EXECUTION
EXHIBIT 5.2
RECEIVABLES PURCHASE AGREEMENT
DATED AS OF JANUARY 16, 2003
BY AND AMONG
XXXXXXXX STREET FUNDING, LLC
AS SELLER
AND
CHURCH & XXXXXX CO., INC.
AS INITIAL SERVICER
AND
MARKET STREET FUNDING CORPORATION,
AS ISSUER
AND
PNC BANK, NATIONAL ASSOCIATION,
AS ADMINISTRATOR
TABLE OF CONTENTS
PAGE
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ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASES...............................................................1
Section 1.1 Purchase Facility.....................................................................1
Section 1.2 Making Purchases......................................................................2
Section 1.3 Purchased Interest Computation........................................................2
Section 1.4 Settlement Procedures.................................................................3
Section 1.5 Fees..................................................................................6
Section 1.6 Payments and Computations, Etc........................................................6
Section 1.7 Increased Costs.......................................................................6
Section 1.8 Requirements of Law...................................................................8
Section 1.9 Inability to Determine Euro-Rate......................................................9
ARTICLE II. REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS...................................9
Section 2.1 Representations and Warranties; Covenants.............................................9
Section 2.2 Termination Events...................................................................10
ARTICLE III. INDEMNIFICATION...............................................................................10
Section 3.1 Indemnities by the Seller............................................................10
Section 3.2 Indemnities by the Servicer..........................................................12
ARTICLE IV. ADMINISTRATION AND COLLECTIONS.................................................................12
Section 4.1 Appointment of the Servicer..........................................................12
Section 4.2 Duties of the Servicer...............................................................13
Section 4.3 Lock-Box Arrangements................................................................14
Section 4.4 Enforcement Rights...................................................................15
Section 4.5 Responsibilities of the Seller.......................................................15
Section 4.6 Servicing Fee........................................................................16
ARTICLE V. MISCELLANEOUS...................................................................................16
Section 5.1 Amendments, Etc......................................................................16
Section 5.2 Notices, Etc.........................................................................16
Section 5.3 Assignability........................................................................17
Section 5.4 Costs, Expenses and Taxes............................................................18
Section 5.5 No Proceedings; Limitation on Payments...............................................18
Section 5.6 Confidentiality......................................................................18
Section 5.7 GOVERNING LAW AND JURISDICTION.......................................................19
Section 5.8 Execution in Counterparts............................................................20
Section 5.9 Survival of Termination..............................................................20
Section 5.10 WAIVER OF JURY TRIAL.................................................................20
Section 5.11 Entire Agreement.....................................................................20
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Section 5.12 Headings.............................................................................20
Section 5.13 Issuer's Liabilities.................................................................21
1EXHIBIT I DEFINITIONS...............................................................................I-1
EXHIBIT II CONDITIONS OF PURCHASES..................................................................II-1
EXHIBIT III REPRESENTATIONS AND WARRANTIES..........................................................III-1
EXHIBIT IV COVENANTS................................................................................IV-1
EXHIBIT V TERMINATION EVENTS........................................................................V-1
SCHEDULE I CREDIT AND COLLECTION POLICY..............................................................I-1
SCHEDULE II LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS.....................................................II-1
SCHEDULE III TRADE NAMES.............................................................................III-1
SCHEDULE IV OFFICE LOCATIONS.........................................................................IV-1
SCHEDULE V PROCEEDINGS...............................................................................V-1
ANNEX A FORM OF INFORMATION PACKAGE...............................................................A-1
ANNEX B FORM OF PURCHASE NOTICE...................................................................B-1
ANNEX C FORM OF PAYDOWN NOTICE....................................................................C-1
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EXECUTION
This
RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "Agreement") is entered into as of
January 16, 2003, by and among XXXXXXXX STREET FUNDING, LLC, a Delaware limited
liability company, as seller (the "Seller"), CHURCH & XXXXXX CO., INC., a
Delaware corporation ("Church & Xxxxxx"), as initial servicer (in such capacity,
together with its successors and permitted assigns in such capacity, the
"Servicer"), MARKET STREET FUNDING CORPORATION, a Delaware corporation (together
with its successors and permitted assigns, the "Issuer"), and PNC BANK, NATIONAL
ASSOCIATION, a national banking association ("PNC"), as administrator (in such
capacity, together with its successors and assigns in such capacity, the
"Administrator").
PRELIMINARY STATEMENTS. Certain terms that are capitalized and used
throughout this Agreement are defined in Exhibit I. References in the Exhibits
hereto to the "Agreement" refer to this Agreement, as amended, supplemented or
otherwise modified from time to time.
The Seller desires to sell, transfer and assign an undivided variable
percentage interest in a pool of receivables, and the Issuer desires to acquire
such undivided variable percentage interest, as such percentage interest shall
be adjusted from time to time based upon, in part, reinvestment payments that
are made by the Issuer. Notwithstanding the foregoing, the parties hereto
acknowledge and intend that the transactions contemplated hereby will be treated
for accounting and tax purposes as secured loans from the Issuer to the Seller
and not as a sale of assets from the Seller to the Issuer.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 Purchase Facility.
(a) On the terms and conditions hereinafter set forth, the Issuer
hereby agrees to purchase, and make reinvestments of, the Purchased Interest
from the Seller from time to time from the date hereof to the Facility
Termination Date. Under no circumstances shall the Issuer make any such purchase
or reinvestment if, after giving effect to such purchase or reinvestment, the
aggregate outstanding Capital of the Purchased Interest would exceed the
Purchase Limit.
(b) The Seller may, upon at least 30 days' written notice to the
Administrator, terminate the purchase facility provided in this Section in whole
or, upon at least 10 days' written notice to the Administrator, from time to
time, irrevocably reduce in part the unused portion of the Purchase Limit;
provided, that each partial reduction shall be in the amount of at least
$5,000,000, or an integral multiple of $1,000,000 in excess thereof, and that,
unless terminated in whole, the Purchase Limit shall in no event be reduced
below $20,000,000.
Section 1.2 Making Purchases.
(a) Each purchase (but not reinvestment) of undivided percentage
ownership interests with regard to the Purchased Interest hereunder shall be
made upon the Seller's irrevocable written notice in the form of Annex B (the
"Purchase Notice") delivered to the Administrator in accordance with Section 5.2
(which notice must be received by the Administrator before 11:00 a.m.,
Pittsburgh, Pennsylvania time) at least two Business Days before the requested
purchase date, which notice shall specify: (A) the amount requested to be paid
to the Seller (such amount, which shall not be less than $1,000,000 and shall be
in integral multiples of $100,000, being the Capital relating to the undivided
percentage ownership interest then being purchased), (B) the date of such
purchase (which shall be a Business Day), and (C) the pro forma calculation of
the Purchased Interest after giving effect to the increase in Capital.
(b) On the date of each purchase (but not reinvestment) of the
Purchased Interest hereunder, the Issuer shall, upon satisfaction of the
applicable conditions set forth in Exhibit II, make available to the Seller in
same day funds, at JPMorgan Chase Bank, account number 808013629, ABA 000000000,
an amount, which is the Capital relating to the undivided percentage ownership
interest then being purchased, equal to the lesser of (i) the amount requested
by the Seller, (ii) the Purchase Limit minus the aggregate outstanding Capital
immediately prior to such purchase, and (iii) the maximum amount which would
cause the Purchased Interest to equal 100% immediately after such purchase.
(c) Effective on the date of each purchase pursuant to this Section and
each reinvestment pursuant to Section 1.4, the Seller hereby sells and assigns
to the Issuer, in the aggregate, the Purchased Interest.
(d) To secure all of the Seller's obligations (monetary or otherwise)
under this Agreement and the other Transaction Documents to which it is a party,
whether now or hereafter existing or arising, due or to become due, direct or
indirect, absolute or contingent, the Seller hereby grants to the Issuer a
security interest in all of the Seller's right, title and interest (including
any undivided interest of the Seller) in, to and under all of the following,
whether now or hereafter owned, existing or arising: (i) all Pool Receivables,
(ii) all Related Security with respect to such Pool Receivables, (iii) all
Collections with respect to such Pool Receivables, (iv) the Lock-Box Accounts
and all amounts on deposit therein, and all certificates and instruments, if
any, from time to time evidencing such Lock-Box Accounts and amounts on deposit
therein, (v) all rights (but none of the obligations) of the Seller under the
Sale Agreement, and (vi) all proceeds of, and all amounts received or receivable
under any or all of, the foregoing (collectively, the "Pool Assets"). The Issuer
shall have, with respect to the Pool Assets, and in addition to all the other
rights and remedies available to the Issuer, all the rights and remedies of a
secured party under any applicable UCC.
Section 1.3 Purchased Interest Computation.
The Purchased Interest shall be initially computed on the date of the
initial purchase hereunder. Thereafter, until the Facility Termination Date, the
Purchased Interest shall be automatically recomputed (or deemed to be
recomputed) on each Business Day other than a Termination Day. The Purchased
Interest as computed (or deemed recomputed) as of the day
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before the Facility Termination Date shall thereafter remain constant. From and
after the occurrence of any Termination Day (other than any Termination Day
occurring solely under clause (a) of the definition of Facility Termination Date
or on which the Purchase Limit reduces to zero pursuant to Section 1.1(b) of
this Agreement), the Purchased Interest shall (until the events giving rise to
such Termination Day are satisfied or are waived by the Administrator) be deemed
to be 100%. The Purchased Interest shall become zero when the Capital thereof
and Discount thereon shall have been paid in full, all the amounts owed by the
Seller and the Servicer hereunder to the Issuer, the Administrator and any other
Indemnified Party or Affected Person are paid in full, and the Servicer shall
have received the accrued Servicing Fee thereon.
Section 1.4 Settlement Procedures.
(a) The collection of the Pool Receivables shall be administered by the
Servicer in accordance with this Agreement. The Seller shall provide to the
Servicer on a timely basis all information needed for such administration,
including notice of the occurrence of any Termination Day and current
computations of the Purchased Interest.
(b) The Servicer shall, on each day on which Collections of Pool
Receivables are received (or deemed received) by the Seller or the Servicer:
(i) hold in trust (and, at the request of the Administrator,
set aside and segregate in a separate account approved by the Administrator,
provided that prior to such Administrator's request, no such setting aside or
segregation shall be required) for the Issuer, out of the Issuer's Share of such
Collections, first, an amount equal to the Discount accrued through such day for
each Portion of Capital and not previously held in trust, second, an amount
equal to the fees set forth in the Fee Letter accrued and unpaid through such
day, and third, to the extent funds are available therefor, an amount equal to
the Issuer's Share of the Servicing Fee accrued through such day and not
previously held in trust,
(ii) subject to Section 1.4(f), if such day is not a
Termination Day, remit to the Seller, on behalf of the Issuer, the remainder of
the Issuer's Share of such Collections. Such remainder shall be automatically
reinvested in Pool Receivables, and in the Related Security, Collections and
other proceeds with respect thereto; provided, however, that if the Purchased
Interest would exceed 100%, then the Servicer shall not reinvest, but shall hold
in trust for the Issuer (and, at the request of the Administrator, set aside and
segregate in a separate account approved by the Administrator, provided that
prior to Administrator's request, no such setting aside or segregation shall be
required) a portion of such Collections that, together with the other
Collections held in trust pursuant to this paragraph, shall equal the amount
necessary to reduce the Purchased Interest to 100%,
(iii) if such day is a Termination Day, hold in trust (and, at
the request of the Administrator, set aside and segregate in a separate account
approved by the Administrator, provided that prior to Administrator's request,
no such segregation shall be required) for the Issuer the entire remainder of
the Issuer's Share of the Collections; provided, that if amounts are held in
trust on any Termination Day of the type described in clause (a) of the
definition of "Termination Day" and, thereafter, the conditions set forth in
Section 2 of Exhibit II are satisfied or waived by the Administrator, such
previously set-aside amounts shall be
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reinvested in accordance with clause (ii) on the day of such subsequent
satisfaction or waiver of conditions, and
(iv) release to the Seller (subject to Section 1.4(f)) for its
own account any Collections in excess of: (x) amounts required to be reinvested
in accordance with clause (ii) or the proviso to clause (iii) plus (y) the
amounts that are required to be held in trust pursuant to clause (i), the
proviso to clause (ii) and clause (iii) plus (z) an amount equal to the Seller's
Share of the Servicing Fee accrued and unpaid through such day and all
reasonable and appropriate out-of-pocket costs and expenses of the Servicer for
servicing, collecting and administering the Pool Receivables.
(c) The Servicer shall deposit into the Administration Account (or such
other account designated by the Administrator), on each Settlement Date,
Collections held for the Issuer pursuant to clause (b)(i) or (f) plus the amount
of Collections then held for the Issuer pursuant to clauses (b)(ii) and (iii) of
Section 1.4; provided, that if Church & Xxxxxx or an Affiliate thereof is the
Servicer, such day is not a Termination Day and the Administrator has not
notified Church & Xxxxxx (or such Affiliate) that such right is revoked, Church
& Xxxxxx (or such Affiliate) may retain the portion of the Collections held in
trust pursuant to clause (b)(i) that represents the Issuer's Share of the
Servicing Fee. On the last day of each Settlement Period, the Administrator will
notify the Servicer by facsimile of the amount of Discount accrued with respect
to each Portion of Capital during such Settlement Period or portion thereof.
