the
immediately preceding Monthly Period (a) the numerator of which is the sum of
(i) the aggregate Outstanding Balance (in each case, at the time of creation) of
all Receivables generated during the immediately preceding two (2) Monthly
Periods plus (ii) the aggregate Outstanding Balance of all Future Due
Receivables as of such date, and (b) the denominator of which is the aggregate
Outstanding Balance of all Receivables as of such date minus the aggregate
Outstanding Balance of all Receivables on such date that remain unpaid for
ninety-one (91) or more days from their original due dates.
"Dilution Ratio" means, as of any Monthly Reporting Date and
continuing to (but excluding) the next succeeding Monthly Reporting Date, the
ratio, determined as of the last day of the immediately preceding Monthly Period
of (i) the portion of all Receivables which became Diluted Receivables during
such Monthly Period to (ii) the aggregate Outstanding Balance (in each case, at
the time of creation) of all Receivables generated during the second prior
Monthly
8
Period immediately preceding the Monthly Period referred to in clause (i);
provided that for clause (i), Diluted Receivables will not include those Diluted
Receivables which have been accrued for and such accrual balances have been
deducted from the Net Receivables Pool Balance for such Monthly Reporting Date.
"Dilution Reserve Floor Percentage" means, at any time, the product
of (i) the Dilution Horizon Factor multiplied by (ii) the average of the
Dilution Ratios for each of the twelve (12) most recently ended Monthly Periods.
"Dilution Volatility Factor" means, as of any Monthly Reporting Date
and continuing to (but excluding) the next succeeding Monthly Reporting Date, a
percentage determined as of the last day of the immediately preceding Monthly
Period equal to:
(HDR - ADR) x (HDR/ADR)
where:
HDR = the highest 2-month rolling average Dilution Ratio during
the twelve (12) most recently ended Monthly Periods; and
ADR = the average of the Dilution Ratios for each of the twelve
(12) most recently ended Monthly Periods.
"Dollars" and "$" each mean the lawful currency of the United States
of America.
"Dynamic Dilution Reserve Percentage" means, as of any Monthly
Reporting Date and continuing to (but excluding) the next succeeding Monthly
Reporting Date, a percentage determined as of the last day of the immediately
preceding Monthly Period equal to the product of (a) the sum of (i) the product
of (A) the Stress Factor on such date and (B) the 12-month rolling average
Dilution Ratio plus (ii) the Dilution Volatility Factor multiplied by (b) the
Dilution Horizon Factor.
"Dynamic Loss Reserve Percentage" means, as of any Monthly Reporting
Date and continuing to (but excluding) the next succeeding Monthly Reporting
Date, a percentage determined as of the last day of the immediately preceding
Monthly Period equal to the product of (i) the Stress Factor on such date, (ii)
the Loss Horizon Factor on such date and (iii) the highest average Loss Ratio
for any three (3) consecutive Monthly Periods during the preceding twelve (12)
Monthly Periods.
"Effective Date" means February 1, 2006.
"Eligible Institution" means a financial institution approved by the
Managing Agents and the Program Agent.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which (a) is a resident of, and has a billing
address in, the United States and (b) is not an Affiliate of any
Transaction Party;
9
(ii) which is not a Defaulted Receivable;
(iii) which is denominated and payable only in Dollars within the
United States;
(iv) 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 or
regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy) and with respect to which the Originator is not in violation of
any such law, rule or regulation applicable to such Contract in any
material respect;
(v) which is freely assignable and the Contract with respect to
which does not require the consent, authorization or approval of, or
notice to, the Obligor thereof or any other Person;
(vi) which was originated by the Originator in accordance, and
complies, with all applicable requirements of the Credit and Collection
Policy;
(vii) the Obligor of which is not an Obligor of Defaulted
Receivables whose aggregate Outstanding Balance exceeds 10% of the
aggregate Outstanding Balance of all Receivables owed by such Obligor if
such aggregate Outstanding Balance of all Receivables owed by such Obligor
equals or exceeds $100,000.
(viii) which (1) is an "account" within the meaning of 9-102 of the
UCC, (2) is an account receivable representing all or a part of the sales
price of merchandise sold or services rendered within the meaning of
Section 3(c)(5) of the Investment Company Act of 1940, as amended, (3)
together with the Contract related thereto, (x) has been duly authorized,
(y) is in full force and effect, and (z) represents a bona fide obligation
of the related Obligor to pay the stated amount and constitutes the legal,
valid and binding obligation of the Obligor thereof enforceable against
such Obligor in accordance with its terms and (4) is not subject to any
dispute, right of rescission, setoff, recoupment, counterclaim or defense
whether arising out of transactions concerning such Receivable or
otherwise (provided, that only the portion of the Receivable subject to
any such dispute, right of rescission, setoff, recoupment, counterclaim or
defense shall not be considered an Eligible Receivable by virtue of this
clause (viii)(4));
(ix) good and marketable title to which (including all of its
interest in all Related Security and Collections with respect thereto) has
been conveyed by the Originator to the Borrower pursuant to the terms of
the Purchase Agreement, free of any Adverse Claim;
(x) which arises from the sale of goods or the provision of services
by the Originator to an Obligor in the ordinary course of the Originator's
business;
(xi) which arises pursuant to a Contract with respect to which the
Originator has performed all obligations required to be performed by it
thereunder, including,
10
without limitation, shipment of merchandise and/or performance of services
purchased thereunder;
(xii) which has not been compromised, adjusted, re-aged or modified
for credit reasons (except in accordance with the Originator's Credit and
Collection Policy);
(xiii) which is due and payable in full in accordance with the terms
of the applicable Contract, but not to exceed more than 120 days after the
related original invoice date; provided that for those Receivables with
payment terms of 90-120 days after the original due date, such Receivables
in the aggregate cannot exceed 10 % of the aggregate Outstanding Balance
of all Receivables; provided that with respect to an Installment
Receivable, the final due date of the last installment under the Contract
of such Installment Receivable cannot exceed 12 months from the date of
such Installment Receivable's Contract date;
(xiv) which if funded with the proceeds of Promissory Notes, would
constitute a "current transaction" within the meaning of Section 3(a)(3)
of the Securities Act of 1933, as amended;
(xv) the Obligor of which has been directed to make all payments to
a Lockbox that on and after the Blocked Account Date is covered under a
Lockbox Processor Agreement, a Bank Account that on and after the Blocked
Account Date is covered by a Blocked Account Agreement, or an Alternate
Payment Location;
(xvi) which is an "eligible asset" within the meaning of Rule 3a-7
of the Investment Company Act of 1940, as amended;
(xvii) which is not evidenced by an instrument or promissory note;
(xviii) the Obligor of which is not a Designated Obligor; and
(xix) with respect to which the Program Agent has not notified the
Borrower and the Originator that such Receivable (or class of Receivables)
is not acceptable for financing hereunder.
"Enforceability Exceptions" means exceptions to the enforceability
of an obligation arising under (i) bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally,
and (ii) general principles of equity, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific performance, regardless of whether considered in a
proceeding at equity or at law.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
11
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended or any successor statute.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or any of its ERISA Affiliates
of any liability with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (g) the receipt by ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or any ERISA Affiliate of any notice, concerning the imposition
of Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"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.
"Event of Bankruptcy" means, with respect to any Person:
(i) such Person shall fail generally to pay its debts as they come
due, or shall make a general assignment for the benefit of creditors; or
any case or other proceeding shall be instituted by such Person seeking to
adjudicate it as bankrupt or insolvent, or seeking liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition
or readjustment of debts of it or its debts under the Federal Bankruptcy
Code or any other law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, or seeking the entry of
an order for relief or the appointment of a trustee, receiver, custodian,
liquidator, assignee, sequestrator or the like for such Person or all or
substantially all of its assets; or such Person shall take any corporate
or limited liability company action to authorize any of such actions; or
(ii) a case or other proceeding shall be commenced, without the
application or consent of such Person in any court seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the
like for such Person or all or substantially all of its assets, or any
similar action with respect to such Person under the Federal Bankruptcy
Code or any
12
other law relating to bankruptcy, insolvency, reorganization, winding up
or composition or adjustment of debts, and (A) such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of
sixty (60) consecutive days or (B) an order for relief in respect of such
Person shall be entered in such case or proceeding or a decree or order
granting such other requested relief shall be entered.
"Event of Termination" has the meaning assigned to that term in
Section 7.01.
"Excess Interest" means, in respect of Cash Secured Advances at any
time, the excess of (a) the aggregate unpaid accrued interest on the Cash
Secured Advances at such time over (b) the aggregate interest, dividends and any
net investment gains received by the applicable Managing Agent in respect of the
Cash Collateral and available for withdrawal from the Collateral Advance Account
at such time.
"Excluded Receivable" means all accounts receivable of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ for which Honeywell, Inc. is the Obligor.
"Extended Payment Term Overconcentration Amount" means, at any time,
the sum of (i) the aggregate Outstanding Balance of all Receivables with
payments terms that exceed 120 days plus (ii) the excess of the Outstanding
Balance of all Receivables with payment terms of 90-120 days over the product of
(a) 10% and (b) the aggregate Outstanding Balance of all Receivables.
"Extending Lenders" has the meaning assigned to that term in Section
2.01(c).
"Face Amount" means in relation to any Promissory Notes (a) if
issued on a discount basis, the face amount stated therein and (b) if issued on
an interest-bearing basis, the principal amount stated therein plus the amount
of all interest accrued or to accrue thereon on or prior to its stated maturity
date.
"Facility Documents" means collectively, this Agreement, the
Purchase Agreement, the Subordinated Note, each Fee Letter, each Blocked Account
Agreement, each Lock-Box Processor Agreement, the Wachovia Collection Account
Intercreditor Agreement, and all other agreements, documents and instruments
delivered pursuant thereto or in connection therewith.
"Facility Limit" means at any time, $500,000,000, adjusted as
necessary to give effect to the application of any Joinder Agreement, any
reduction by the Borrower pursuant to Section 2.01(b) and any change in the
amount of any Lender Group Limit.
"Federal Funds Rate" means, with respect to any Lender 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 immediately 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
applicable Managing Agent from three federal funds brokers of recognized
standing selected by it.
13
"Fee Letter" means the Fee Letter dated as of the date hereof
between the Managing Agent, the related Lenders and the Borrower, and each other
fee letter executed in connection with this Agreement or in connection with a
Joinder Agreement, each as amended, restated, supplemented or otherwise modified
from time to time.
"Fee Payment Date" means the third (3rd) Business Day of each
Monthly Period.
"Fees" means, collectively, all Liquidity Fees, Program Fees and
Other Fees.
"Final Collection Date" means the date on or following the
Termination Date on which the Aggregate Principal Balance has been reduced to
zero and all other Borrower Obligations have been paid in full.
"Five Year Credit Agreement" means the Second Amended and Restated
Five-Year Competitive Advance and Revolving Credit Facility Agreement dated as
of July 19, 2004 as amended and restated as of July 20, 2005 and as amended and
restated as of December 8, 2005 among ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and the lenders and
agents party thereto, as the same may be modified, supplemented or amended from
time to time or, if such agreement is terminated, the agreement providing for a
comparable committed revolving credit facility to ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇.
"Future Due Receivables" means, as of any date, those Receivables
that have been billed but are not due within the next thirty (30) days from such
date.
"GAAP" means generally accepted accounting principles as in effect
in the United States of America from time to time, consistently applied.
"Government Receivable" means any Receivable the Obligor of which is
a Governmental Authority.
"Governmental Authority" means any national, state or local
government (whether domestic or foreign), any political subdivision thereof or
any other governmental, quasi-governmental, judicial, regulatory, public or
statutory instrumentality, authority, body, agency, bureau or entity (including
any zoning authority, the Comptroller of the Currency or the Federal Reserve
Board, any central bank or any comparable authority) or any arbitrator with
authority to bind a party to this Agreement at law.
"Governmental Rule" means any law, rule, regulation, ordinance,
order, code interpretation, treaty, judgment, decree, directive, guidelines,
policy or similar form of decision of any Governmental Authority.
"Governmental Authority Overconcentration Amount" means, at any
time, the product of (x) the Governmental Authority Overconcentration Percentage
multiplied by (y) the aggregate Outstanding Balance of all Pool Receivables at
such time.
"Governmental Authority Overconcentration Percentage" means, at any
time, the excess (if any) of (i) the ratio (expressed as a percentage) of the
Outstanding Balance of Government Receivables to the aggregate Outstanding
Balance of all Receivables as determined
14
during each audit conducted by the Lenders or their representative or, prior to
the initial audit, 1% over (ii) 5% (and if no such excess exists, 0%).
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business. For
purposes hereof, the amount of any Guarantee shall be deemed to be an amount
equal to the stated or determinable amount of the related primary obligations,
or portion thereof, in respect of which such Guarantee is made or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the guarantor in good faith.
"Hedge Transactions" means transactions under any agreement with
respect to any swap, forward, future or derivative transaction or option or
similar agreement involving, or settled by reference to, one or more rates,
currencies or prices of commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value, or any similar transaction or any combination of such
transactions; provided that no phantom stock or similar plan providing for
payments only on account of services provided by current or former directors,
officers, employees or consultants of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or its Subsidiaries shall
be a Hedge Transaction.
"Incipient Event of Termination" means any event which, with the
giving of notice or lapse of time or both, would constitute an Event of
Termination.
"Incipient Judgment Event" means any Incipient Event of Termination
or Incipient Servicer Default that results from one or more judgments for the
payment of money in an aggregate amount in excess of $75,000,000 and not covered
by insurance having been rendered against ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, any of its
Subsidiaries or any combination thereof and the same remaining undischarged and
not effectively stayed, vacated or bonded pending appeal.
"Incipient Judgment Event Grace Period" means, with respect to an
Incipient Judgment Event, a period not to exceed 30 consecutive days following
the occurrence of such Incipient Judgment Event.
"Incipient Servicer Default" means any event which, with the giving
of notice or lapse of time or both, would constitute a Servicer Default.
15
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services,
(e) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all Capital Lease Obligations of such Person, and
(h) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit, letters of guaranty and banker's acceptances;
provided, however, that Indebtedness of any Person shall not include (i) trade
payables, (ii) any obligations of such Person incurred in connection with
letters of credit, letters of guaranty or similar instruments obtained or
created in the ordinary course of business to support obligations of such Person
that do not constitute Indebtedness or (iii) endorsements of checks, bills of
exchange and other instruments for deposit or collection in the ordinary course
of business.
"Indemnified Party" has the meaning set forth in Section 8.01.
"Initial Borrowing" means the first Borrowing made pursuant to this
Agreement.
"Installment Receivable Overconcentration Amount" means, at any
time, the product of (x) the Installment Receivable Overconcentration Percentage
multiplied by (y) the aggregate Outstanding Balance of all Pool Receivables at
such time.
"Installment Receivable Overconcentration Percentage" means, at any
time, the excess (if any) of (i) the percentage, as determined during each audit
conducted by the Lenders or their representative, of Receivables arising under
installment sale arrangements (the "Installment Receivables") to the aggregate
Outstanding Balance of all Receivables or, prior to the initial audit, 4% over
(ii) 6% (and if no such excess exists, 0%).
"Interest" means, for any Tranche and any Tranche Period, the sum
for each day during such Tranche Period of the following:
IR x PB/CB
where:
IR = the Interest Rate for such Tranche for such day.
PB = the Principal Balance of such Tranche on such day.
CB = (i) in the case of a Tranche, the Interest Rate for which is
based on the Base Rate, 365 and (ii) in the case of any
other Tranche, 360.
16
"Interest and Fee Reserve" means, at any time, an amount equal to
the sum of (A) the accrued and unpaid Interest, Program Fee, Liquidity Fee, and
Servicer Fee as of the Monthly Report Date plus (B) the product of (i) the
Liquidation Interest and Program Fee Percentage at such time multiplied by (ii)
the Aggregate Principal Balance at such time plus (C) the product of (i) the
Liquidation Servicer Fee Percentage at such time and (ii) the aggregate
Outstanding Balance of all Pool Receivables at such time.
"Interest Payment Date" means, (i) with respect to any Tranche which
accrues interest at the CP Rate, the third (3rd) Business Day of the month
immediately succeeding the related Tranche Period, (ii) with respect to any Base
Rate Tranche, the third (3rd) Business Day of the month immediately succeeding
the month in which the related Tranche Period ends, and (iii) with respect to
any LIBOR Tranche, the last day of the related Tranche Period and with respect
to any such Tranche Period longer than three (3) months, the third (3rd)
Business Day of each calendar quarter.
"Interest Rate" means, with respect to any Tranche for any day (i)
to the extent such Tranche is funded on such day by a Conduit Lender through the
issuance of Promissory Notes, the CP Rate and (ii) otherwise, the Alternative
Rate; provided, for both clause (i) and (ii), that at all times following the
occurrence and during the continuation of an Event of Termination, the Interest
Rate for each Tranche on each day shall be an interest rate per annum equal to
the Base Rate in effect from time to time plus 2.00%.
"IRC" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor statute.
"IRS" means the Internal Revenue Service of the United States of
America.
"Joinder Agreement" means a joinder agreement substantially in the
form set forth as Exhibit I hereto pursuant to which a new Lender Group becomes
party to this Agreement.
"Law" means any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Governmental Authority.
"Lender" means any Conduit Lender or Committed Lender, as
applicable, and "Lenders" means, collectively, the Conduit Lenders and the
Committed Lenders.
"Lender Group" means any Managing Agent and its related Conduit
Lenders and Committed Lenders.
"Lender Group Limit" means, for any Lender Group, the amount set
forth on Schedule I (or in the Joinder Agreement pursuant to which such Lender
Group became party hereto) subject to assignment pursuant to Section 10.03, as
such amount may be reduced in accordance with Section 2.01(b) or for a
Non-Extending Lender Group, the Lender Group Limit shall be reduced to zero on
the Scheduled Termination Date of such Lender Group.
17
"Lender Group Percentage" means, for any Lender Group, the
percentage equivalent of a fraction (expressed out to five decimal places), the
numerator of which is the aggregate Commitments of all Committed Lenders in such
Lender Group and the denominator of which is the Aggregate Commitment.
"Level I Ratings Period" means any period of time during which the
Debt Rating of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ is at least BB or higher by S&P and at least Ba2
or higher by ▇▇▇▇▇'▇.
"Level II Ratings Period" means any period of time during which the
Debt Rating of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ is (i) less than BB by S&P, (ii) less than Ba2
by ▇▇▇▇▇'▇, or (ii) has been withdrawn by either S&P or ▇▇▇▇▇'▇.
"Leverage Ratio" means, on any date, the ratio of (a) Total
Indebtedness at such date to (b) Consolidated EBITDA for the period of four
consecutive quarters ended on or most recently prior to such date.
"LIBO Rate" means, for any Tranche for any Tranche Period, the rate
determined by the related Managing Agent by reference to the British Bankers'
Association Interest Settlement Rate for deposits in Dollars, with a maturity
comparable to such Tranche Period, appearing on page 3750 of the Telerate
Service (or any such page as may replace page 3750 on such service or any
successor to or substitute for such service, providing rate quotations
comparable to those currently provided by such service, as determined by the
related Managing Agent from time to time for purposes of providing quotations of
interest rates applicable to deposits in Dollars in the London interbank market)
at approximately 11:00 a.m., London time, on the second Business Day before the
first day of such Tranche Period. In the event that such rate is not available
at such time for any reason, then the "LIBO Rate" shall be the rate at which
deposits in Dollars in a principal amount of not less than $1,000,000 and for a
maturity comparable to such Tranche Period are offered by the related Reference
Bank in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, on the second Business Day before (and
for value on) the first day of such Tranche Period.
"LIBO Rate Reserve Percentage" means, for any Tranche Period in
respect of which Interest is computed by reference to the LIBO Rate, the reserve
percentage applicable two Business Days before the first day of such Tranche
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 Tranche 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)
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 Tranche Period.
"LIBOR Tranche" has the meaning set forth in Section 2.03(b).
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or otherwise), or preference,
priority, charge or other
18
security agreement or preferential arrangement of any kind or nature whatsoever
that is intended as security.
"Liquidation Fee" means for any Tranche Period of any Tranche held
by a Lender (i) the amount, if any, by which the additional Interest which would
have accrued during such Tranche Period on the reductions of the Principal
Balance of the Tranche relating to such Tranche Period had a reduction of the
Principal Balance not occurred, exceeds (ii) the income, if any, received by the
Lender which holds such Tranche from the investment of the proceeds of such
reductions of Principal Balance. A certificate as to the amount of any
Liquidation Fee (including the computation of such amount) shall be submitted by
the affected Lender to the Borrower and shall be conclusive and binding for all
purposes, absent manifest error.
"Liquidation Interest and Program Fee Percentage" means, at any time
for purposes of calculating the Interest and Fee Reserve, an amount equal to the
product of (a) the sum of (i) 1.5 multiplied by the Alternative Rate for a
period of thirty (30) days deemed to have commenced on the date of the
calculation of the Interest and Fee Reserve plus (ii) the Applicable Margin plus
(iii) the Program Fee Rate multiplied by (B) a fraction, having as its numerator
the sum of (i) the average Turnover Ratio for any period of three (3)
consecutive Monthly Periods plus (ii) the Collection Delay Factor, and having as
its denominator, 360.
"Liquidation Servicer Fee Percentage" means, at any time, for
purposes of calculating the Interest and Fee Reserve, an amount equal to the
product of (a) the Servicer Fee Rate per annum and (b) a fraction, having as its
numerator the sum of (i) the average Turnover Ratio for any period of three (3)
consecutive Monthly Periods plus (ii) the Collection Delay Factor and having as
its denominator, 360.
"Liquidity Facility Termination Date" means any day upon which the
commitments of any financial institutions from time to time extending liquidity
support for the Promissory Notes issued by any Conduit Lender in connection with
this Agreement or to fund the acquisition and/or maintenance by any Conduit
Lender of Loans in respect of which Interest accrues or is to accrue at the
Alternative Rate, shall be terminated for any reason (whether at the stated
maturity or earlier) or shall otherwise cease to be in full force and effect.
"Liquidity Fee" has the meaning set forth in the Fee Letter.
"Liquidity Provider" means any of the financial institutions from
time to time party to any Asset Purchase Agreement or any liquidity loan
agreement or similar arrangement with a Conduit Lender.
"Loan" means a loan made to the Borrower pursuant to Article II.
"Lock-Box" means any post office box maintained by the Originator,
the Servicer or a Lock-Box Processor, in each case, for the purpose of receiving
payments on Receivables or other Collections.
"Lock-Box Processor" means any of the Persons identified as a
Lock-Box Processor on Exhibit F and any other Person that may from time to time
perform lock-box services with respect to one or more Lock-Boxes.
19
"Lockbox Account" means any account maintained by the Originator at
a Lockbox Bank for the purpose of receiving Collections from receivables.
"Lockbox Bank" means any bank at which the Originator maintains
Lockbox Accounts for the purpose of receiving Collections from receivables.
"Lock-Box Processor Agreement" means an agreement with respect to a
Lockbox Account in substantially the form of (i) Exhibit D-2 or (ii) a Blocked
Account Agreement that incorporates the substantive provisions of Exhibit D-2,
or such other form as may be acceptable to the Program Agent in its discretion,
among the Borrower, the Originator, the Program Agent and the related Lock-Box
Processor.
"Loss Horizon Factor" means, as of any Monthly Reporting Date and
continuing to (but excluding) the next succeeding Monthly Reporting Date, a
ratio determined as of the last day of the immediately preceding Monthly Period
by dividing (i) the sum of (a) aggregate Outstanding Balances (in each case, at
the time of creation) of all Receivables generated during the three (3)
immediately preceding Monthly Periods plus (b) the aggregate outstanding balance
of Future Due Receivables as of such date by (ii) the aggregate Outstanding
Balances of all Pool Receivables as of such day minus the aggregate Outstanding
Balances of all Receivables, as of such day, that remain unpaid ninety-one (91)
or more days from their original due dates.
"Loss Ratio" means, as of any Monthly Reporting Date and continuing
to (but excluding) the next succeeding Monthly Reporting Date, the ratio
(expressed as a percentage) determined as of the last day of the immediately
preceding Monthly Period by dividing (A) the sum of (i) the aggregate
Outstanding Balance of all Receivables that were aged at least 61 days, but not
greater than 90 days from their respective original due dates on such date and
(ii) the aggregate Outstanding Balance of all Receivables that were less than 61
days past due and were written off during such Monthly Period by (B) the
aggregate Outstanding Balance (in each case, at the time of creation) of all
Receivables generated during the fourth preceding Monthly Period.
"Loss Reserve Floor Percentage" means, (i) during any Level I
Ratings Period, the product of (x) 4 and (y) the Normal Concentration Limit
Percentage and (ii) during any Level II Ratings Period, the product of (x) 5 and
(y) the Normal Concentration Limit Percentage.
"Loss-to-Liquidation Ratio" means, as of any Monthly Reporting Date
and continuing to (but excluding) the next succeeding Monthly Reporting Date,
the ratio (expressed as a percentage) for the immediately preceding Monthly
Period determined by dividing (i) the aggregate Outstanding Balance of all
Receivables that were (or should have been in accordance with the Credit and
Collection Policy) written off during such Monthly Period by (ii) the aggregate
amount of cash Collections received by the Servicer during such Monthly Period.
"Majority Committed Lenders" means, at any time, Committed Lenders
whose Commitments together exceed fifty percent (50%) of the Aggregate
Commitment at such time.
"Majority Managing Agents" means, at any time, Managing Agents whose
Lender Group Limits together exceed fifty percent (50%) of the Facility Limit at
such time.
20
"Managing Agent" means, as to any Conduit Lender or Committed
Lender, the Person listed on Schedule I as the "Managing Agent" for such
Lenders, together with its respective successors and permitted assigns.
"Material Adverse Effect" means a material adverse effect on (i) the
business, operations or condition, financial or otherwise, of the Originator and
its Subsidiaries taken as a whole (ii) the ability of any Transaction Party to
perform its obligations under this Agreement or any other Facility Document,
(iii) the legality, validity or enforceability against any Transaction Party of
this Agreement or any other Facility Document, (iv) any Secured Party's interest
in the Receivables generally or in any significant portion of the Receivables,
the Related Security or the Collections with respect thereto, or (v) the
collectibility of the Receivables generally or of any material portion of the
Receivables.
"Material Indebtedness" means Indebtedness, or obligations in
respect of one or more Hedge Transactions, of any one or more of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and its Subsidiaries (other than the Borrower) in an aggregate
principal amount exceeding $50,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or
any of its Subsidiaries in respect of any Hedge Transaction at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or such Subsidiary would be required to pay if such Hedge
Transaction were terminated at such time.
"Maximum Allowable Principal Amount" means for any Monthly Period,
the lowest of (i) the Facility Limit as of the end of such Monthly Period, (ii)
the Borrowing Base as of the end of such Monthly Period and (iii) the Maximum
Permitted Amount as of the end of such Monthly Period.
"Maximum Permitted Amount" means, on any date of determination, the
sum of (i) $300,000,000 plus (ii) the maximum amount of Indebtedness that may be
secured by Liens pursuant to Section 6.01(k) of the Five Year Credit Agreement.
"Monthly Maximum Principal Amount Decline" means for any Monthly
Period, the ratio (expressed as a percentage) determined by dividing (a) the
amount equal to (i) the Maximum Allowable Principal Amount as of the end of the
Monthly Period immediately preceding such Monthly Period minus (ii) the Maximum
Allowable Principal Amount as of the end of such Monthly Period by (b) the
Maximum Allowable Principal Amount as of the end of the Monthly Period
immediately preceding such Monthly Period; provided that if the amount in clause
(ii) above is greater than the amount in clause (i) above, the Monthly Maximum
Principal Amount Decline is zero.
"Monthly Period" means each calendar month.
"Monthly Report" means a report, in substantially the form of
Exhibit C-1, furnished by the Servicer to the Managing Agents for the Lenders
pursuant to Section 5.05(d).
"Monthly Reporting Date" means the fifteenth (15th) day of each
Monthly Period (or, if such day is not a Business Day, the next succeeding
Business Day).
21
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and its successors.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Receivables Pool Balance" means at any time of calculation
hereunder, without duplication, an amount equal to the Outstanding Balances of
all Eligible Receivables at such time, minus, (i) the aggregate amount of
unapplied cash and unapplied credits, (ii) the aggregate outstanding balance of
all Defaulted Receivables, (iii) aggregate amount of customer deposits, (iv) the
aggregate amount of Retainages relating to the Receivables, (v) the outstanding
balance of accruals relating to Dilution Factors, (vi) the Extended Payment Term
Overconcentration Amount at such time, (vii) the Obligor Overconcentration
Amount at such time, (viii) the Governmental Authority Overconcentration Amount
at such time, (ix) the Installment Receivables Overconcentration Amount at such
time, (x) the Retail Receivables Overconcentration Amount, (xi) the aggregate
outstanding balance of all Receivables that represent customer shortpays (open
chargebacks), (xii) potential set-off amounts calculated as the sum of all the
outstanding amounts that are owed by the Borrower or the Originator to each of
the ten largest Obligors in the Receivables Pool during the most recent Monthly
Report (but not in excess of) the Outstanding Balance of all Receivables that
are not Defaulted Receivables of each such Obligor, (xiii) the aggregate accrued
and unpaid sales and excise taxes and other similar taxes and charges payable in
connection with the Receivables and their creation at such time; provided that
for clauses (xii) and (xiii), such deductions will be applicable only during the
period when the Debt Ratings of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ are less than either BBB- by
S&P or less than Baa3 by Moody's.
"Non-Extending Lender" means each Lender in any Lender Group that
does not extend its Scheduled Termination Date pursuant to Section 2.01(c) and
in respect of which the Borrower has not requested advances pursuant to Section
2.01(d).
"Normal Concentration Limit" means, at any time with respect to any
Obligor, the product of (i) 2.75% (the "Normal Concentration Limit Percentage")
multiplied by (ii) the Net Receivables Pool Balance.
"Obligor" means any Person obligated to make payments pursuant to a
Contract.
"Obligor Overconcentration Amount" means, at any time, the
aggregate, for all Obligors, of the amounts by which the aggregate Outstanding
Balance of all Eligible Receivables of each such Obligor and its Affiliates
exceeds the product of (i) the applicable Concentration Limit for such Obligor
at such time, and (ii) the Net Receivables Pool Balance at such time.
"Official Body" means any Governmental Authority or any accounting
board or authority (whether or not part of a government) which is responsible
for the establishment or interpretation of national or international accounting
principles, in each case whether foreign or domestic.
"Originator" means ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇.
22
"Other Fees" means amounts owed by the Borrower hereunder pursuant
to Sections 2.11, 2.12, 2.13, 2.14, 8.01 and 10.10.
"Outstanding Balance" means, with respect to a Receivable at any
time, the then outstanding principal balance thereof.
"Participant" has the meaning specified in Section 10.03(f).
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Investments" shall mean:
(a) direct obligations of, or guaranteed as to the full and timely
payment of principal and interest by, the United States or obligations of
any agency or instrumentality thereof, if such obligations are backed by
the full faith and credit of the United States;
(b) federal funds, certificates of deposit, time deposits, bankers'
acceptances (which shall each have an original maturity of not more than
ninety (90) days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days) or demand deposits
of any United States depository institution or trust company organized
under the laws of the United States or any state and subject to
supervision and examination by federal and or state banking authorities;
provided, that the short-term obligations of such depository institution
or trust company are rated in one of the two highest available rating
categories by the Rating Agencies on the date of acquisition thereof;
(c) commercial paper (having original maturities of not more than
thirty (30) days) of any corporation incorporated under the laws of the
United States or any state thereof which is rated A-1 or better by S&P and
P-1 by Moody's on the date of acquisition thereof;
(d) securities of money market funds rated AA or better by S&P and
Aa or better by Moody's on the date of acquisition thereof; or
(e) repurchase obligations secured by an investment described in
clause (a) above with a market value greater than the repurchase
obligation, provided that such security is held by a third party custodian
which has a rating for its short-term, unsecured debt or commercial paper
(other than such obligations the rating of which is based on the credit of
a Person other than such custodian) of P-1 by Moody's and at least A-1 by
S&P on the date of acquisition thereof.
"Permitted Liens" means any of the following:
(a) Liens for taxes and assessments (i) which are not yet due and
payable or (ii) the validity of which are being contested in good faith by
appropriate proceedings and
23
with respect to which the Borrower is maintaining adequate reserves in
accordance with GAAP;
(b) Liens in favor of the Program Agent or any Secured Party,
including any Liquidity Providers (but only in connection with this
Agreement); and
(c) Liens in favor of the Borrower arising pursuant to the Purchase
Agreement.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an "employer" defined in
Section 3(5) of ERISA.
"Pool Receivable" means each Receivable in which an interest has
been transferred or purported to be transferred to the Borrower by the
Originator pursuant to the Purchase Agreement.
"Prime Rate" means, with respect to any Lender Group, the rate of
interest announced publicly by the related Reference Bank from time to time as
its prime or base rate (such rate not necessarily being the lowest or best rate
charged by such Reference Bank).
"Principal Balance" means with respect to any Tranche, the original
principal amount of a Loan made hereunder that has been allocated to such
Tranche pursuant to Section 2.03(a), as such amount may be divided or combined
in accordance therewith, in each case as reduced from time to time by (i)
payments made in accordance with Section 2.05 and (ii) Collections received by
the applicable Lender holding such Tranche from distributions made pursuant to
Section 2.06 or Section 2.07, as applicable, that have been applied to reduce
the Principal Balance of such Tranche (or during the Term Period, deposited in
the Collateral Advance Account); provided, that if such Principal Balance 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
Principal Balance shall be increased by the amount of such rescinded or returned
distribution, as though it had not been received by such Lender.
"Program Agent" means CNAI, in its capacity as agent for the
Lenders, together with its successors and permitted assigns.
"Program Fee" has the meaning set forth in the Fee Letter.
"Program Fee Rate" has the meaning set forth in the Fee Letter.
24
"Prohibited Transaction" means any transaction set forth in Section
406 of ERISA or Section 4975 of the IRC which is not exempt under Section 408 of
ERISA or Section 4975(d) of the IRC.
"Promissory Notes" means, collectively, (i) promissory notes issued
by a Conduit Lender and (ii) participations sold by a Conduit Lender pursuant to
Section 10.03(f); provided, that the terms "Promissory Notes" shall not include
the interests sold by a Conduit Lender pursuant to an Asset Purchase Agreement.
"Pro Rata Share" means, at any time for any Committed Lender in any
Lender Group, (a) the Commitment of such Committed Lender at such time divided
by the sum of the Commitments of all Committed Lenders in such Lender Group at
such time and (b) after the Commitments of all the Committed Lenders in such
Lender Group have been terminated, the outstanding principal amount of the Loans
funded by such Committed Lender at such time divided by the outstanding
principal amount of the Loans funded by all the Committed Lenders in such Lender
Group at such time.
"Purchase Agreement" means that certain Purchase and Contribution
Agreement dated as of the date hereof between the Originator and the Borrower,
as amended, restated, supplemented or otherwise modified from time to time.
"Rate Type" means the Adjusted LIBO Rate, the Base Rate or the CP
Rate.
"Rating Agencies" means each of S&P and Moody's or their respective
successors.
"Receivable" means all indebtedness of an Obligor arising under a
Contract from the sale of goods or services by the Originator in the ordinary
course of its business to an Obligor of the Originator, including all interest,
finance charges, sales taxes and other taxes with respect thereto, provided that
until May 31, 2006, "Receivable" shall not include any Excluded Receivable.
"Records" means all Contracts and all other material agreements,
documents, instruments, books, records and other information (including, without
limitation, computer programs, tapes, discs, punch cards, data processing
software and related property and rights) maintained by or on behalf of the
Borrower or the Servicer with respect to the Pool Receivables, the related
Obligors and the Related Security.
"Reference Bank" means, with respect to any Lender Group, the
financial institution identified as the Reference Bank for such Lender Group on
Schedule I or such other financial institution as shall be specified by the
Managing Agent for such Lender Group in a written notice to the Borrower.
"Related Security" means, with respect to any Pool Receivable: (i)
all security interests or liens and property subject thereto from time to time
purporting to secure payment of such Pool Receivable, whether pursuant to the
related Contract or otherwise, (ii) all UCC financing statements or other
filings covering any collateral securing payment of such Pool Receivable (it
being understood that such UCC financing statements will not be assigned of
25
record to the Program Agent unless requested by the Program Agent after an Event
of Termination), (iii) all guarantees, prepayment penalties, cancellation fees,
indemnities, warranties, letters of credit, insurance policies and proceeds and
premium refunds thereof and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such Pool
Receivable whether pursuant to the related Contract or otherwise, (iv) all
Records related to such Pool Receivable, (v) all right, title and interest in
and to the Purchase Agreement, and (vi) all proceeds of the foregoing.
"Release" has the meaning specified in Section 2.06(a)(v).
"Required Reserves" means, at any time, the sum of (a) the Aggregate
Loss and Dilution Reserve plus (b) the Interest and Fee Reserve.
"Responsible Officer" means, with respect to any Person, the chief
executive officer, the president, any vice president, the chief financial
officer or the treasurer or assistant treasurer of such Person, any other
officer, member or manager having substantially the same authority and
responsibility.
"Retail Receivable" means a Receivable arising under a revolving
credit agreement/credit sale agreement.
"Retail Receivable Overconcentration Amount" means, at any time, the
product of (x) the Retail Receivable Overconcentration Percentage multiplied by
(y) the aggregate Outstanding Balance of all Pool Receivables at such time.
"Retail Receivable Overconcentration Percentage" means, at any time,
the excess (if any) of (i) the percentage, as determined during each audit
conducted by the Lenders or their representative, of Retail Receivables to the
aggregate Outstanding Balance of all Receivables or, prior to the initial audit,
2% over (ii) 4% (and if no such excess exists, 0%).
"Retainage" means an agreed upon dollar amount or percentage of a
payment due under a Contract that is withheld by an Obligor from periodic
payments to the Originator as security for the Originator's performance under
such Contract.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
"Scheduled Termination Date" means, (i) with respect to the
Committed Lenders' Commitments hereunder, January 31, 2007, unless such date is
extended pursuant to Section 2.01(c).; provided, that if there shall have
occurred a Cash Secured Advance Commencement Date for a Lender Group, the
Scheduled Termination Date for such Term-Out Lenders shall mean January 28, 2009
and (ii) with respect to the Conduit Lenders January 28, 2009.
"Secured Parties" means, collectively, the Lenders, each Managing
Agent, the Program Agent and each other Indemnified Party.
"Servicer" means ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, or such other Person(s) then
authorized pursuant to Section 6.01 to service, administer, ▇▇▇▇ and collect
Pool Receivables.
26
"Servicer Default" means the occurrence of any of the following with
respect to the Servicer:
(a) the Servicer shall fail to make any payment or deposit required
to be made by it hereunder when due, and such failure shall continue for
two (2) Business Days; or
(b) the Servicer shall fail to perform or observe any term, covenant
or agreement contained in this Agreement or any other Facility Document on
its part to be performed or observed and such failure remains unremedied
for thirty (30) days after it receives notice of such failure from any
Affected Party or a Responsible Officer of the Servicer has knowledge
thereof; or
(c) any representation or warranty made or deemed to be made by the
Servicer under this Agreement, any Monthly Report, any Weekly Report, any
Borrowing Request or other information or report delivered pursuant hereto
shall prove to have been false or incorrect in any material respect when
made or deemed made or delivered; or
(d) an Event of Bankruptcy shall have occurred with respect to the
Servicer; or
(e) occurrence of an other Event of Termination relating to the
Servicer (including, without limitation, breach of any applicable
financial covenants).
"Servicer Fee" means a fee with respect to each Monthly Period,
payable in arrears on each Fee Payment Date for the account of the Servicer, in
an amount equal to the product of (i) the aggregate Outstanding Balances of all
Pool Receivables as of the last day of such Monthly Period, (ii) the Servicer
Fee Rate and (iii) a fraction equal to the number of actual days elapsed in such
Monthly Period divided by 360; provided, that if the Servicer is not
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or an Affiliate of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, the Servicer Fee shall be
reflective on the market rate for servicing similar Receivables.
"Servicer Fee Rate" means a rate per annum equal to one-half of one
percent (0.50%).
"Settlement Date" means (i) the next Business Day immediately
following each Monthly Reporting Date and (ii) (A) during any period when the
conditions precedent set forth in Section 3.02 are not satisfied and (B) on and
after the occurrence of the Termination Date each other Business Day specified
by the Program Agent (which, in the discretion of the Program Agent, may be as
frequently as daily) in a written notice to the Borrower and the Servicer.
"▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇" means The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, an Ohio
corporation.
"Special Concentration Limit" has the meaning assigned to that term
in the definition of "Concentration Limit."
"Stress Factor" means (i) during any Level I Ratings Period, 2.00
and (ii) during any Level II Ratings Period, 2.25.
27
"Subordinated Note" means that certain Subordinated Note dated as of
the date hereof, executed by the Borrower in favor of the Originator pursuant to
the Purchase Agreement, as amended, restated, supplemented or otherwise modified
from time to time.
"Subsidiary" means, as to any Person (other than ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇),
any corporation, limited liability company or other entity of which securities,
membership interests or other ownership interests having ordinary voting power
to elect a majority of the Board of Directors, managers or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person. "Subsidiary" shall mean, as to ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, any corporation,
limited liability company, partnership, association or other entity the accounts
of which would be consolidated with those of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ in its
consolidated financial statements if such financial statements were prepared in
accordance with GAAP, as well as any other corporation, limited liability
company, partnership, association or other entity of which securities or other
ownership interests representing more than 50% of the equity or more than 50% of
the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned by ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or
one or more subsidiaries of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or by ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and one or
more subsidiaries of the parent.
"Term-Out Lender" means any Committed Lender which is a member of a
Lender Group for which the Term Period has commenced.
"Term Period" means, for any Committed Lender, the period commencing
on the Cash Secured Advance Commencement Date, if any, and ending on the
Termination Date.
"Termination Date" means the earliest to occur of (i) the earliest
Scheduled Termination Date on which there are no Term Out Lenders or Extending
Lenders, (ii) January 28, 2009, (iii) the declaration or automatic occurrence of
the Termination Date pursuant to Section 7.01, and (iv) that Business Day which
the Borrower designates as the Termination Date by notice to the Program Agent
at least five (5) Business Days prior to such Business Day.
"Total Indebtedness" means all Indebtedness of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and
its Subsidiaries, determined on a consolidated basis in accordance with GAAP
consistently applied.
"Tranche" has the meaning specified in Section 2.03(a).
"Tranche Period" means, with respect to any Tranche:
(a) in the case of any Tranche in respect of which Interest is
computed by reference to the CP Rate, (i) initially, the period commencing on
(and including) the first Borrowing Date and ending on (and including) the last
day of the Monthly Period in which such Borrowing Date occurs, and (ii)
thereafter, each successive period commencing on (but excluding) the last day of
the immediately preceding Monthly Period for such Tranche and ending on (and
including) the last day of such Monthly Period; and
(b) in the case of any Tranche in respect of which Interest is
computed by reference to the Alternative Rate, each period from one to and
including 30 days in the case of a Tranche funded at the Base Rate, or a period
of one, two, three or six months in the case of a
28
Tranche funded at the Adjusted LIBO Rate, as the Borrower shall select in a
written notice to the Program Agent and the Lenders not later than 1:00 P.M.
(New York City time) on the third Business Day immediately before the first day
of such Tranche Period, each such Tranche Period for such Tranche to commence on
the last day of the immediately preceding Tranche Period for such Tranche (or if
there is no such Tranche Period, on the applicable Borrowing Date thereof),
except that if the Program Agent and the Lenders shall not have received such
notice before 1:00 P.M. on such third Business Day, such Tranche Period shall be
one day; provided, however, that:
(i) any Tranche 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, that if Interest in respect of
such Tranche Period is computed by reference to the Adjusted LIBO Rate,
and such Tranche 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 Tranche Period shall end on the next preceding
Business Day);
(ii) in the case of any Tranche Period of one day, (A) if such
Tranche Period is the initial Tranche Period for a Tranche, such Tranche
Period shall be the applicable Borrowing Date; (B) any subsequently
occurring Tranche Period which is one day shall, if the immediately
preceding Tranche Period is more than one day, be the last day of such
immediately preceding Tranche Period and, if the immediately preceding
Tranche Period is one day, be the day next following such immediately
preceding Tranche Period; and (C) if such Tranche Period occurs on a day
immediately preceding a day which is not a Business Day, such Tranche
Period shall be extended to the next succeeding Business Day;
(iii) in the case of any Tranche Period for any Tranche which
commences before the Termination Date and would otherwise end on a date
occurring after the Termination Date, such Tranche Period shall end on the
Termination Date and the duration of each Tranche Period which commences
on or after the Termination Date shall be a period from and including the
last day of the immediately preceding Tranche Period (or, in the case of
the initial Tranche Period immediately following the Termination Date,
from and including the Termination Date) to but excluding the next
Interest Payment Date; and
(iv) at any time when the Base Rate shall have been in effect for a
Tranche Period of ten consecutive Business Days, and the conditions set
forth in clauses (i) and (iv) of the definition of Alternative Rate do not
exist, any Lender may, upon one Business Day's notice to the Borrower
(with a copy to the Program Agent), select as the next succeeding Tranche
Period for such Tranche (and any subsequent Tranche Periods designated by
such Lender) a period of one month during which Interest shall be computed
by reference to the Adjusted LIBO Rate; provided, however, that prior to
such selection the Borrower may notify the applicable Lender that, in view
of anticipated Collections and repayments, Interest should continue to be
computed by reference to the Base Rate.
29
"Transaction Parties" means, collectively, the Borrower, the
Originator and (so long as it is ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or an Affiliate thereof) the
Servicer.
"Turnover Ratio" means as of any Monthly Reporting Date and
continuing to (but excluding) the next succeeding Monthly Reporting Date, an
amount equal to the product of (i) the Receivables Pool Balance as of the close
of business on the last day of the immediately preceding Monthly Period divided
by the aggregate amount of Collections received during such Monthly Period
multiplied by (ii) 30.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the applicable jurisdiction.
"Wachovia Collection Account" means ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ account number
[____________] with Wachovia Bank, N.A.
"Wachovia Collection Account Intercreditor Agreement" means the
Intercreditor Agreement between ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, the Borrower and the Program
Agent with respect to the Wachovia Collection Account, as such Intercreditor
Agreement may be amended from time to time in accordance with its terms.
"Weekly Report" means a report furnished by the Servicer to the
Managing Agents on each Weekly Reporting Date pursuant to Section 5.05(e), in
substantially the form of Exhibit C-2, reflecting information for the seven (7)
day period ending on the day immediately preceding such Weekly Reporting Date.
"Weekly Reporting Date" means each Tuesday (or if such day is not a
Business Day, the next succeeding Business Day).
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Other Terms and Constructions. Under this Agreement,
all accounting terms not specifically defined herein shall be construed in
accordance with GAAP as in effect in the United States, and all accounting
determinations made and all financial statements prepared hereunder shall be
made and prepared in accordance with GAAP. 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. The words "herein," "hereof," and
"hereunder" and other words of similar import refer to this Agreement as a
whole, including the exhibits and schedules hereto, as the same may from time to
time be amended or supplemented and not to any particular section, subsection,
or clause contained in this Agreement, and all references to Sections, Exhibits
and Schedules shall mean, unless the context clearly indicates otherwise, the
Sections hereof and the Exhibits and Schedules attached hereto, the terms of
which Exhibits and Schedules are hereby incorporated into this Agreement. The
captions and section numbers appearing in this Agreement are inserted only as a
matter of convenience and do not define, limit, construe or describe the scope
or intent of the provisions of this Agreement. Each of the definitions set forth
in Section 1.01 hereof shall be equally applicable to both the singular and
plural forms of the defined terms. Unless specifically stated otherwise, all
references herein to
30
any agreements, documents or instruments shall be references to the same as
amended, restated, supplemented or otherwise modified from time to time.
SECTION 1.03. Computation of Time Periods. Unless otherwise stated
in this Agreement, in the computation of a period of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding."
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
SECTION 2.01. The Loans.
(a) On the terms and subject to the conditions hereof, on the
Effective Date, and thereafter from time to time prior to the Termination Date,
each Conduit Lender may in its sole discretion, and each Committed Lender shall,
if the Conduit Lender in its related Lender Group elects not to, make Loans to
the Borrower in an amount, for each Lender Group, equal to its Lender Group
Percentage of the amount requested by the Borrower pursuant to Section 2.02;
provided that no Lender shall make any such Loan if, after giving effect to such
Loan:
(i) the aggregate outstanding Principal Balance of the
Tranches funded by such Lender hereunder shall exceed its Conduit Lending
Limit (in the case of a Conduit Lender) or Commitment (in the case of a
Committed Lender);
(ii) the Aggregate Principal Balance shall exceed the lesser
of the Facility Limit and the Maximum Permitted Amount;
(iii) the sum of (A) the aggregate Face Amount of Promissory
Notes issued by the Conduit Lender(s) in such Lender Group to fund or
maintain the Loans hereunder and (B) the aggregate outstanding Principal
Balance of the Tranches funded hereunder by the Lenders in such Lender
Group other than through the issuance of Promissory Notes, shall exceed
the Lender Group Limit for such Lender Group; and
(iv) the Aggregate Principal Balance shall exceed the
Borrowing Base.
If there is more than one Committed Lender in a Lender Group, each such
Committed Lender shall lend its Pro Rata Share of such Lender Group's Lender
Group Percentage of each requested Loan, to the extent such Loan is not made by
the related Conduit Lender. Each Borrowing shall be in a minimum principal
amount equal to $5,000,000 and in integral multiples of $100,000 in excess
thereof. Subject to the foregoing and to the limitations set forth in Section
2.05, the Borrower may borrow, prepay and reborrow the Loans hereunder.
(b) Reduction of the Facility Limit. The Borrower may, from time to
time upon at least three (3) Business Days' prior written notice to each
Managing Agent, elect to reduce the Facility Limit in whole or in part, provided
that after giving effect to any such reduction and any principal payments on
such date, the Aggregate Principal Balance shall not exceed the Facility Limit.
Any such reduction shall be in a minimum amount of $5,000,000 and in integral
multiples of $1,000,000 in excess thereof, provided further that any such
reduction
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shall effect a ratable reduction of the Commitments of each Committed Lender and
of each Lender Group's Lender Group Limit. Once the Facility Limit is reduced
pursuant to this Section 2.01(b) it may not subsequently be reinstated without
the consent of each Committed Lender.
(c) Extension of Scheduled Termination Date. The Borrower may, no
more frequently than once each year by delivering written notice to the Managing
Agents (with a copy to the Program Agent and the Conduit Lenders), request the
Lenders to extend the date set forth in clause (i) of the definition of
"Scheduled Termination Date" (the "Commitment Termination Date") for an
additional 364 days past the then applicable Commitment Termination Date, with
such extension to become effective with respect to any Lender Group, as of the
date one or more Committed Lenders having Commitments equal to 100% of such
Lender Group's Lender Group Limit shall in their sole discretion consent to such
extension (the Lenders in such a Lender Group, "Extending Lenders.") Any such
request shall be subject to the following conditions: (i) at no time will any
Commitment have a term of more than 364 days and, if any such request would
result in a term of more than 364 days, such request shall be deemed to have
been made for such number of days so that, after giving effect to such extension
on the date requested, such term will not exceed 364 days, (ii) none of the
Lenders will have any obligation to extend any Commitment, (iii) any such
extension of the Commitment Termination Date will be effective only upon the
written agreement of at least one Committed Lender and the Borrower and (iv) any
request for such extension shall be made at least sixty (60) days prior to the
then current Commitment Termination Date. The Managing Agent for each applicable
Committed Lender will respond to any such request within thirty (30) days but in
any event no earlier than thirty (30) days prior to the then current Commitment
Termination Date, provided, that any Managing Agent's failure to respond within
such period shall be deemed to be a rejection of the requested extension.
(d) Cash Secured Advance Commencement Date. At least five (5)
Business Days prior to the Cash Secured Advance Commencement Date for any Lender
Group, the Borrower shall notify the Managing Agent for such Lender Group if the
Seller wishes the Committed Lenders in such Lender Group to make the advances
described in this Section. Following such notice, on the Cash Secured Advance
Commencement Date for such Lender Group, each Committed Lender in such Lender
Group shall, and severally agrees to, make an advance to the Borrower in Dollars
in an amount equal to the excess of (i) such Committed Lender's Commitment over
(ii) the unpaid Principal Balance of Loans held by such Committed Lender on such
date (including Loans purchased or to be purchased on such date pursuant to the
Asset Purchase Agreement to which such Committed Lender is a party), and such
Committed Lender shall make such advance by causing an amount equal to such
advance to be deposited in same day funds into the Collateral Advance Account.
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SECTION 2.02. Borrowing Procedures.
(a) Borrowing Requests.
(i) The Borrower shall request a Borrowing hereunder by
submitting to the Program Agent a written notice, substantially in the
form of Exhibit B (each, a "Borrowing Request") not later than 1:00 p.m.
(New York City time) on the second Business Day prior to the date of the
proposed Borrowing (or if the interest rate for the applicable Tranche is
computed with reference to the Adjusted LIBO Rate by such time on the
third Business Day prior to the date of the proposed Borrowing) (each, a
"Borrowing Date"), provided, however, that if the Conduit Lenders have
declined to fund any Borrowing Request and the Borrower is requesting that
all Loans to be made on such Borrowing Date accrue Interest at the Base
Rate, the Borrower shall submit such Borrowing Request on the Borrowing
Date. Promptly after its receipt thereof, the Program Agent shall submit a
copy of each Borrowing Request to each Managing Agent who shall promptly
forward a copy thereof to the Lenders in its Lender Group.
(ii) Each Borrowing Request shall: (A) specify (1) the amount
of the requested Borrowing and the allocation of such amount among the
Lender Groups (which shall be proportional to the respective Conduit
Lending Limits of the Conduit Lenders in each Lender Group), (2) the
Aggregate Principal Balance after giving effect to such Borrowing, (3) the
desired Borrowing Date, and (4) the account of the Borrower to which the
proceeds of such Borrowing are to be remitted, and (B) certify that, after
giving effect to the proposed Borrowing, no Borrowing Base Deficiency
would exist.
(b) Conduit Lender Acceptance or Rejection. If a Conduit Lender
shall receive a Borrowing Request, such Conduit Lender shall instruct the
related Managing Agent to accept or reject such request by no later than the
close of business on the Business Day immediately following the date of the
applicable Borrowing Request. If a Conduit Lender rejects a Borrowing Request,
the related Managing Agent shall promptly notify the Borrower and the related
Committed Lenders of such rejection. If a Conduit Lender declines to fund its
portion of any Borrowing Request, the Borrower may cancel and rescind such
Borrowing Request in its entirety upon notice thereof received by the Program
Agent and each Managing Agent prior to the close of business on the Business Day
immediately prior to the proposed Borrowing Date. At no time will a Conduit
Lender be obligated to make Loans hereunder regardless of any notice given or
not given pursuant to this Section.
(c) Committed Lender's Commitment.
(i) If a Conduit Lender rejects a Borrowing Request and the
Borrower has not cancelled such Borrowing Request in accordance with
clause (b) above, any Loan requested by the Borrower in such Borrowing
Request that would otherwise be made by such Conduit Lender shall be made
by the related Committed Lenders in its Lender Group on a pro rata basis
in accordance with their respective Pro Rata Shares of such Loan;
provided, however, that during the Term Period, if any, each Committed
Lender shall, at least two Business Days prior to the date
33
of such Borrowing, instruct the Program Agent, to wire (or otherwise
transfer in immediately available funds) on the date of such Borrowing to
the Borrower at the account specified by the Borrower such Committed
Lenders' Pro Rata Share of the amount of the Borrowing to be made by its
Lender Group out of the funds available therefor in the Collateral Advance
Account.
(ii) The obligations of any Committed Lender to make Loans
hereunder are several from the obligations of any other Committed Lenders
(whether or not in the same Lender Group). The failure of any Committed
Lender to make Loans hereunder shall not release the obligations of any
other Committed Lender (whether or not in the same Lender Group) to make
Loans hereunder, but no Committed Lender shall be responsible for the
failure of any other Committed Lender to make any Loan hereunder.