(d) Upon receipt of funds deposited into the Administration Account
pursuant to clause (c), the Administrator shall cause such funds to be
distributed as follows:
(i) if such distribution occurs on a day that is not a
Termination Day and the Purchased Interest does not exceed 100%, first to the
Issuer in payment in full of all accrued Discount and fees (other than Servicing
Fees) with respect to each Portion of Capital, and second, if the Servicer has
held in trust amounts in respect of the Servicing Fee pursuant to clause (b)(i)
and has not retained such amounts pursuant to clause (c), to the Servicer
(payable in arrears on each Settlement Date) in payment in full of the Issuer's
Share of accrued Servicing Fees so held in trust, and
(ii) if such distribution occurs on a Termination Day or on a
day when the Purchased Interest exceeds 100%, first to the Issuer in payment in
full of all accrued Discount with respect to each Portion of Capital, second to
the Issuer in payment in full of Capital (or, if such day is not a Termination
Day, the amount necessary to reduce the Purchased Interest to 100%), third, to
the Servicer in payment in full of all accrued Servicing Fees, and fourth, if
the Capital and accrued Discount with respect to each Portion of Capital have
been reduced to zero, and all accrued Servicing Fees payable to the Servicer
have been paid in full, to the Issuer, the Administrator and any other
Indemnified Party or Affected Person in payment in full of any other amounts
owed thereto by the Seller hereunder.
After the Capital, Discount, fees payable pursuant to the Fee Letter and
Servicing Fees with respect to the Purchased Interest, and any other amounts
payable by the Seller and the Servicer to the Issuer, the Administrator or any
other Indemnified Party or Affected Person hereunder, have
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been paid in full, all additional Collections with respect to the Purchased
Interest shall be paid to the Seller for its own account.
(e) For the purposes of this Section 1.4:
(i) if on any day the Outstanding Balance of any Pool
Receivable is reduced or adjusted as a result of any defective, rejected,
returned, repossessed or foreclosed goods or services, or any revision,
cancellation, allowance, rebate, discount or other adjustment made by the Seller
or any Affiliate of the Seller, or any setoff or dispute between the Seller or
any Affiliate of the Seller and an Obligor, the Seller shall be deemed to have
received on such day a Collection of such Pool Receivable in the amount of such
reduction or adjustment;
(ii) if on any day any of the representations or warranties in
Section l(g) or (m) of Exhibit III is not true with respect to any Pool
Receivable, the Seller shall be deemed to have received on such day a Collection
of such Pool Receivable in full;
(iii) except as provided in clause (i) or (ii), or as
otherwise required by applicable law or the relevant Contract, all Collections
received from an Obligor of any Receivable shall be applied to the Receivables
of such Obligor in the order of the age of such Receivables, starting with the
oldest such Receivable, unless such Obligor designates in writing its payment
for application to specific Receivables; and
(iv) if and to the extent the Administrator or the Issuer
shall be required for any reason to pay over to an Obligor (or any trustee,
receiver, custodian or similar official in any Insolvency Proceeding) any amount
received by it hereunder, such amount shall be deemed not to have been so
received by the Administrator or the Issuer but rather to have been retained by
the Seller and, accordingly, the Administrator or the Issuer, as the case may
be, shall have a claim against the Seller for such amount, payable when and to
the extent that any distribution from or on behalf of such Obligor is made in
respect thereof
(f) If at any time the Seller shall wish to cause the reduction of
Capital (but not to commence the liquidation, or reduction to zero, of the
entire Capital of the Purchased Interest), the Seller may do so as follows:
(i) the Seller shall give the Administrator and the Servicer
written notice in the form of Annex C (the "Paydown Notice") (which notice must
be received by the Administrator before 2:00 p.m., Pittsburgh, Pennsylvania
time) (A) at least one Business Day prior to the date of such reduction for any
reduction of Capital less than or equal to $10,000,000 and (B) at least three
(3) Business Days' prior to the date of such reduction for any reduction of
Capital greater than $10,000,000;
(ii) On the proposed date of the commencement of such
reduction and on each day thereafter, the Servicer shall cause Collections not
to be reinvested until the amount thereof not so reinvested shall equal the
desired amount of reduction; and
(iii) the Servicer shall hold such Collections in trust (but
shall still not be required to segregate and set aside) for the Issuer, for
payment to the Administrator on the
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next Settlement Date immediately following the current Settlement Period, and
Capital shall be deemed reduced in the amount to be paid to the Administrator
only when in fact finally so paid;
provided, that (a) the amount of any such reduction shall be not less than
$1,000,000 and shall be an integral multiple of $100,000, and the entire Capital
of the Purchased Interest after giving effect to such reduction shall be not
less than $1,000,000 and shall be in an integral multiple of $100,000 and (b)
the Seller shall choose a reduction amount, and the date of commencement
thereof, so that to the extent practicable such reduction shall commence and
conclude in the same Settlement Period.
Section 1.5 Fees.
The Seller shall pay to the Administrator certain fees in the amounts
and on the dates set forth in a letter, dated the date hereof, between the
Seller and the Administrator (as such letter agreement may be amended,
supplemented or otherwise modified from time to time, the "Fee Letter").
Section 1.6 Payments and Computations, Etc.
(a) All amounts to be paid or deposited by the Seller or the Servicer
hereunder shall be made without reduction for offset or counterclaim and shall
be paid or deposited no later than noon, Pittsburgh, Pennsylvania time on the
day when due in same day funds to the Administration Account. All amounts
received after noon, Pittsburgh, Pennsylvania will be deemed to have been
received on the next Business Day.
(b) The Seller or the Servicer, as the case may be, shall, to the
extent permitted by law, pay interest on any amount not paid or deposited by the
Seller or the Servicer, as the case may be, when due hereunder, at an interest
rate equal to 2.0% per annum above the Base Rate, payable on demand.
(c) All computations of interest under clause (b) and all computations
of Discount, fees and other amounts hereunder shall be made on the basis of a
year of 360 (or 365 or 366, as applicable, with respect to Discount or other
amounts calculated by reference to the Base Rate) days for the actual number of
days elapsed. Whenever any payment or deposit to be made hereunder shall be due
on a day other than a Business Day, such payment or deposit shall be made on the
next Business Day and such extension of time shall be included in the
computation of such payment or deposit.
Section 1.7 Increased Costs.
(a) If the Administrator, the Issuer, any Purchaser, any other Program
Support Provider or any of their respective Affiliates (each an "Affected
Person") reasonably determines that the existence of or compliance with: (i) any
law or regulation or any change therein or in the interpretation or application
thereof, in each case adopted, issued or occurring after the date hereof, or
(ii) any request, guideline or directive from any central bank or other
Governmental Authority (whether or not having the force of law) issued or
occurring after the date of this Agreement, increases or would increase the
amount of capital required or expected to be maintained by such Affected Person
(taking into consideration such Affected Person's policies
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regarding capital), and such Affected Person determines that the amount of such
capital is increased by or based upon the existence of any commitment to make
purchases of (or otherwise to maintain the investment in) Pool Receivables
related to this Agreement or any related liquidity facility, credit enhancement
facility and other commitments of the same type, then, within ten (10) days
after delivery to the Seller of a certificate by such Affected Person (with a
copy to the Administrator) containing the relevant facts, set forth in
reasonable detail, relating to such occurrence and calculations of amounts due
as a result thereof (an "Affected Person's Certificate"), the Seller shall pay
to the Administrator, for the account of such Affected Person, from time to time
as specified by such Affected Person, additional amounts sufficient to
compensate such Affected Person in the light of such circumstances, to the
extent that such Affected Person reasonably determines such increase in capital
to be allocable to the existence of any of such commitments. The certificate as
to such amounts submitted to the Seller and the Administrator by such Affected
Person shall be conclusive and binding for all purposes, absent manifest error.
For avoidance of doubt, any interpretation of Accounting Research Bulletin No.
51 by the Financial Accounting Standards Board shall constitute an adoption,
change, request or directive subject to this Section 1.7(a).
(b) If, due to either: (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), which introduction, guideline or
request commences or is made after the date hereof, in each case excluding the
maximum effective percentage in effect on any day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
reserve requirements with respect to eurocurrency funding (currently referred to
as "Eurocurrency Liabilities") and compliance therewith, there shall be any
increase in the cost to any Affected Person of agreeing to purchase or
purchasing, or maintaining the ownership of, the Purchased Interest in respect
of which Discount is computed by reference to the Euro-Rate, then, within ten
(10) days after delivery to the Seller of an Affected Person's Certificate by
such Affected Person, the Seller shall pay to such Affected Person, from time to
time as specified by such Affected Person, additional amounts sufficient to
compensate such Affected Person for such increased costs. A certificate as to
such amounts submitted to the Seller and the Administrator by such Affected
Person shall be conclusive and binding for all purposes, absent manifest error.
(c) If such increased costs affect the related Affected Person's
portfolio of financing transactions, such Affected Person shall use reasonable
averaging and attribution methods to allocate such increased costs to the
transactions contemplated by this Agreement. Each Affected Person agrees that,
upon the occurrence of any event giving rise to a claim against the Seller under
Section 1.7 or 1.8 hereof , it will if requested by the Seller, use reasonable
efforts (subject to overall policy considerations of such Affected Person) to
designate another lending office for any credit extended by such Affected Person
that is affected by such event, provided that such designation is made on such
terms that such Affected Person and its lending office suffer no economic, legal
or regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of such Section. Nothing in this Section
shall affect or postpone any of the obligations of the Seller or the rights of
Administrator, Issuer, or any Program Support Provider provided in this
Agreement.
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(d) Notwithstanding anything to the contrary contained herein, the
Seller shall not be required to compensate an Affected Person pursuant to this
Section 1.7 or Section 1.8 hereof, for any amounts incurred more than six (6)
months prior to the date of delivery to Seller of an Affected Person's
Certificate; provided that, if the circumstances giving rise to such claim have
a retroactive effect, then such six-month period shall be extended to include
the period of such retroactive effect.
Section 1.8 Requirements of Law.
If any Affected Person reasonably determines that the existence of or
compliance with: (a) any law or regulation or any change therein or in the
interpretation or application thereof, in each case adopted, issued or occurring
after the date hereof, or (b) any request, guideline or directive from any
central bank or other Governmental Authority (whether or not having the force of
law) issued or occurring after the date of this Agreement:
(i) does or shall subject such Affected Person to any tax of
any kind whatsoever with respect to this Agreement, any increase in the
Purchased Interest or in the amount of Capital relating thereto, or does or
shall change the basis of taxation of payments to such Affected Person on
account of Collections, Discount or any other amounts payable hereunder
(excluding taxes imposed on the overall or branch pre-tax net income of such
Affected Person, and franchise taxes imposed on such Affected Person, by the
jurisdiction under the laws of which such Affected Person is organized or
otherwise is considered doing business (unless the Affected Person would not be
considered doing business in such jurisdiction, but for having entered into, or
engaged in the transactions in connection with, this Agreement or any other
Transaction Document or having entered into, or engaged in, any similar
transactions not in connection with this Agreement) or a political subdivision
thereof),
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of, purchases,
advances or loans by, or other credit extended by, or any other acquisition of
funds by, any office of such Affected Person that are not otherwise included in
the determination of the Euro-Rate or the Base Rate hereunder, or
(iii) does or shall impose on such Affected Person any other
condition, and the result of any of the foregoing is: (A) to increase the cost
to such Affected Person of acting as Administrator, or of agreeing to purchase
or purchasing or maintaining the ownership of undivided percentage ownership
interests with regard to the Purchased Interest (or interests therein) or any
Portion of Capital, or (B) to reduce any amount receivable hereunder (whether
directly or indirectly), then, in any such case, subject to the terms of Section
1.7(c) and Section 1.7(d) hereof, and within ten (10) days after delivery to the
Seller of an Affected Person's Certificate by such Affected Person, the Seller
shall pay to such Affected Person additional amounts necessary to compensate
such Affected Person for such additional cost or reduced amount receivable,
provided that there shall be no duplication for amounts payable under this
Section with amounts payable under Section 1.7. All such amounts shall be
payable as incurred. A certificate from such Affected Person to the Seller and
the Administrator certifying, in reasonably specific detail, the basis for,
calculation of, and amount of such additional costs or reduced amount receivable
shall be conclusive and binding for all purposes, absent manifest
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error; provided, however, that no Affected Person shall be required to disclose
any confidential or tax planning information in any such certificate.
Section 1.9 Inability to Determine Euro-Rate.
(a) If the Administrator determines before the first day of any
Settlement Period (which determination shall be final and conclusive, absent
manifest error) that, by reason of circumstances affecting the interbank
eurodollar market generally, deposits in dollars (in the relevant amounts for
such Settlement Period) are not being offered to banks in the interbank
eurodollar market for such Settlement Period, or adequate means do not exist for
ascertaining the Euro-Rate for such Settlement Period, then the Administrator
shall give notice thereof to the Seller. Thereafter, until the Administrator
notifies the Seller that the circumstances giving rise to such suspension no
longer exist, (a) no Portion of Capital shall be funded at the Alternate Rate
determined by reference to the Euro-Rate and (b) the Discount for any
outstanding Portions of Capital then funded at the Alternate Rate determined by
reference to the Euro-Rate shall, on the last day of the then current Settlement
Period, be converted to the Alternate Rate determined by reference to the Base
Rate.
(b) If, on or before the first day of any Settlement Period, the
Administrator shall have been notified by any Purchaser that, such Purchaser has
determined (which determination shall be final and conclusive, absent manifest
error) that, any enactment, promulgation or adoption of or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by a governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Purchaser with any guideline, request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for such Purchaser to fund or
maintain any Portion of Capital at the Alternate Rate and based upon the
Euro-Rate, the Administrator shall notify the Seller thereof. Upon receipt of
such notice, until the Administrator notifies the Seller that the circumstances
giving rise to such determination no longer apply, (a) no Portion of Capital
shall be funded at the Alternate Rate determined by reference to the Euro-Rate
and (b) the Discount for any outstanding Portions of Capital then funded at the
Alternate Rate determined by reference to the Euro-Rate shall be converted to
the Alternate Rate determined by reference to the Base Rate either (i) on the
last day of the then current Settlement Period if such Purchaser may lawfully
continue to maintain such Portion of Capital at the Alternate Rate determined by
reference to the Euro-Rate to such day, or (ii) immediately, if such Purchaser
may not lawfully continue to maintain such Portion of Capital at the Alternate
Rate determined by reference to the Euro-Rate to such day.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS
Section 2.1 Representations and Warranties; Covenants.