(iii) Notwithstanding anything herein to the contrary, a
Committed Lender shall not be obligated to fund any Loan at any time on or
after the Termination Date or if, after giving effect to such Loan, the
aggregate outstanding Loans funded by such Committed Lender hereunder
would exceed an amount equal to (i) such Committed Lender's Commitment
less (ii) such Committed Lender's ratable share of the aggregate
outstanding principal balance of the Loans held by the Conduit Lender(s)
in such Committed Lender's Lender Group.
(d) Disbursement of Funds. On each Borrowing Date, each applicable
Lender (other than the Lenders in a Term Period) shall remit its share of the
aggregate amount of the Loans requested by the Borrower to the account of its
related Managing Agent specified therefor to such Lender by 1:30 p.m. (New York
City time) by wire transfer of same day funds (or during the Term Period for any
Lender Group such funds will be so wired from the Collateral Advance Account by
the applicable Managing Agent). Upon receipt of such funds, each Managing Agent
shall remit such funds by wire transfer of same day funds to the account of the
Borrower specified in the related Borrowing Request by 3:00 p.m. (New York City
time) to the extent it has received such funds from the Lenders in its Lender
Group no later than 1:30 p.m. (New York City time). Upon any disbursement made
from the Collateral Advance Account to fund a Borrowing, each Term Out Lender
will be deemed to have paid to the Borrower such Lender's Pro Rata Share of such
Lender Group's amount of the Borrowing being made for all purposes of this
Agreement.
SECTION 2.03. Tranches.
(a) Generally. Each Loan shall be allocated to one or more "Tranche
Periods" as set forth in the definition of such term. Any portion of a Loan
having one Tranche Period and one Rate Type is referred to herein as a
"Tranche". The Borrower shall from time to time select Tranche Periods and Rate
Types with respect to Tranches funded by the Committed Lenders, subject to the
provisions of this Agreement and provided that no Event of Termination has
occurred. At all times after the occurrence and during the continuation of an
Event of Termination, each Committed Lender shall select the Tranche Periods and
Rate Types with respect to the Tranches it funds hereunder. Either the Borrower
or, following an Event of Termination and during the continuation thereof, the
applicable Lender, may, upon notice to the other party received at least three
Business Days prior to the last day of any Tranche Period in the case of the
Borrower giving notice, or up to the last day of such Tranche Period in the case
of
34
the Lender giving notice, either (i) divide any Tranche originating on such last
day or having a Tranche Period ending on such last day into two or more Tranches
having an aggregate Principal Balance equal to the Principal Balance of such
divided Tranche, or (ii) combine any two or more Tranches originating on such
last day or having Tranche Periods ending on such last day into a single Tranche
having a Principal Balance equal to the aggregate of the Principal Balance of
such Tranches; provided, however, that no Tranche with respect to which Interest
is determined by reference to the CP Rate may be combined with a Tranche with
respect to which Interest is determined by reference to the Alternate Rate, and
a Tranche held by one Lender may not be combined with any Tranche held by any
other Lender.
(b) Illegality. Notwithstanding any other provision of this
Agreement, if the adoption of or any change in any Law or in the interpretation
or application thereof by any relevant Governmental Authority shall make it
unlawful for any Lender, in its reasonable determination, to fund or maintain
Tranches for which Interest is calculated by reference to the LIBO Rate (each a
"LIBOR Tranche") as contemplated by this Agreement or to obtain in the interbank
Eurodollar market the funds with which to make or maintain any such LIBOR
Tranche, such Lender shall promptly notify the Program Agent, its Managing Agent
and the Borrower thereof whereupon, until such Lender notifies the Borrower and
the Program Agent that the circumstances giving rise to such suspension no
longer exist, (i) the obligation of such Lender to fund or maintain LIBOR
Tranches shall forthwith be suspended and (ii) such Lender's then outstanding
LIBOR Tranches, if any, shall be converted on the last day of the Tranche Period
for such Tranches or within such earlier period as required by Law into Tranches
that accrue Interest based on the Base Rate (each a "Base Rate Tranche"). Before
giving any notice to the Program Agent, its Managing Agent and the Borrower
pursuant to this clause (b), such Lender shall designate a different office as
its lending office if such designation would avoid the need for giving such
notice and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.
(c) LIBO Rate Inadequate; Inability to Determine LIBO Rate. If prior
to the commencement of any Tranche Period for a LIBOR Tranche, either (i) the
related Lender reasonably determines that the rate at which deposits of Dollars
are being offered to such Lender in the London interbank market does not
accurately reflect the cost to such Lender of funding or maintaining LIBOR
Tranches for such Tranche Period or (ii) the related Lender is unable, after
reasonable attempts, to obtain Dollars in the London interbank market to fund or
maintain such Tranche for such Tranche Period, then such Lender shall give
notice thereof to the Borrower, its Managing Agent and the Program Agent by
telephone or telecopy as promptly as practicable thereafter and, until such
Lender notifies the Borrower, its Managing Agent and the Program Agent that the
circumstances giving rise to such suspension no longer exist, (A) the
obligations of the such Lender to make LIBOR Tranches or to continue or convert
outstanding Tranches as or into LIBOR Tranches shall be suspended, (B) each
outstanding LIBOR Tranche funded by such Lender shall be converted into a Base
Rate Tranche on the last day of the Tranche Period applicable thereto, and (C)
if any Borrowing Request requests a LIBOR Tranche, the portion of such Borrowing
to be funded by such Lender shall be made as a Base Rate Tranche.
SECTION 2.04. Interest and Fees. On each Interest Payment Date for a
Tranche, the Borrower shall pay to each Lender (or its related Managing Agent)
all accrued and unpaid Interest with respect to such Tranche. The Borrower shall
pay to each Managing Agent the
35
Liquidity Fees and Program Fees in the amounts and on the dates set forth in
each of the Fee Letters. On or before the first Business Day after the end of
each Tranche Period in respect of which Interest is computed by reference to the
CP Rate, the related Lender (or the related Managing Agent on behalf of such
Lender) shall furnish the Borrower with an invoice setting forth the amount of
the accrued and unpaid Interest for such Tranche Period. On or before the first
Business Day after the end of each calendar month each Managing Agent shall
furnish the Borrower with an invoice setting forth the amount of the accrued and
unpaid Liquidity Fees and Program Fees payable to the Lenders in such Managing
Agent's Lender Group. All payments of Interest and fees shall be made out of
Collections, the proceeds of Loans or, if the Program Agent consents, such other
funds available to the Borrower.
SECTION 2.05. Optional Prepayments. The Borrower may, at its option,
prepay on any Business Day all or any portion of any Loan upon prior written
notice delivered to each Managing Agent not later than 11:00 A.M. (New York City
time) three (3) Business Days prior to the date of such payment. Each such
notice shall be in the form attached as Exhibit J and shall (i) specify the
aggregate amount of the prepayment to be made on the Loans and the Loans to
which such prepayment is to be applied and (ii) specify the Business Day on
which the Borrower will make such prepayment. Each such prepayment shall be in a
minimum principal amount equal to $5,000,000 and in integral multiples of
$100,000 in excess thereof and shall be made ratably among the Lenders based on
the aggregate Principal Balance of the Tranches held by each. At the request of
any Managing Agent, each such prepayment of the Loans to the Lenders in such
Managing Agent's Lender Group must be accompanied by a payment of all accrued
and unpaid Interest on the amount prepaid and any other amounts (including
amounts payable under Section 2.13) due from the Borrower hereunder in respect
of such prepayment. Any such prepayment shall be made out of Collections or,
with the consent of the Program Agent (such consent not to be unreasonably
withheld) out of other funds of the Borrower.
SECTION 2.06. Application of Collections Prior to Termination Date.
(a) On each Business Day prior to the Termination Date, the Servicer
shall cause all Collections received on such day to be applied in the following
order and priority:
(i) first, if a Borrowing Base Deficiency exists, or the
Aggregate Principal Balance exceeds the lesser of the Facility Limit and
the Maximum Permitted Amount, to the Managing Agents, on behalf of the
applicable Lenders, an amount equal to such Borrowing Base Deficiency or
the amount necessary to cause the Aggregate Principal Balance to be less
than or equal to the Facility Limit and the Maximum Permitted Amount, as
applicable (such amount to be allocated among the Lenders ratably in
accordance with the outstanding principal balance of the Loans held by
each) provided, however, that during the Term Period, - if any, the
Servicer shall instead deposit each Lender Group's ratable portion of such
payment to the Collateral Advance Account (resulting in a reduction of the
Loans of the Term-Out Lenders in such Lender Group and an increase in the
Cash Secured Advances of such Lenders) to be held for the purposes set
forth in Section 2.19(a); provided, further, that at any time there are
Extending Lenders and Non-Extending Lenders, notwithstanding the
foregoing, the amount necessary to cause the Aggregate Principal Balance
to be less than or equal to the Facility
36
Limit, shall be applied to pay the Managing Agents of all Non-Extending
Lenders with such amount to be allocated among the Non-Extending Lenders
ratably in accordance with the outstanding principal balance of the Loans
held by each;
(ii) second, in the event that at least one Committed Lender
has agreed to any extension of the Commitment Termination Date pursuant to
Section 2.01(c) when requested by the Borrower, and at least one Lender
has not agreed to such extension (each such Lender, other than any
Term-Out Lender, a "Non-Renewing Lender"), then, from and after the
occurrence of the Commitment Termination Date for any Non-Renewing Lender,
to each such Non-Renewing Lender, in payment of the outstanding principal
balance of its Loans, in an amount equal to such Non-Renewing Lender's
ratable share (in accordance with the respective outstanding principal
balance of the Loans made by each of the Lenders) of the balance of such
Collections (such ratable share to be determined on each Business Day,
solely for the purposes of this clause (ii), based upon the outstanding
Loans of the Lenders immediately preceding such Commitment Termination
Date, until such Non-Renewing Lender's outstanding Loans are reduced to
zero;
(iii) third, if the Managing Agent of a Conduit Lender has
notified the Borrower and the Servicer that such Conduit Lender shall not
make any more Loans, to such Conduit Lender, in reduction of its
outstanding Loans, in an amount equal to such Conduit Lender's ratable
share of the balance of such Collections (in accordance with the
outstanding principal balance of such Loans held by each Lender) until the
principal balance of the Loans of such Conduit Lender is reduced to zero;
(iv) fourth, if any Borrower Obligations (other than Interest,
Liquidity Fees, Program Fees, the Servicer Fee and Loans) are then due and
payable by the Borrower to any Secured Party, pay to each such Secured
Party (ratably in accordance with the amounts owing to each) the Borrower
Obligations so due and payable; and
(v) fifth, remit any remaining Collections to the Borrower for
application in accordance with Section 2.06(c) below (any such remittance,
a "Release"); provided that, if the conditions precedent for such Release
set forth in Section 3.02 are not satisfied, the Servicer shall, at the
instructions of the Program Agent, deposit such Collections into the
Collection Account for application on the next Business Day in accordance
with this Section 2.06 or Section 2.07, as applicable.
(b) On each Interest Payment Date for a Tranche, the Servicer shall
remit to the Managing Agents, on behalf of the applicable Lenders, solely out of
Collections or the proceeds of Loans, the accrued and unpaid Interest in respect
of such Tranche. On each Fee Payment Date, the Servicer shall pay, solely out of
Collections or the proceeds of Loans, (i) all accrued and unpaid Liquidity Fees
and Program Fees then due and payable to the Persons entitled thereto, (ii) all
Excess Interest, if any, accrued through the last day of the most recently ended
Monthly Period in respect of all Cash Secured Advances to the applicable
Managing Agents for the Term-Out Lenders, and (iii) to itself, all accrued and
unpaid Servicer Fees then due and payable.
37
(c) Any Collections remitted to the Borrower pursuant to Section
2.06(a)(v) shall be applied by the Servicer, on behalf of the Borrower: (i)
first, if so requested by the Borrower, to pay or prepay (or set aside for the
payment or prepayment of) Loans, (ii) second, to pay the purchase price for
Receivables to be acquired by the Borrower from the Originator on such day under
the Purchase Agreement, (iii) third, to repay the principal of, and accrued and
unpaid interest on, the Subordinated Note, and (iv) fourth, in such other manner
as the Borrower may specify and that is not prohibited by the terms of the
Facility Documents.
SECTION 2.07. Application of Collections After Termination Date.
(a) On the Termination Date, the Servicer shall deposit, at the
instructions of the Program Agent, to the Collection Account all Collections
held by it on such date (including amounts previously set aside or held by it
pursuant to Section 2.06). On each Business Day thereafter, the Servicer shall
deposit to the Collection Account, within one (1) Business Day of its receipt
thereof, all Collections received by it that have not previously been deposited
to the Collection Account. The Servicer shall not make any withdrawals from the
Collection Account during such period except for the purpose of distributing
such Collections in accordance with this Section 2.07.
(b) On each Settlement Date from and after the Termination Date, the
Servicer shall apply all Collections received since the prior Settlement Date,
and all funds, if any, on deposit in the Collection Account that have not been
previously applied hereunder (including, without limitation, any investment
earnings received with respect to such funds) in the following order of
priority:
(i) first, to the Program Agent an amount equal to the Borrower
Obligations (other than those described in clause (iii) below) owing to
the Program Agent in respect of costs and expenses of the type described
in Section 10.10 incurred by it in connection with the enforcement of any
Facility Document or the collection of any amounts due thereunder;
(ii) second, to the Servicer (if not ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or an
Affiliate of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇) the accrued and unpaid Servicer Fee and, if
not otherwise paid, at the direction of the Majority Managing Agents, pay
to each Approved Sub-servicer all amounts then due and payable pursuant to
the contract between the Servicer and such Approved Sub-servicer;
(iii) third, to the Lenders, the Managing Agents and the Program
Agent, on a pro rata basis, an amount equal to the aggregate accrued and
unpaid Interest, Excess Interest accrued through the last day of the most
recently ended Monthly Period in respect of all Cash Secured Advances,
Liquidity Fees and Program Fees;
(iv) fourth, to the Lenders an amount equal to the Aggregate
Principal Balance (such amount to be allocated among the Lenders ratably
in accordance with the outstanding principal balance of the Loans held by
each);
(v) fifth, if any Borrower Obligations (other than the amounts paid
pursuant to clauses (i) through (iv) above) are then due and payable by
the Borrower to any Secured
38
Party, to each such Secured Party (ratably in accordance with the amounts
owing to each) the Borrower Obligations so due and payable;
(vi) sixth, to the Servicer (if ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or an Affiliate of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇) the accrued and unpaid Servicer Fee; and
(vii) seventh, on the Final Collection Date, remit any remaining
funds to the Borrower.
SECTION 2.08. Deemed Collections. If on any day (i) the Outstanding
Balance of any Pool Receivable is either reduced or canceled as a result of a
Dilution Factor or (ii) any representation or warranty made by the Originator,
the Borrower or the Servicer is or becomes untrue with respect to a Receivable,
the Borrower shall be deemed to have received on such day, an amount equal to
the reduction or in the case of, or in the case of a cancellation or breach of
representation, the Outstanding Balance of such Diluted Receivable; provided,
that such Deemed Collections may be applied to the purchase price paid to the
Originator for newly purchased Receivables or to reduce the outstanding balance
of the Subordinated Note to the extent permitted under the Purchase Agreement.
If the Borrower is on any day deemed to have received Collections pursuant to
this Section 2.08 from and after the Termination Date, on such day the Borrower
shall pay an amount of funds equal to such deemed Collections to the Servicer
for allocation and application in accordance with Section 2.07.
SECTION 2.09. Payments and Computations, Etc. All amounts to be paid
or deposited by the Borrower or the Servicer hereunder shall be paid or
deposited in accordance with the terms hereof no later than 2:00 p.m. (New York
City time) on the day when due in lawful money of the United States of America
in immediately available funds to the Collection Account or such account as the
Program Agent or the relevant Managing Agents may designate prior to such
payment from time to time in writing. The Borrower and the Servicer (only with
respect to amounts payable pursuant to Section 8.02) shall, to the extent
permitted by law, pay to the Affected Party interest on all amounts not paid or
deposited or debited by such Person when due hereunder at 2% per annum above the
Base Rate, payable on demand. All computations of interest (including, without
limitation, interest on Cash Secured Advances during the Term Period) and all
computations of Interest, Liquidity Fees, Program Fees and Servicer Fees
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first but excluding the last day) elapsed; provided, that
all computations of Interest on Base Rate Tranches shall be made on the basis of
a year of 365 days for the actual number of days (including the first but
excluding the last day) elapsed. In no event shall any provision of this
Agreement require the payment or permit the collection of Interest in excess of
the maximum permitted by applicable law. In the event that any payment hereunder
(whether constituting a repayment of Loans or a payment of Interest or any other
amount) is rescinded or must otherwise be returned for any reason, the amount of
such payment shall be restored and such payment shall be considered not to have
been made.
SECTION 2.10. [Reserved].
SECTION 2.11. Interest Protection.
39
(a) If due to either: (i) the introduction of or any change
(including, without limitation, any change by way of imposition or increase of
reserve requirements) in or in the interpretation by any Governmental Authority
of any law or regulation (other than laws or regulations relating to taxes)
after the date hereof or (ii) the compliance by any Lender or any Liquidity
Provider with any directive or request from any central bank or other
Governmental Authority (whether or not having the force of law) imposed after
the date hereof, (1) there shall be an increase in the cost to such Lender or
such Liquidity Provider of funding or maintaining any Tranche which accrues
Interest at the Adjusted LIBO Rate or the CP Rate hereunder or of extending a
commitment in respect thereof, or (2) such Lender or such Liquidity Provider
shall be required to make a payment calculated by reference to any Tranche which
accrues Interest at the Adjusted LIBO Rate or the CP Rate funded by it or
Interest received by it, then the Borrower shall, from time to time, within
thirty (30) days after demand by the related Managing Agent, pay such Managing
Agent for the account of such Lender or such Liquidity Provider (as a third
party beneficiary, in the case of any Affected Party other than one of the
Lenders), that portion of such increased costs incurred, amounts not received or
required payment made or to be made, which such Managing Agent reasonably
determines is attributable to funding and maintaining, or extending a commitment
to fund, any Tranche which accrues Interest at the Adjusted LIBO Rate or the CP
Rate hereunder or pursuant to any Asset Purchase Agreement or similar liquidity
facility.
(b) Each Managing Agent will promptly notify the Borrower and the
Program Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle any Lender or related Liquidity Provider in its
Lender Group to compensation pursuant to Section 2.11(a). Each Lender or
Liquidity Provider will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of such Lender or Liquidity Provider, be otherwise
disadvantageous to it. In determining the amount of such compensation, such
Lender may use any reasonable averaging and attribution methods. The applicable
Lender or Liquidity Provider (or such party's related Managing Agent) shall
submit to the Borrower a certificate describing such increased costs incurred,
amounts not received or receivable or required payment made or to be made, which
certificate shall be conclusive in the absence of manifest error.
(c) If less than all Lenders claim reimbursement from the Borrower
pursuant to Section 2.11(a), each such Lender claiming reimbursement shall be
obligated, at the request of the Borrower, to assign all of its rights and
obligations hereunder to (i) the Lenders of its Lender Group hereunder that are
willing to accept such rights and obligations or (ii) another financial
institution nominated by the Borrower which is reasonably acceptable to the
other Lenders in such Lender Group and is willing to participate in this
Agreement through the Scheduled Termination Date in place of such Lender;
provided, that (x) the Lender claiming reimbursement receives payment in full,
pursuant to an Assignment and Acceptance, of an amount equal to the aggregate
outstanding principal balance of all Loans and all other accrued an unpaid
Borrower Obligations owing to it and (ii) the replacement Committed Lender
proposed by the Borrower otherwise satisfies the requirements of Section
10.03(b).
(d) Failure or delay on the part of any Managing Agent to demand
compensation pursuant to Section 2.11(a) shall not constitute a waiver of such
Managing Agent's right to demand such compensation; provided that the Borrower
shall not be required to
40
compensate any Lender or related Liquidity Provider pursuant to this Section for
any increased capital unless such Managing Agent gives notice to the Borrower
and the Program Agent to compensate such Lender or Liquidity Provider pursuant
to this Section within 180 days after the date such Managing Agent knows an
event has occurred pursuant to which such Lender or Liquidity Provider will seek
such compensation.
SECTION 2.12. Increased Capital.
(a) If either (i) the introduction of or any change in or in the
interpretation by any Official Body of any law or regulation or (ii) compliance
by any Affected Party with any directive or request from any central bank or
other Official Body (whether or not having the force of law) imposed after the
date hereof affects or would affect the amount of capital required or expected
to be maintained by such Affected Party or such Affected Party reasonably
determines that the amount of such capital is increased by or based upon the
existence of any Lender's agreement to make or maintain Loans hereunder and
other similar agreements or facilities and such event would have the effect of
reducing the rate of return on capital of such Affected Party by an amount
deemed by such Affected Party to be material, then, within thirty (30) days
after demand by such Affected Party or the related Managing Agent, the Borrower
shall pay to such Affected Party (as a third party beneficiary, in the case of
any Affected Party other than one of the Lenders) or the related Managing Agent
for the account of such Affected Party from time to time, as specified by such
Affected Party or such Managing Agent, additional amounts sufficient to
compensate such Affected Party in light of such circumstances, to the extent
that such Affected Party or such Managing Agent on behalf of such Affected Party
reasonably determines such increase in capital to be attributable to the
existence of the applicable Lender's agreements hereunder.
(b) Each Managing Agent will promptly notify the Borrower and the
Program Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle any Lender or Affected Party in its Lender Group to
compensation pursuant to Section 2.12(a). Each Lender or Affected Party will
designate a different lending office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Lender or Affected Party, be otherwise disadvantageous to it. In
determining the amount of such compensation, such Lender or Affected Party may
use any reasonable averaging and attribution methods. The applicable Lender or
Affected Party (or such party's related Managing Agent) shall submit to the
Borrower a certificate describing such compensation, which certificate shall be
conclusive in the absence of manifest error.
(c) If less than all Lenders claim reimbursement from the Borrower
pursuant to Section 2.12(a), each such Lender claiming reimbursement shall be
obligated, at the request of the Borrower, to assign all of its rights and
obligations hereunder to (i) the Lenders of its Lender Group hereunder that are
willing to accept such rights and obligations or (ii) another financial
institution nominated by the Borrower which is reasonably acceptable to the
other Lenders in such Lender Group and is willing to participate in this
Agreement through the Scheduled Termination Date in place of such Lender;
provided, that (x) the Lender claiming reimbursement receives payment in full,
pursuant to an Assignment and Acceptance, of an amount equal to the aggregate
outstanding principal balance of all Loans and all other accrued an unpaid
Borrower
41
Obligations owing to it and (ii) the replacement Committed Lender proposed by
the Borrower otherwise satisfies the requirements of Section 10.03(b).
(d) Failure or delay on the part of any Managing Agent to demand
compensation pursuant to Section 2.12(a) shall not constitute a waiver of such
Managing Agent's right to demand such compensation; provided that the Borrower
shall not be required to compensate any Lender or Affected Party in its Lender
Group pursuant to this Section for any increased capital unless such Managing
Agent gives notice to the Borrower and the Program Agent to compensate such
Lender or Affected Party in its Lender Group pursuant to this Section within 180
days after the date such Managing Agent knows an event has occurred pursuant to
which such Lender or Affected Party in its Lender Group will seek such
compensation.
SECTION 2.13. Funding Losses. In the event that any Liquidity
Provider or any Lender shall incur any loss, expense or Liquidation Fees
(including, without limitation, any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Liquidity Provider or Lender in order to fund or maintain any Loan or interest
therein) as a result of (i) any reduction of the Principal Balance of any
Tranche at any time or conversion of any Tranche to another Tranche prior to the
originally scheduled last day of the converted Tranche, (ii) any transfer of any
Loan or interest therein from a Conduit Lender to its Liquidity Providers, or
(iii) any Loan not being made in accordance with a request therefor under
Section 2.02, then, upon demand from the related Managing Agent to Borrower,
Borrower shall pay to such Managing Agent for the account of such Liquidity
Provider or Lender, the amount of such loss, expense or Liquidation Fees. Such
written notice shall, in the absence of manifest error, be conclusive and
binding upon Borrower.
SECTION 2.14. Taxes.
(a) Except to the extent required by applicable law, any and all
payments and deposits required to be made hereunder or under any instrument
delivered hereunder by the Borrower hereunder shall be made free and clear of
and without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto
(except for net income taxes that are imposed by the United States and franchise
taxes and net income taxes that are imposed on such Affected Party by the state
or foreign jurisdiction under the laws of which such Affected Party is organized
or any political subdivision thereof). If the Borrower or the Servicer shall be
required by law to make any such deduction, (i) the Borrower shall make an
additional payment to such Affected Party, in an amount sufficient so that,
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.14), such Affected Party receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower (or the Servicer, on its behalf) shall make such
deductions and (iii) the Borrower (or the Servicer, on its behalf) shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or other documentary taxes or any other excise or property taxes or
similar levies which arise from any payment made hereunder or under any
instrument delivered hereunder or from the execution,
42
delivery or registration of, or otherwise with respect to, this Agreement or any
instrument delivered hereunder.
(c) Each Affected Party which is not organized under the laws of the
United States or any State thereof shall, on or prior to the date that such
Affected Party becomes a party to or obtains rights under this Agreement, and
prior to any payment being made by the Borrower to such Affected Party, deliver
to the Borrower (i) two duly completed and executed copies of the IRS Form W-8
BEN or W-8 ECI (or any successor form) as applicable; and (ii) such other forms
or certificates as may be required under the laws of any applicable jurisdiction
(on or before the date that any such form expires or becomes obsolete), in order
to permit the Borrower to make payments to, and deposit funds to or for the
account of, such Affected Party hereunder and under the other Facility Documents
without any deduction or withholding for or on account of any tax. Each such
Affected Party shall submit to the Borrower (with copies to the Program Agent)
two updated, completed, and duly executed versions of: (i) all forms referred to
in the previous sentence upon the expiry of, or the occurrence of any event
requiring a change in, the most recent form previously delivered by it to the
Borrower or the substitution of such form; and (ii) such extensions or renewals
thereof as may reasonably be requested by the Borrower.
(d) If the Borrower is required to pay additional amounts to or for
the benefit of any Affected Party pursuant to this Section as a result of a
change of law or treaty occurring after such Affected Party first became a party
to this Agreement, such Affected Party will, at the Borrower's request, change
the jurisdiction of its applicable lending office if, in the sole judgment of
such Affected Party, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Affected Party.
SECTION 2.15. Security Interest. As security for the performance by
the Borrower of all the terms, covenants and agreements on the part of the
Borrower to be performed under this Agreement or any other Facility Document,
including the payment when due of all Borrower Obligations, the Borrower hereby
grants to the Program Agent, for the benefit of the Secured Parties, a security
interest in all of the Borrower's right, title and interest in, to and under the
following (collectively, the "Collateral"):
(a) all Pool Receivables, whether now owned and existing or
hereafter acquired or arising, together with all Related Security and
Collections with respect thereto;
(b) the Collection Account, each Deposit Account and each Lock-Box,
including, without limitation, (i) all Collections held therein and all
certificates and instruments, if any, from time to time representing or
evidencing any of such accounts or any Collections held therein, (ii) all
investment property and other financial assets representing Collections or
proceeds thereof held in, or acquired with funds from, such accounts and all
certificates and instruments from time to time representing or evidencing such
investment property and financial assets, (iii) all notes, certificates of
deposit and other instruments from time to time hereafter delivered or
transferred to, or otherwise possessed by, the Program Agent in substitution for
any of the then existing accounts and (iv) all interest, dividends, cash,
instruments, financial assets, investment property and other property from time
to time received, receivable or otherwise
43
distributed in respect of or in exchange for any and all of such accounts, in
each case, related to Pool Receivables; and
(c) to the extent not included in the foregoing, all Proceeds of any
and all of the foregoing.
The Borrower hereby authorizes the filing of financing statements,
and continuation statements and amendments thereto and assignments thereof,
describing the collateral covered thereby as "all of debtor's personal property
or assets" or words to that effect, notwithstanding that such wording may be
broader in scope than the collateral described in this Section 2.15. This
Agreement shall constitute a security agreement under applicable law.
SECTION 2.16. Evidence of Debt. Each Lender shall maintain an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
outstanding principal balance of such Loans and the amount of Interest payable
and paid to such Lender from time to time hereunder. The entries made in such
accounts of the Lenders shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided, however, that the failure
of any Lender to maintain such accounts or any error therein shall not in any
manner affect the obligation of the Borrower to repay the Loans in accordance
with the terms of this Agreement.
SECTION 2.17. Interest on Cash Secured Advances. The Borrower shall
pay interest to each Term-Out Lender on the unpaid principal amount of such
Committed Lender's Cash Secured Advance from the date of such Cash Secured
Advance until such principal amount shall be repaid in full, at a rate per annum
equal at all times during each Tranche Period at the Interest Rate for such
Tranche Period, payable in arrears on each Interest Payment Date for such
Tranche Period and on the Termination Date for all Tranches related to such Cash
Secured Advance. On each Interest Payment Date for each Tranche Period after the
Cash Secured Advance Commencement Date the Program Agent shall disburse, on
behalf of the Borrower, those dividends from or net investment gains with
respect to, the Cash Collateral which shall then be available to be withdrawn
from the Collateral Advance Account, and the Program Agent shall distribute such
funds to the Term-Out Lenders, ratably according to the respective outstanding
principal amounts of their respective Cash Secured Advances, for application to
the payment of unpaid accrued interest on the Cash Secured Advances. Any
remaining unpaid accrued interest on the Cash Secured Advances shall be paid
from the Collections of the Receivables pursuant to Sections 2.06, 2.07 and
2.19(d).
SECTION 2.18. Repayment of Cash Secured Advances. The Borrower shall
repay to each Term-Out Lender the aggregate outstanding principal amount of such
Lender's Cash Secured Advance on the Termination Date for all Tranches related
to such Cash Secured Advance.
SECTION 2.19. Use of Proceeds; Security Interest in Collateral
Advance Account.
44
(a) The Borrower hereby agrees that it shall use the proceeds of the
Cash Secured Advances solely to fund and maintain the Collateral Advance Account
for the purpose of funding Loans from time to time during the Term Period.
(b) The Borrower hereby grants to the Program Agent, for the ratable
benefit of the Term-Out Lenders, a security interest in the following
(collectively, the "Cash Collateral"):
(i) the Collateral Advance Account, all funds from time to time
credited to the Collateral Advance Account, all financial assets
(including, without limitation, Permitted Investments) from time to time
acquired with any such funds or otherwise credited to the Collateral
Advance Account, all interest, dividends, cash, instruments and other
investment property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such funds or
such financial assets, and
(ii) all proceeds of, collateral for, and supporting obligations
relating to any and all of the Cash Collateral.
(c) The grant of a security interest by the Borrower to the Program
Agent for the ratable benefit of the Term-Out Lenders, pursuant to clause (b)
above secures the payment of the Borrower's obligation to repay the Cash Secured
Advances, and to pay interest thereon, pursuant to Sections 2.17 and 2.18,
respectively.
(d) On the Termination Date for all Tranches if the Term Period has
occurred, the Program Agent, shall: (i) convert the Cash Collateral that does
not constitute cash into cash proceeds and (ii) pay to each Term-Out Lender,
ratably according to the respective outstanding principal amounts of their
respective Cash Secured Advances, for application, first, to the repayment of
the outstanding principal amounts of the Cash Secured Advances and second, to
the payment of unpaid accrued interest on the Cash Secured Advances (to the
extent such funds are available therefor).
SECTION 2.20. Establishment of Collateral Advance Account.
(a) Subsequent to the date of this Agreement, the Servicer, for the
benefit of the Term-Out Lenders, upon the request of the Program Agent, shall
establish and maintain or cause to be established and maintained in the name of
the Program Agent, with an Eligible Institution, an account (such account being
the "Collateral Advance Account" and such institution holding such account being
the "Collateral Advance Account Bank"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Term-Out
Lenders and entitled "Citicorp North America, Inc., as Program Agent --
Collateral Advance Account for the SWC Receivables Funding LLC Loan and
Servicing Agreement." The Collateral Advance Account shall be under the sole
dominion and control of the Program Agent for the benefit of the Committed
Lenders which have made Cash Secured Advances, and neither the Borrower, nor any
Person claiming by, through or under the Borrower, shall have any right, title
or interest in, or any right to withdraw any amount from, the Collateral Advance
Account. At the time the Collateral Advance Account is established the Borrower
shall cause the Collateral Advance Account Bank to agree in writing that it
shall have no right of set-off or
45
banker's lien against, and no right to otherwise deduct from, any funds held in
the Collateral Advance Account for any amount owed to it by any Person, provided
that the Collateral Advance Account Bank may retain rights of set-off for
scheduled fees and routine expenses. The tax identification number associated
with the Collateral Advance Account shall be that of the Borrower.
(b) At the time the Collateral Advance Account is established the
Borrower shall cause the Collateral Advance Account Bank to agree in writing
that it will comply with (A) all written instructions directing disposition of
the funds in the Collateral Advance Account, (B) all notifications and
entitlement orders that it receives directing it to transfer or redeem any
financial asset in the Collateral Advance Account, and (C) all other directions
concerning the Collateral Advance Account, including, without limitation,
directions to distribute to the Program Agent, proceeds of any such transfer or
redemption or interest or dividends on property in the Collateral Advance
Account (any such instruction, notification or direction referred to in clause
(A), (B) or (C) above being a "Collateral Advance Account Direction"), in each
case of clauses (A), (B) and (C) above originated by the Program Agent, without
further consent by the Borrower or any other Person. Except as specified in
Section 2.20(c), the Collateral Advance Account Bank will comply with Collateral
Advance Account Directions and other directions concerning the Collateral
Advance Account originated by, and only by, the Program Agent.
(c) Funds on deposit in the Collateral Advance Account shall, at the
written direction of the Servicer, be invested by the Program Agent, in
Permitted Investments as instructed by the Servicer in writing (which may be a
standing instruction). All such Permitted Investments shall be held in the
Collateral Advance Account for the benefit of the Program Agent, for the ratable
benefit of the Committed Lenders which have made Cash Secured Advances. Such
funds shall be invested in Permitted Investments that will mature so that funds
will be available in amounts sufficient for the Program Agent, to make each
distribution as and when required under the terms of this Agreement. All
interest and other investment earnings (net of losses and investment expenses)
received on funds on deposit in the Collateral Advance Account, to the extent
such investment income is not needed for the ratable benefit of the Term-Out
Lenders under the terms of this Agreement, shall be added to the Collateral
Advance Account.
ARTICLE III
CONDITIONS OF EFFECTIVENESS AND LOANS
SECTION 3.01. Conditions Precedent to Effectiveness and Initial
Borrowing.
As conditions precedent to the effectiveness of this Agreement, and
the initial Borrowing hereunder (i) the Managing Agents shall have received each
of the documents, instruments, legal opinions and other agreements listed on
Exhibit G that are required to be delivered on or prior to the Effective Date,
together with all fees due and payable on the date hereof and on the Effective
Date; (ii) since December 31, 2004, no event has occurred which would have a
Material Adverse Effect and (iii) each Managing Agent shall have completed
satisfactory due diligence and audits with respect to the Originator, the
Borrower and the Receivables and each Lender shall have received all necessary
credit approvals in order to consummate the transactions contemplated by this
Agreement.
46
SECTION 3.02. Conditions Precedent to All Borrowings and Releases.
Each Borrowing (including, without limitation, the Initial Borrowing) made by
the Lenders to the Borrower and each Release, shall be subject to the further
conditions precedent that on the date of each Borrowing or Release, each of the
following shall be true and correct both before and immediately after giving
effect to such Borrowing or Release, as applicable:
(a) with respect to such Borrowing or Release, each Managing Agent
shall have received from the Servicer the Monthly Report and/or Weekly Report,
as applicable, most recently required to be delivered pursuant to Section 5.05.
(b) with respect to such Borrowing or any Release at a time any
Loans are outstanding, the representations and warranties contained in Article
IV shall be correct in all material respects (except that the materiality
standard in this clause (b) shall not apply to any such representation or
warranty that is qualified by a materiality standard by its terms and that this
clause (b) shall not include any representations or warranties contained in
Article IV that are not correct due to the occurrence and continuation of an
Incipient Judgment Event with respect to which the Incipient Judgment Event
Grace Period has not lapsed) on and as of such date as though made on and as of
such date unless such representations and warranties by their terms refer to an
earlier date, in which case they shall be correct on and as of such earlier
date;
(c) with respect to such Borrowing only, no event has occurred and
is continuing, or would result from such Borrowing which constitutes an Event of
Termination, a Servicer Default, an Incipient Event of Termination or an
Incipient Servicer Default (it being understood and agreed that an Incipient
Judgment Event during the Incipient Judgment Event Grace Period shall not
constitute an Event of Termination, Servicer Default, Incipient Event of
Termination or Incipient Servicer Default for purposes of this Section 3.02(c));
(d) with respect to such Release only, no event has occurred and is
continuing, or would result from such Release which constitutes an Event of
Termination or a Servicer Default (provided that for purposes of this Section
3.02(d) and the determination of whether an Event of Termination or Servicer
Default has occurred with respect to the Borrower or the Servicer, clause (ii)
of the definition of "Event of Bankruptcy" shall not be given effect) (it being
understood and agreed that an Incipient Judgment Event during the Incipient
Judgment Event Grace Period shall not constitute an Event of Termination or a
Servicer Default for purposes of this Section 3.02(d));
(e) with respect to such Borrowing or Release, the Termination Date
has not occurred;
(f) with respect to such Borrowing or Release, no Borrowing Base
Deficiency shall exist; and
(g) only with respect to any such Borrowing requested to be made by
a Conduit Lender, the related Managing Agent shall not have delivered to the
Borrower a notice stating that such Conduit Lender shall not make any further
Loans hereunder.
47
Each delivery of a Borrowing Request to the Program Agent, and the acceptance by
the Borrower of the proceeds of any Borrowing or any Release, shall constitute a
representation and warranty by the Borrower that, as of the date of such
Borrowing or Release, both before and after giving effect thereto and the
application of the proceeds thereof, each of the applicable statements set forth
in clauses (a) through (g) above are true and correct.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as of the Effective Date and on each date a
Loan or a Release is made as follows, provided that this Section 4.01 shall not
include any representations or warranties that are not correct due to the
occurrence and continuation of an Incipient Judgment Event with respect to which
the Incipient Judgment Event Grace Period has not lapsed:
(a) Due Formation and Good Standing. The Borrower is a limited
liability company, duly organized, validly existing and in good standing under
the laws of the State of Delaware 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) Due Authorization and No Conflict. The execution, delivery and
performance by the Borrower of this Agreement, the Purchase Agreement and all
other Facility Documents to which it is a party, and the transactions
contemplated hereby and thereby, are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action and do not
contravene or constitute a default under, any provision of applicable law or of
the Borrower's certificate of formation or of the limited liability company
agreement or of any agreement, judgment, injunction, decree or other instrument
binding upon the Borrower or result in the creation or imposition of any Adverse
Claim on any asset of the Borrower. This Agreement, the Purchase Agreement and
the other Facility Documents to which the Borrower is a party have been duly
executed and delivered on behalf of the Borrower.
(c) Governmental Consent. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Borrower of this
Agreement, the Purchase Agreement or any other agreement, document or instrument
to be delivered by it hereunder that has not already been given or obtained,
except for filings under the UCC required under Article III.
(d) Enforceability of Facility Documents. Each of this Agreement,
the Purchase Agreement and each other Facility Document to be delivered by the
Borrower in connection herewith, constitutes the legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
its terms, subject to the Enforceability Exceptions.
(e) No Litigation. There are no actions, suits or proceedings
pending, or to the knowledge of the Borrower threatened, against the Borrower or
the property of the Borrower, in any court, or before any arbitrator of any
kind, or before or by any Governmental Authority.
48
The Borrower is not in default with respect to any order of any court,
arbitrator or Governmental Authority.
(f) Perfection of Interest in Collateral. Each Pool Receivable is
owned by the Borrower free and clear of any Adverse Claim, and the Program
Agent, for the benefit of the Secured Parties, has a first priority perfected
security interest in each Pool Receivable, and in the Related Security,
Collections and other Collateral with respect thereto, in each case free and
clear of any Adverse Claim. No effective financing statement or other instrument
similar in effect, is filed in any appropriate recording office listing the
Borrower as debtor or seller, covering any Collateral except such as may be
filed in favor of the Program Agent in accordance with this Agreement, and no
effective financing statement or other instrument similar in effect, is filed in
any recording office listing the Originator as a debtor or seller, covering any
Collateral except as may be filed in favor of the Borrower and assigned to the
Program Agent in accordance with this Agreement.
(g) Compliance with Laws. The Borrower has complied in all material
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject.
(h) Accuracy of Information. All written information heretofore
furnished by the Borrower or any of its Affiliates to the Program Agent, any
Managing Agent or any Lender for purposes of or in connection with this
Agreement, any Monthly Report, any Weekly Report, any of the other Facility
Documents or any transaction contemplated hereby or thereby is, and all such
written information hereafter furnished by the Borrower or any of its Affiliates
to the Program Agent, any Managing Agent or any Lender will be, true and
accurate in every material respect on the date such written information is
stated or certified and does not and will not contain any material misstatement
of fact or omit to state a material fact or any fact necessary to make the
statements contained therein not misleading.
(i) Location of Records; Organizational Identification Number. The
locations of the offices where the Borrower keeps all the Records are listed on
Exhibit E. The Borrower's federal employer identification number is ▇▇-▇▇▇▇▇▇▇
and its organizational identification number is 4084713. The Borrower is
organized solely under the laws of the State of Delaware.
(j) Collection Information. The names and addresses of all the
Alternate Payment Locations, Approved Sub-servicers, Deposit Account Banks and
Lock-Box Processors, together with the addresses of the Lock-Boxes and the
account numbers of the Deposit Accounts are as specified in Exhibit F. The
Alternate Payment Locations and the Lock-Boxes set forth on Exhibit F are the
only addresses to which Obligors are directed to make payment. The Deposit
Accounts set forth on Exhibit F are the only accounts to which Obligors,
Approved Sub-servicers or Lock-Box Processors remit Collections of Pool
Receivables by wire transfer or electronic funds transfer. The Borrower has not
granted any Person, other than the Program Agent, "control" (within the meaning
of Section 9-102 of any applicable enactment of the UCC) of any Deposit Account
or the right to take control of any Deposit Account at a future time or upon the
occurrence of a future event.
49
(k) No Trade Names. The Borrower has no, and has not used any, trade
names, fictitious names, assumed names or "doing business as" names.
(l) Investments. The Borrower does not own or hold, directly or
indirectly (i) any capital stock or equity security of, or any equity interest
in, any Person or (ii) any debt security or other evidence of indebtedness of
any Person, except for Permitted Investments. The Borrower has no Subsidiaries.
(m) Facility Documents. The Purchase Agreement is the only agreement
pursuant to which the Borrower directly or indirectly purchases and receives
capital contributions of Receivables or any other accounts receivable from the
Originator and the Facility Documents delivered to the Program Agent represent
all agreements between the Originator and the Borrower relating to the transfer
of the Receivables except for other agreements related to the transactions that
are permitted by Section 5.03(k).
(n) Business. Since its formation, the Borrower has conducted no
business other than entering into and performing it obligations under the
Facility Documents to which it is a party, and such other activities as are
incidental to the foregoing. The Facility Documents to which it is a party, and
any agreements entered into in connection with the transactions that are
permitted by Section 5.03(k), are the only agreements to which the Borrower is a
party.
(o) Taxes. The Borrower has filed or has received an extension of
time for filing of, all United States Federal income tax returns (if any) and
all other material tax returns which are required to be filed by it and has paid
all taxes that are due and payable by it pursuant to such returns or pursuant to
any assessment received by the Borrower, except to the extent that any such
assessment is being contested in good faith by appropriate proceedings. The
charges, accruals and reserves on the books of the Borrower in respect of taxes
and other governmental charges are, in the Borrower's opinion, adequate.
(p) Solvency. The Borrower: (i) is not "insolvent" (as such term is
defined in Section 101(32)(A) of the Bankruptcy Code), (ii) is able to pay its
debts as they come due; and (iii) does not have unreasonably small capital for
the business in which it is engaged or for any business or transaction in which
it is about to engage.
(q) Use of Proceeds. No proceeds of any Loan will be used by the
Borrower to acquire any security in any transaction which is subject to Section
13 or 14 of the Securities Exchange Act of 1934, as amended.
(r) Ownership. As of the date hereof, all of the membership
interests in the Borrower are directly owned of record by ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, all
of which are validly issued, fully paid and nonassessable and there are no
options, warrants or other rights to acquire any membership interests in the
Borrower other than the provisions relating to the special membership interest
of the independent director.
(s) Eligibility. Each Receivable included as an Eligible Receivable
in the calculation of the Net Receivables Pool Balance satisfies the
requirements of eligibility contained in the definition of "Eligible Receivable"
as of the date of such inclusion.
50
(t) Payments to Originator. With respect to each Pool Receivable,
the Borrower shall have (i) received such Pool Receivables as a contribution to
the capital of the Borrower by the Originator or (ii) purchased such Pool
Receivable from the Originator in exchange for payment (made by the Originator
in accordance with the provisions of the Purchase Agreement) in an amount which
constitutes fair consideration and reasonably equivalent value. No such sale
shall have been made for or on account of an antecedent debt owed by the
Originator to the Borrower and no such sale is or may be voidable or subject to
avoidance under any section of the Bankruptcy Code.
(u) Material Adverse Effect. Since the date of formation, no event
has occurred which would have a Material Adverse Effect.
(v) Compliance with Credit and Collection Policy. The Borrower has
complied in all material respects with the Credit and Collection Policy with
regard to each Pool Receivable and the related Contract and has not made any
change to such Credit and Collection Policy other than as permitted under
Section 5.03(c).
(w) Event of Termination. No Event of Termination or Incipient
Termination Event has occurred or is continuing.
SECTION 4.02. Representations and Warranties of the Servicer. The
Servicer represents and warrants on the Effective Date and on each date a Loan
or a Release is made as follows, provided that this Section 4.02 shall not
include any representations or warranties that are not correct due to the
occurrence and continuation of an Incipient Judgment Event with respect to which
the Incipient Judgment Event Grace Period has not lapsed:
(a) Due Formation and Good Standing. The Servicer is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Ohio, has all corporate power and authority to carry on its business as
now conducted and is qualified to do business in, and is in good standing in,
every jurisdiction where the nature of its business requires it to be so
qualified except where the failure so to qualify could not reasonably be
expected to have a Material Adverse Effect.
(b) Due Authorization and No Conflict. The execution, delivery and
performance by the Servicer of this Agreement are within the Servicer's
corporate powers, have been duly authorized by all necessary corporate action on
the part of the Servicer and do not contravene or constitute a default under,
any provision of applicable law or of the Servicer's certificate or articles of
incorporation or by-laws or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Servicer that could have a Material
Adverse Effect or result in the creation or imposition of any Adverse Claim on
any asset of the Servicer upon or with respect to any of its properties. This
Agreement and the other Facility Documents to which the Servicer is a party have
been duly executed and delivered on behalf of the Servicer.
(c) Governmental Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Servicer of this
Agreement or any other agreement, document or instrument to be delivered by it
hereunder that has not already been given or obtained.
51
(d) Enforceability of Facility Documents. Each of this Agreement and
each other Facility Document to be delivered by the Servicer in connection
herewith constitutes the legal, valid and binding obligation of the Servicer
enforceable against the Servicer in accordance with its terms, subject to the
Enforceability Exceptions.
(e) No Litigation. Except as publicly disclosed in its filings with
the Securities and Exchange Commission, there are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against, or to the knowledge of a Responsible Officer of the Servicer after due
inquiry, threatened against the Servicer or any of its subsidiaries (i) that
could reasonably be expected to be adversely determined and that, if adversely
determined, could reasonably be expected to result in a Material Adverse Effect
or (ii) that seeks to prevent the consummation of the transactions contemplated
by this Agreement or the other Facility Documents. The Servicer is not in
default with respect to any order of any court, arbitrator or other Governmental
Authority, which default could reasonably be expected to have a Material Adverse
Effect or prevent the consummation of the transactions contemplated by this
Agreement and the other Facility Documents.
(f) Compliance with Laws. The Servicer has complied in all respects
with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards applicable to it or its property, except where
such compliance is being contested in good faith through appropriate proceedings
or except where the failure, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(g) Accuracy of Information. All written information heretofore
furnished by the Servicer or any of its Affiliates to the Program Agent, any
Managing Agent or any Lender for purposes of or in connection with this
Agreement, any Monthly Report, Weekly Report, any of the other Facility
Documents or any transaction contemplated hereby or thereby is, and all such
written information hereafter furnished by the Servicer or any of its Affiliates
to the Program Agent, any Managing Agent or any Lender will be, true and
accurate in every material respect on the date such written information is
stated or certified and does not and will not contain any material misstatement
of fact or omit to state a material fact or any fact necessary to make the
statements contained therein not misleading.
(h) Collection Information. The names and addresses of all the
Alternate Payment Locations, Approved Sub-servicers, Deposit Account Banks and
Lock-Box Processors, together with the addresses of the Lock-Boxes and the
account numbers of the Deposit Accounts are as specified in Exhibit F. The
Alternate Payment Locations and the Lock-Boxes set forth on Exhibit F are the
only addresses to which Obligors are directed to make payment. The Deposit
Accounts set forth on Exhibit F are the only accounts to which Obligors,
Approved Sub-servicers or Lock-Box Processors remit Collections of Pool
Receivables by wire transfer or electronic funds transfer. The Servicer has not
granted any Person "control" (within the meaning of Section 9-102 of any
applicable enactment of the UCC) of any Deposit Account or the right to take
control of any Deposit Account at a future time or upon the occurrence of a
future event.
(i) Software. The Servicer has the right (whether by license,
sublicense or assignment) to use all of the computer software used to account
for the Pool Receivables to the extent necessary to administer the Pool
Receivables.
52
(j) Eligibility. Each Pool Receivable included as an Eligible
Receivable in the calculation of the Net Receivables Pool Balance satisfies the
requirements of eligibility contained in the definition of "Eligible Receivable"
as of the date of such inclusion.
(k) Material Adverse Effect. Since December 31, 2004, no event has
occurred which would have a Material Adverse Effect.
(l) Compliance with Credit and Collection Policy. The Servicer has
complied in all material respects with the Credit and Collection Policy with
regard to its servicing of each Pool Receivable.
(m) Event of Termination. No Event of Termination or Incipient
Termination Event has occurred or is continuing.
(n) Financial Statements.
(i) The consolidated balance sheet of the Servicer and its
Consolidated Subsidiaries as of December 31, 2004 and the related
consolidated statements of income and cash flows for the fiscal year then
ended, reported on by Ernst & Young LLP, contained in the report on Form
10-K filed by the Servicer with the Securities and Exchange Commission,
fairly present, in conformity with GAAP, the consolidated financial
position of the Servicer and its Consolidated Subsidiaries as of such date
and their consolidated results of operations and cash flows for such
fiscal year.
(ii) The unaudited consolidated balance sheet of the Servicer
and its Consolidated Subsidiaries as of September 30, 2005 and the related
unaudited consolidated statements of income and cash flows for the nine
months then ended, contained in the report on Form 10-Q filed by the
Servicer with the Securities and Exchange Commission, fairly present in
all material respects, in conformity with GAAP applied on a basis
consistent with the financial statements referred to in clause (i) above
(except as described in the notes thereto), the financial position of the
Servicer and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such nine-month
period (subject to normal year-end adjustments).
(o) ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other ERISA Events, could reasonably be
expected to result in a Material Adverse Effect. ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and the
Subsidiaries have not incurred any material accumulated funding deficiency
within the meaning of ERISA. As used in this Section, "material" means the
measure of a matter of significance that shall be determined as being an amount
equal to 10% of Consolidated Net Worth.
ARTICLE V
GENERAL COVENANTS
SECTION 5.01. Affirmative Covenants of the Borrower. Except as
otherwise provided herein, from the Effective Date until the later of the
Termination Date and the Final Collection Date, the Borrower will, unless the
Program Agent and the Majority Managing Agents shall otherwise consent in
writing:
53
(a) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, ordinances, orders, rules, regulations and requirements of
Governmental Authorities.
(b) Preservation of Existence. (i) Observe all procedures required
by its certificate of formation and the limited liability company agreement and
preserve and maintain its corporate existence, rights, franchises and privileges
in the jurisdiction of its incorporation, and (ii) qualify and remain qualified
in good standing as a foreign corporation in each other jurisdiction where the
nature of its business requires such qualification and where, in the case of
clause (ii), the failure to be so qualified could reasonably be expected to have
a Material Adverse Effect.
(c) Audits. At any time and from time to time during regular
business hours and upon reasonable prior notice, permit the Program Agent, the
Managing Agents or their agents or representatives:
(i) to conduct periodic audits of the Pool Receivables and the
Related Security and the related Records and collection systems of the
Borrower;
(ii) to examine and make copies of and abstracts from the
Records in its possession or control relating to the Pool Receivables and
Related Security, including, without limitation, the related Contracts;
(iii) to visit the offices and properties of the Borrower for
the purpose of examining the materials described in clause (ii) above; and
(iv) to discuss matters relating to the Receivables or the
Borrower's performance hereunder with any of the officers or employees of
the Borrower having knowledge of such matters.
(d) Keeping of Records and Books of Account. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing the Pool Receivables in the event of the
destruction of the originals thereof) and keep and maintain (or cause the
Servicer to keep and maintain) all documents, books, records and other
information reasonably necessary for the collection of all Pool Receivables, and
in which timely entries are made in accordance with GAAP. Such books and records
shall include, without limitation, records adequate to permit the daily
identification of each new Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable, as well as the Borrower's actual
experience with respect to any Dilution Factor. The Borrower shall promptly
notify the Program Agent and each Managing Agent of any material conversion or
substitution (excluding, in each case, version upgrades) of the computer
software used by the Borrower (or the Servicer, as applicable) in its collection
of Pool Receivables.
(e) Performance and Compliance with Pool Receivables and Contracts.
At its expense, timely and fully perform and comply in all material respects
with all provisions, covenants and other promises required to be observed by it
with respect to the Pool Receivables and the Contracts related thereto.
54
(f) Credit and Collection Policy. Comply in all material respects
with the Credit and Collection Policy in regard to the Pool Receivables and the
related Contracts.
(g) Collections.
(i) Cause all Obligors to remit all payments in respect of the
Pool Receivables to an Alternate Payment Location, a Lock-Box or a Deposit
Account;
(ii) Cause all Lock-Box Processors to deposit all Collections
received thereby or remitted to any Lock-Box into a Deposit Account within
two (2) Business Days following receipt thereof;
(iii) Cause all Persons receiving Collections at an Alternate
Payment Location, including Approved Sub-servicers, to remit such
Collections to a Lock-Box or deposit such Collections to the Wachovia
Collection Account within four (4) Business Days following receipt;
(iv) (x) at any time the Debt Rating of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ is less
than BBB by S&P or less than Baa2 by ▇▇▇▇▇'▇ (or either such Debt Ratings
have been withdrawn) establish a new Deposit Account at an Eligible
Institution in the name of Borrower and (y) at any time the Debt Rating of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ is less than BBB- by S&P or less than Baa3 by ▇▇▇▇▇'▇ (or
either such Debt Ratings have been withdrawn) cause any Collections
initially remitted into the Wachovia Collection Account to be segregated
from other funds and deposited within two (2) Business Days following such
remittance into the Deposit Account established pursuant to the preceding
clause (x);
(v) On or prior to the Blocked Account Date, deliver, or cause
to be delivered, to the Program Agent, fully executed copies of (A)
Lock-Box Processor Agreements with respect to each Lock-Box Processor and
(B) Blocked Account Agreements with respect to each Deposit Account, and
from and after such date, (1) cause each Deposit Account to be subject at
all times to a Blocked Account Agreement, (2) cause each Lock-Box to be
accessed solely by a Lock-Box Processor, (3) cause each Lock-Box Processor
with respect to each Lock-Box to be subject at all times to a Lock-Box
Processor Agreement, (C) the Wachovia Collection Account Intercreditor
Agreement and (D) an opinion of ▇▇▇▇▇ Day regarding the priority of a
security interest obtained pursuant to Section 2.15 hereof and the
Purchase Agreement in form and substance reasonably acceptable to the
Program Agent;
(vi) Prevent the remittance of any funds other than Collections
into any Lock-Box and if any funds other than Collections are remitted to
any Lock-Box, segregate and remit any such funds to the owner thereof
within two (2) Business Days following receipt; and
(vii) Prevent the deposit of any funds other than Collections
into any Deposit Account (other than the Wachovia Collection Account) and
if any funds other than Collections are deposited into any Deposit Account
(other than the Wachovia Collection Account), segregate and remit any such
funds to the owner thereof within two (2) Business Days following such
deposit;
55
(h) Posting of Collections and Pool Receivables. Apply all
Collections to the Pool Receivables owed by the applicable Obligor in a timely
manner in accordance with its business practices in existence as of the
Effective Date.