Each of the Seller, Church & Xxxxxx and the Servicer hereby makes the
representations and warranties, and hereby agrees to perform and observe the
covenants, applicable to it set forth in Exhibits III and IV, respectively.
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Section 2.2 Termination Events.
If any of the Termination Events set forth in Exhibit V shall occur,
the Administrator may, by notice to the Seller, declare the Facility Termination
Date to have occurred (in which case the Facility Termination Date shall be
deemed to have occurred); provided, that automatically upon the occurrence of
any event (without any requirement for the passage of time or the giving of
notice) described in paragraph (f) of Exhibit V, the Facility Termination Date
shall occur. Upon any such declaration, occurrence or deemed occurrence of the
Facility Termination Date, the Issuer and the Administrator shall have, in
addition to the rights and remedies that they may have under this Agreement, all
other rights and remedies provided after default under the
New York UCC and
under other applicable law, which rights and remedies shall be cumulative.
ARTICLE III
INDEMNIFICATION
Section 3.1 Indemnities by the Seller.
Without limiting any other rights that the Administrator, the Issuer,
any Program Support Provider or any of their respective Affiliates, employees,
officers, directors, agents, counsel, successors, transferees or assigns (each,
an "Indemnified Party") may have hereunder or under applicable law, the Seller
hereby agrees to indemnify each Indemnified Party from and against any and all
claims, damages, expenses, costs, losses and liabilities (including Attorney
Costs) (all of the foregoing being collectively referred to as "Indemnified
Amounts") arising out of or resulting from this Agreement (whether directly or
indirectly), the use of proceeds of purchases or reinvestments, the ownership of
the Purchased Interest, or any interest therein, or in respect of any
Receivable, Related Security or Contract, excluding, however: (a) Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of such Indemnified Party or its officers, directors, agents or
counsel, (b) any indemnification which has the effect of recourse for the
non-payment of the Receivables to any indemnitor (except as otherwise
specifically provided under Section 1.4 (e) and this Section 3.1) for
Receivables, or (c) (i) overall net income taxes or franchise taxes imposed on
such Indemnified Party by the jurisdiction under the laws of which such
Indemnified Party is organized or is otherwise considered doing business (unless
the Indemnified Party would not be considered to be doing business in such
jurisdiction but for having entered into or engaged in the transactions in
connection with this Agreement or any other Transaction Document or having
entered into, or engaged in, any similar transactions not in connection with
this Agreement) or any political subdivision thereof; provided, however, that
the exception to indemnification in this (c)(1) shall apply if the Indemnified
Party is considered to be doing business in such jurisdiction due to the
quantity or volume of transactions such Indemnified Party has engaged in that
are either pursuant to this Agreement or are similar to transactions such party
has engaged in pursuant to this Agreement; or (ii) any taxes imposed as a result
of the failure to comply with Section 5.3(f) (other than a failure resulting
solely from a change in law occurring after the date hereof). Without limiting
or being limited by the foregoing, and subject to the exclusions set forth in
the preceding sentence, the Seller shall pay within ten (10) days after demand
(which demand shall be accompanied by documentation of the Indemnified Amounts,
in reasonable detail) to each Indemnified Party any and all amounts
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necessary to indemnify such Indemnified Party from and against any and all
Indemnified Amounts relating to or resulting from any of the following:
(i) the failure of any Receivable included in the calculation
of the Net Receivables Pool Balance as an Eligible Receivable to be an Eligible
Receivable, the failure of any information contained in an Information Package
to be true and correct, or the failure of any other information provided to the
Issuer or the Administrator with respect to Receivables or this Agreement to be
true and correct in all material respects,
(ii) the failure of any representation, warranty or statement
made or deemed made by the Seller (or any of its officers) under or in
connection with this Agreement to have been true and correct as of the date made
or deemed made in all respects when made,
(iii) the failure by the Seller to comply with any applicable
law, rule or regulation with respect to any Pool Receivable or the related
Contract, or the failure of any Pool Receivable or the related Contract to
conform to any such applicable law, rule or regulation,
(iv) the failure to vest in the Issuer a valid and
enforceable: (A) perfected undivided percentage ownership interest, to the
extent of the Purchased Interest, in the Receivables in, or purporting to be in,
the Receivables Pool and the other Pool Assets, or (B) first priority perfected
security interest in the Pool Assets, in each case, free and clear of any
Adverse Claim,
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Receivables in, or purporting to be in, the Receivables Pool and the other Pool
Assets, whether at the time of any purchase or reinvestment or at any subsequent
time,
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool (including a defense
based on such Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance with its
terms), or any other claim resulting from the sale of the goods or services
related to such Receivable or the furnishing or failure to furnish such goods or
services or relating to collection activities with respect to such Receivable
(if such collection activities were performed by the Seller or any of its
Affiliates acting as Servicer or by any agent or independent contractor retained
by the Seller or any of its Affiliates),
(vii) any failure of the Seller (or any of its Affiliates
acting as the Servicer) to perform its duties or obligations in accordance with
the provisions hereof or under the Contracts,
(viii) any products liability or other claim, investigation,
litigation or proceeding arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract,
(ix) the commingling of Collections at any time with other
funds,
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(x) the use of proceeds of purchases or reinvestments, or
(xi) any reduction in Capital as a result of the distribution
of Collections pursuant to Section 1.4(d), if all or a portion of such
distributions shall thereafter be rescinded or otherwise must be returned for
any reason.
Section 3.2 Indemnities by the Servicer.
Without limiting any other rights that the Administrator, the Issuer or
any other Indemnified Party may have hereunder or under applicable law, the
Servicer hereby agrees to indemnify each Indemnified Party from and against any
and all Indemnified Amounts arising out of or resulting from (whether directly
or indirectly): (a) the failure of any information contained in an Information
Package to be true and correct, or the failure of any other information provided
to the Issuer or the Administrator by, or on behalf of, the Servicer to be true
and correct in all material respects, (b) the failure of any representation,
warranty or statement made or deemed made by the Servicer (or any of its
officers) under or in connection with this Agreement to have been true and
correct as of the date made or deemed made in all respects when made, (c) the
failure by the Servicer to comply with any applicable law, rule or regulation
with respect to any Pool Receivable or the related Contract, (d) any dispute,
claim, offset or defense of the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool resulting from or related to the
collection activities with respect to such Receivable, (e) the commingling of
Collections at any time with other funds, or (f) any failure of the Servicer to
perform its duties or obligations in accordance with the provisions hereof.
ARTICLE IV
ADMINISTRATION AND COLLECTIONS
Section 4.1 Appointment of the Servicer.
(a) The servicing, administering and collection of the Pool Receivables
shall be conducted by the Person so designated from time to time as the Servicer
in accordance with this Section. Until the Administrator gives notice to Church
& Xxxxxx (in accordance with this Section) of the designation of a new Servicer,
Church & Xxxxxx is hereby designated as, and hereby agrees to perform the duties
and obligations of, the Servicer pursuant to the terms hereof. Upon the
occurrence of a Termination Event, the Administrator may designate as Servicer
any Person (including itself) to succeed Church & Xxxxxx or any successor
Servicer, on the condition in each case that any such Person so designated shall
agree to perform the duties and obligations of the Servicer pursuant to the
terms hereof.
(b) Upon the designation of a successor Servicer as set forth in clause
(a), Church & Xxxxxx agrees that it will terminate its activities as Servicer
hereunder in a manner that the Administrator determines will facilitate the
transition of the performance of such activities to the new Servicer, and Church
& Xxxxxx shall cooperate with and assist such new Servicer. Such cooperation
shall include, to the extent permitted by law and the terms of the written
agreements between Church & Xxxxxx and the relevant third party providers of the
licenses, hardware, software, access to and transfer of related records, and
software and use by the new Servicer of
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all licenses, hardware or software necessary or desirable to collect the Pool
Receivables and the Related Security.
(c) Church & Xxxxxx acknowledges that, in making their decision to
execute and deliver this Agreement, the Administrator and the Issuer have relied
on Church & Dwight's agreement to act as Servicer hereunder. Accordingly, Church
& Xxxxxx agrees that it will not voluntarily resign as Servicer.
(d) The Servicer may delegate its duties and obligations hereunder to
any subservicer (each a "Sub-Servicer"); provided, that, in each such
delegation: (i) such Sub-Servicer shall agree in writing to perform the duties
and obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer
shall remain primarily liable for the performance of the duties and obligations
so delegated, (iii) the Seller, the Administrator and the Issuer shall have the
right to look solely to the Servicer for performance, and (iv) the terms of any
agreement with any Sub-Servicer shall provide that the Administrator may
terminate such agreement upon the termination of the Servicer hereunder by
giving notice of its desire to terminate such agreement to the Servicer (and the
Servicer shall provide appropriate notice to each such Sub-Servicer); provided,
however, that if any such delegation is to any Person other than any Originator,
the Administrator shall have consented in writing in advance to such delegation.
Section 4.2 Duties of the Servicer.
(a) The Servicer shall take or cause to be taken all such action as may
be necessary or advisable to administer and collect each Pool Receivable from
time to time, all in accordance with this Agreement and all applicable laws,
rules and regulations, with reasonable care and diligence, and in accordance
with the Credit and Collection Policy The Servicer shall hold in trust (but
shall not be required to set aside or segregate), for the accounts of the Seller
and the Issuer, the amount of the Collections to which each is entitled in
accordance with Article I. The Servicer may, in accordance with the applicable
Credit and Collection Policy, extend the maturity of any Pool Receivable and
extend the maturity or adjust the Outstanding Balance of any Defaulted
Receivable as the Servicer may determine to be appropriate to maximize
Collections thereof (and take any other actions with respect to a Receivable in
accordance with the Credit and Collection Policy or make or issue credit memos,
non-cash adjustments, other reductions or adjustments on the Servicer's books
and records in order to accomplish the items listed in subclauses (i) through
(v) of clause (a) of the definition of Specific Dilution Ratio) ; provided,
however, that: for the purposes of this Agreement, (i) such extension shall not
change the number of days such Pool Receivable has remained unpaid from the
original due date related to such Pool Receivable, (ii) such extension or
adjustment shall not alter the status of such Pool Receivable as a Delinquent
Receivable or a Defaulted Receivable or limit the rights of the Issuer or the
Administrator under this Agreement and (iii) if a Termination Event has occurred
and Church & Xxxxxx or an Affiliate thereof is serving as the Servicer, Church &
Xxxxxx or such Affiliate may make such extension or adjustment only upon the
prior approval of the Administrator. The Seller shall deliver to the Servicer
and the Servicer shall hold for the benefit of the Seller and the Administrator
(individually and for the benefit of the Issuer), in accordance with their
respective interests, all records and documents (including computer tapes or
disks) with respect to each Pool Receivable. Notwithstanding anything to the
contrary contained herein, the Administrator may in its reasonable discretion,
subject, if no Termination Event exists
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and is continuing, to the consent of the Servicer, not to be unreasonably
withheld, direct the Servicer (whether the Servicer is Church & Xxxxxx or any
other Person) to commence or settle any legal action to enforce collection of
any Pool Receivable or to foreclose upon or repossess any Related Security.
(b) The Servicer shall, as soon as practicable following actual receipt
of collected funds, turn over to the Seller the collections of any indebtedness
of the Seller that is not a Pool Receivable, less, if Church & Xxxxxx or an
Affiliate thereof is not the Servicer, all reasonable and appropriate
out-of-pocket costs and expenses of such Servicer of servicing, collecting and
administering such collections. The Servicer, if other than Church & Xxxxxx or
an Affiliate thereof, shall, as soon as practicable upon demand, deliver to the
Seller all records in its possession that evidence or relate to any indebtedness
of the Seller that is not a Pool Receivable, and copies of records in its
possession that evidence or relate to any indebtedness that is a Pool
Receivable.
(c) The Servicer's obligations hereunder shall terminate on the later
of: (i) the Facility Termination Date and (ii) the date on which all amounts
required to be paid to the Issuer, the Administrator and any other Indemnified
Party or Affected Person hereunder shall have been paid in full.
After such termination, if Church & Xxxxxx or an Affiliate thereof was
not the Servicer on the date of such termination, the Servicer shall promptly
deliver to the Seller all books, records and related materials that the Seller
previously provided to the Servicer, or that have been obtained by the Servicer,
in connection with this Agreement.
Section 4.3 Lock-Box Arrangements.
Prior to the initial purchase hereunder, the Seller shall enter into
Lock-Box Agreements with all of the Lock-Box Banks and deliver original
counterparts thereof to the Administrator. Upon the occurrence of a Termination
Event, the Administrator may at any time thereafter give notice to each Lock-Box
Bank that the Administrator is exercising its rights under the Lock-Box
Agreements to do any or all of the following: (a) to have the exclusive
ownership and control of the Lock-Box Accounts transferred to the Administrator
and to exercise exclusive dominion and control over the funds deposited therein,
(b) to have the proceeds that are sent to the respective Lock-Box Accounts
redirected pursuant to the Administrator's instructions rather than deposited in
the applicable Lock-Box Account, and (c) to take any or all other actions
permitted under the applicable Lock-Box Agreement. The Seller hereby agrees that
if the Administrator at any time takes any action set forth in the preceding
sentence, the Administrator shall have exclusive control of the proceeds
(including Collections) of all Pool Receivables and the Seller hereby further
agrees to take any other action that the Administrator may reasonably request to
transfer such control. Any proceeds of Pool Receivables received by the Seller
or the Servicer thereafter shall be sent immediately to the Administrator. The
parties hereto hereby acknowledge that if at any time the Administrator takes
control of any Lock-Box Account, the Administrator shall not have any rights to
the funds therein in excess of the unpaid amounts due to the Administrator, the
Issuer or any other Person hereunder, and the Administrator shall distribute or
cause to be distributed such funds in accordance with Section 4.2(b) and Article
I (in each case as if such funds were held by the Servicer thereunder).
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Section 4.4 Enforcement Rights.
(a) At any time following the occurrence of a Termination Event:
(i) the Administrator may direct the Obligors that payment of
all amounts payable under any Pool Receivable is to be made directly to the
Administrator or its designee,
(ii) the Administrator may instruct the Seller or the Servicer
to give notice of the Issuer's interest in Pool Receivables to each Obligor,
which notice shall direct that payments be made directly to the Administrator or
its designee, and the Seller or the Servicer, as the case may be, shall give
such notice at the expense of the Seller or the Servicer, as the case may be;
provided, that if the Seller or the Servicer, as the case may be, fails to so
notify each Obligor, the Administrator (at the Seller's or the Servicer's, as
the case may be, expense) may so notify the Obligors, and
(iii) the Administrator may request the Servicer to, and upon
such request the Servicer shall: (A) assemble all of the records necessary or
desirable to collect the Pool Receivables and the Related Security, and transfer
or license, to the extent permitted by law and the relevant licenses, to a
successor Servicer the use of all software necessary or desirable to collect the
Pool Receivables and the Related Security, and make the same available to the
Administrator or its designee at a place selected by the Administrator, and (B)
segregate all cash, checks and other instruments received by it from time to
time constituting Collections in a manner acceptable to the Administrator and,
promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Administrator or
its designee.
(b) The Seller hereby authorizes the Administrator, and irrevocably
appoints the Administrator as its attorney-in-fact with full power of
substitution and with full authority in the place and stead of the Seller, which
appointment is coupled with an interest, to, following the occurrence of a
Termination Event, take any and all steps in the name of the Seller and on
behalf of the Seller necessary or desirable, in the determination of the
Administrator, to collect any and all amounts or portions thereof due under any
and all Pool Assets, including endorsing the name of the Seller on checks and
other instruments representing Collections and enforcing such Pool Assets.
Notwithstanding anything to the contrary contained in this subsection, none of
the powers conferred upon such attorney-in-fact pursuant to the preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it, which action was not out of gross negligence or willful misconduct,
shall prove to be inadequate or invalid, nor shall they confer any obligations
upon such attorney-in-fact in any manner whatsoever.
Section 4.5 Responsibilities of the Seller.
(a) Anything herein to the contrary notwithstanding, the Seller shall:
(i) perform all of its obligations, if any, under the Contracts related to the
Pool Receivables to the same extent as if interests in such Pool Receivables had
not been transferred hereunder, and the exercise by the Administrator or the
Issuer of their respective rights hereunder shall not relieve the Seller from
such obligations, and (ii) pay, or cause to be paid, when due any taxes,
including any sales
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taxes payable in connection with the Pool Receivables and their creation and
satisfaction. The Administrator and the Issuer shall not have any obligation or
liability with respect to any Pool Asset, nor shall either of them be obligated
to perform any of the obligations of the Seller, Church & Xxxxxx or any
Originator thereunder.
(b) Church & Xxxxxx hereby irrevocably agrees that if at any time it
shall cease to be the Servicer hereunder, it shall provide (if the then-current
Servicer so requests) data-processing functions in connection with the
administration of the Receivables and the Collections thereon in substantially
the same way that Church & Xxxxxx conducted such data-processing functions while
it acted as the Servicer.
Section 4.6 Servicing Fee.
(a) Subject to clause (b), the Servicer shall be paid a fee equal to
1.00% per annum (the "Servicing Fee Rate") of the daily average aggregate
Outstanding Balance of the Pool Receivables. The Issuer's Share of such fee
shall be paid through the distributions contemplated by Section 1.4(d), and the
Seller's Share of such fee shall be paid by the Seller on each Monthly
Settlement Date.
(b) If the Servicer ceases to be Church & Xxxxxx or an Affiliate
thereof, the servicing fee shall be the greater of: (i) the amount calculated
pursuant to clause (a), and (ii) an alternative amount specified by the
successor Servicer not to exceed 110% of the aggregate reasonable costs and
expenses incurred by such successor Servicer in connection with the performance
of its obligations as Servicer.
ARTICLE V
MISCELLANEOUS
Section 5.1 Amendments, Etc.
No amendment or waiver of any provision of this Agreement or any other
Transaction Document, or consent to any departure by the Seller or the Servicer
therefrom, shall be effective unless in a writing signed by the Administrator,
and, in the case of any amendment, by the other parties thereto; and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No failure on the part of the
Issuer or the Administrator to exercise, and no delay in exercising any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
Section 5.2 Notices, Etc.
All notices and other communications hereunder shall, unless otherwise
stated herein, be in writing (which shall include facsimile communication ) and
be sent or delivered to each party hereto at its address set forth under its
name on the signature pages hereof or at such other address as shall he
designated by such party in a written notice to the other parties hereto.
Notices and communications by facsimile shall be effective when sent (and shall
be followed by hard copy sent by first class mail), and notices and
communications sent by other means shall be effective when received.
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Section 5.3 Assignability.
(a) This Agreement and the Issuer's rights and obligations herein
(including ownership of the Purchased Interest or an interest therein) shall be
assignable, in whole or in part, by the Issuer and its successors and assigns
with the prior written consent of the Seller; provided, however, that such
consent shall not be unreasonably withheld; and provided further, that no such
consent shall be required if the assignment is made to (1) PNC, (2) any
Affiliate of PNC (other than a director or officer of PNC), or (3) any Person
that is: (i) in the business of issuing Notes and (ii) associated with or
administered by PNC or any Affiliate of PNC. Each assignor may, in connection
with the assignment, disclose to the applicable assignee (that shall have agreed
to be bound by Section 5.6) any information relating to the Servicer, the Seller
or the Pool Receivables furnished to such assignor by or on behalf of the
Servicer, the Seller, the Issuer or the Administrator. The Administrator shall
give prior written notice of any assignment of the Issuer's rights and
obligations (including ownership of the Purchased Interest to any Person other
than a Program Support Provider).
(b) The Issuer may at any time grant to one or more banks or other
institutions (each a "Purchaser") party to the Liquidity Agreement, or to any
other Program Support Provider, participating interests in the Purchased
Interest. In the event of any such grant by the Issuer of a participating
interest to a Purchaser or other Program Support Provider, the Issuer shall
remain responsible for the performance of its obligations hereunder. The Seller
agrees that each Purchaser or other Program Support Provider shall be entitled
to the benefits of Sections 1.7 and 1.8.
(c) This Agreement and the rights and obligations of the Administrator
hereunder shall be assignable, in whole or in part, by the Administrator and its
successors and assigns; provided, that unless: (i) such assignment is to an
Affiliate of PNC, (ii) it becomes unlawful for PNC to serve as the Administrator
or (iii) a Termination Event exists, the Seller has consented to such
assignment, which consent shall not be unreasonably withheld.
(d) Except as provided in Section 4.1 (d), none of the Seller, Church &
Xxxxxx or the Servicer may assign its rights or delegate its obligations
hereunder or any interest herein without the prior written consent of the
Administrator.
(e) Without limiting any other rights that may be available under
applicable law, the rights of the Issuer may be enforced through it or by its
agents.
(f) Each assignee pursuant to clause (a) or Purchaser that is not a
"U.S. Person" as defined in Section 7701(a)(30) of the Code (a "Non-U.S.
Purchaser") shall deliver to the Seller two copies of either U.S. Internal
Revenue Service Form W-8BEN or Form W-8ECI as relevant to such party's status,
or, in the case of a Non-U.S. Purchaser claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement to that effect and a Form W-8BEN,
or any subsequent versions thereof or successors thereto, properly completed and
duly executed by such Non-U.S. Purchaser claiming exemption from U.S. federal
withholding tax on the relevant payments made by the Seller under this Agreement
and the other Transaction Documents. Such forms shall be delivered by each
Non-U.S. Purchaser on or before the date it becomes a party to this Agreement
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(or, in the case of any Purchaser, on or before the date such Purchaser
purchases the related participation). In addition, each Non-U.S. Purchaser shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Purchaser. Each Non-U.S. Purchaser shall
promptly notify the Seller at any time it determines that it is no longer in a
position to provide any previously delivered certificate to the Seller (or any
other form of certification adopted by the U.S. taxing authorities for such
purpose).
Section 5.4 Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification granted under Section
3.1, the Seller agrees to pay within ten (10) days after demand (which demand
shall be accompanied by documentation thereof in reasonable detail) all
reasonable costs and expenses in connection with the preparation, execution,
delivery and administration (including periodic internal audits by the
Administrator of Pool Receivables) of this Agreement, the other Transaction
Documents and the other documents and agreements to be delivered hereunder (and
all reasonable costs and expenses in connection with any amendment, waiver or
modification of any thereof), including: (i) Attorney Costs for the
Administrator, the Issuer and their respective Affiliates and agents with
respect thereto and with respect to advising the Administrator, the Issuer and
their respective Affiliates and agents as to their rights and remedies under
this Agreement and the other Transaction Documents , and (ii) all reasonable
costs and expenses (including Attorney Costs), if any, of the Administrator, the
Issuer and their respective Affiliates and agents in connection with the
enforcement of this Agreement and the other Transaction Documents.
(b) In addition, the Seller shall pay within ten (10) days after demand
any and all stamp and other taxes and fees payable in connection with the
execution, delivery, filing and recording of this Agreement or the other
documents or agreements to be delivered hereunder, and agrees to save each
Indemnified Party harmless from and against any liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and fees.
Section 5.5 No Proceedings; Limitation on Payments.
To the maximum extent permissible by applicable law, each of the
Seller, Church & Xxxxxx, the Servicer, the Administrator, each assignee of the
Purchased Interest or any interest therein, and each Person that enters into a
commitment to purchase the Purchased Interest or interests therein, hereby
covenants and agrees that it will not institute against, or join any other
Person in instituting against, the Issuer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding, or other proceeding under any
federal or state bankruptcy or similar law, for one year and one day after the
latest maturing Note issued by the Issuer is paid in full. The provision of this
Section 5.5 shall survive any termination of this Agreement.
Section 5.6 Confidentiality.
Each of the Seller and the Servicer agrees to maintain the
confidentiality of this Agreement and the other Transaction Documents (and all
drafts thereof) in communications with third parties and otherwise; provided,
that this Agreement may be disclosed to: (a) third parties to the extent such
disclosure is made pursuant to a written agreement of confidentiality in form
and substance reasonably satisfactory to the Administrator, (b) the Seller's
legal counsel and
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auditors if they agree to hold it confidential, (c) to the Securities and
Exchange Commission in connection with the filings of the Servicer, (d) the
Administrative Agent and the lenders under the Credit Agreement, dated as of
September 28, 2001, among Church & Xxxxxx Co., Inc., the lenders party thereto,
PNC Bank, National Association, Fleet National Bank, The Bank of Nova Scotia,
and National City Bank, each as syndication agent, and The Chase Manhattan Bank,
as administrative agent, provided, however, that the Fee Letter may not be
disclosed pursuant to this clause (d), and (e) as otherwise required by
applicable law; provided, however, that upon filing of any Transaction Documents
with the Securities and Exchange Commission pursuant to clause (c), such
Transaction Documents (but not any other Transaction Documents not so filed)
shall cease to be subject to the confidentiality provisions of this sentence.
Unless otherwise required by applicable law, each of the Administrator and the
Issuer agrees to maintain the confidentiality of non-public financial
information regarding Church & Xxxxxx and its Subsidiaries and Affiliates;
provided, that such information may be disclosed to: (i) third parties to the
extent such disclosure is considered reasonably necessary by the Administrator
or the Issuer and made pursuant to a written agreement of confidentiality in
form and substance reasonably satisfactory to Church & Xxxxxx, (ii) legal
counsel and auditors of the Issuer or the Administrator if they agree to hold it
confidential, (iii) the rating agencies rating the Notes to the extent such
information relates to the Receivables Pool or the transactions contemplated by
this Agreement, or if not so related, upon obtaining the consent of the
Servicer, not to be unreasonably withheld, (iv) any Program Support Provider or
potential Program Support Provider (if they agree to hold it confidential), (v)
any placement agent placing the Notes and (vi) any regulatory authorities having
jurisdiction over PNC, the Issuer, any Program Support Provider or any
Purchaser.
Section 5.7 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF
NEW YORK) EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY
INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF
NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF
NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES
PERSONAL SERVICE
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OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY
NEW YORK LAW.
Section 5.8 Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of
which, when so executed, shall be deemed to be an original, and all of which,
when taken together, shall constitute one and the same agreement.
Section 5.9 Survival of Termination.
The provisions of Sections 1.7, 1.8, 3.1, 3.2, 5.4, 5.5, 5.6, 5.7, 5.10
and 5.13 shall survive any termination of this Agreement as specified herein.
Neither the Servicer nor any other Person may waive a breach of Exhibit III,
Section 1(g) of this Agreement for so long as the Notes are outstanding.
Section 5.10 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO WAIVES THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING
OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR
OTHERWISE. EACH OF THE PARTIES HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT
TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.