(i) Separate Corporate Existence. Take all reasonable steps
(including, without limitation, all steps that the Program Agent or any Managing
Agent may from time to time reasonably request) to maintain the Borrower's
identity as a separate legal entity from the Originator and to make it manifest
to third parties that the Borrower is an entity with assets and liabilities
distinct from those of the Originator and each other Affiliate thereof. Without
limiting the generality of the foregoing, the Borrower shall:
(i) at all times have at least one (1) "Independent Director" as
defined in and as required under the Borrower's limited liability company
agreement, acceptable to the Managing Agents, and at least one (1)
officer, who may be an employee of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, responsible for
managing the Borrower's day-to-day operations;
(ii) maintain the Borrower's books and records separate from
those of any Affiliate and maintain records of all intercompany debits and
credits and transfers of funds made by the Originator on its behalf;
(iii) except as otherwise contemplated under Section 2.06,
prevent the commingling of funds or other assets of the Borrower with
those of any other Affiliate, and not maintain bank accounts or other
depository accounts to which any Affiliate is an account party, into which
any Affiliate makes deposits or from which any Affiliate has the power to
make withdrawals except as otherwise contemplated hereunder or under the
Purchase Agreement with respect to its or the Servicer's administration of
Collections;
(iv) not enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of
any property or the rendering of any service) with any Affiliate which is
on terms that are less favorable to the Borrower than those that might be
obtained in an arm's length transaction at the time from Persons who are
not an Affiliate and which is not evidenced by or pursuant to a written
agreement;
(v) pay its own operating expenses and liabilities (including
but not limited to the salaries paid to its employees and any fees paid to
its managers and Independent Managers) from its own separate assets;
(vi) clearly identify its office space (by sign or otherwise) as
being separate and distinct from the offices of, or any space occupied by,
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and its other Affiliates even if such office space is
leased or subleased from, or is on or near premises occupied by
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or by such Affiliates and allocate fairly any overhead,
if relevant, for shared office space or business facilities or equipment;
(vii) act solely in its own name, through its own officials or
representatives where relevant, and not hold itself out as a "division" or
"part" of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or its Affiliates;
56
(viii) have stationery and other business forms and a telephone
number separate from that of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or its Affiliates;
(ix) at all times be adequately capitalized in light of its
contemplated business; and
(x) take all other actions reasonably necessary on its part to
operate its business and perform its obligations under the Facility
Documents in a manner consistent with the factual assumptions described in
the legal opinions with respect to non-consolidation or true sale matters
of ▇▇▇▇▇ Day delivered to the Program Agent and the Managing Agents
pursuant to Section 3.01 hereof.
(j) Rights under the Purchase Agreement. From and after the
Termination Date, direct, instruct, or request any lawful action under the
Purchase Agreement, including without limitation, in connection with enforcement
of its rights thereunder, as instructed by the Program Agent; provided, however,
that both before and after the Termination Date, the Borrower shall deliver any
lawful notice as directed by the Program Agent, the delivery of which is a
condition precedent to any "Purchase Termination Event" under (and as defined
in) the Purchase Agreement.
(k) Location of Records. Keep its chief place of business and chief
executive office and the offices where it keeps the Records at (i) the
address(es) of the Borrower referred to on Exhibit E or (ii) upon 30 days' prior
written notice to the Program Agent, at any other location in the United States
where all actions reasonably requested by any Managing Agent to protect and
perfect the interests of the Program Agent and the Lenders in the Collateral
have been taken and completed.
(l) Taxes. File, cause to be filed or obtain an extension of the
time to file, all material tax returns and reports required by law to be filed
by it and will promptly pay or cause to be paid all taxes and governmental
charges at any time owing, provided that the Servicer may contest in good faith
any such taxes, assessments and other charges and, in such event, may permit the
taxes, assessments or other charges so contested to remain unpaid during any
period, including appeals, when the Servicer is in good faith contesting the
same so long as (i) adequate reserves have been established in accordance with
GAAP, (ii) enforcement of the contested tax, assessment or other charge is
effectively stayed for the entire duration of such contest if such enforcement
could reasonably be expected to have a Material Adverse Effect, and (iii) any
tax, assessment or other charge determined to be due, together with any interest
or penalties thereon, is promptly paid as required after final resolution of
such contest, and pay when due any taxes payable in connection with the
Receivables, exclusive of taxes on or measured by income or gross receipts of
the Program Agent, the Managing Agents, the Lenders.
(m) Performance and Enforcement of Purchase Agreement. (i) Perform
and require the Originator to, perform each of their respective obligations and
undertakings under and pursuant to the Purchase Agreement; purchase Receivables
thereunder in compliance with the terms thereof; (ii) enforce the rights and
remedies accorded to the Borrower under the Purchase Agreement and (iii) take
all actions to perfect and enforce its rights and interests (and the rights and
interests of the Program Agent and the Lenders as assignees of the Borrower)
57
under the Purchase Agreement as the Program Agent or any Managing Agent may from
time to time reasonably request, including, without limitation, making claims to
which it may be entitled under any indemnity, reimbursement or similar provision
contained in the Purchase Agreement.
(n) Ownership. Take all necessary action to (i) vest legal and
equitable title to the Receivables, the Related Security and the Collections
purchased under the Purchase Agreement irrevocably in the Borrower, free and
clear of any Adverse Claims other than Permitted Liens (including, without
limitation, the filing of all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect the Borrower's interest in such Receivables, Related
Security and Collections and such other action to perfect, protect or more fully
evidence the interest of Borrower therein as the Program Agent or any Managing
Agent may reasonably request), and (ii) establish and maintain, in favor of the
Program Agent, for the benefit of the Lenders, a valid and perfected first
priority perfected security interest in all Receivables, Related Security and
Collections to the full extent contemplated herein, free and clear of any
Adverse Claims other than Permitted Liens (including, without limitation, the
filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect the Program Agent's (for the benefit of the Lenders) security
interest in such Receivables, Related Security and Collections and such other
action to perfect, protect or more fully evidence the interest of the Program
Agent for the benefit of the Lenders as the Program Agent or any Managing Agent
may reasonably request). The Borrower authorizes the Program Agent to file
financing or continuation statements, and amendments thereto and assignments
thereof, relating to the Receivables and the Related Security, the related
Contracts and the Collections with respect thereto and the other Collateral
without the signature of the Borrower. A photocopy or other reproduction of this
Agreement shall be sufficient as a financing statement where permitted by law.
SECTION 5.02. Reporting Requirements of the Borrower. From the
Effective Date until the later of the Termination Date and the Final Collection
Date, the Borrower will, unless the Program Agent and the Majority Managing
Agents shall otherwise consent in writing, furnish or cause to be furnished to
the Program Agent and each Managing Agent:
(a) Event of Termination. As soon as reasonably practicable and in
any event within three (3) Business Days after any Responsible Officer of the
Borrower obtains knowledge of the occurrence of each Event of Termination or
Incipient Event of Termination (if such Incipient Event of Termination is
continuing on the date of such notice), the statement of a Responsible Officer
of the Borrower setting forth the details of such Event of Termination or
Incipient Event of Termination and the action which the Borrower is taking or
proposes to take with respect thereto.
(b) Financial Statements. (i) As soon as available, and in any event
within one hundred twenty (120) days after the end of each fiscal year of the
Borrower, a balance sheet of the Borrower as of the end of such fiscal year and
a statement of income and retained earnings of the Borrower for such fiscal
year, certified by the Borrower's chief financial officer, chief accounting
officer or other manager of the Borrower, (ii) as soon as is available, and in
any event within ninety (90) days after the end of each fiscal year of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, a consolidated balance sheet of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and its
Consolidated Subsidiaries as of the end of such fiscal
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year and a statement of income and retained earnings of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ for
such fiscal year, all reported in accordance with GAAP by Ernst & Young, LLP or
other independent public accountants of nationally recognized standing, (iii)
within sixty (60) days after the end of the first, second and third quarterly
accounting periods in each fiscal year of the Borrower, a balance sheet of the
Borrower as of the end of such fiscal quarter and a statement of income and
retained earnings of the Borrower for the period commencing at the end of the
previous fiscal year and ending as of the end of such quarter, certified by the
Borrower's chief financial officer, chief accounting officer, or other manager
of the Borrower and (iv) within forty-five (45) days after the end of the first,
second and third quarterly accounting periods in each fiscal year of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, a balance sheet of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ as of the end of such
fiscal quarter and a statement of income and retained earnings of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ for the period commencing at the end of the previous fiscal
year and ending as of the end of such quarter, certified by the chief financial
officer of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇.
(c) Compliance Certificates. Concurrently with any delivery of
information under clause (b) above, a certificate of a Responsible Officer of
the Borrower (i) setting forth in reasonable detail the calculations required to
establish whether the Event of Termination set forth in Section 7.01(p) has
occurred and (ii) certifying that no Event of Termination or Incipient Event of
Termination exists on the date of such certificate and, if an Event of
Termination or Incipient Event of Termination then exists, setting forth the
details thereof and the action which the Borrower is taking or proposes to take
with respect thereto.
(d) Public Filings. Promptly after the filing thereof, copies of all
registration statements (other than exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and
8-K (or their equivalents) filed by ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ with the Securities and
Exchange Commission.
(e) Reporting on Adverse Effects. Promptly and in no event more than
two (2) Business Days after any Responsible Officer of the Borrower obtains
knowledge of any matter or the occurrence of any event concerning the Borrower,
the Servicer or the Originator which would reasonably be expected to have a
Material Adverse Effect, notice thereof.
(f) Defaults. Promptly and in no event more than three (3) Business
Days after any Responsible Officer of the Borrower obtains knowledge of any
default by the Borrower under any agreement other than the Facility Documents to
which the Borrower is a party which could reasonably be expected to have a
Material Adverse Effect, the statement of a Responsible Officer of the Borrower
setting forth the details of such default and the action which the Borrower is
taking or proposes to take with respect thereto.
(g) Ratings. Promptly and in no event more than three (3) Business
Days after any Responsible Officer of the Borrower obtains knowledge of any
downgrade or withdrawal of the Debt Rating of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, notice of such
downgrade or withdrawal of such Debt Rating.
(h) Copies of Notices. Promptly after receipt thereof, copies of any
notice, request for consent, or certification delivered to it by the Originator
under the Purchase Agreement.
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(i) Credit and Collection Policy. Promptly and in no event more than
three (3) Business Days after any Responsible Officer of the Borrower obtains
knowledge of any amendment, modification, supplement or other change to the
Credit and Collection Policy that could have a material adverse effect on the
collectibility of the Receivables, the statement of a Responsible Officer of the
Borrower setting forth the details of such amendment, modification or
supplement.
(j) Other Information. As soon as reasonably practicable, from time
to time, such other information, documents, records or reports respecting the
Receivables or the conditions or operations, financial or otherwise, of the
Borrower as the Program Agent or any Managing Agent may from time to time
reasonably request.
As long as ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ is required or permitted to file reports under the
Securities Exchange Act of 1934, as amended, a copy of its report on Form 10-K
shall satisfy the requirements of Section 5.02(b)(ii) of this Agreement and a
copy of its report on Form 10-Q shall satisfy the requirements of Section
5.02(b)(iv) of this Agreement. Information required to be delivered pursuant to
clauses (b) or (d) of this Section 5.02 shall be deemed to have been delivered
on the date on which the Borrower provides notice to the Program Agent and the
Managing Agents that such information has been posted on ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇
website on the Internet at ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇.▇▇▇ or at another website identified
in such notices and accessible to the Program Agent and each Managing Agent
without charge; provided, however, that such notice may be included in any
certificate delivered pursuant to clause (c) above.
SECTION 5.03. Negative Covenants of the Borrower. From the Effective
Date until the Final Collection Date, the Borrower will not, without the written
consent of the Program Agent and the Majority Managing Agents:
(a) Sales, Liens, Etc. Against Collateral. Sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon or with respect to, any Collateral or assign any
right to receive income in respect thereof except in each case as contemplated
or provided hereunder.
(b) Extension or Amendment of Pool Receivables. Extend, amend, waive
or otherwise modify, the terms of any Pool Receivable or any Contract related
thereto, except (i) in accordance with the Credit and Collection Policy or (ii)
as otherwise permitted hereunder (including, without limitation, any such action
permitted to be taken by the Servicer).
(c) Change in Business or Credit and Collection Policy. Make any
change in the character of its business or in the Credit and Collection Policy,
which change could be reasonably expected to have a Material Adverse Effect or
make any change in the character of its business.
(d) Change in Payment Instructions to Obligors. Make any change in
its instructions to Obligors regarding the making of payments in respect of the
Receivables to any Alternate Payment Location, Lock-Box or Deposit Account,
other than instructing Obligors to remit payments to another Alternate Payment
Location, Lock-Box or Deposit Account.
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(e) Changes to Alternate Payment Locations, Lock-Boxes, Deposit
Accounts, Lock-Box Processor Agreements and Blocked Account Agreements. Add any
account as a Deposit Account, any bank as a Deposit Account Bank, any Person as
a Lock-Box Processor or any lock-box as a Lock-Box with respect to any
Collateral, in each case other than those then listed in Exhibit F, unless the
Program Agent shall have received (i) thirty (30) days' prior written notice of
such addition and (ii) prior to the effective date of such addition, (x)
executed copies of Blocked Account Agreements (in the case of each new Deposit
Account), Lock-Box Processor Agreements (in the case of each new Lock-Box or
Lock-Box Processor) and Lock-Box Transfer Notices (in the case of each new
Lock-Box), executed by each Deposit Account Bank or Lock-Box Processor, as
applicable, the Borrower, the Originator, and the Program Agent, (y) copies of
all material agreements signed by the Borrower, the Originator or the respective
Deposit Account Bank or Lock-Box Processor, as applicable, with respect to any
new Deposit Account, Deposit Account Bank, Lock-Box or Lock-Box Processor, and
(z) a revised Exhibit F hereto. The Borrower shall provide the Program Agent and
each Managing Agent with prompt written notice of any termination of any bank as
a Deposit Account Bank or any Person as a Lock-Box Processor, together with a
revised Exhibit F hereto. The Borrower shall provide the Program Agent and each
Managing Agent with prompt written notice of any addition or termination of any
Alternate Payment Location, together with a revised Exhibit F hereto.
(f) Merger, Consolidation, Etc. Sell any equity interest to any
Person (other than ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇) or consolidate with or merge into or with
any Person, or purchase or otherwise acquire all or substantially all of the
assets or capital stock, or other ownership interest of, any Person or from any
Subsidiary, or sell, transfer, lease or otherwise dispose of all or
substantially all of its assets to any Person, except as expressly provided or
permitted under the terms of this Agreement or as consented to by the Program
Agent.
(g) Change in Name; Jurisdiction of Organization. (i) Make any
change to its name (within the meaning of Section 9-507(c) of any applicable
enactment of the UCC) indicated on its certificate of incorporation (or
equivalent organizational document), or (ii) change its form of organization or
its jurisdiction of organization, unless, in either case, prior to the effective
date of such change, it delivers to the Program Agent such financing statements
or amendments to financing statements (Form UCC-1 or Form UCC-3, respectively)
authorized by it which the Program Agent may request to reflect such name change
or change in form or jurisdiction of organization, together with such other
documents, legal opinions and instruments that the Program Agent may reasonably
request in connection with the transaction giving rise thereto.
(h) ERISA Matters. Establish or be a party to any Plan or
Multiemployer Plan other than any such plan established by an Affiliate of the
Borrower.
(i) Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness except for (i) Indebtedness to the Program Agent, any Lender, any
Affected Party or the Servicer expressly contemplated hereunder or (ii)
Indebtedness to the Originator pursuant to the Purchase Agreement or the
Subordinated Note.
(j) Guarantees. Guarantee, endorse or otherwise be or become
contingently liable (including by agreement to maintain balance sheet tests) in
connection with the obligations
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of any other Person, except endorsements of negotiable instruments for
collection in the ordinary course of business and reimbursement and
indemnification obligations in favor of the Program Agent, any Managing Agent,
any Lender or any Affected Party as provided for under this Agreement.
(k) Limitation on Transactions with Affiliates. Enter into, or be a
party to any transaction with any Affiliate of the Borrower, except for:
(i) the transactions contemplated hereby, by the Purchase
Agreement and by the other Facility Documents;
(ii) capital contributions by ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ to the Borrower
which are in compliance with Section 5.01(i); and
(iii) to the extent not otherwise prohibited under this
Agreement, other transactions in the nature of employment contracts and
directors' or manager's fees, upon fair and reasonable terms materially no
less favorable to the Borrower than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate.
(l) Facility Documents. Terminate, amend or otherwise modify the
Purchase Agreement, the Subordinated Note, any Blocked Account Agreement or any
Lock-Box Processor Agreement, or grant any waiver or consent thereunder.
(m) Limitation on Investments. Make or suffer to exist any loans or
advances to, or extend any credit to, or make any investments (by way of
transfer of property, contributions to capital, purchase of stock or securities
or evidences of indebtedness, acquisition of the business or assets, or
otherwise) in, any Affiliate or any other Person except for Permitted
Investments and the purchase and receipt of capital contributions of Receivables
and related assets pursuant to the terms of the Purchase Agreement.
(n) Organizational Documents. (i) Change, amend, alter or otherwise
modify its limited liability company agreement in any fashion that could
reasonably be expected to have a Material Adverse Effect or (ii) change, amend,
alter or otherwise modify its certificate of formation.
(o) Treatment as Sales. Not account for or treat (whether in
financial statements or otherwise) the transactions contemplated by the Purchase
Agreement in any manner other than as the sale and/or absolute conveyance of
Receivables by ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ to the Borrower.
(p) Use of Proceeds. Use the proceeds of the Loans for any purpose
other than the purchase of Receivables from the Originator pursuant to the
Purchase Agreement.
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SECTION 5.04. Affirmative Covenants of the Servicer. From the
Effective Date until the Final Collection Date, the Servicer will, unless the
Program Agent and the Majority Managing Agents shall otherwise consent in
writing:
(a) Compliance with Laws, Etc. Comply in all respects with all
applicable laws, rules, ordinances, regulations, requirements and orders of
Governmental Authorities with respect to the Pool Receivables, the servicing
thereof and the agreements and documents related thereto, except where such
compliance is being contested in good faith through appropriate proceedings or
except where the failure to comply, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(b) Preservation of Existence. (i) Observe all procedures required
by its certificate or articles of incorporation and by-laws and preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and (ii) qualify and remain qualified in good
standing as a foreign corporation in each other jurisdiction where the nature of
its business requires such qualification and where, in the case of clause (ii),
failure to be so qualified could reasonably be expected to have a Material
Adverse Effect.
(c) Audits. At any time and from time to time during regular
business hours and upon reasonable prior notice, permit the Program Agent, the
Managing Agents or their agents or representatives:
(i) to conduct periodic audits of the Pool Receivables and the
Related Security and the related Records and collection systems of the
Servicer;
(ii) to examine and make copies of and abstracts from the
Records in its possession or control relating to the Pool Receivables and
Related Security, including, without limitation, the related Contracts;
(iii) to visit the offices and properties of the Servicer for
the purpose of examining the materials described in clause (ii) above; and
(d) to discuss matters relating to the Receivables or the Servicer's
performance hereunder with any of the officers or employees of the Servicer
having knowledge of such matters.
(e) Keeping of Records and Books of Account. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing the Pool Receivables in the event of the
destruction of the originals thereof) and keep and maintain (or cause the
Originator to keep and maintain) all documents, books, records and other
information reasonably necessary for the collection of all Pool Receivables, and
in which timely entries are made in accordance with GAAP. Such books and records
shall include, without limitation, records adequate to permit the daily
identification of each new Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable, as well as the Servicer's actual
experience with respect to any Dilution Factor. The Servicer shall promptly
notify the Program Agent and each Managing Agent of any material conversion or
substitution (excluding in each case, version upgrades) of the computer software
used by the Servicer in its collection of the Pool Receivables.
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(f) Performance and Compliance with Pool Receivables. At its expense
timely and fully perform and comply in all material respects with all
provisions, covenants and other promises required to be observed by it with
respect to the Pool Receivables and the Contracts related thereto.
(g) Credit and Collection Policy. Comply in all material respects
with the Credit and Collection Policy in regard to the Pool Receivables and the
related Contracts.
(h) Collections. Comply with the provisions of Section 5.01(g) as if
the obligations of the Borrower pursuant to Section 5.01(g) were the obligations
of the Servicer.
(i) Posting of Collections and Pool Receivables. Apply all
Collections to the Pool Receivables owed by the applicable Obligor in a timely
manner in accordance with the servicing practices of the Originator in existence
as of the date of this Agreement.
(j) Frequency of Billing. Prepare and mail invoices with respect to
all Pool Receivables no less frequently than monthly.
SECTION 5.05. Reporting Requirements of the Servicer. From the
Effective Date until the Final Collection Date, the Servicer will, unless the
Program Agent and the Majority Managing Agents shall otherwise consent in
writing, furnish to the Program Agent and each Managing Agent:
(a) as soon as reasonably practicable and in any event within three
(3) Business Days after any Responsible Officer of the Servicer obtains
knowledge of the occurrence of each Event of Termination or Incipient Event of
Termination (if such Incipient Event of Termination is continuing on the date of
such notice), the statement of a Responsible Officer of the Servicer setting
forth the details of such Event of Termination or Incipient Event of
Termination;
(b) as soon as reasonably practicable and in any event within three
(3) Business Days after any Responsible Officer of the Servicer obtains
knowledge of the occurrence of each event described in the definition of
"Servicer Default" or each event which, with the giving of notice or lapse of
time or both, would constitute a Servicer Default (if such event is continuing
on the date of such notice), the statement of a Responsible Officer of the
Servicer setting forth the details of such Servicer Default or event and the
action which the Servicer proposes to take with respect thereto;
(c) as soon as reasonably practicable and in any event within three
(3) Business Days after any Responsible Officer of the Servicer obtains
knowledge of any reduction of the Maximum Permitted Amount below the Facility
Limit, the statement of a Responsible Officer of the Servicer setting forth the
Maximum Permitted Amount;
(d) as soon as reasonably practicable, from time to time, such other
information, documents, records or reports within its possession respecting the
Pool Receivables or the conditions or operations, financial or otherwise, of the
Servicer as the Program Agent or any Managing Agent may from time to time
reasonably request;
64
(e) on each Monthly Reporting Date, a Monthly Report; and
(f) on each Weekly Reporting Date during any period during which the
Originator's Debt Rating is less than BBB- by S&P, or less than Baa3 by ▇▇▇▇▇'▇,
or either such Debt Rating has been withdrawn, a Weekly Report.
SECTION 5.06. Negative Covenants of the Servicer. From the Effective
Date until the Final Collection Date, the Servicer will not, without the written
consent of the Program Agent and the Majority Managing Agents:
(a) Extension or Amendment of Pool Receivables. Extend, amend, waive
or otherwise modify, the terms of any Pool Receivable or any Contract related
thereto, except (i) in accordance with the Credit and Collection Policy as it
deems appropriate to maximize collections thereof or (ii) as otherwise permitted
hereunder.
(b) Change in Business or Credit and Collection Policy. Make any
change in the character of its servicing practices or in the Credit and
Collection Policy, which change would, in either case, be reasonably expected to
have a Material Adverse Effect.
(c) Change in Payment Instructions to Obligors. Make any change in
its instructions to Obligors regarding the making of payments in respect of the
Receivables to any Alternate Payment Location, Lock-Box or Deposit Account,
other than instructing Obligors to remit payments to another Alternate Payment
Location, Lock-Box or Deposit Account.
(d) Changes to Lock-Boxes, Deposit Accounts, Lock-Box Agreements and
Blocked Account Agreements. Add any account as a Deposit Account, any bank as a
Deposit Account Bank, any Person as a Lock-Box Processor or any lock-box as a
Lock-Box with respect to any Collateral, in each case other than those then
listed in Exhibit F, unless the Program Agent shall have received (i) thirty
(30) days' prior notice of such addition and (ii) prior to the effective date of
such addition, (x) executed copies of Blocked Account Agreements (in the case of
each new Deposit Account), Lock-Box Processor Agreements (in the case of each
new Lock-Box or Lock-Box Processor), and Lock-Box Transfer Notices (in the case
of each new Lock-Box) executed by each Deposit Account Bank or Lock-Box
Processor, as applicable, the Borrower, the Originator, and the Program Agent,
(y) copies of all material agreements and documents signed by the Borrower, the
Originator or the respective Deposit Account Bank or Lock-Box Processor, as
applicable, with respect to any new Deposit Account, Deposit Account Bank,
Lock-Box or Lock-Box Processor, and (z) a revised Exhibit F hereto. The Servicer
shall provide the Program Agent and each Managing Agent with prompt written
notice of any termination of any bank as a Deposit Account Bank or any Person as
a Lock-Box Processor, together with a revised Exhibit F hereto. The Servicer
shall provide the Program Agent and each Managing Agent with prompt written
notice of any addition or termination of any Alternate Payment Location,
together with a revised Exhibit F hereto.
(e) Leverage Ratio. The Servicer will not permit the Leverage Ratio
at any time to exceed 3.0 to 1.0.
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ARTICLE VI
ADMINISTRATION OF RECEIVABLES
SECTION 6.01. Designation of Servicer.
(a) The servicing, administering and collection of the Pool
Receivables shall be conducted by the Person so designated from time to time in
accordance with this Section 6.01. Until the Program Agent, with the consent or
at the direction of the Managing Agents, gives notice to the Borrower and the
Servicer of the designation of a new Servicer as provided in Section 6.01(b)
below, ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ is hereby designated as, and hereby agrees to perform
the duties and obligations of, the Servicer pursuant to the terms hereof. The
Borrower hereby grants to Servicer an irrevocable power of attorney, with full
power of substitution, coupled with an interest, to take in the name of the
Borrower any and all steps which are necessary or advisable to endorse,
negotiate or otherwise realize on any writing or other right of any kind in
connection with any Pool Receivable or other Collateral.
(b) Upon the occurrence and during the continuation of any Servicer
Default, the Program Agent may, and at the direction of the Majority Managing
Agents shall, upon written notice to the parties hereto designate as Servicer
any Person to succeed ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ (or any successor Servicer) subject to
the condition that any such Person so designated shall agree to perform the
duties and obligations of the Servicer pursuant to the terms hereof. The
Servicer shall not resign from the obligations and duties hereby imposed on it
except upon the reasonable determination by the Servicer that (x) the
performance of its duties hereunder is no longer permissible under applicable
law and (y) there is no reasonable action which the Servicer could take to make
the performance of its duties hereunder permissible under applicable law.
(c) ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and any other Servicer agrees that, upon its
resignation or replacement as Servicer pursuant to Section 6.01(b) above, it
will cooperate with the Borrower, the Program Agent and the successor Servicer
in effecting the termination of its responsibilities and rights as Servicer
hereunder, including, without limitation, (i) assisting the successor Servicer
in enforcing all rights under the Pool Receivables and Related Security, (ii)
transferring, promptly upon receipt, to the successor Servicer, any Collections
or other amounts related to the Pool Receivables received by such Servicer,
(iii) transferring to the successor Servicer all Records held by or under the
control of such Servicer and (iv) permitting the successor Servicer to have
access to all tapes, discs, diskettes and related property containing
information concerning the Pool Receivables and the Records and taking all
actions necessary in its control to permit the successor Servicer to use all
computer software that may facilitate the Servicer's access to and use of such
information and acting as data processing agent for such successor Servicer if
requested. Upon the resignation or replacement of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ as Servicer,
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ shall no longer be entitled to the Servicer Fee accruing from
and after the effective date of such resignation or replacement.