Section 5.11 Entire Agreement.
This Agreement and the other Transaction Documents embody the entire
agreement and understanding between the parties hereto, and supersede all prior
or contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof, except for any prior
arrangements made with respect to the payment by the Issuer of (or any
indemnification for) any fees, costs or expenses payable to or incurred (or to
be incurred) by or on behalf of the Seller, the Servicer and the Administrator.
Section 5.12 Headings.
The captions and headings of this Agreement and any Exhibit, Schedule
or Annex hereto are for convenience of reference only and shall not affect the
interpretation hereof or thereof.
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Section 5.13 Issuer's Liabilities.
The obligations of the Issuer under the Transaction Documents are
solely the corporate obligations of the Issuer. No recourse shall be had for any
obligation or claim arising out of or based upon any Transaction Document
against any stockholder, employee, officer, director or incorporator of the
Issuer; provided, however, that this Section shall not relieve any such Person
of any liability it might otherwise have for its own gross negligence or willful
misconduct.
Section 5.14 Call Option.
The Seller shall have the right to repurchase the Purchased Interest
from the Issuer on any Settlement Date on the terms hereinafter set forth in
this Section 5.14. The Seller shall give the Administrator at least five (5)
Business Days prior written notice of such repurchase and upon payment of the
repurchase price for the Purchased Interest, as hereinafter provided, the Issuer
shall be deemed to have reconveyed the Purchased Interest to the Seller without
recourse, representation or warranty except for a representation from the Issuer
that the Purchased Interest assigned is (or concurrently with the Issuer's
receipt of such repurchase price shall become) free of any Adverse Claim created
by the Issuer. The Seller shall pay such repurchase price for the Purchased
Interest in immediately available funds to the Administrator (for the benefit of
the Issuer or the Administrator, as the case may be) in an amount equal to the
sum of (i) the Discount on the Capital related to the Purchased Interest accrued
to and including the repurchase date, (ii) the Capital in the Purchased
Interest, (iii) amounts payable pursuant to Sections 1.7 and 1.8 (of which the
Seller has notice) related to the Purchased Interest accrued to and including
the repurchase date, (iv) all other obligations that are then due and payable
and (v) if Church & Xxxxxx is not the Servicer, the Servicing Fee allocated to
the Purchased Interest that has accrued to and including the repurchase date.
Section 5.15 Secured Lending.
Notwithstanding anything in this Agreement to the contrary, the parties
hereto intend that this Agreement constitutes a security agreement and the
transactions effected hereby constitute secured loans by the Issuer to the
Seller under applicable laws and not a sale of the Purchased Interest.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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[SIGNATURE PAGE 1 OF 3 TO
RECEIVABLES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SELLER: XXXXXXXX STREET FUNDING, LLC
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Address: :
Attention:
Telephone:
Facsimile:
INITIAL SERVICER: CHURCH & XXXXXX CO., INC.
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Address:
Attention:
Telephone:
Facsimile:
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EXECUTION
[SIGNATURE PAGE 2 OF 3 TO
RECEIVABLES PURCHASE AGREEMENT]
ISSUER: MARKET STREET FUNDING CORPORATION
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Address:
Market Street Funding Corporation
c/o AMACAR Group, LLC
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
With a copy to:
PNC Bank, National Association
One PNC Plaza, 26th floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
[SIGNATURE PAGE 3 OF 3 TO
RECEIVABLES PURCHASE AGREEMENT]
ADMINISTRATOR: PNC BANK, NATIONAL ASSOCIATION
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Address:
PNC Bank, National Association
One PNC Plaza, 26th floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
-2-
EXHIBIT I
DEFINITIONS
As used in the Agreement (including its Exhibits, Schedules and
Annexes), the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined). Unless otherwise indicated, all Section, Annex, Exhibit and Schedule
references in this Exhibit are to Sections of and Annexes, Exhibits and
Schedules to the Agreement.
"Administration Account" means the account (account number 1002422076,
ABA number 000000000) of the Administrator maintained at the office of PNC at
One PNC Plaza, 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or such
other account as may be so designated in writing by the Administrator to the
Servicer.
"Administrator" has the meaning set forth in the preamble to the
Agreement.
"Adverse Claim" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement other than Permitted
Claims; it being understood that any thereof in favor of, or assigned to, the
Issuer or the Administrator (for the benefit of the Issuer) shall not constitute
an Adverse Claim.
"Affected Person" has the meaning set forth in Section 1.7 of the
Agreement.
"Affiliate" means, as to any Person: (a) any Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a), except that, with respect to the Issuer,
Affiliate shall mean the holder(s) of its capital stock. For purposes of this
definition, control of a Person shall mean the power, direct or indirect: (x) to
vote 25% or more of the securities having ordinary voting power for the election
of directors or managers of such Person, or (y) to direct or cause the direction
of the management and policies of such Person, in either case whether by
ownership of securities, contract, proxy or otherwise.
"Agreement" has the meaning set forth in the preamble hereto.
"Alternate Rate" for any Settlement Period for any Portion of Capital
allocable to the Purchased Interest means an interest rate per annum equal to:
(a) 1.25% per annum above the Euro-Rate for such Settlement Period; provided,
however, that if (x) it shall become unlawful for any Purchaser or Program
Support Provider to obtain funds in the London interbank eurodollar market in
order to make, fund or maintain any Purchased Interest, or if such funds shall
not be reasonably available to any Purchaser or Program Support Provider, or (y)
there shall not be at least two Business Days prior to the commencement of an
applicable Settlement Period to determine a Euro-Rate in accordance with its
terms, then the "Alternate Rate" shall be equal to the Base Rate in effect for
each day during the remainder of such Settlement Period or (b) if requested by
the Seller the Base Rate for such Settlement Period; provided, however, that the
"Alternate Rate" for any day while a Termination Event exists shall be an
interest rate equal to 2.00% per annum above the Base Rate in effect on such
day.
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"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978
(11 U.S.C. Section 101, et seq.), as amended from time to time.
"Base Rate" means, for any day, a fluctuating interest rate per annum
as shall be in effect from time to time, which rate shall be at all times equal
to the higher of:
(a) the rate of interest in effect for such day as publicly
announced from time to time by PNC in Pittsburgh, Pennsylvania as its
"prime rate." Such "prime rate" is set by PNC based upon various
factors, including PNC's costs and desired return, general economic
conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above or below such
announced rate, and
(b) 0.50% per annum above the latest Federal Funds Rate.
"BBA" means the British Bankers' Association.
"Benefit Plan" means, at a particular time, any employee benefit plan
that is covered by ERISA and in respect of which the Seller, the Originator,
Church & Xxxxxx or any Commonly Controlled Entity is (or if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Business Day" means any day (other than a Saturday or Sunday) on
which: (a) banks are not authorized or required to close in
New York City,
New
York or Pittsburgh, Pennsylvania and (b) if this definition of "Business Day" is
utilized in connection with the Euro-Rate, dealings are carried out in the
London interbank market.
"Capital" means the amount paid to the Seller in respect of the
Purchased Interest by the Issuer pursuant to the Agreement, or such amount
divided or combined in order to determine the Discount applicable to any Portion
of Capital, in each case reduced from time to time by Collections distributed
and applied on account of such Capital pursuant to Section 1.4(d) of the
Agreement; provided, that if such Capital shall have been reduced by any
distribution, and thereafter all or a portion of such distribution is rescinded
or must otherwise be returned for any reason, such Capital shall be increased by
the amount of such rescinded or returned distribution as though it had not been
made.
"Cash Discount Reserve" means at any time the greater of (a) balance
sheet reserve amount for cash discounts maintained on the books and records of
the Originator and (b) the product of (i) 2.0% (or such percentage as reasonably
determined by the Administrator) times (ii) Gross New Receivables in the most
recent fiscal month times (iii) 90% (or such percentage as reasonably determined
by the Administrator).
"Change in Control" means that Church & Xxxxxx, ceases to own, directly
or indirectly, 100% of the capital stock of the Seller free and clear of all
Adverse Claims.
"Church & Xxxxxx" has the meaning set forth in the preamble to the
Agreement.
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"Closing Date" means January 16, 2003.
"Collections" means, with respect to any Pool Receivable: (a) all funds
that are received by any Originator, Church & Xxxxxx, the Seller or the Servicer
in payment of any amounts owed in respect of such Receivable (including purchase
price, finance charges, interest and all other charges), or applied to amounts
owed in respect of such Receivable (including insurance payments and net
proceeds of the sale or other disposition of repossessed goods or other
collateral or property of the related Obligor or any other Person directly or
indirectly liable for the payment of such Pool Receivable and available to be
applied thereon), (b) all amounts deemed to have been received pursuant to
Section 1.4(e) of the Agreement and (c) all other proceeds of such Pool
Receivable; provided that any such amounts shall cease to be Collections upon
reinvestment, distribution or other disposition pursuant to the terms of the
Transaction Documents.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, that is under common control with the Seller, the Originator, or
Church & Xxxxxx or within the meaning of Section 4001 of ERISA or is part of a
group that includes the Seller, the Originator, or Church & Xxxxxx and that is
treated as a single employer under Section 414 of the Internal Revenue Code.
"Company Note" has the meaning set forth in Section 3.1 of the Sale
Agreement.
"Concentration Percentage" means: (a) for any Special Obligor, 30%, (b)
for any Group A Obligor 16.0%, (c) for any Group B Obligor, 16.0%, (d) for any
Group C Obligor 8.0% and (e) for any Group D Obligor, 4.0%.
"Concentration Reserve" means, at any time: (a) the aggregate Capital
at such time multiplied by (b)(i) the Concentration Reserve Percentage, divided
by (ii) 1.0, minus the Concentration Reserve Percentage.
"Concentration Reserve Percentage" means, at any time, the largest of
the following: (i) the sum of four largest Group D Obligor Percentages (up to
the Concentration Percentage for each Obligor), (ii) the sum of the two largest
Group C Obligor Percentages (up to the Concentration Percentage for each
Obligor), (iii) the largest Group B Obligor Percentage (up to the Concentration
Percentage for each Obligor) or Group A Obligor Percentage (up to the
Concentration Percentage for each Obligor), and (iv) the lesser of 16% and the
largest Special Obligor Percentage.
"Contract" means, with respect to any Receivable, any and all
contracts, instruments, agreements, leases, invoices, notes or other writings
pursuant to which such Receivable arises or that evidence such Receivable or
under which an Obligor becomes or is obligated to make payment in respect of
such Receivable.
"CP Rate" for any Settlement Period for any Portion of Capital means a
rate calculated by the Administrator equal to: (a) the rate (or if more than one
rate, the weighted average of the rates) at which Notes of the Issuer on each
day during such period have been outstanding; provided, that if such rate(s) is
a discount rate(s), then the CP Rate shall be the rate (or if more than one
rate, the weighted average of the rates) resulting from converting such discount
rate(s)
I-3
to an interest-bearing equivalent rate plus (b) the commissions and charges
charged by such placement agent or commercial paper dealer with respect to such
Notes, expressed as a percentage of the face amount of such Notes and converted
to an interest-bearing equivalent rate per annum. Notwithstanding the foregoing,
the "CP Rate" for any day while a Termination Event exists shall be an interest
rate equal to 2% above the Base Rate in effect on such day.
"Credit and Collection Policy" means, as the context may require, those
receivables credit and collection policies and practices of the Originator in
effect on the date of the Agreement and described in Schedule I to the
Agreement, as amended, modified or supplemented from time to time in compliance
with the terms of this Agreement.
"Cut-off Date" has the meaning set forth in the Sale Agreement.
"Days' Sales Outstanding" means, at any time, an amount computed as of
any date of determination equal to: (a) the average of the Outstanding Balance
of all Pool Receivables as of the last day of each of the three most recent
fiscal months ended on the last day of such fiscal month immediately prior to
such date of determination divided by (b)(i) the Gross New Receivables made by
the Originator during the three fiscal months ended on or immediately prior to
such date of determination divided by (ii) 90.
"Debt" means: (a) indebtedness for borrowed money, (b) obligations
evidenced by bonds, debentures, notes or other similar instruments, (c)
obligations to pay the deferred purchase price of property or services other
than trade accounts payable and accrued expenses which, in each case, are not
more than 60 days past due nor evidenced by a promissory note, (d) obligations
as lessee under leases that shall have been or should be, in accordance with
generally accepted accounting principles, recorded as capital leases, and (e)
obligations under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kinds referred to in clauses (a) through (d).
"Defaulted Receivable" means a Receivable:
(a) as to which any payment, or part thereof, remains unpaid for more
than 60 days from the original due date for such payment, or
(b) without duplication, any Receivable less than 61 days from the
original due date, (i) as to which an Insolvency Proceeding shall have occurred
and be continuing with respect to the Obligor thereof or any other Person
obligated thereon or owning any Related Security with respect thereto, or
(ii)that has been written off the Seller's books as uncollectible in accordance
with the Credit and Collection Policy. The Outstanding Balance of any Defaulted
Receivable shall be determined without regard to any credit memos or credit
balances.
"Default Ratio" means the ratio (expressed as a percentage and rounded
to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of
the last day of each fiscal month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that became Defaulted Receivables during such
month, by (b) the Gross New Receivables made by the Originator (or Receivables
of such Originator otherwise created) during the month that is three fiscal
months before such month.
I-4
"Delinquency Ratio" means the ratio (expressed as a percentage and
rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed
as of the last day of each fiscal month by dividing: (a) the aggregate
Outstanding Balance of all Pool Receivables that were Delinquent Receivables on
such day by (b) the aggregate Outstanding Balance of all Pool Receivables on
such day, and shall exclude Other Receivables and Receivables with respect to
which the Obligor is an Affiliate of Church & Xxxxxx or not a U.S. resident and
any amounts associated with unreconciled variances between the general ledger
and the aged trial balance as reported to the Administrator, provided that such
exclusions shall occur only for so long as and to the extent that such amounts
are not contained in the aging categories of the Information Package provided to
the Administrator.
"Delinquent Receivable" means (i) any Receivable (1) that has a stated
maturity of up to 37 days after the original invoice (or the electronic
equivalent of an invoice) date, and (2) as to which any payment, or part
thereof, remains unpaid upon the earlier of (a) more than 60 days from the
original due date for such payment and (b) more than 90 days past the original
invoice (or the electronic equivalent of an invoice) date; (ii) any Receivable
(1) that has a stated maturity of more than 37 but less than 61 days after the
original invoice (or the electronic equivalent of an invoice) date, and (2) as
to which any payment, or part thereof, remains unpaid for more than 60 days from
the original due date for such payment; (iii) any Receivable (1) that has a
stated maturity of at least 61 but less than or equal to 67 days after the
original invoice (or the electronic equivalent of an invoice) date, and (2) as
to which any payment, or part thereof, remains unpaid for more than 120 days
from the original invoice (or the electronic equivalent of an invoice) date for
such payment; and (iv) any Receivable (1) that has a stated maturity of more
than 67 days after the original invoice (or the electronic equivalent of an
invoice date), and (2) as to which any payment, or part thereof, remains unpaid
for more than 60 days from the original due date for such payment. The
Outstanding Balance of any Delinquent Receivable shall be determined without
regard to any credit memos or credit balances and shall exclude Other
Receivables and Receivables with respect to which the Obligor is an Affiliate of
Church & Xxxxxx or not a U.S. resident and any amounts associated with
unreconciled variances between the general ledger and the aged trial balance as
reported to the Administrator, provided that such exclusions shall occur only
for so long as and to the extent that such amounts are not contained in the
aging categories of the Information Package provided to the Administrator.
"Dilution Horizon" means, for any fiscal month, the ratio (expressed as
a percentage and rounded to the nearest 1/100th of 1%, with 5/l000th of 1%
rounded upward) computed as of the last day of such fiscal month of: (a) the
Gross New Receivables (excluding all Gross New Receivables the Obligors of which
are federal, state or local governments, instrumentalities, subdivisions,
affiliates, or agencies thereof) made by the Originator during the most recent
fiscal month to (b) the Net Receivables Pool Balance at the last day of the most
recent fiscal month.
"Dilution Ratio" means the ratio (expressed as a percentage and rounded
to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as
of the last day of each fiscal month by dividing: (a) the aggregate amount of
payments, reductions or adjustments, other than credit memos and non cash
adjustments related to or contemplated by the items listed in the definition of
the Specific Dilution Ratio required to be made by the Seller pursuant to
Section 1.4(e)(i) of the Agreement during such fiscal month by (b) the average
of Gross New Receivables made by the Originator during each of the last two
fiscal months, excluding in each
I-5
of clauses (a) and (b) all Gross New Receivables the Obligors of which are
federal, state or local governments, instrumentalities, subdivisions,
affiliates, or agencies thereof, and all credit activity relating thereto.
"Dilution Reserve" means, on any date, an amount equal to: (a) the
Capital at the close of business of the Seller on such date multiplied by (b)
(i) the Dilution Reserve Percentage on such date, divided by (ii) 100% minus the
Dilution Reserve Percentage on such date.
"Dilution Reserve Percentage" means on any date, the greater of (a) 5%
and (b) product of (i) the Dilution Horizon multiplied by (ii) the sum of (x) 2
times the average of the Dilution Ratios for the twelve most recent fiscal
months and (y) the Spike Factor.
"Discount" means:
(a) for the Portion of Capital for any Settlement Period to
the extent the Issuer will be funding such Portion of Capital during
such Settlement Period through the issuance of Notes:
CPR x C x ED/360
(b) for the Portion of Capital for any Settlement Period to
the extent the Issuer will not be funding such Portion of Capital
during such Settlement Period through the issuance of Notes:
AR x C x ED/Year + TF
where:
AR = the Alternate Rate for the Portion of Capital
for such Settlement Period,
C = the Portion of Capital during such Settlement
Period,
CPR = the CP Rate for the Portion of Capital for such
Settlement Period,
ED = the actual number of days during such Settlement
Period,
Year = if such Portion of Capital is funded based upon:
(i) the Euro-Rate, 360 days, and (ii) the Base
Rate, 365 or 366 days, as applicable, and
TF = the Termination Fee, if any, for the Portion of
Capital for such Settlement Period;
provided, that no provision of the Agreement shall require the payment or permit
the collection of Discount in excess of the maximum permitted by applicable law;
and provided further, that Discount for the Portion of Capital shall not be
considered paid by any distribution to the extent
I-6
that at any time all or a portion of such distribution is rescinded or must
otherwise be returned for any reason.
"Eligible Receivable" means, at any time, a Pool Receivable:
(a) the Obligor of which is (i) a United States resident (ii)
not a government or a governmental subdivision, affiliate or agency,
(iii) not subject to any action of the type described in paragraph (f)
of Exhibit V to the Agreement and (iv) not an Affiliate of Church &
Xxxxxx,
(b) that is denominated and payable only in U.S. dollars in
the United States,
(c) that does not have a stated maturity which is more than 37
days after the original invoice (or the electronic equivalent of an
invoice) date of such Receivable, provided, however, that up to 10% of
all Eligible Receivables, as calculated prior to giving effect to this
proviso, may have a stated maturity of more than 37 but less than or
equal to 67 days after the original invoice (or the electronic
equivalent of an invoice) date,
(d) that arises under a duly authorized Contract for the sale
and delivery of goods and services in the ordinary course of the
Originator's business,
(e) that arises under a duly authorized Contract that is in
full force and effect and that is a legal, valid and binding obligation
of the related Obligor, enforceable against such Obligor in accordance
with its terms,
(f) that conforms in all material respects with all applicable
laws, rulings and regulations in effect,
(g) that is not the subject of any asserted dispute, offset,
hold back defense, Adverse Claim or other claim,
(h) that satisfies all applicable requirements of the
applicable Credit and Collection Policy,
(i) that has not been modified, waived or restructured since
its creation, except as permitted pursuant to Section 4.2 of the
Agreement,
(j) in which the Seller owns good and marketable title, free
and clear of any Adverse Claims other than Permitted Claims, and that
is freely assignable under applicable law by the Seller (including
without any consent of the related Obligor) ,
(k) for which the Issuer shall have a valid and enforceable
undivided percentage ownership or security interest, to the extent of
the Purchased Interest, and a valid and enforceable first priority
perfected security interest therein and in the Related Security and
Collections with respect thereto, in each case free and clear of any
Adverse Claim,
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(l) that constitutes an account as defined in the UCC, and
that is not evidenced by instruments or chattel paper,
(m) that is neither a Defaulted Receivable nor a Delinquent
Receivable,
(n) for which neither any Originator thereof, the Seller nor
the Servicer has established any offset arrangements with the related
Obligor (other than amounts covered by the Cash Discount Reserve),
(o) for which Defaulted Receivables of the related Obligor do
not exceed 50% of the Outstanding Balance of all such Obligor's
Receivables,
(p) that represents amounts earned and payable by the Obligor
that are not subject to the performance of additional services by any
Originator thereof, and
(q) is not Other Receivables.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"Euro-Rate" means with respect to any Settlement Period the interest
rate per annum determined by the Administrator by dividing (the resulting
quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum)
(i) the rate of interest determined by the Administrator in accordance with its
usual procedures (which determination shall be conclusive absent manifest error)
to be the average of the London interbank market offered rates for U.S. dollars
quoted by the BBA as set forth on Dow Xxxxx Markets Service (formerly known as
Telerate) (or appropriate successor or, if the BBA or its successor ceases to
provide display page 3750 (or such other display page on the Dow Xxxxx Markets
Service system as may replace display page 3750) at or about 11:00 a.m. (London
time) on the Business Day which is two (2) Business Days prior to the first day
of such Settlement Period for an amount comparable to the Portion of Capital to
be funded at the Alternate Rate and based upon the Euro-Rate during such
Settlement Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage. The Euro-Rate may also be expressed by the following formula:
Euro-Rate= Average of London interbank offered rates quoted
by BBA as shown on Dow Xxxxx Markets Service
display page 3750 or appropriate successor
------------------------------------------------
1.00 - Euro-Rate Reserve Percentage
where "Euro-Rate Reserve Percentage" means, the maximum effective percentage in
effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including without limitation, supplemental, marginal, and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
"Eurocurrency Liabilities"). The Euro-Rate shall be adjusted with respect to any
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Portion of Capital funded at the Alternate Rate and based upon the Euro-Rate
that is outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage as of such effective date. The Administrator shall give prompt notice
to the Seller of the Euro-Rate as determined or adjusted in accordance herewith
(which determination shall be conclusive absent manifest error).
"Excess Concentration" means the sum of the amounts by which the
Outstanding Balance of Eligible Receivables of each Obligor then in the
Receivables Pool exceeds an amount equal to: (a) the Concentration Percentage
for such Obligor multiplied by (b) the Outstanding Balance of all Eligible
Receivables then in the Receivables Pool.
"Facility Termination Date" means the earliest to occur of: (a) January
16, 2006 (b) the date determined pursuant to Section 2.2 of the Agreement, (c)
the date the Purchase Limit reduces to zero pursuant to Section 1.1(b) of the
Agreement, (d) the date that the commitments of the Purchasers terminate under
the Liquidity Agreement, and (e) the Issuer shall fail to cause the amendment or
modification of any Transaction Document or related opinion as required by
Moody's or Standard and Poor's, and such failure shall continue for 30 days
after such amendment is initially requested.
"Federal Funds Rate" means, for any day, the per annum rate set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)." If on any relevant day such rate is not yet published in H.
15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of
New York (including any such successor, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective Rate." If
on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be
the arithmetic mean as determined by the Administrator of the rates for the last
transaction in overnight Federal funds arranged before 9:00 a.m. (New York time)
on that day by each of three leading brokers of Federal funds transactions in
New York City selected by the Administrator.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any entity succeeding to any of its principal functions.
"Fee Letter" has the meaning set forth in Section 1.5 of the Agreement.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any court, and any Person owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Gross New Receivables" means, for any period, the aggregate amount of
invoiced sales (net of trade allowances) made by the Originator during such
period.
"Group A Obligor" means any Obligor with a short-term rating of at
least: (a) "A-l" by Standard & Poor's, or if such Obligor does not have a
short-term rating from Standard & Poor's,
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a rating of "A+" or better by Standard & Poor's on its long-term senior
unsecured and uncredit-enhanced debt securities, and (b) "P-1" by Moody's, or if
such Obligor does not have a short-term rating from Moody's, "Al" or better by
Moody's on its long-term senior unsecured and uncredit-enhanced debt securities.
"Group A Obligor Percentage" means, at any time, for each Group A
Obligor, the percentage equivalent of: (a) the aggregate Outstanding Balance of
the Eligible Receivables of such Group A Obligor less any Excess Concentrations
of such Obligor, divided by (b) the aggregate Outstanding Balance of all
Eligible Receivables at such time.
"Group B Obligor" means an Obligor, not a Group A Obligor, with a
short-term rating of at least: (a) "A-2" by Standard & Poor's, or if such
Obligor does not have a short-term rating from Standard & Poor's, a rating of
"BBB+" to "A" by Standard & Poor's on its long-term senior unsecured and
uncredit-enhanced debt securities, and (b) "P-2" by Moody's, or if such Obligor
does not have a short-term rating from Moody's, "Baal" to "A2" by Moody's on its
long-term senior unsecured and uncredit-enhanced debt securities.
"Group B Obligor Percentage" means, at any time, for each Group B
Obligor, the percentage equivalent of: (a) the aggregate Outstanding Balance of
the Eligible Receivables of such Group B Obligor less any Excess Concentrations
of such Obligor, divided by (b) the aggregate Outstanding Balance of all
Eligible Receivables at such time.
"Group C Obligor" means an Obligor, not a Group A Obligor or a Group B
Obligor, with a short-term rating of at least: (a) "A-3" by Standard & Poor's,
or if such Obligor does not have a short-term rating from Standard & Poor's, a
rating of "BBB-" to "BBB" by Standard & Poor's on its long-term senior unsecured
and uncredit-enhanced debt securities, and (b) "P-3" by Moody's, or if such
Obligor does not have a short-term rating from Moody's, "Baa3" to "Baa2" by
Moody's on its long-term senior unsecured and uncredit-enhanced debt securities.
"Group C Obligor Percentage" means, at any time, for each Group C
Obligor, the percentage equivalent of: (a) the aggregate Outstanding Balance of
the Eligible Receivables of such Group C Obligor less any Excess Concentrations
of such Obligor, divided by (b) the aggregate Outstanding Balance of all
Eligible Receivables at such time.
"Group D Obligor" means any Obligor that is not a Group A Obligor,
Group B Obligor or Group C Obligor.
"Group D Obligor Percentage" means, at any time, for each Group D
Obligor: (a) the aggregate Outstanding Balance of the Eligible Receivables of
such Group D Obligor less any Excess Concentrations of such Obligor, divided by
(b) the aggregate Outstanding Balance of all Eligible Receivables at such time.
"Group Members" means the collective reference to Church & Xxxxxx and
its Subsidiaries.
"Indemnified Amounts" has the meaning set forth in Section 3.1 of the
Agreement.
"Indemnified Party" has the meaning set forth in Section 3.1 of the
Agreement.