(d) Without the consent of each Managing Agent, the Servicer shall
not be permitted to delegate any of its duties or responsibilities as Servicer
to any Person other than (i) an Approved Sub-servicer and (ii) except with
respect to certain Defaulted Receivables, to outside collection agencies in
accordance with its customary practices.
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(e) Notwithstanding the delegation by the Servicer of any of its
duties or responsibilities as Servicer to any Person or the appointment of any
Approved Sub-servicer pursuant to clause (d) above, (i) the Servicer shall
remain liable for the timely and complete performance of its duties and
obligations pursuant to the terms hereof, (ii) the Servicer shall retain
management information systems and sufficient servicing capability, in the
reasonable judgment of the Program Agent and each Managing Agent, to perform the
servicing functions described herein, and (iii) any sub-servicing agreement that
may be entered into and any other transactions or services relating to the Pool
Receivables involving an Approved Sub-servicer shall be deemed to be between
such sub-servicer and the Servicer alone, and none of the Lenders, the Program
Agent, the Managing Agents and the Liquidity Providers shall be deemed parties
thereto or shall have any obligations, duties or liabilities with respect to any
Approved Sub-servicer.
SECTION 6.02. Duties of the Servicer.
(a) The Servicer shall take or cause to be taken all such actions as
it deems necessary or advisable to collect each Pool Receivable from time to
time, all in accordance, in all material respects, with applicable laws, rules,
regulations and the Credit and Collection Policy. Each of the Borrower, each
Lender, each Liquidity Provider, each Managing Agent and the Program Agent
hereby appoints as its agent the Servicer, from time to time designated pursuant
to Section 6.01, to enforce its respective rights and interests in and under the
Pool Receivables and the Related Security. The Servicer (so long as it is
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇) will at all times apply the same standards and follow the same
procedures with respect to the decision to commence litigation with respect to
the Pool Receivables, and in prosecuting and litigating with respect to Pool
Receivables, as it applies and follows with respect to trade accounts receivable
serviced by it which are not Pool Receivables; provided, however, that from and
after the Termination Date, the Servicer shall commence or settle any legal
action to enforce collection of any Delinquent Receivable or Defaulted
Receivable or to foreclose upon or repossess any Related Security with respect
thereto as directed by the Program Agent. In no event shall the Servicer be
entitled to make the Program Agent, any Managing Agent, any Lender or any
Liquidity Provider a party to any litigation without the such Person's express
prior written consent.
(b) The Servicer shall apply all Collections to the Pool Receivables
owed by the applicable Obligors in a timely manner in accordance with the
business practices of the Originator in existence as of the date hereof. In the
event the Servicer receives any Collections or other proceeds of the Collateral,
it shall hold such Collections and other proceeds on behalf of the Borrower for
application and remittance in accordance with Section 2.06 or 2.07, as
applicable, and it shall remit the same to the Collection Account to the extent
required hereunder. The Borrower shall deliver to the Servicer, and the Servicer
shall hold in trust for the Borrower, the Lenders and the Liquidity Providers in
accordance with their respective interests, all Records.
(c) The Servicer shall, as soon as practicable following receipt,
turn over to the Person entitled thereto collections in respect of any
receivable which is not a Pool Receivable less, to the extent the Servicer
performed any collection or enforcement actions which it was authorized by such
Person to perform, all reasonable and appropriate out of pocket costs and
expenses of such Servicer incurred in collecting and enforcing such receivable.
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SECTION 6.03. Rights of the Program Agent.
(a) Following the occurrence and during the continuation of any
Event of Termination, an Incipient Event of Termination of the type described in
clause (e) in Section 7.01, or during a Level II Ratings Period, the Program
Agent may with the consent, and shall at the direction, of the Majority Managing
Agents (i) exercise its right to take exclusive ownership and control of the
Collection Account, the Lock-Boxes and the Deposit Accounts, and each of the
Borrower and the Servicer hereby agrees to take any further action necessary
that the Program Agent may reasonably request to effect such control and (ii)
notify any of the Lock-Box Processors to remit all items of payment or proceeds
thereof to the Program Agent or its designee, and to notify any or all of the
Deposit Account Banks to remit all amounts deposited in the applicable Deposit
Accounts to the Collection Account or to any other account designated by the
Program Agent. The Program Agent shall promptly notify the Borrower and the
Servicer of any exercise of the Program Agent's right to take exclusive control
of the Collection Account, the Lock-Boxes and the Deposit Accounts. From and
after the date the Program Agent exercises its right to take exclusive control
of the Collection Account, all withdrawals and distributions to be made from the
Collection Account by the Servicer hereunder shall be made by the Program Agent.
(b) The Borrower hereby grants to the Program Agent an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of the Borrower, following the occurrence and during the
continuance of an Event of Termination, any and all steps which are necessary or
advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind in connection with any Pool Receivable or other Collateral.
(c) At any time after the Effective Date, the Program Agent may, and
upon the request of the Majority Managing Agents shall, cause the Collection
Account to be established. The Borrower, the Program Agent and Eligible
Institution (in its capacity as the holder of the Collection Account) agree that
the Program Agent shall have exclusive dominion and control over the Collection
Account and that the Eligible Institution will comply with instructions
originated by the Program Agent directing disposition of the funds in the
Collection Account without further consent by the Borrower; provided that until
the Program Agent provides such instructions to Citibank (in accordance with
Section 6.03(a)), the Eligible Institution shall be entitled to comply with
instructions originated by the Servicer directing disposition of the funds in
the Collection Account without further consent by the Borrower or the Program
Agent. This agreement shall constitute an "authenticated record" for purposes of
Section 9-104 (and similar related provisions) of the UCC.
SECTION 6.04. Responsibilities of the Borrower. Anything herein to
the contrary notwithstanding, the Borrower shall (i) perform all of its
obligations with respect to the Pool Receivables to the same extent as if a
security interest in the Pool Receivables had not been granted hereunder and the
exercise by the Program Agent of its rights hereunder shall not relieve Borrower
from such obligations and (ii) pay when due any taxes, including without
limitation, sales, excise and personal property taxes payable by it in
connection with the Pool Receivables. None of the Program Agent, the Managing
Agents, the Lenders or the Liquidity Providers shall have any obligation or
liability with respect to any Pool Receivables or other Collateral, nor shall
any of them be obligated to perform any of the obligations of the Borrower
thereunder.
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SECTION 6.05. Further Action Evidencing Program Agent's Interest.
Each of the Borrower and the Servicer agrees that from time to time, at its
expense, it will promptly execute and deliver all further instruments and
documents, and take all further action that the Program Agent may reasonably
request in order to perfect, protect or more fully evidence the interest of the
Program Agent or the Secured Parties granted hereunder or to enable the Program
Agent to exercise or enforce any of its or the Secured Parties' rights
hereunder. Without limiting the generality of the foregoing, each of the
Borrower and the Servicer will (i) code its master data processing records
evidencing such Pool Receivables to evidence that a security interest therein
has been granted to the Program Agent under this Agreement, and (ii) upon the
request of the Program Agent, file such financing statements, continuation
statements or amendments thereto or assignments thereof, and execute and file
such other instruments or notices, as may be necessary or appropriate or as the
Program Agent may reasonably request. If after the occurrence and during the
continuation of any Event of Termination, either the Borrower or the Servicer
fails to perform any of its respective agreements or obligations under this
Agreement, the Program Agent may (but shall not be required to) itself perform,
or cause performance of, such agreement or obligation, and the reasonable
out-of-pocket expenses of the Program Agent incurred in connection therewith
shall be payable by the Borrower or the Servicer, as applicable, upon the
Program Agent's demand therefor.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01. Events of Termination. If any of the following events
(each, an "Event of Termination") shall occur:
(a) The Borrower, the Originator or the Servicer shall fail to make
any payment or deposit required to be made by it hereunder or under any other
Facility Document when due and such failure shall continue for two (2) Business
Days or, with respect to payments of Interest by the Borrower, three (3)
Business Days;
(b) The Borrower, the Originator or the Servicer shall fail to
perform or observe any term, covenant or agreement contained in this Agreement
or any other Facility Document on its part to be performed or observed and any
such failure shall remain unremedied for thirty (30) days after any Affected
Party gives notice thereof to the Borrower, the Originator or Responsible
Officer of the Servicer, as applicable, or the Borrower, the Originator or the
Servicer, as applicable, otherwise obtains knowledge thereof;
(c) Any representation or warranty made or deemed to be made by the
Borrower, the Originator or the Servicer under or in connection with this
Agreement or any other Facility Document (including any Monthly Report, any
Weekly Report, any Borrowing Request or other information or report delivered
pursuant hereto) shall prove to have been materially false or incorrect (except
that the materiality standard in this clause (c) shall not apply to any such
representation or warranty that is qualified by a materiality standard by its
terms) when made or deemed made or delivered;
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(d) The Program Agent, on behalf of the Secured Parties, shall cease
to have a valid and perfected first priority security interest in the Pool
Receivables and the Related Security and Collections with respect thereto or any
other Collateral;
(e) An Event of Bankruptcy shall occur with respect to any
Transaction Party;
(f) A Servicer Default shall occur;
(g) A "Purchase Termination Event" shall occur under (and as defined
in) the Purchase Agreement;
(h) As of the last day of any Monthly Period,
(i) the average of the Dilution Ratios for any three (3)
consecutive Monthly Periods shall exceed 6.00%;
(ii) the average of the Delinquency Ratios for any three (3)
consecutive Monthly Periods shall exceed 8.50%;
(iii) the average of the Default Ratios for any three (3)
consecutive Monthly Periods shall exceed 2.50%; or
(iv) the average of the Loss-to-Liquidation Ratios for any three
(3) consecutive Monthly Periods shall exceed 2.00%;
(v) the average of the Turnover Ratios for any three (3)
consecutive Monthly Periods shall exceed 75 days;
(i) As of the close of business on any date, (i) any Borrowing Base
Deficiency shall exist (after giving effect to any increases or reductions to
the Aggregate Principal Balance on such date) and such deficiency continues for
two (2) Business Days or the Aggregate Principal Balance exceeds the lesser of
the Facility Limit and the Maximum Permitted Amount and such excess continues
for two (2) Business Days;
(j) (i) (A) The Borrower shall fail to make any payment in respect
of any Indebtedness in an aggregate principal amount exceeding $25,000 when and
as the same shall become due and payable or (B) an event of default shall have
occurred and be continuing under an agreement, or related agreements, under
which the Borrower has outstanding Indebtedness; or (ii) (A) ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or
any Subsidiary (other than the Borrower) shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable (subject to any
applicable grace period) or (B) any event or condition occurs and, while
continuing, results in any Material Indebtedness becoming due prior to its
scheduled maturity or that enables or permits (subject to any applicable grace
period) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (B) shall not apply
to secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness or to Capital
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Leases that terminate as a result of the voluntary sale or transfer of or a
casualty or condemnation affecting the property or assets subject thereto;
(k) (i) One or more final judgments, decrees or orders for the
payment of money shall be rendered against the Borrower in the aggregate amount
of $25,000 or more (other than (x) a judgment which is fully discharged within
30 days after its entry, or (y) a judgment, the execution of which is
effectively stayed within 30 days after its entry but only for 30 days after the
date on which such stay is terminated or expires) or (ii) one or more judgments
for the payment of money in an aggregate amount in excess of $75,000,000 and not
covered by insurance shall be rendered against ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, any Subsidiary
of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ (other than the Borrower) or any combination thereof and the
same shall remain undischarged for a period of 60 consecutive days during which
execution shall not be effectively stayed, vacated or bonded pending appeal, or
any action shall be legally taken by a judgment creditor to attach or levy upon
material assets of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or any Subsidiary of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ (other
than the Borrower) to enforce one or more judgments for the payment of money in
an aggregate amount in excess of $75,000,000;
(l) (i) Any of this Agreement, the Purchase Agreement, the
Subordinated Note or any Fee Letter shall cease to be in full force and effect
or any of the Borrower, the Originator or the Servicer shall so assert in
writing or otherwise seek to terminate or disaffirm its obligations under any
such Facility Document at any time following the execution thereof;
(m) A Change in Control shall have occurred;
(n) An ERISA Event shall have occurred that, when taken together
with all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect;
(o) Any Transaction Party receives notice or becomes aware that a
notice of federal tax lien has been filed against any Transaction Party;
(p) A material adverse effect on (i) the ability of any Transaction
Party to perform its obligations under this Agreement or any other Facility
Document or (ii) the collectibility of the Receivables generally or of any
material portion of the Receivables shall have occurred and is continuing other
than in the case of both clause (i) and (ii) an Incipient Judgment Event during
an Incipient Judgment Event Grace Period; or
(q) any violation of Section 5.06(e) occurs.
then, and in any such event, the Program Agent shall, at the request, or may
with the consent, of the Majority Committed Lenders by notice to the Borrower,
declare the Termination Date to have occurred; provided, however, that, in the
case of any event described in subsection (e) above, the Termination Date shall
be deemed to have occurred automatically upon the occurrence of such event. Upon
any such declaration or automatic occurrence, the Program Agent and the Secured
Parties shall have, in addition to all other rights and remedies under this
Agreement or otherwise but subject to the following sentence and Section 10.09
hereof, all other rights and remedies provided under the UCC of the applicable
jurisdiction and other applicable
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laws, which rights shall be cumulative. Upon the declaration or automatic
occurrence of the Termination Date in accordance with this Section 7.01, all
obligations hereunder shall be immediately due and payable and all Loans shall
be immediately due and payable.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Indemnities by the Borrower. Without limiting any
other rights which any Affected Party may have hereunder or under applicable law
(including, without limitation, the right to recover damages for breach of
contract), the Borrower hereby agrees to indemnify any Lender, the Program
Agent, each Managing Agent, the Servicer (if not an Affiliate of the Borrower)
and any Liquidity Provider, and their respective directors, officers and
employees (the "Indemnified Parties"), from and against any and all damages,
losses, claims, liabilities and related costs and expenses, including reasonable
external attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts"), awarded against or incurred
by such Indemnified Party to the extent relating to or arising from or as a
result of this Agreement or the funding or maintenance of Loans made by a Lender
hereunder subject to the proviso set forth below. Without limiting the
generality of the foregoing indemnification, the Borrower shall indemnify the
Indemnified Parties for Indemnified Amounts to the extent relating to or
resulting from any of the following:
(i) the failure of any Pool Receivable represented by the Borrower
to be an Eligible Receivable hereunder to be an "Eligible Receivable" at
the time of such representation;
(ii) reliance on any representation or warranty made or deemed made
by the Borrower under this Agreement or any other Facility Document to
which it is a party which shall have been false or incorrect when made or
deemed made;
(iii) the failure by the Borrower to comply with any term, provision
or covenant contained in this Agreement, the Purchase Agreement or any
other Facility Document to which it is party or with any applicable law,
rule or regulation with respect to any Pool Receivable, the related
Contract, or the Related Security, or the nonconformity of any Pool
Receivable, the related Contract or the Related Security with any such
applicable law, rule or regulation;
(iv) any products liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever sort
arising out of or in connection with goods or services, the sale or
provision of which gave rise to or are the subject of any Pool Receivable
or Contract;
(v) the failure to pay when due any taxes, including, without
limitation, sales, excise or personal property taxes payable by the
Borrower in connection with the Collateral;
(vi) the payment by such Indemnified Party of taxes, including,
without limitation, any taxes imposed by any jurisdiction on amounts
payable and any liability
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(including penalties, interest and expenses) arising therefrom or with
respect thereto, to the extent caused by the Borrower's actions or failure
to act in breach of this Agreement;
(vii) the failure to vest and maintain vested in the Program Agent,
on behalf of the Secured Parties, a first priority perfected security
interest in the Pool Receivables, together with all Collections, Related
Security and other Collateral, free and clear of any Lien except a Lien in
favor of any Affected Party, whether existing at the time such Pool
Receivable arose or at any time thereafter;
(viii) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the applicable
UCC or other applicable laws naming the Borrower as "Debtor" with respect
to any Collateral;
(ix) any dispute, claim, offset or defense (other than as a result
of the bankruptcy or insolvency of the related Obligor) of an Obligor to
the payment of any Pool Receivable (including, without limitation, a
defense based on such Pool Receivable 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 goods or services
related to such Pool Receivable or the furnishing or failure to furnish
such goods or services (other than as a result of the bankruptcy or
insolvency of the related Obligor);
(x) the commingling of Collections with any other funds;
(xi) any failure by the Borrower to give reasonably equivalent value
to the Originator in consideration for the transfer by the Originator to
the Borrower of any Pool Receivables, or any attempt by any Person to void
any such transfer under any statutory provision or common law or equitable
action, including, without limitation, any provision or the Bankruptcy
Code;
(xii) the failure of any Lock-Box Processor or Deposit Account Bank
to remit any amounts or items of payment held in a Deposit Account or in a
Lock-Box pursuant to the instructions of the Program Agent given in
accordance with this Agreement, the applicable Lock-Box Processor
Agreement, Blocked Account Agreement or the other Facility Documents,
whether by reason of the exercise of setoff rights or otherwise;
(xiii) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of Loans made pursuant to this Agreement
or any other Facility Document delivered hereunder or in respect of any of
the Collateral;
(xiv) any claim brought by any Person arising from any activity by
the Borrower in servicing, administering or collecting any Pool
Receivable;
(xv) the grant by the Borrower of a security interest in any
Receivable in violation of any applicable law, rule or regulation;
(xvi) the failure of the Borrower to furnish accurate and complete
documentation (including, without limitation, a Contract or invoice) to
any Obligor;
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(xvii) the failure of any Lock-Box Processor, Approved
Sub-servicer or any other third party with a contractual relationship with
the Borrower for the acceptance or processing of Collections, to remit any
Collections received by it to a Lock-Box or a Deposit Account within two
(2) Business Days of receipt;
provided, however, that the Borrower shall not be required to indemnify any
Indemnified Party to the extent of any amounts (x) resulting from the gross
negligence or willful misconduct of such Indemnified Party, or (y) constituting
credit recourse for the failure of an Obligor to pay a Pool Receivable, or (z)
constituting net income or franchise taxes that are imposed by the United States
or franchise taxes or net income taxes that are imposed on such Indemnified
Party by the state or foreign jurisdiction under the laws of which such
Indemnified Party is organized or any political subdivision thereof. Any amounts
subject to the indemnification provisions of this Section 8.01 shall be paid by
the Borrower to the related Indemnified Party within 10 Business Days, following
written demand therefor.
SECTION 8.02. Indemnities by the Servicer. The Servicer agrees to
indemnify each Indemnified Party for Indemnified Amounts to the extent arising
out of or resulting from any of the following:
(i) the failure of any Pool Receivable represented by the
Servicer to be an Eligible Receivable hereunder to be an "Eligible
Receivable" at the time of such representation;
(ii) reliance on any representation or warranty made or deemed
made by the Servicer under this Agreement or any other Facility Document
to which it is a party, which shall have been false or incorrect when made
or deemed made;
(iii) the failure by the Servicer to comply with any term,
provision or covenant contained in this Agreement, the Purchase Agreement
or any Facility Document to which it is party or with any applicable law,
rule or regulation with respect to any Pool Receivable or the Related
Security;
(iv) the failure of any Lock-Box Processor, Approved
Sub-servicer or any other third party with a contractual relationship with
the Servicer or any of its Affiliates for the acceptance or processing of
Collections, to remit any Collections received by it to a Lock-Box or a
Deposit Account within two (2) Business Days of receipt; or
(v) any action or omission by the Servicer which reduces or
impairs the rights or interests of the Program Agent, the Managing Agents
or any Lender with respect to any Collateral or the value of any
Collateral;
(vi) any claim brought by any Person arising from any activity
by the Servicer in servicing, administering or collecting any Pool
Receivable;
(vii) the failure of the Servicer to furnish accurate and
complete documentation (including, without limitation, a Contract or
invoice) to any Obligor;
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(viii) the commingling of Collections with other funds;
provided, however, that the Servicer shall not be required to indemnify any
Indemnified Party to the extent of any amounts (x) resulting from the gross
negligence or willful misconduct of such Indemnified Party, or (y) constituting
credit recourse for the failure of an Obligor to pay a Pool Receivable, or (z)
constituting net income or franchise taxes that are imposed by the United States
or franchise taxes or net income taxes that are imposed on such Indemnified
Party by the state or foreign jurisdiction under the laws of which such
Indemnified Party is organized or any political subdivision thereof. Any amounts
subject to the indemnification provisions of this Section 8.02 shall be paid by
the Servicer to the related Indemnified Party within 10 Business Days, following
written demand therefor.
SECTION 8.03. Limited Liability of Parties. No Indemnified Party
shall have any liability (whether in contract, tort or otherwise) to the
Borrower, the Originator or the Servicer or any of their security holders or
creditors for or in connection with the transactions contemplated hereby, except
to the extent such liability is determined in a final non-appealable judgment by
a court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct or breach of its obligations under this
Agreement.
ARTICLE IX
THE AGENTS
SECTION 9.01. Authorization and Action. Each Lender hereby appoints
and authorizes its related Managing Agent and the Program Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to such Managing Agent or the Program Agent by the terms
hereof, together with such powers as are reasonably incidental thereto. The
provisions of this Article IX are solely for the benefit of the Managing Agents,
the Program Agent and the Lenders. The Borrower shall not have any rights as a
third-party beneficiary or otherwise under any of the provisions hereof. In
performing their functions and duties hereunder, the Managing Agents shall act
solely as the agent for the respective Conduit Lenders and the Committed Lenders
in the related Lender Group and do not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for the other
Lenders, the Borrower, the Servicer, the Originator, any Affiliate thereof or
any of their respective successors and assigns.
SECTION 9.02. Agents' Reliance, Etc. Neither the Program Agent nor
any Managing Agent nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
such Managing Agent or the Program Agent under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, each of the Program Agent and
the Managing Agents: (i) may consult with legal counsel (including counsel for
the Borrower, the Servicer or any other Affiliate of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇),
independent 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; (ii) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations made in or in
connection with this
75
Agreement; (iii) 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 Borrower, the Servicer or any other Affiliate of
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or to inspect the property (including the books and records) of
the Borrower, the Servicer or any other Affiliate of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇; (iv)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; and (v) 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 facsimile) believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 9.03. Agents and Affiliates. Each Managing Agent and the
Program Agent and their respective Affiliates may engage in any kind of business
with the Borrower, ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or any Obligor, any of their respective
Affiliates and any Person who may do business with or own securities of
Borrower, ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or any Obligor or any of their respective Affiliates,
all as if such Persons were not Managing Agents and/or Program Agent and without
any duty to account therefor to any Lender.
SECTION 9.04. Lender's Loan Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Program Agent, any Managing
Agent, any of their respective Affiliates or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own evaluation
and decision to enter into this Agreement and, if it so determines, to make
Loans hereunder. Each Lender also acknowledges that it will, independently and
without reliance upon the Program Agent, any Managing Agent, any of their
respective Affiliates, or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under this Agreement.
SECTION 9.05. Delegation of Duties. The Program Agent and each
Managing Agent may each execute any of its duties under this Agreement by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Neither the Program Agent nor
any Managing Agent shall be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
SECTION 9.06. Indemnification. Each Managing Agent severally agrees
to indemnify the Program Agent (to the extent not reimbursed by the Borrower,
the Servicer, the Originator or ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇), ratably according to its
related Lender Group Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Program Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by the Program
Agent under this Agreement; provided, that (i) no Managing Agent shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting or arising
from the Program Agent's gross negligence or willful misconduct and (ii) no
Managing Agent shall be liable for any amount in respect of any compromise or
settlement of any of the foregoing unless such compromise or settlement is
approved by the Majority Managing Agents. Without limitation of the generality
of the
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foregoing, each Managing Agent agrees to reimburse the Program Agent, ratably
according to its related Lender Group Percentage, promptly upon demand, for any
reasonable out-of-pocket expenses (including reasonable counsel fees) incurred
by the Program Agent in connection with the administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement; provided, that no Managing Agent shall be responsible for the
costs and expenses of the Program Agent in defending itself against any claim
alleging the gross negligence or willful misconduct of the Program Agent to the
extent such gross negligence or willful misconduct is determined by a court of
competent jurisdiction in a final and non-appealable decision.
SECTION 9.07. Successor Agents. The Program Agent and each Managing
Agent may, upon thirty (30) days' notice to the Borrower, each Lender and each
other party hereto, resign as Program Agent or Managing Agent, as applicable. If
any such party shall resign as Program Agent or Managing Agent under this
Agreement, then, in the case of the Program Agent, the Majority Committed
Lenders and the Borrower, and in the case of any Managing Agent, its related
Conduit Lenders, during such thirty-day period shall appoint a successor agent,
whereupon such successor agent shall succeed to the rights, powers and duties of
the Program Agent or applicable Managing Agent and references herein to the
Program Agent or such Managing Agent shall mean such successor agent, effective
upon its appointment; and such former Program Agent's or Managing Agent's
rights, powers and duties in such capacity shall be terminated, without any
other or further act or deed on the part of such former Program Agent or
Managing Agent or any of the parties to this Agreement. After any retiring
Program Agent's or Managing Agent's resignation hereunder as such agent, the
provisions of Article VIII, this Article IX and Section 10.09 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Program Agent or a Managing Agent under this Agreement.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments, Etc.
(a) No waiver of any provision of this Agreement nor consent to any
departure by the Borrower or the Servicer therefrom shall in any event be
effective unless the same shall be in writing and signed by the Program Agent
and the Managing Agents and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
(b) No amendment to this Agreement shall be effective unless the
same shall be in writing and signed by each of the Borrower, the Servicer, the
Program Agent, the Managing Agents and the Majority Committed Lenders, provided,
however, that, without the written consent of all the Committed Lenders, no such
amendment shall (i) extend the Termination Date, (ii) extend the date of any
payment or deposit of Collections by the Borrower or by the Servicer or the time
of payment of Interest, (iii) release the security interest in or transfer all
or any material portion of the Collateral, (iv) change the outstanding principal
amount of any of the Loans made by any Committed Lender hereunder other than as
provided herein, (v) change the amount of any Lender Group Limit other than as
provided herein or increase the
77
Facility Limit hereunder, (vi) increase the Concentration Limit or any Special
Concentration Limit, (vii) amend, modify or waive any provision of the
definitions of "Eligible Receivables", "Majority Committed Lenders", "Net
Receivables Pool Balance" or "Required Reserves" or any of the defined terms
used in such definitions or this Section 10.01, (viii) consent to or permit the
assignment or transfer by the Borrower or any of its rights and obligations
under this Agreement or of any of its right, title or interest in or to the Pool
Receivables, (ix) amend or modify any provision of Section 7.01 or Section
10.03, or (x) amend or modify any defined term (or any defined term used
directly or indirectly in such defined term) used in clauses (i) through (ix)
above in a manner which would circumvent the intention of the restrictions set
forth in such clauses.
SECTION 10.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including communication by facsimile copy) and shall be personally delivered or
sent by registered mail, return receipt requested, or by courier or by
facsimile, to each party hereto, at its address set forth on Schedule II hereof
or at such other address as shall be designated by such party in a written
notice to the other parties hereto. All such notices and communications shall be
effective, upon receipt, or in the case of overnight courier, two (2) days after
being deposited with such courier, or, in the case of notice by facsimile, when
electronic confirmation of receipt is obtained, in each case addressed as
aforesaid.
SECTION 10.03. Assignability.