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"Independent Director" has the meaning set forth in paragraph 3(c) of
Exhibit IV to the Agreement.
"Information Package" means a report, in substantially the form of
Annex A to the Agreement, including all supporting input information, source
data information, worksheets and calculations, furnished to the Administrator
pursuant to the Agreement.
"Insolvency Proceeding" means: (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of creditors
of a Person, composition, marshaling of assets for creditors of a Person, or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors, in each of cases (a) and (b) undertaken
under U.S. Federal, state or foreign law, including the Bankruptcy Code.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of the Internal Revenue Code also refer to any successor
sections.
"Issuer" has the meaning set forth in the preamble to the Agreement.
"Issuer's Share" of any amount means such amount multiplied by the
Purchased Interest at the time of determination.
"Liquidity Agent" means PNC in its capacity as the Liquidity Agent
pursuant to the Liquidity Agreement.
"Liquidity Agreement" means the Liquidity Asset Purchase Agreement,
dated as of even date herewith, between the purchasers from time to time party
thereto, the Issuer and PNC, as Administrator and Liquidity Agent, as the same
may be further amended, supplemented or otherwise modified from time to time.
"Lock-Box Account" means an account in the name of the Seller and
maintained by the Seller at a bank or other financial institution for the
purpose of receiving Collections.
"Lock-Box Agreement" means an agreement, in form and substance
satisfactory to the Administrator, among the Originator, the Seller, the
Servicer, the Administrator, the Issuer and a Lock-Box Bank.
"Lock-Box Bank" means any of the banks or other financial institutions
holding one or more Lock-Box Accounts.
"Loss Reserve" means, on any date, an amount equal to: (a) the Capital
at the close of business of the Seller on such date multiplied by (b)(i) the
Loss Reserve Percentage on such date divided by (ii) 100% minus the Loss Reserve
Percentage on such date.
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"Loss Reserve Percentage" means, on any date, the greater of: (a) 5% or
(b) the product of (i) 2.0 times (ii) the highest average of the Default Ratios
for any three consecutive fiscal months during the twelve most recent fiscal
months and (iii) (A) the Gross New Receivables (excluding all Gross New
Receivables the Obligors of which are federal, state or local governments,
instrumentalities, subdivisions, affiliates, or agencies thereof) made by the
Originator (or Receivables of such Originator otherwise created) during the four
most recent fiscal months divided by (B) the Net Receivables Pool Balance as of
such date.
"Material Adverse Effect" means, relative to any Person with respect to
any event or circumstance, a material adverse effect on:
(a) the assets, operations, business or financial condition of
such Person,
(b) the ability of any of such Person to perform its
obligations under the Agreement or any other Transaction Document to
which it is a party,
(c) the validity or enforceability of any other Transaction
Document, or the validity, enforceability or collectibility of a
material portion of the Pool Receivables, or
(d) the status, perfection, enforceability or priority of the
Issuer's or the Seller's interest in the Pool Assets.
"Monthly Settlement Date" means the fifteenth day of each calendar
month (or the next succeeding Business Day if such day is not a Business Day),
beginning February 15, 2003.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan": a Benefit Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Receivables Pool Balance" means, at any time: (a) the Outstanding
Balance of Eligible Receivables then in the Receivables Pool minus (b) the sum
of (i) Excess Concentration, (ii) Specifically Reserved Dilution Amount, and
(iii) Cash Discount Reserve.
"Notes" means short-term promissory notes issued, or to be issued, by
the Issuer to fund its investments in accounts receivable or other financial
assets.
"Obligor" means, with respect to any Receivable, the Person obligated
to make payments pursuant to the Contract relating to such Receivable.
"Obligor Percentage" means any of the Group A Obligor Percentage, the
Group B Obligor Percentage, the Group C Obligor Percentage or the Group D
Obligor Percentage.
"Originator" has the meaning set forth in the Sale Agreement.
"Originator Assignment Certificate" means the assignment by each
Originator, in substantially the form of Exhibit C to the Sale Agreement,
evidencing Seller's ownership of the
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Receivables generated by the Originator, as the same may be amended,
supplemented, amended and restated, or otherwise modified from time to time in
accordance with the Sale Agreement.
"Other Receivables" means Receivables which are recorded on the
Servicer's books and records with a posting key other than RV01 under the SAP
financial reporting system, and are reported in the Monthly Information Package
as open deductions, and include (a) amounts associated with deductions,
charge-backs, open payments, over-payments, or unapplied credits, or without
duplication (b) amounts in which any of the following shall have occurred and be
continuing: (i) an Obligor thereof has claimed a credit adjustment to
Receivables and such credit has not been resolved by the Servicer, (ii) the
Servicer has reissued an invoice to an Obligor related to credits claimed under
clause (i) hereof, or (iii) amounts which are due to an Obligor which have not
been applied or issued to such Obligor whether in the form of credit memos or
cash payments.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Paydown Notice" has the meaning set forth in Section 1.4(f)(i) of the
Agreement.
"Payment Date" has the meaning set forth in Section 2.1 of the Sale
Agreement.
"Permitted Claim" means inchoate tax liens.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
"PNC" has the meaning set forth in the preamble to the Agreement.
"Pool Assets" has the meaning set forth in Section 1.2(d) of the
Agreement.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Portion of Capital" means any separate portion of Capital being funded
or maintained by the Issuer (or its successors or permitted assigns) by
reference to a particular interest rate basis. In addition, at any time when the
Capital of the Purchased Interest is not divided into two or more such portions,
"Portion of Capital" means 100% of the Capital.
"Program Support Agreement" means and includes the Liquidity Agreement
and any other agreement entered into by any Program Support Provider providing
for: (a) the issuance of one or more letters of credit for the account of the
Issuer, (b) the issuance of one or more surety bonds for which the Issuer is
obligated to reimburse the applicable Program Support Provider for any drawings
thereunder, (c) the sale by the Issuer to any Program Support Provider of the
Purchased Interest (or portions thereof) and/or (d) the making of loans and/or
other extensions of credit to the Issuer in connection with the Issuer's
Receivables-securitization program contemplated in the Agreement, together with
any letter of credit, surety bond or other instrument issued thereunder (but
excluding any discretionary advance facility provided by the Administrator).
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"Program Support Provider" means and includes any Purchaser and any
other Person (other than any customer of the Issuer) now or hereafter extending
credit or having a commitment to extend credit to or for the account of, or to
make purchases from, the Issuer pursuant to any Program Support Agreement.
"Purchase and Sale Indemnified Amounts" has the meaning set forth in
Section 9.1 of the Sale Agreement.
"Purchase and Sale Indemnified Party" has the meaning set forth in
Section 9.1 of the Sale Agreement.
"Purchase and Sale Termination Date" has the meaning set forth in
Section 1.4 of the Sale Agreement.
"Purchase and Sale Termination Event" has the meaning set forth in
Section 8.1 of the Sale Agreement.
"Purchase Facility" has the meaning set forth in Section 1.1 of the
Sale Agreement.
"Purchase Limit" means $60,000,000, as such amount may be reduced
pursuant to Section 1.1 (b) of the Agreement. References to the unused portion
of the Purchase Limit shall mean, at any time, the Purchase Limit minus the then
outstanding Capital.
"Purchase Notice" has the meaning set forth in Section 1.2(a) of the
Agreement.
"Purchase Price" has the meaning set forth in Section 2.1 of the Sale
Agreement.
"Purchase Report" has the meaning set forth in Section 2.1 of the Sale
Agreement.
"Purchased Interest" means, at any time, the undivided percentage
ownership interest in: (a) each and every Pool Receivable now existing or
hereafter arising, (b) all Related Security with respect to such Pool
Receivables and (c) all Collections with respect to, and other proceeds of, such
Pool Receivables and Related Security. Such undivided percentage interest shall
be computed as:
Capital + Total Reserves
------------------------------
Net Receivables Pool Balance
The Purchased Interest shall be determined from time to time pursuant to Section
1.3 of the Agreement.
"Purchaser" has the meaning set forth in Section 5.3(b) of the
Agreement.
"Receivable" means any indebtedness and other obligations owed to the
Seller (as assignee of the Originator) or the Originator by, or any right of the
Seller or the Originator to payment from or on behalf of, an Obligor, whether
constituting an account, chattel paper, instrument or general intangible, in
each case arising from the sale of goods and the rendering of services related
to the sales of such goods, in the ordinary course of business by the
Originator,
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and includes the obligation to pay any finance charges, fees and other charges
with respect thereto; provided, however, that Receivable shall not include any
right of the Originator or the Seller arising out of the licensing of
intellectual property rights or solely out of the provision of services (and
unrelated to a sale of goods by Originator). Indebtedness and other obligations
arising from any one transaction, including indebtedness and other obligations
represented by an individual invoice or agreement, shall constitute a Receivable
separate from a Receivable consisting of the indebtedness and other obligations
arising from any other transaction.
"Receivables Pool" means, at any time, all of the then outstanding
Receivables purchased by or contributed to the Seller pursuant to the Sale
Agreement prior to the Facility Termination Date.
"Reference Bank" means PNC.
"Related Rights" has the meaning set forth in Section 1.1 of the Sale
Agreement.
"Related Security" means, with respect to any Receivable:
(a) all of the Seller's and each Originator's interest in any
goods (including returned goods), and documentation of title evidencing
the shipment or storage of any goods (including returned goods),
relating to any sale giving rise to such Receivable,
(b) all instruments and chattel paper that may evidence such
Receivable,
(c) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable
or otherwise, together with all UCC financing statements or similar
filings relating thereto, and
(d) all of the Seller's and each Originator's rights,
interests and claims relating to such Receivable under the Contracts
and all guaranties, indemnities, insurance and other agreements
(including the related Contract) or arrangements of whatever character
from time to time supporting or securing payment of such Receivable or
otherwise relating to such Receivable, whether pursuant to the Contract
related to such Receivable or otherwise.
"Responsible Officer" means (a) with respect to the Originator and the
Servicer, the treasurer, chief financial officer, the controller, the general
counsel, the treasury manager, the credit and collections manager and the vice
president - financial analysis and planning, and (b) with respect to the Seller,
the president, vice president, secretary and treasurer, and, in the case of each
of (a) and (b) any other officer of any such Person who may after the date
hereof be charged with the responsibility for administration of any Transaction
Document.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
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"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Xxx.xx. 4043.
"Sale Agreement" means the Purchase and Sale Agreement, dated as of
even date herewith, between the Seller and the Originator, as such agreement may
be amended, restated, supplemented or otherwise modified from time to time.
"Seller" has the meaning set forth in the preamble to the Agreement.
"Seller's Share" of any amount means the greater of: (a) $0 and (b)
such amount minus the Issuer's Share.
"Servicer" has the meaning set forth in the preamble to the Agreement.
"Servicing Fee" shall mean the fee referred to in Section 4.6 of the
Agreement.
"Servicing Fee Rate" shall mean the rate referred to in Section 4.6 of
the Agreement.
"Settlement Date" means with respect to any Portion of Capital for any
Settlement Period, (i) prior to the Facility Termination Date, the Monthly
Settlement Date and (ii) on and after the Facility Termination Date, each day
selected from time to time by the Administrator (it being understood that the
Administrator may select such Settlement Date to occur as frequently as daily),
or, in the absence of such selection, the Monthly Settlement Date.
"Settlement Period" means: (a) before the Facility Termination Date:
(i) initially the period commencing on the date of the initial purchase pursuant
to Section 1.2 of the Agreement (or in the case of any fees payable hereunder,
commencing on the Closing Date) and ending on (but not including) the next
Monthly Settlement Date, and (ii) thereafter, each period commencing on such
Monthly Settlement Date and ending on (but not including) the next Monthly
Settlement Date, and (b) on and after the Facility Termination Date: such period
(including a period of one day) as shall be selected from time to time by the
Administrator or, in the absence of any such selection, each period of 30 days
from the last day of the preceding Settlement Period.
"Single Employer Plan": any Benefit Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
"Solvent" means, with respect to any Person at any time, a condition
under which:
(i) the fair value and present fair saleable value of such
Person's total assets is, on the date of determination, greater than
such Person's total liabilities (including contingent and unliquidated
liabilities) at such time;
(ii) the fair value and present fair saleable value of such
Person's assets is greater than the amount that will be required to pay
such Person's probable liability on its existing debts as they become
absolute and matured ("debts," for this purpose, includes
I-16
all legal liabilities, whether matured or unmatured, liquidated or
unliquidated, absolute, fixed, or contingent);
(iii) such Person is and shall continue to be able to pay all
of its liabilities as such liabilities mature; and
(iv) such Person does not have unreasonably small capital with
which to engage in its current and in its anticipated business.
For purposes of this definition:
(A) the amount of a Person's contingent or unliquidated
liabilities at any time shall be that amount which, in light of all the
facts and circumstances then existing, represents the amount which can
reasonably be expected to become an actual or matured liability;
(B) the "fair value" of an asset shall be the amount which may
be realized within a reasonable time either through collection or sale
of such asset at its regular market value;
(C) the "regular market value" of an asset shall be the amount
which a capable and diligent business person could obtain for such
asset from an interested buyer who is willing to Purchase such asset
under ordinary selling conditions; and
the "present fair saleable value" of an asset means the amount which
can be obtained if such asset is sold with reasonable promptness in an
arm's-length transaction in an existing and not theoretical market.
"Special Obligor" means Wal-Mart Stores, Inc. or any Affiliate thereof,
for so long as Wal-Mart Stores, Inc. maintains a rating of at least "A+" from
Standard & Poor's and "A1" by Xxxxx'x on its long-term senior unsecured and
uncredit-enhanced debt securities.