(a) Any Conduit Lender may, (i) with notice to the Borrower and the
Servicer, and with the consent of the Managing Agent for the Lender Group of
which it is a member, assign at any time all or any portion of its rights and
obligations hereunder and interests herein to (A) any other Lender, (B) any
commercial paper conduit managed by such Conduit Lender's sponsor or
administrator bank if the Promissory Notes of such commercial paper conduit have
short-term ratings from S&P and Moody's that are equivalent to or higher than
the short-term ratings by S&P and Moody's of the Promissory Notes of such
Conduit Lender, (C) any Affiliate of such Conduit Lender's sponsor bank or (D)
any Liquidity Provider with respect to such Conduit Lender and (ii) with the
consent of the Borrower (such consent not to be unreasonably withheld, delayed
or conditioned) and the Managing Agent for the Lender Group of which it is a
member, assign at any time all or any portion of its rights and obligations
hereunder and interests herein to any other Person not listed in clause (i)
above. Any Managing Agent may, with notice to the Borrower and the Servicer, and
with the consent of the Lenders in its Lender Group, assign at any time all or
any portion of its rights and obligations hereunder and interests herein to any
Affiliate of such Managing Agent.
(b) Any Committed Lender may, with the consent of the Borrower (such
consent not to be unreasonably withheld, delayed or conditioned) and with the
consent of the Managing Agent for the Lender Group of which it is a member,
assign at any time all or any portion of its rights and obligations hereunder
and interests herein to any Person; provided, however, that the consent of the
Borrower shall not be required in connection with any assignment by a Committed
Lender (i) after the occurrence and during the continuance of an Event of
Termination or (ii) to any other Lender.
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(c) With respect to any assignment hereunder
(i) each such assignment shall be of a constant, and not a
varying, percentage of all rights and obligations under this
Agreement,
(ii) the amount being assigned pursuant to each such
assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be
less than $10,000,000, and
(iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and
recording in the Register (as defined below), an Assignment and
Acceptance, together with a processing and recordation fee of
$2,500.
(d) Upon such execution, delivery, acceptance and recording from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party to this Agreement and, to the extent that
rights and obligations under this Agreement have been assigned to it pursuant to
such Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (y) the assigning Lender shall, to the extent that rights and
obligations have been assigned by it pursuant to such Assignment and Acceptance,
relinquish such rights and be released from such obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).At all times during
which any Loan is outstanding, the Program Agent shall maintain at its address
referred to in Section 10.02 of this Agreement (or such other address of the
Program Agent notified by the Program Agent to the other parties hereto) a
register as provided herein (the "Register"). The Aggregate Principal Balance
and any interests therein, and any Assignments and Acceptances of the Aggregate
Principal Balance or any interest therein delivered to and accepted by the
Program Agent, shall be registered in the Register, and the Register shall serve
as a record of ownership that identifies the owner of the Aggregate Principal
Balances and any interest therein. Notwithstanding any other provision of this
Agreement, no transfer of the Aggregate Principal Balances or any interest
therein shall be effective unless and until such transfer has been recorded in
the Register. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower, the Servicer, the Program
Agent, the Managing Agents and the Lenders may treat each Person whose name is
recorded in the Register as a Lender, as the case may be, under this Agreement
for all purposes of this Agreement. This Section 10.03(d) shall be construed so
that the Aggregate Principal Balance and any interest therein is maintained at
all times in "registered form" within the meaning of Sections 163(f), 871(h) and
881(c) of the IRC, solely for the purposes of this Section 10.03, the Program
Agent will act as an agent of the Borrower. The Register shall be available for
inspection by the Borrower or any Managing Agent at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance, the Program
Agent shall, if such Assignment and Acceptance has been duly completed, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.
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(f) Any Lender may, without the consent of the Borrower, sell
participations to one or more banks or other entities (each, a "Participant") in
all or a portion of its rights and obligations hereunder (including the
outstanding Loan); provided that following the sale of a participation under
this Agreement (i) the obligations of such Lender shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Program Agent, the
Servicer and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which such Lender sells such
a participation shall provide that the Participant shall not have any right to
direct the enforcement of this Agreement or the other Facility Documents or to
approve any amendment, modification or waiver of any provision of this Agreement
or the other Facility Documents; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver that (i) reduces the amount of
principal or Interest that is payable on account of any Loan or delays any
scheduled date for payment thereof or (ii) reduces any fees payable by the
Borrower to the Program Agent (to the extent relating to payments to the
Participant) or delays any scheduled date for payment of such fees. The Borrower
acknowledges and agrees that any Lender's source of funds may derive in part
from its Participants. Accordingly, references in Sections 2.12 or 2.14 and the
other terms and provisions of this Agreement and the other Facility Documents to
determinations, reserve and capital adequacy requirements, expenses, increased
costs, reduced receipts and the like as they pertain to the Lenders shall be
deemed also to include those of its Participants; provided, however, that in no
event shall the Borrower be liable to any Participant under Sections 2.12 or
2.14 for an amount in excess of that which would be payable to the applicable
Lender under such sections.
(g) Neither the Borrower nor the Servicer may assign any of its
rights or obligations hereunder or any interest herein without the prior written
consent of the Program Agent and the Majority Managing Agents.
(h) Notwithstanding any other provision of this Agreement to the
contrary, any Lender may at any time pledge or grant a security interest in all
or any portion of its rights (including, without limitation, rights to payment
of the principal balance of the Loans and Interest with respect thereto)
hereunder to secure obligations of such Lender to a Federal Reserve Bank,
without notice to or consent of the Borrower or the Program Agent; provided,
that no such pledge or grant of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or grantee for
such Lender as a party hereto.
SECTION 10.04. Additional Lender Groups. Upon the Borrower's
request, an additional Lender Group may be added to this Agreement at any time
by the execution and delivery of a Joinder Agreement by the members of such
proposed additional Lender Group, the Borrower, the Servicer, ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇,
the Program Agent and each of the Managing Agents, which execution and delivery
shall not be unreasonably refused by such parties. Upon the effective date of
such Joinder Agreement, (i) each Person specified therein as a "Conduit Lender"
shall become a party hereto as a Conduit Lender, entitled to the rights and
subject to the obligations of a Conduit Lender hereunder, (ii) each Person
specified therein as a "Committed Lender" shall become a party hereto as a
Committed Lender, entitled to the rights and subject to the obligations of a
Committed Lender hereunder, (iii) each Person specified therein as a
80
"Managing Agent" shall become a party hereto as a Managing Agent, entitled to
the rights and subject to the obligations of a Managing Agent hereunder and (iv)
the Facility Limit shall be increased by an amount equal to the aggregate
Commitments of the Committed Lenders party to such Joinder Agreement. On or
prior to the effective date of such Joinder Agreement, the Borrower and the new
Managing Agent shall enter into a fee letter for purposes of setting forth the
fees payable to the members of such Lender Group in connection with this
Agreement, which fee letter shall be considered a "Fee Letter" for all purposes
of this Agreement.
SECTION 10.05. Consent to Jurisdiction.
(a) Each party hereto hereby irrevocably submits to the
non-exclusive jurisdiction of any New York State or Federal court sitting in New
York City in any action or proceeding arising out of or relating to this
Agreement, and each party hereto hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such New
York State court or, to the extent permitted by law, in such Federal court. The
parties hereto hereby irrevocably waive, to the fullest extent they may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding. The parties hereto agree that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Each of the Borrower and the Servicer consents to the service of
any and all process in any such action or proceeding by the mailing of copies of
such process to it at its address specified in Section 10.02. Nothing in this
Section 10.05 shall affect the right of any Lender or the Administrative Agent
to serve legal process in any other manner permitted by law.
SECTION 10.06. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH THIS AGREEMENT OR ANY OTHER FACILITY DOCUMENT.
SECTION 10.07. Right of Setoff. Each Lender (including a Lender
which has made Cash Secured Advances) is hereby authorized (in addition to any
other rights it may have) at any time after the occurrence of the Termination
Date due to the occurrence of an Event of Termination, or at any time that any
Borrower Obligation hereunder is due and payable, to set off, appropriate and
apply (without presentment, demand, protest or other notice which are hereby
expressly waived) any deposits and any other indebtedness held or owing by such
Lender to, or for the account of, the Borrower against the amount of the
Borrower Obligations owing by the Borrower to such Person. Each Lender is hereby
authorized (in addition to any other rights it may have) at any time after the
occurrence of the Termination Date due to the occurrence of an Event of
Termination, or at any time that any payment obligation of the Servicer
hereunder is due and payable, to set off, appropriate and apply (without
presentment, demand, protest or other notice which are hereby expressly waived)
any deposits and any other indebtedness held or owing by such Lender to, or for
the account of, the Servicer against the amount of such obligations owing by the
Servicer to such Person.
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SECTION 10.08. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it with respect to any Borrower Obligations or
obligation of the Servicer in a greater proportion than that received by any
other Lender entitled to receive a ratable share of such amount, such Lender
agrees, promptly upon demand, to purchase for cash without recourse or warranty
a portion of such Borrower Obligations or Servicer obligation held by the other
Lenders so that after such purchase each Lender will hold its ratable proportion
of such Borrower Obligations or Servicer obligations, as applicable; provided
that if all or any portion of such excess amount is thereafter recovered from
such Lender, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.
SECTION 10.09. Limitation of Liability.
(a) No claim may be made by any Transaction Party or any other party
hereto against any other party hereto or their respective Affiliates, directors,
officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement or any other Facility Document, or any act,
omission or event occurring in connection herewith or therewith; and each party
hereto hereby waives, releases, and agrees not to ▇▇▇ upon any claim for any
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.
(b) Notwithstanding anything to the contrary contained herein, the
obligations of the Conduit Lenders under this Agreement are solely the corporate
obligations of each such Conduit Lender and shall be payable only at such time
as funds are actually received by, or are available to, such Conduit Lender in
excess of funds necessary to pay in full all outstanding Promissory Notes issued
by such Conduit Lender and, to the extent funds are not available to pay such
obligations, the claims relating thereto shall not constitute a claim against
such Conduit Lender. Each party hereto agrees that the payment of any claim (as
defined in Section 101 of Title 11 of the Bankruptcy Code) of any such party
shall be subordinated to the payment in full of all Promissory Notes.
(c) No recourse under any obligation, covenant or agreement of any
Conduit Lender contained in this Agreement shall be had against any
incorporator, stockholder, officer, director, member, manager, employee or agent
of such Conduit Lender or any of its Affiliates (solely by virtue of such
capacity) by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is solely a corporate obligation of such Conduit
Lender, and that no personal liability whatever shall attach to or be incurred
by any incorporator, stockholder, officer, director, member, manager, employee
or agent of any Conduit Lender or any of its Affiliates (solely by virtue of
such capacity) or any of them under or by reason of any of the obligations,
covenants or agreements of such Conduit Lender contained in this Agreement, or
implied therefrom, and that any and all personal liability for breaches by any
Conduit Lender of any of such obligations, covenants or agreements, either at
common law or at equity, or by statute, rule or regulation, of every such
incorporator, stockholder, officer, director, member, manager, employee or agent
is hereby expressly waived as a condition of and in consideration for the
execution of this Agreement; provided that the foregoing shall not relieve any
such
82
Person from any liability it might otherwise have as a result of fraudulent
actions taken or fraudulent omissions made by them.
SECTION 10.10. Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification under Article VIII
hereof, the Borrower agrees to pay to the Program Agent and each Managing Agent
promptly after written demand thereof (i) all reasonable costs and expenses
incurred in connection with the periodic auditing of the Borrower and the
Servicer pursuant to Section 5.01(c) or 5.04(c) of this Agreement; provided,
that the Borrower shall only be responsible for the reasonable costs and
expenses incurred in connection with one audit of the Borrower, the Originator,
and the Servicer, in each case during any twelve (12) month period beginning on
the date hereof and on each anniversary of the date hereof, and in each case, so
long as (x) no Event of Termination shall have occurred and be continuing and
(y) the results of the previous audits were complete and reasonably acceptable
to the Program Agent and (ii) all reasonable costs and expenses of the Program
Agent and each Managing Agent in connection with the preparation, execution and
delivery (including any requested amendments, waivers or consents) of this
Agreement and the other documents to be delivered hereunder, including, without
limitation, all pre-closing due diligence expenses and the reasonable fees and
out-of-pocket expenses of special counsel for the Program Agent and each
Managing Agent with respect thereto and with respect to advising the Program
Agent and each Managing Agent and the related Lenders as to their respective
rights and remedies under this Agreement, and the other agreements executed
pursuant hereto and (iii) all costs and out-of-pocket expenses (including fees
and expenses of outside counsel), incurred by the Program Agent and each
Managing Agent in connection with any amendment to any of the Facility Documents
after the Effective Date and the enforcement of this Agreement and the other
agreements and documents to be delivered hereunder after the occurrence of an
Event of Termination.
(b) In addition, the Borrower shall pay any and all stamp, sales,
transfer and other taxes and fees (including, without limitation, UCC filing
fees and any penalties associated with the late payment of any UCC filing fees)
payable or determined to be payable in connection with the execution, delivery,
filing and recording of this Agreement or the other agreements and documents to
be delivered hereunder (including any UCC financing statements) and agrees to
indemnify the Program Agent, the Managing Agents, the Lenders and the Liquidity
Providers against any liabilities with respect to or resulting from any delay by
the Borrower in paying or omission to pay such taxes and fees.
SECTION 10.11. No Proceedings. The Borrower, the Servicer, each
Lender, each Managing Agent and the Program Agent each hereby agrees that it
will not institute against any Conduit Lender any proceeding of the type
referred to in Section 7.01(e) so long as any Promissory Notes shall be
outstanding or there shall not have elapsed one year plus one day since the last
day on which any such Promissory Notes shall have been outstanding.
SECTION 10.12. Confidentiality.
(a) By accepting delivery of this Agreement, the Borrower agrees not
to disclose to any person or entity the existence of this Agreement or the
Facility Documents (other
83
than (x) the Purchase Agreement or (y) Blocked Account Agreements, Lock-Box
Processor Agreements or other agreements with third-parties not bound by the
confidentiality provisions hereof and which do not describe the financial or
structural terms of the agreements to which the Borrower, the Program Agent, the
Managing Agents and the Lenders are parties) or the terms hereof or thereof
(including, without limitation, any specific pricing information provided by the
Program Agent, the Managing Agents or the Lenders or the amount or terms of any
fees payable to the Program Agent, the Managing Agents or the Lenders in
connection with the transaction contemplated by this Agreement, the
"Transaction"), the proposal or structure of the Transaction, any related
structures developed by the Program Agent for the Borrower, the existence or
status of any ongoing negotiations between the Borrower, the Program Agent, the
Managing Agents and the Lenders concerning the Transaction (collectively, the
"Product Information"), except (i) to its and its affiliates' officers,
directors, employees, agents, accountants, legal counsel and other
representatives (collectively, the "Borrower Representatives") who have a need
to know the Product Information for the purpose of assisting in the negotiation
and completion of the Transaction and who agree to be bound by the provisions of
this section applicable to the Borrower, (ii) in connection with any legal or
regulatory action or proceeding relating to this Agreement or the transactions
contemplated hereby or the exercise of any remedies hereunder, (iii) to extent
required by applicable law, regulation, subpoena or other legal process or (iv)
to the extent requested by any governmental or regulatory authority having
jurisdiction over the Borrower, the Originator or any Borrower Representative.
The Borrower will be responsible for any failure of any Borrower Representative
to comply with the provisions of this clause (a).
(b) The Program Agent, the Managing Agents and the Lenders will not
disclose to any person or entity the confidential or proprietary information of
the Borrower or the Originator furnished to the Program Agent, the Managing
Agents and the Lenders in connection with the Transaction (the "Borrower
Information"), except (i) to their respective and their Affiliates' officers,
directors, employees, agents, accountants, legal counsel and other
representatives (collectively, the "Lender Representatives") who have a need to
know the Borrower Information for the purpose of assisting in the negotiation
and completion of the Transaction and who agree to be bound by the provisions in
this section applicable to the Program Agent, the Managing Agents and the
Lenders, (ii) to the extent required by applicable law, regulation, subpoena or
other legal process, (iii) to the extent requested by any governmental or
regulatory authority having jurisdiction over the Program Agent, the Managing
Agents, the Lenders or any Lender Representative, (iv) to the Rating Agencies,
(v) to any actual or potential subordinated investor in any Conduit Lender that
has signed a confidentiality agreement containing restrictions on disclosure
substantially similar to this Section or (vi) to credit enhancers and dealers
and investors in respect of Promissory Notes of any Conduit Lender in accordance
with the customary practices of such Lender for disclosures to credit enhancers,
dealers or investors, as the case may be, it being understood that any such
disclosure to dealers or investors will not identify the Borrower or any of
their respective Affiliates by name. The Program Agent, the Managing Agents and
each Lender, as the case may be, will be responsible for any failure of any
related Lender Representative to comply with the provisions of this clause (b).
(c) The Program Agent, the Managing Agents and the Lenders will (i)
not disclose to any person or entity the confidential or proprietary information
of Obligors relating to Retail Receivables (if any) obtained pursuant to this
Agreement (the "Obligor Information"), (ii)
84
comply with all applicable laws (including ▇▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act) with respect
to Obligor Information and (iii) not use Obligor Information obtained pursuant
to this Agreement to solicit such Obligors for credit cards or savings accounts
or other business.
(d) Notwithstanding any other provision herein, the Borrower (and
its employees, representatives or other agents) may disclose to any and all
persons, without limitation of any kind, the U.S. tax treatment and U.S. tax
structure of this Agreement and all materials of any kind (including opinions or
other tax analyses) that are provided to such party relating to such U.S. tax
treatment and U.S. tax structure, other than any information for which
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.
SECTION 10.13. No Waiver; Remedies. No failure on the part of the
Program Agent, any Managing Agent, any Lender or any Liquidity Provider to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 10.14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 10.15. 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. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.16. Integration; Binding Effect; Survival of Termination.
This Agreement and the other Facility Documents executed by the parties hereto
on the date hereof contain the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof superseding all prior oral or written understandings.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns (including any
trustee in bankruptcy). Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms and shall remain
in full force and effect until the Final Collection Date; provided, however,
that the provisions of 2.11, 2.12, 2.13 and Article VIII, and the provisions of
Sections 10.06, 10.09, 10.10, 10.11 and 10.12 shall survive any termination of
this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SWC RECEIVABLES FUNDING LLC,
as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY,
as Servicer
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President - Finance and
Chief Financial Officer
Signature Page to
Loan and Servicing Agreement
CITICORP NORTH AMERICA, INC.,
as a Managing Agent and as Program Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice-President
▇▇▇▇▇▇, LLC,
as a Conduit Lender
By: Citicorp North America, Inc.,
as Attorney-in-Fact
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice-President
CITIBANK, N.A., as a Committed Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice-President
Signature Page to
Loan and Servicing Agreement
EXHIBIT A
FORM OF CREDIT AND COLLECTION POLICY
Attached
EXHIBIT B
FORM OF BORROWING REQUEST
[DATE]
To: Citicorp North America, Inc. ("CNAI"), as Program Agent
From: SWC Receivables Funding LLC (the "Borrower")
Re: Loan and Servicing Agreement, dated as of February 1, 2006 among the
Borrower, The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, as Servicer, the Persons from time
to time party thereto as Conduit Lenders, the financial institutions from
time to time party thereto as Committed Lenders, the Persons from time to
time party thereto as Managing Agents and CNAI, as Program Agent for the
Conduit Lenders and the Committed Lenders (as amended, restated,
supplemented or otherwise modified from time to time, the "Agreement").
Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
A. (i) Pursuant to Section 2.02(a) of the Agreement, the
undersigned hereby requests a Borrowing from
each Lender Group in an aggregate amount equal
to the following (which shall be at least
$5,000,000, or integral multiples of $100,000 in
excess thereof): $ _________
Lender Group
(identified by related Managing Agent) Dollar Amount of Borrowing
-------------------------------------- --------------------------
Citicorp North America, Inc. $
[__________] [$_________]
Total $
(ii) The requested Borrowing Date is: _________
(iii) The Aggregate Principal Balance under the Agreement
after giving effect to the requested Borrowing under
(i) above will equal: $ _________
(iv) The proceeds of the requested Borrowing are requested
to be remitted to the following account of the
Borrower: _________
(v) If Conduit Lenders have declined to fund, the Borrower
requests a Loan based on [LIBOR for a term of [___]
months][the Base Rate].
B. As of the date hereof and the Borrowing Date of such
Borrowing:
(i) The representations and warranties contained in
Article IV of the Agreement are true and correct
unless such representation and warranties by
their terms refer to an earlier date, in which
case they shall be correct on and as of such
earlier date;
(ii) No event has occurred and is continuing, or would result from the
Borrowing requested hereunder, that constitutes an Event of
Termination or an Incipient Event of Termination; and
(iii) After giving effect to the requested Borrowing, no Borrowing Base
Deficiency shall exist.
(iv) All other conditions precedent set forth in Section 3.02 of the
Agreement have been satisfied.
The undersigned certifies that this Borrowing Request is correct in all material
respects as of the date furnished.
SWC RECEIVABLES FUNDING LLC
By: ___________________________________
Name:
Title:
EXHIBIT C-1
FORM OF MONTHLY REPORT
Attached
EXHIBIT C-2
FORM OF WEEKLY REPORT
Attached
EXHIBIT D-1
FORM OF BLOCKED ACCOUNT AGREEMENT
[DATE]
[DEPOSIT BANK]
[ADDRESS]
Re: The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company and SWC Receivables Funding LLC
Ladies and Gentlemen:
[DEPOSIT BANK], a [national banking association] organized under the
laws of the [United States of America] is referred to herein as "you". Reference
is hereby made to the post office boxes identified on Schedule I hereto, as such
Schedule I may be amended from time to time (each, a "Lock-Box", and
collectively, the "Lock-Boxes"), in each case to which you have access for the
purpose of receiving mail and processing payments therefrom in accordance with
the lockbox servicing arrangement existing from time to time between you and The
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company ("▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇" or the "Servicer") (such
arrangement, evidenced by any lockbox servicing agreement(s) executed from time
to time by you and ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or by you and the Company (as defined below)
with respect to the Lock-Boxes (but exclusive of this letter agreement (as
defined below)), the "Terms and Conditions"). You hereby confirm your agreement
to perform the services contemplated thereby. Among the services you have agreed
to perform thereunder is to remit all checks and other evidences of payment
received into each Lock-Box to the related deposit bank identified on Schedule I
hereto, or such other accounts of which you may be notified by the Company (as
defined below) or the Servicer, on its behalf (or, after the delivery of the
Notice (as defined below), the Agent (as defined below)) from time to time (each
such account a "Lock-Box Account" and collectively, the "Lock-Box Accounts"). In
addition, reference is also hereby made to the other deposit accounts identified
on Schedule I hereto as such Schedule I may be amended from time to time (each
such account a "Deposit Account" and collectively, the "Deposit Accounts"). The
Lock-Box Accounts and the Deposit Accounts are collectively referred to herein
as the "Accounts"
The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company ("▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇") hereby informs you
that pursuant to that certain Purchase and Contribution Agreement, dated as of
February 1, 2006 (as amended, restated, supplemented or otherwise modified from
time to time, the "PCA"), among ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and SWC Receivables Funding LLC
(the "Company"), ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ (i) has assigned all of its rights and
interest in and to the Lock-Boxes and under the Terms and Conditions to the
Company and (ii) has transferred all of its right, title and interest in and to
each of the Accounts to the Company. You are instructed to re-title the Accounts
in the name, and under the federal taxpayer identification number, of the
Company and modify your books and records accordingly.
The Company hereby informs you that pursuant to that certain Loan
and Servicing Agreement, dated as of February 1, 2006 (as amended, restated,
supplemented or
otherwise modified from time to time, the "LSA"), among the Company,
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ as servicer (the "Servicer"), the parties from time to time
parties thereto as Lenders (the "Lenders"), Citicorp North America, Inc.
("CNAI") as Program Agent for the Lenders (in such capacity, the "Agent"), and
the other parties from time to time parties thereto as Managing Agents (the
"Managing Agents"), the Company has granted a first priority security interest
in all of its right, title and interest in and to, and exclusive control of, the
Lock-Boxes and the Accounts to the Agent, for the benefit of the Agent, the
Lenders, the Managing Agents and the other "Secured Parties" under the LSA.
You hereby agree that you are a "bank" within the meaning of Section
9-102 of the Uniform Commercial Code as is in effect in the State of [New York]
(the "UCC") and that the Accounts constitute "deposit accounts" within the
meaning of Section 9-102 of the UCC. This letter agreement shall constitute an
"authenticated record" for purposes of, and the Company hereby grants to and
confers upon the Agent "control" of the Lock- Boxes and the Accounts as
contemplated in Section 9-104 (and similar related provisions) of the UCC.
The Agent hereby authorizes you, and you hereby agree, until
delivery by the Agent of the Notice (as defined below), to take instructions
exclusively from the Company (or the Servicer, on its behalf), on behalf of the
Agent with respect to the Lock-Boxes and the checks, drafts or other payment
items received into the Lock-Boxes (including without limitation remitting all
such payment items to the applicable Lock-Box Accounts as directed by the
Company (or the Servicer, on its behalf)), the Accounts and the funds on deposit
therein (provided, that such instructions shall not be inconsistent with the
Terms and Conditions or this letter agreement) and the Company (or the Servicer,
on its behalf) will have exclusive control and access to the Lock-Boxes and the
Accounts.
The Company hereby irrevocably instructs you, and you hereby agree,
that upon receiving notice from the Agent in the form attached hereto as Annex A
(the "Notice"): (i) the Agent will have exclusive control of and access to the
Lock-Boxes and the Accounts, and none of the Company or any of its affiliates
will have any control of the Lock-Boxes and the Accounts or any access thereto
or any authority to direct the disposition of any funds or payment items
received therein, (ii) you will either continue to deposit the payment items
from the Lock-Boxes into the applicable Lock-Box Accounts, or will redirect the
payment items as the Agent may otherwise request, (iii) all services to be
performed by you under the Terms and Conditions will be performed on behalf of
the Agent, (iv) you will comply with instructions originated by the Agent
directing disposition of the funds in the Accounts without further consent by
the Company or any affiliate thereof and (iii) all correspondence or other mail
which you have agreed to send to the Company will be sent to the Agent at the
following address:
Citicorp North America, Inc., as Agent
Citigroup Global Securitized Markets
19th Floor
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
The Company agrees to continue to pay all fees and other assessments
due to you in connection with the Terms and Conditions and the Accounts and the
servicing or maintenance of any of the Lock-Boxes at any time. In the event that
all such fees due to you are not paid within sixty (60) days after the due date,
you are authorized to charge the Accounts in the amount of such fees. In the
event you are unable to obtain sufficient funds from such charges to cover such
fees, the Company and ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, jointly and severally, shall indemnify
you for all then-due fees on the Accounts that have not been paid.
You hereby acknowledge that monies deposited in the Accounts are
subject to the liens of the Agent, and will not be subject to deduction,
set-off, banker's lien or any other right you or any other party may have
against the Company; however, the Company and the Agent agree that you may debit
the Accounts for any items (including, but not limited to, checks, drafts,
Automated Clearinghouse (ACH) credits or wire transfers or other electronic
transfers or credits) deposited or credited to the Accounts which may be
returned or otherwise not collected and for all charges, fees, commissions and
expenses incurred by you in providing services or otherwise in connection
herewith; you may charge the Accounts as permitted herein at such times as are
in accordance with your customary practices for the chargeback of returned items
and expenses. In the event you are unable to obtain sufficient funds from such
charges to cover returned items, or reversed or returned credits, or any other
items not collected and any other charges (collectively, "Returned Items"),
expenses, or commissions incurred by you in providing the services (referred to
as a "cost" or "costs"), the Company and ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, jointly and
severally, shall indemnify you for all amounts related to the above described
costs incurred by you; provided, however, that with respect only to Returned
Items, such indemnity shall be only from the Company (and not ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇)
and only to the extent the Company (and not the Agent or any other Person) has
received the amount of such Returned Items or the proceeds thereof.
This letter agreement may not be modified (including any
modification to Schedule I) by the Company unless the prior written consent of
each other party hereto is obtained. The Company may not terminate this letter
agreement except with the written consent of the Agent and upon thirty (30)
business days' prior notice to the other parties hereto. You may terminate this
letter agreement upon thirty (30) business days' prior written notice to the
Company and the Agent. The Agent may terminate this letter agreement upon five
(5) days' prior written notice to you. Upon any termination by you pursuant to
this paragraph, all collected balances in the Accounts on the date of such
termination will be transferred in accordance with the instructions of the Agent
if the Notice has been received by you or otherwise in accordance with the
instructions of the Company (or the Servicer, on its behalf).
In addition, following receipt by the Agent of any notice of
termination of this letter agreement by you pursuant to the preceding paragraph,
commencing within a reasonable period of time not to exceed thirty (30) days
after your receipt of such instructions, and upon your receipt of the prepayment
described below, you will follow the instructions of the Agent, if the Notice
has been received by you, or otherwise in accordance with the instruction of the
Company (or the Servicer, on its behalf), directing the disposition of mail and
other items received into the Lock-Boxes for a period of four months after the
termination date, with your fees with respect to such disposition being prepaid
directly to you at the time of such termination. The agreements in this section
shall survive the termination of this letter agreement.
The Terms and Conditions are made part of this letter agreement with
respect to matters not explicitly covered in this letter agreement. To the
extent there is a conflict between this letter agreement and the Terms and
Conditions, this letter agreement shall take precedence. The termination of this
Agreement in accordance with the terms hereof shall not constitute a termination
of the Terms and Conditions.
THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF [NEW YORK]. YOU AGREE THAT THE STATE OF [NEW YORK]
SHALL BE DEEMED TO BE YOUR JURISDICTION FOR PURPOSES OF SECTION 9-304 OF THE
UCC.
This letter agreement may be executed in any number of counterparts
and all of such counterparts taken together will be deemed to constitute one and
the same instrument.
Each party agrees to take all actions reasonably requested by any
other party to carry out the purposes of this letter agreement or to preserve
and protect the rights of each party hereunder.
Please indicate your agreement to the terms of this letter agreement
by signing in the space provided below. This letter agreement will become
effective immediately upon execution of a counterpart of this letter agreement
by all parties hereto.
Very truly yours,
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY
By: ___________________________________
Name:
Title:
SWC RECEIVABLES FUNDING LLC
By: ___________________________________
Name:
Title:
Acknowledged and agreed to
as of the date first above written
[DEPOSIT BANK]
By: _________________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.,
as Agent
By: _________________________________
Name:
Title:
SCHEDULE I
LOCK-BOXES AND ACCOUNTS
[Re: letter agreement, dated as of [DATE], by and among The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
Company, SWC Receivables Funding LLC, Citicorp North America, Inc. and [DEPOSIT
BANK]](1)
Lock-Boxes & related Lock-Box Accounts
LOCK-BOX ADDRESS ACCOUNT NUMBER
___________________________________ _________________________________
___________________________________ _________________________________
___________________________________ _________________________________
___________________________________ _________________________________
Other Deposit Accounts
[BRANCH LOCATION] ACCOUNT NUMBER
___________________________________ _________________________________
___________________________________ _________________________________
___________________________________ _________________________________
___________________________________ _________________________________
[As of [DATE], this Schedule I amends and supersedes any Schedule I
previously delivered or executed in connection with the above-referenced letter
agreement. Each signatory hereto, by signing in the space provided below, agrees
that (i) all references in the letter agreement to Schedule I shall refer to
this amended Schedule I and (ii) the above-referenced letter agreement, as
expressly modified hereby, remains in full force and effect and is hereby
expressly reaffirmed.]
[SWC RECEIVABLES FUNDING LLC
By: _________________________________
Name:
Title:
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY
-----------
(1) Bracketed text and executed signature blocks to be completed only for the
purposes of amending Schedule I.
By: _________________________________
Name:
Title:
[DEPOSIT BANK]
By: _________________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.,
as Agent
By: _________________________________
Name:
Title:]
ANNEX A
FORM OF NOTICE
[On letterhead of CNAI]
_______________ __, 20__
[DEPOSIT BANK]
[ADDRESS]
Re: SWC Receivables Funding LLC
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to
that certain letter agreement, dated as of [DATE], among The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
Company, SWC Receivables Funding LLC, you and us, to have exclusive control of
lock-box number[s] [___________] (the "Lock-Box[es]") and account number[s]
[___________] (the "Account[s]") maintained with you, transferred to us.
[Available funds deposited in the Account[s] should be sent at the end of each
day to ____________.]
We appreciate your cooperation in this matter.
Very truly yours,
CITICORP NORTH AMERICA, INC.,
as Agent
By:_________________________________
Name:
Title:
EXHIBIT D-2
FORM OF
LOCK-BOX PROCESSOR AGREEMENT
[DATE]
[LOCK-BOX PROCESSOR]
[ADDRESS]
Re: The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company and SWC Receivables Funding LLC
Ladies and Gentlemen:
Reference is hereby made to the post office boxes identified on
Schedule I hereto, as such Schedule I may be amended from time to time (each, a
"Lock-Box", and collectively, the "Lock-Boxes"), in each case to which you have
access for the purpose of receiving mail and processing payments therefrom in
accordance with the lockbox servicing arrangement existing from time to time
between you and the ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, an Ohio corporation
("▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇" or the "Servicer") (such arrangement, evidenced by any
lockbox servicing agreement(s) executed from time to time by you and
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ or by you and the Company (as defined below) with respect to
the Lock-Boxes (but exclusive of this Letter Agreement (as defined below)), the
"Terms and Conditions"). You hereby confirm your agreement to perform the
services contemplated thereby. Among the services you have agreed to perform
thereunder is to remit all checks and other evidences of payment received into
each Lock-Box to the related deposit bank identified on Schedule I hereto (the
"Account Bank") for deposit thereby to the related accounts identified on
Schedule I hereto, or such other accounts of which you may be notified by the
Company (as defined below) or the Servicer, on its behalf (or, after the
delivery of the Notice (as defined below), the Agent (as defined below)) from
time to time (each, a "Lock-Box Account", and collectively, the "Lock-Box
Accounts").
[LOCK-BOX PROCESSOR], a [TYPE AND JURISDICTION OF ORGANIZATION], is
referred to herein as "you". ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ hereby informs you, and by
executing this Letter Agreement you expressly acknowledge, that
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, in consideration of the indirect benefits it expects to
receive as a result of the transactions evidenced by the LSA (as defined below),
hereby assigns to SWC Receivables Funding LLC, a Delaware limited liability
company (the "Company"), all of ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇' rights and interest in and to
the Lock-Boxes and under the Terms and Conditions; provided, that, upon the
termination of the LSA in accordance with the terms thereof, all such rights
shall revert back to ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇.
The Company hereby informs you that pursuant to that certain Loan
and Security Agreement, dated as of February 1, 2006 (as amended, restated,
supplemented or otherwise
modified from time to time, the "LSA"), among the Company, ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, as
Servicer, the parties from time to time parties thereto as Lenders (the
"Lenders"), Citicorp North America, Inc. ("CNAI") and the other parties from
time to time parties thereto as Managing Agents (the "Managing Agents"), and
CNAI, as Program Agent for the Lenders (in such capacity, the "Agent"), the
Company has granted a first priority security interest in all of its right,
title and interest in and to, and exclusive control (subject to certain rights
of the Company and the Servicer described herein and therein) of, the Lock-Boxes
and the Lock-Box Accounts to the Agent, for the benefit of the Agent, the
Lenders, the Managing Agents and the other "Secured Parties" under the LSA.
The Agent hereby authorizes you, and you hereby agree, until
delivery by the Agent of the Notice (as defined below), to take instructions
exclusively from the Company (or the Servicer, on its behalf), on behalf of the
Agent, with respect to the Lock-Boxes and the checks, drafts or other payment
items received into the Lock-Boxes (including without limitation remitting all
such payment items to the applicable Lock-Box Accounts as directed by the
Company (or the Servicer, on its behalf)); provided that such instructions shall
not be inconsistent with this Letter Agreement (the "Letter Agreement") or the
Terms and Conditions. The Agent hereby agrees to indemnify, hold harmless and
release you, your affiliates, officers, directors, employees, and agents from
and against any loss, cost, damage, liability, claim action, suit, judgment or
expense, including but not limited to any reasonable external attorneys' fees
and court costs suffered or incurred by you, as a result of Agent's gross
negligence or willful misconduct.
The Company hereby irrevocably instructs you, and you hereby agree,
that upon your receipt of notice from the Agent in the form attached hereto as
Annex A (the "Notice"): (i) the Agent will have exclusive control of and access
to the Lock-Boxes, and none of the Company or any of its affiliates will have
any control of or access to the Lock-Boxes or any authority to direct the
disposition of any funds or payment items received therein, (ii) you will either
continue to deposit the payment items from the Lock-Boxes into the applicable
Lock-Box Accounts, or will redirect the payment items as the Agent may otherwise
request, (iii) all services to be performed by you under the Terms and
Conditions will be performed on behalf of the Agent, and (iv) all correspondence
or other mail which you have agreed to send to the Company will be sent to the
Agent at the following address:
Citicorp North America, Inc., as Agent
Citigroup Global Securitized Markets
19th Floor
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Moreover, upon such notice, the Agent will have all rights and
remedies given to the Company under the Terms and Conditions. The Company
agrees, however, to continue to pay all fees and other assessments due under the
Terms and Conditions and in connection with the servicing or maintenance of any
of the Lock-Boxes. In the event that all such fees due to you are not paid
within sixty (60) days after the due date, the Company and the Servicer, jointly
and severally, shall indemnify you for all then-due fees on the Lock-Boxes that
have not been paid.
This Letter Agreement may not be modified (including any
modification to Schedule I) by the Company unless the prior written consent of
each other party hereto is obtained. The Company may not terminate this letter
agreement except with the written consent of the Agent and upon thirty (30)
business days' prior notice to the other parties hereto. You may terminate this
Letter Agreement upon thirty (30) business days' prior written notice to the
Company and the Agent. The Agent may terminate this Letter Agreement upon five
(5) days' prior written notice to you.
Following receipt by the Agent of any notice of termination of this
Letter Agreement by you pursuant to the preceding paragraph, commencing within a
reasonable period of time not to exceed thirty (30) days after your receipt of
such instructions, and upon your receipt of the prepayment described below, you
will follow the instructions of the Agent, if the Notice has been received by
you, or otherwise in accordance with the instruction of the Company (or the
Servicer, on its behalf), directing the disposition of mail and other items
received into the Lock-Boxes for a period of four months after the termination
date, with your fees with respect to such disposition being prepaid directly to
you at the time of such termination. The agreements in this section shall
survive the termination of this Letter Agreement.
The Terms and Conditions are made part of this Letter Agreement with
respect to matters not explicitly covered in this Letter Agreement. To the
extent there is a conflict between this Letter Agreement and the Terms and
Conditions, this Letter Agreement shall take precedence. The termination of this
Agreement in accordance with the terms hereof shall not constitute a termination
of the Terms and Conditions.
THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
This Letter Agreement may be executed in any number of counterparts
and all of such counterparts taken together will be deemed to constitute one and
the same instrument.
Each party agrees to take all actions reasonably requested by any
other party to carry out the purposes of this Letter Agreement or to preserve
and protect the rights of each party hereunder.
Please indicate your agreement to the terms of this Letter Agreement
by signing in the space provided below. This Letter Agreement will become
effective immediately upon execution of a counterpart of this Letter Agreement
by all parties hereto.
Very truly yours,
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY
By: ________________________________
Name:
Title:
SWC RECEIVABLES FUNDING LLC
By: ________________________________
Name:
Title:
Acknowledged and agreed to
as of the date first above written
[LOCK-BOX PROCESSOR]
By: _____________________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.,
as Agent
By: _____________________________________
Name:
Title:
SCHEDULE I
LOCK-BOXES, ACCOUNT BANKS AND LOCK-BOX ACCOUNTS
[Re: Letter Agreement, dated as of [DATE], by and among The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇
Company, SWC Receivables Funding LLC, Citicorp North America, Inc. and [LOCK-BOX
PROCESSOR]](1)
LOCK-BOX ADDRESS ACCOUNT BANK LOCK-BOX ACCOUNT
---------------- ------------ ----------------
[As of [DATE], this Schedule I amends and supersedes any Schedule I
previously delivered or executed in connection with the above-referenced Letter
Agreement. Each signatory hereto, by signing in the space provided below, agrees
that (i) all references in the Letter Agreement to Schedule I shall refer to
this amended Schedule I and (ii) the above-referenced Letter Agreement, as
expressly modified hereby, remains in full force and effect and is hereby
expressly reaffirmed.]
[SWC RECEIVABLES FUNDING LLC
By:_________________________________
Name:
Title:
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY
By:_________________________________
Name:
Title:
[LOCK-BOX PROCESSOR]
By:_________________________________
Name:
Title:
CITICORP NORTH AMERICA, INC.,
as Agent
By:_________________________________
Name:
Title:
----------
(1) Bracketed text and executed signature blocks to be completed only for the
purposes of amending Schedule I.
ANNEX A
FORM OF NOTICE
[On letterhead of CNAI]
[DATE]
[LOCK-BOX PROCESSOR]
[ADDRESS]
Re: SWC Receivables Funding LLC
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights pursuant to
that certain Letter Agreement, dated as of [DATE], among SWC Receivables Funding
LLC (the "Company"), The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, you and us, to have exclusive
control of post office box number[s] [___________] (the "Lock-Boxes") serviced
by you, transferred to us. [All payment items received in the Lock-Boxes should
be sent at the end of each day to ____________.] You have further agreed to
perform all lockbox services you are performing in accordance with the lockbox
servicing arrangement existing from time to time between you and the Company on
our behalf.
We appreciate your cooperation in this matter.
Very truly yours,
CITICORP NORTH AMERICA, INC.,
as Agent
By: __________________________
Name:
Title:
EXHIBIT E
LIST OF OFFICES OF BORROWER
WHERE RECORDS ARE KEPT
1225 Republic
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT F
LIST OF ALTERNATE PAYMENT LOCATIONS; DEPOSIT ACCOUNTS; DEPOSIT ACCOUNT
BANKS; LOCK-BOX PROCESSORS AND LOCK-BOXES
Attached.
List of Alternate Payment Locations
Stores and The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company branches listed from time to time in the
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company internet web site under "Store Locations" at
▇▇▇.▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇.▇▇▇
EXHIBIT G
LIST OF CLOSING DOCUMENTS
Attached
EXHIBIT H
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated as of [Date]
Reference is made to the Loan and Servicing Agreement, dated as of
February 1, 2006, among SWC Receivables Funding LLC, as Borrower, The
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, as Servicer, the Persons from time to time party
thereto as Conduit Lenders, the financial institutions from time to time party
thereto as Committed Lenders, the Persons from time to time party thereto as
Managing Agents and Citicorp North America, Inc., as Program Agent for the
Conduit Lenders and the Committed Lenders (as amended, restated, supplemented or
otherwise modified from time to time, the "Agreement"). Terms defined in the
Agreement are used herein with the same meaning.
[Assigning Lender] (the "Assignor"), [Assignee] (the "Assignee") and
[Assignor's Managing Agent], in its capacity as Managing Agent for the Lender
Group which includes the Assignor [and the Assignee] (in such capacity, the
"Managing Agent"), hereby agree as follows:
1. Purchase and Sale of Interest. The Assignor hereby sells and
assigns to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to all of the Assignor's rights and obligations
under the Agreement as of the date hereof (including, without limitation, its
[Commitment] [Conduit Lending Limit] and all Loans, if any, or interests therein
held by it) equal to the percentage (the "Percentage") interest specified on the
signature page hereto. After giving effect to such sale and assignment, [the
Assignee will be a [Committed] [Conduit] Lender in the Lender Group that
includes [__________] as the Managing Agent and] the Assignee's [Commitment]
[Conduit Lending Limit] will be as set forth in Section 2 of the signature page
hereto. [As consideration for the sale and assignment contemplated in this
Section 1, the Assignee shall pay to the Assignor on the Effective Date (as
hereinafter defined) in immediately available funds an amount equal to
$[__________], representing the purchase price payable by the Assignee for the
interests in the transferred interest sold and assigned to the Assignee under
this Section 1.]*
2. Representations and Disclaimers of Assignor. The Assignor:
(a) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim;
(b) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with any Facility Document or any
other instrument or document furnished pursuant thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of
any Facility Document or any other instrument or document furnished
pursuant thereto; and
(c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Originator,
the Borrower or the Servicer, or the performance or observance by any such
party of any of its respective obligations under the Facility Documents or
any other instrument or document furnished pursuant thereto.
----------
* Include bracketed text if Assignor holds a portion of the Loans on the
Effective Date.
3. Representations and Agreements of Assignee. The Assignee:
(a) confirms that it has received a copy of the Agreement, together
with copies of the most recent financial statements delivered pursuant to
Section 5.02(b) of the Agreement and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision
to enter into this Assignment and Acceptance;
(b) agrees that it will, independently and without reliance upon the
Program Agent, any Managing Agent, the Assignor or any other Lender and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under the Agreement;
(c) [appoints and authorizes the Program Agent and [__________], as
its Managing Agent, to take such action as agent on its behalf and to
exercise such powers under the Agreement and the other Facility Documents
as are delegated to the Program Agent and such Managing Agent,
respectively, by the terms thereof, together with such powers as are
reasonably incidental thereto;]
(d) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Agreement and this Assignment
and Acceptance are required to be performed by it as a [Committed]
[Conduit] Lender;
(e) specifies as its address for notices the office set forth
beneath its name on the signature pages hereof; and
(f) represents that this Assignment and Acceptance has been duly
authorized, executed and delivered by the Assignee pursuant to its
[corporate] powers and constitutes the legal, valid and binding obligation
of the Assignee.
4. Effectiveness of Assignment. Following the execution of this
Assignment and Acceptance by the Assignor, the Managing Agent, [and] the
Assignee, [the Borrower and the Servicer,] it will be delivered to the Program
Agent for acceptance and recording by the Program Agent. The effective date of
this Assignment and Acceptance shall be the date of acceptance thereof by the
Program Agent, unless otherwise specified in Section 3 of the signature page
hereto (the "Effective Date").
5. Rights of the Assignee. Upon such acceptance and recording by the
Program Agent, as of the Effective Date, [(i) the Assignee shall be a party to
the Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a [Committed] [Conduit] Lender thereunder and
hereunder and (ii)] the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Agreement.
6. Payments. Upon such acceptance and recording by the Program
Agent, from and after the Effective Date, all payments under the Agreement in
respect of the interest assigned hereby (including, without limitation, all
payments of fees with respect thereto) shall be made to the Assignee or the
Assignee's Managing Agent, for the benefit of the Assignee, in accordance with
the Agreement. The Assignor and Assignee shall make all appropriate adjustments
in payments under the Agreement for periods prior to the Effective Date directly
between themselves.
7. GOVERNING LAW. THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
Signature Page to
Assignment and Acceptance
Dated as of [Date]
Section 1.
Percentage: ________%
Section 2.
Assignee's [Commitment] [Conduit Lending Limit] as
of the Effective Date: $___________
Principal balance of Loans
held by Assignee as of the Effective Date: $__________
Section 3.
Effective Date:** ________, 200__
[NAME OF ASSIGNOR]
By:_________________________
Name:
Title:
[NAME OF ASSIGNEE]
By:_________________________
Name:
Title:
Address for Notices:
[Insert]
Accepted this _____ day of
_____________, 200__
CITICORP NORTH AMERICA, INC.,
as Program Agent
By:_________________________
Name:
Title:
----------
** This date should be no earlier than the date of acceptance by the Program
Agent.
AGREED TO THIS ____ DAY OF ___________, 200___:
[NAME OF MANAGING AGENT],
as Managing Agent
By:_________________________________
Name:
Title:
SWC RECEIVABLES FUNDING LLC,
as Borrower
By:_________________________________
Name:
Title:
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY,
as Servicer
By:_________________________________
Name:
Title:]
EXHIBIT I
FORM OF JOINDER AGREEMENT
Reference is made to the Loan and Servicing Agreement, dated as of
February 1, 2006, among SWC Receivables Funding LLC, as Borrower, The
▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, as Servicer, the Persons from time to time party
thereto as Conduit Lenders, the financial institutions from time to time party
thereto as Committed Lenders, the Persons from time to time party thereto as
Managing Agents and Citicorp North America, Inc., as Program Agent for the
Conduit Lenders and the Committed Lenders (as amended, restated, supplemented or
otherwise modified from time to time, the "Agreement"). To the extent not
defined herein, capitalized terms used herein have the meanings assigned to such
terms in the Agreement.
[New Managing Agent] (the "New Managing Agent"), [New Conduit
Lender(s)] (the "New Conduit Lender(s)") and [New Committed Lender(s)] (the "New
Committed Lender(s)"; and together with the New Managing Agent and New Conduit
Lender(s), the "New Lender Group") agree as follows:
1. By execution and delivery of this Joinder Agreement and pursuant
to Section 10.04 of the Agreement, the New Lender Group elects to become a
"Lender Group" under the Agreement.
2. The effective date (the "Effective Date") of this Joinder
Agreement shall be the later of (i) the date on which a fully executed copy of
this Joinder Agreement is delivered to the Program Agent, (ii) the date of this
Joinder Agreement [and (iii) the effective date of that certain assignment
agreement of even date herewith between the [New Committed Lender] [New Conduit
Lender] and [Name of [Committed] [Conduit] Lender Assignor].
3. By executing and delivering this Joinder Agreement, each of the
New Managing Agent, the New Conduit Lender(s) and the New Committed Lender(s)
confirms to and agrees with each other party to the Agreement that (i) it has
received a copy of the Agreement and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Joinder Agreement; (ii) it will, independently and without reliance
upon the Program Agent, any other Managing Agent, any other Lender or any of
their respective Affiliates, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Agreement or any documents or agreements
to be delivered thereunder; (iii) it appoints and authorizes the Program Agent
to take such action as agent on its behalf and to exercise such powers pursuant
to Article IX of the Agreement; (iv) it will perform in accordance with their
terms all of the obligations which by the terms of the Agreement and the
documents or agreements to be delivered thereunder are required to be performed
by it as a Managing Agent, a Conduit Lender, or a Committed Lender,
respectively; (v) its address for notices shall be the office set forth beneath
its name on the signature pages of this Joinder Agreement; (vi) the Lender Group
Limit for the New Lender Group shall be as set forth on the signature page
hereto; and (vii) it is duly authorized to enter into this Joinder Agreement.
4. On the Effective Date of this Joinder Agreement, each of the New
Managing Agent, the New Conduit Lender(s) and the New Committed Lender(s) shall
join in and be a party to the Agreement and, to the extent provided in this
Joinder Agreement, shall have the rights and obligations of a Managing Agent, a
Conduit Lender and a Committed Lender, respectively, under the Agreement.
Schedule II to the Agreement shall be amended to incorporate the information set
forth on Schedule I to this Joinder Agreement and Schedule III shall be amended
to incorporate the notice addresses set forth on
the signature pages to this Joinder Agreement. [In addition, the New Conduit
Lender hereby specifies that it is a "Pre-Review Conduit Lender".]
5. This Joinder Agreement may be executed by one or more of the
parties on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
6. This Joinder Agreement SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES).
7. Each of the parties hereto hereby waives any right to have a jury
participate in resolving any dispute, whether sounding in contract, tort, or
otherwise between or among the parties hereto, or any of them, arising out of,
connected with, related to, or incidental to the relationship between them in
connection with this Joinder Agreement. Instead, any dispute resolved in court
will be resolved in a bench trial without a jury.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF, the parties hereto have caused this Joinder
Agreement to be executed by their respective officers thereunto duly authorized,
as of this [__] day of [________], [20__].
The "Lender Group Limit" for the New Lender Group is $[__________].
NEW CONDUIT LENDER(S):
[NAME(S)]
By:_______________________
Name:
Title:
Address for notices:
[Address]
NEW COMMITTED LENDER(S):
[NAME(S)]
By:_______________________
Name:
Title:
Address for notices:
[Address]
NEW MANAGING AGENT:
[NAME]
By:_______________________
Name:
Title:
Address for notices:
[Address]
AGREED TO THIS ____ DAY OF ___________, 200___:
CITICORP NORTH AMERICA, INC.,
as Program Agent
By:_________________________________
Name:
Title:
[EACH MANAGING AGENT],
as a Managing Agent
By:_________________________________
Name:
Title:
SWC RECEIVABLES FUNDING LLC,
as Borrower
By:_________________________________
Name:
Title:
THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ COMPANY,
as Servicer
By:_________________________________
Name:
Title:
SCHEDULE I
Reference Bank for New Lender Group: ______________________
Conduit Lending Limit(s) for New Conduit Lender(s): ______________________
______________________
Commitment(s) of New Committed Lender(s): ______________________
______________________
EXHIBIT J
FORM OF PREPAYMENT NOTICE
[Date]
To: Citicorp North America, Inc. ("CNAI"), as Program Agent,
CNAI, as a Managing Agent,
[__________], as a Managing Agent
From: SWC Receivables Funding LLC (the "Borrower")
Re: Loan and Servicing Agreement, dated as of February 1, 2006, among the
Borrower, The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, as Servicer, the Persons from time
to time party thereto as Conduit Lenders, the financial institutions from
time to time party thereto as Committed Lenders, the Persons from time to
time party thereto as Managing Agents and CNAI, as Program Agent for the
Conduit Lenders and the Committed Lenders (as amended, restated,
supplemented or otherwise modified from time to time, the "Agreement").
Terms defined in the Agreement are used herein with the same meaning.
Pursuant to Section 2.05 of the Agreement, the undersigned hereby notifies
each Managing Agent of its intent to make certain prepayments (which shall be
made ratably among the Lenders based on the aggregate outstanding Principal
Balance of the Loans held by each) as outlined below. This notice must be
received no later than 11:00 A.M. (New York City time) three (3) Business Days
prior to the date of such payment.
1. The aggregate amount (which shall be at least $5,000,000, or integral
multiples of $100,000 in excess thereof) of the prepayment is:
$_____________
2. The Loans to which such prepayment is to be applied are as follows:
Principal balance
(before giving effect to
Lender Borrowing Date prepayment) Amount of Prepayment
------ -------------- ------------------------ --------------------
3. The Business Day upon which the undersigned shall make such prepayment is:
______________.
The undersigned hereby certifies that this prepayment notice is correct in
all material respects as of the date so furnished.
SWC RECEIVABLES FUNDING LLC
By:___________________________
Name:
Title:
SCHEDULE I
LENDER GROUPS
Citicorp North America, Inc. Lender Group
Managing Agent: Citicorp North America, Inc.
Conduit Lender: ▇▇▇▇▇▇, LLC
Conduit Lending Limit: $500,000,000
Committed Lender: Citibank, N.A.
Commitments: $500,000,000
Reference Bank: Citibank, N.A.
SCHEDULE II
NOTICE ADDRESSES
Citicorp North America, Inc.
Citigroup Global Securitized Markets
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇.▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇ LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Global Securitization
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Global Securitization
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SWC Receivables Funding LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention of Vice President and Treasurer (Telecopy
No. (▇▇▇) ▇▇▇-▇▇▇▇) and Senior Vice President-Finance and Chief Financial
Officer (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇) with a copy to the General Counsel
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇)
SCHEDULE III
SPECIAL CONCENTRATION LIMITS
OBLIGOR CONCENTRATION LIMIT
------------------------------------- ---------------------------------
Each Obligor with a Debt Rating of 100 % of the Loss Reserve Floor
AA- and Aa3, or higher Percentage
Each Obligor with a Debt Rating of at 50% of the Loss Reserve Floor
least BBB- and Baa3 or higher, but Percentage
less than AA- or Aa3
Each Obligor with a Debt Normal Concentration Limit
Rating of less than BBB- or Percentage
less than Baa3
For purposes of establishing the Concentration Limit hereunder, in the event
that (a) the Debt Rating of either S&P or ▇▇▇▇▇'▇ (but not both) is not
available, the Debt Rating which is available will apply, (b) a Debt Rating is
not available from S&P is also not available from ▇▇▇▇▇'▇, then the
Concentration Limit will be the Normal Concentration Limit and (c) a Debt Rating
changes such that it falls into a different Concentration Limit category, the
Concentration Limit applicable to such Obligor shall be automatically adjusted
(without notice from the Program Agent) simultaneously with any such change in
Debt Rating.
SCHEDULE IV
LIST OF APPROVED SUB-SERVICERS
None.