"Special Obligor Percentage" means, at any time, for each Special
Obligor, the percentage equivalent of: (a) the aggregate Outstanding Balance of
the Eligible Receivables of such Special Obligor less any Excess Concentrations
of such Obligor, divided by (b) the aggregate Outstanding Balance of all
Eligible Receivables at such time.
"Specific Dilution Amount" means an amount calculated as the product of
(a) Specific Dilution Percentage, and (b) the sum of (i) cumulative Gross New
Receivables in the most recent two fiscal months, and (ii) if the Specific
Dilution Horizon is greater than 60 days, Gross New Receivables in the fiscal
month that is two months prior to the current fiscal month.
"Specific Dilution Horizon" means an amount equal to the greater of (a)
60 days or (b) Days Sales Outstanding for the most recent fiscal month.
"Specific Dilution Percentage" means the greater of (a) 10.0% (or such
percentage as reasonably determined by the Administrator) or (b) the sum of (i)
the maximum of (A) the average Specific Dilution Ratio during the most recent
three fiscal months and (B) the average
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Specific Dilution Ratio during the most recent twelve fiscal months, and (ii)
the standard deviation (expressed as a % and rounded to the nearest 1/100th of
1%, with 5/1000th of 1% rounded upward) of the Specific Dilution Ratio during
the most recent twelve fiscal months.
"Specific Dilution Ratio" means the ratio (expressed as a % and rounded
to the nearest 1/100th of 1.0%, with 5/1000th of 1% rounded upward), computed on
the last day of each fiscal month by dividing (a) the sum of credit memos and
non-cash adjustments categorized on the Servicer's books and records as (i)
marketing development fund commitments, (ii) marketing development fund
advertising, (iii) trade promotions, (iv) other trade allowances, and (v)
slotting allowances by (b) the aggregate Gross New Receivables in the fiscal
month that is three months prior to the current fiscal month.
"Specifically Reserved Dilution Amount" means the positive difference,
if any, between (a) Specific Dilution Amount for such fiscal month and (b) Other
Receivables for such fiscal month.
"Spike Factor" means, for any fiscal month, (a) the positive
difference, if any, between: (i) the highest Dilution Ratio for any one fiscal
month during the twelve most recent fiscal months and (ii) the arithmetic
average of the Dilution Ratios for such twelve months times (b) (i) the highest
Dilution Ratio for any one fiscal month during the twelve most recent fiscal
months divided by (ii) the arithmetic average of the Dilution Ratios for such
twelve months.
"Standard & Poor's" means Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc.
"Subsidiary" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock of each class
or other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.
"Termination Day" means: (a) each day on which the conditions set forth
in Section 2 of Exhibit II to the Agreement are not satisfied or (b) each day
that occurs on or after the Facility Termination Date.
"Termination Event" has the meaning specified in Exhibit V to the
Agreement.
"Termination Fee" means, for any Settlement Period during which a
Termination Day occurs, the amount, if any, by which: (a) the additional
Discount (calculated without taking into account any Termination Fee or any
shortened duration of such Settlement Period pursuant to the definition thereof)
that would have accrued during such Settlement Period on the reductions of
Capital relating to such Settlement Period had such reductions not been made,
exceeds (b) the income, if any, received by the Issuer or any Program Support
Provider from investing the proceeds of such reductions of Capital, as
determined by the Administrator, which determination shall be binding and
conclusive for all purposes, absent manifest error.
I-18
"Total Reserves" means, at any time the sum of: (a) the Yield Reserve,
plus (b) the greater of (i) the sum of (A) Loss Reserve plus (B) the Dilution
Reserve and (ii) the Concentration Reserve.
"Transaction Documents" means the Agreement, the Lock-Box Agreements,
the Fee Letter, the Sale Agreement, and all other certificates, instruments, UCC
financing statements, reports, notices, agreements and documents executed or
delivered under or in connection with the Agreement, in each case as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with the Agreement.
"Turnover Rate" means, for any fiscal month, an amount computed as of
the last day of such fiscal month equal to: (a) the Outstanding Balance of all
Pool Receivables as of the last day of such fiscal month divided by (b)(i) the
Gross New Receivables made by the Originator (or Receivables of such Originator
otherwise created) during the three fiscal months ended on or before the last
day of such fiscal month divided by (ii)(3).
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction.
"Unmatured Purchase and Sale Termination Event" means any event which,
with the giving of notice or lapse of time, or both, would become a Purchase and
Sale Termination Event.
"Unmatured Termination Event" means an event that, with the giving of
notice or lapse of time, or both, would constitute a Termination Event.
"Yield Reserve" means, on any date, an amount equal to: (a) the Capital
at the close of business of the Seller on such date multiplied by (b)(i) the
Yield Reserve Percentage on such date divided by (ii) 100% minus the Yield
Reserve Percentage on such date.
"Yield Reserve Percentage" means at any time:
(BR+SFR) x l.5 xTR
------
12
where:
BR = the Base Rate computed as of the last day of
the most recent Settlement Period,
TR = Turnover Rate for the last month, and
SFR = the Servicing Fee Rate
Other Terms. All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles. All
terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article 9.
Unless the context otherwise requires, "or" means "and/or," and "including" (and
I-19
with correlative meaning "include" and "includes") means including without
limiting the generality of any description preceding such term.
I-20
EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The Initial Purchase under
this Agreement is subject to the following conditions precedent that the
Administrator shall have received on or before the date of such purchase, each
in form and substance (including the date thereof) satisfactory to the
Administrator:
(a) A counterpart of the Agreement and the other Transaction Documents
duly executed by the parties thereto.
(b) Certified copies of: (i) the resolutions of the Board of Directors
of each of the Seller and the Originator authorizing the execution, delivery and
performance by the Seller and the Originator, as the case may be, of the
Agreement and the other Transaction Documents to which it is a party; (ii) all
documents evidencing other necessary corporate or organizational action and
governmental approvals, if any, with respect to the Agreement and the other
Transaction Documents and (iii) the certificate of incorporation and by-laws or
limited liability company agreement, as applicable, of the Seller and the
Originator.
(c) A certificate of the Secretary or Assistant Secretary of the
Seller, the Originator and Church & Xxxxxx certifying the names and true
signatures of its officers who are authorized to sign the Agreement and the
other Transaction Documents. Until the Administrator receives a subsequent
incumbency certificate from the Seller, the Originator, or Church & Xxxxxx, as
the case may be, the Administrator shall be entitled to rely on the last such
certificate delivered to it by the Seller, the Originator, or Church & Xxxxxx,
as the case may be.
(d) Proper financing statements, duly executed or otherwise
authenticated on or before the date of such initial purchase suitable for filing
under the UCC of all jurisdictions that the Administrator may deem necessary or
desirable in order to perfect the interests of the Seller and the Issuer
contemplated by the Agreement and the Sale Agreement.
(e) Proper financing statements (Form UCC-3), duly executed or
otherwise authenticated and suitable for filing under the UCC of all
jurisdictions that the Administrator may deem, if any, necessary or desirable to
release all security interests and other rights of any Person in the
Receivables, Contracts or Related Security previously granted by the Originator
or the Seller.
(f) Completed UCC search reports, dated on or shortly before the date
of the initial purchase hereunder, listing the financing statements filed in all
applicable jurisdictions referred to in subsection (e) above that name the
Originator or the Seller as debtor, together with copies of such other financing
statements, and similar search reports with respect to judgment liens, federal
tax liens and liens of the Pension Benefit Guaranty Corporation in such
jurisdictions, as the Administrator may request, showing no Adverse Claims on
any Pool Assets other than such Adverse Claims as to which those financing
statements (Form UCC-3) referred to in Subsection (e) above shall terminate.
II-1
(g) Favorable opinions, in form and substance reasonably satisfactory
to the Administrator, of: (i) Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel for the
Seller, the Originator, and the Servicer, and (ii) in-house counsel for the
Seller, the Originator and the Servicer.
(h) Satisfactory results of a review, field examination and audit
(performed by representatives of the Administrator) of the Servicer's
collection, operating and reporting systems, the Credit and Collection Policy of
the Originator, historical receivables data and accounts, including satisfactory
results of a review of the Servicer's operating location(s) and satisfactory
review and approval of the Eligible Receivables in existence on the date of the
initial purchase under the Agreement.
(i) A pro forma Information Package representing the performance of the
Receivables Pool for December, 2002.
(j) Evidence of payment by the Seller of all accrued and unpaid fees
(including those contemplated by the Fee Letter), costs and expenses to the
extent then due and payable on the date thereof, including any such costs, fees
and expenses arising under or referenced in Section 5.4 of the Agreement and the
Fee Letter.
(k) The Fee Letter duly executed by the Seller and the Servicer.
(l) Good standing certificates with respect to each of the Seller, the
Originator, and the Servicer issued by the Secretary of State (or similar
official) of the state of each such Person's organization or formation and chief
executive office.
(m) The Liquidity Agreement and all other Transaction Documents duly
executed by the parties thereto.
(n) A computer file containing all information with respect to the
Receivables as the Administrator or the Issuer may reasonably request.
(o) Such other approvals, opinions or documents as the Administrator or
the Issuer may reasonably request.
2. Conditions Precedent to All Purchases and Reinvestments. Each
purchase (except as to clause (a), including the initial purchase) and each
reinvestment shall be subject to the further conditions precedent that:
(a) in the case of each purchase, the Servicer shall have delivered to
the Administrator on or before such purchase, in form and substance satisfactory
to the Administrator, a completed pro forma Information Package to reflect the
level of Capital and related reserves and the calculation of the Purchased
Interest after such subsequent purchase and a completed Purchase Notice in the
form of Annex B; and
(b) on the date of such purchase or reinvestment the following
statements shall be true (and acceptance of the proceeds of such purchase or
reinvestment shall be deemed a representation and warranty by the Seller that
such statements are then true):
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(i) the representations and warranties contained in Exhibit
III to the Agreement are true and correct in all material respects on
and as of the date of such purchase or reinvestment as though made on
and as of such date;
(ii) no event has occurred and is continuing, or would result
from such purchase or reinvestment, that constitutes a Termination
Event or an Unmatured Termination Event; and
(iii) the Capital does not exceed the Purchase Limit.
II-3
EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. Representations and Warranties of the Seller. The Seller represents
and warrants as follows:
(a) The Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, and is
duly qualified to do business and is in good standing as a foreign entity in
every jurisdiction where the nature of its business requires it to be so
qualified, except where the failure to be so qualified would not have a Material
Adverse Effect.
(b) The execution, delivery and performance by the Seller of the
Agreement and the other Transaction Documents to which it is a party, including
its use of the proceeds of purchases and reinvestments: (i) are within its
organizational powers; (ii) have been duly authorized by all necessary
organizational action; (iii) do not contravene or result in a default under or
conflict with: (A) its certificate of incorporation, formation, limited
liability company agreement or any other organizational document of the Seller,
(B) any material law, rule or regulation applicable to it, (C) any indenture,
loan agreement, mortgage, deed of trust or other material agreement or
instrument to which it is a party or by which it is bound, or (D) any material
order, writ, judgment, award, injunction or decree binding on or affecting it or
any of its property; and (iv) do not result in or require the creation of any
Adverse Claim upon or with respect to any of its properties. The Agreement and
the other Transaction Documents to which it is a party have been duly executed
and delivered by the Seller.
(c) No authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority or other Person is required for its due
execution, delivery and performance by the Seller of the Agreement or any other
Transaction Document to which it is a party, other than the Uniform Commercial
Code filings referred to in Exhibit II to the Agreement, all of which shall be
filed within ten days after the date of the first purchase hereunder.
(d) Each of the Agreement and the other Transaction Documents to which
the Seller is a party constitutes its legal, valid and binding obligation
enforceable against the Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws from time to time in effect affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) Except as set forth in Schedule V, there is no action, suit,
proceeding or investigation pending before any court, regulatory body,
arbitrator, administrative agency, or other tribunal or governmental
instrumentality (a) asserting the invalidity of any Transaction Document, (b)
seeking to prevent the consummation of any of the transactions contemplated by
any Transaction Document or (c) seeking any determination or ruling that is
reasonably likely to have a Material Adverse Effect.
III-1
(f) No proceeds of any purchase or reinvestment will be used to acquire
any equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
(g) The Seller is the legal and beneficial owner of, and has good title
to, the Pool Receivables, the Lock-Box Accounts (and related lock-boxes) and
Related Security, free and clear of any Adverse Claim. Upon each purchase or
reinvestment, the Issuer shall acquire a valid and enforceable perfected
undivided percentage ownership or security interest, to the extent of the
Purchased Interest, in each Pool Receivable then existing or thereafter arising
and in the Related Security, Collections and other proceeds with respect
thereto, free and clear of any Adverse Claim. The Agreement creates a valid and
continuing security interest (as defined in the applicable UCC) in favor of the
Issuer in the Pool Assets and the Lock-Box Accounts (and related lock-boxes),
which security interest is prior to all other Adverse Claims, and is enforceable
as such against creditors of and purchasers from the Seller. The Receivables
constitute "accounts", "general intangibles" or "tangible chattel paper" within
the meaning of the applicable UCC. Each Lock-Box Account constitutes a "deposit
account" within the meaning of the applicable UCC. The Seller has caused or will
have caused, within ten (10) days after the first purchase hereunder, the filing
of all appropriate UCC financing statements in the proper filing offices in the
appropriate jurisdictions under applicable laws in order to perfect the security
interest in the Pool Assets and the Lock-Box Accounts (and related lock-boxes)
granted to the Issuer hereunder. Other than the security interest granted to the
Issuer pursuant to this Agreement, Seller has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Pool Assets or
the Lock-Box Accounts (and related lock-boxes). Seller has not authorized the
filing of and is not aware of any UCC financing statements against Seller that
include a description of collateral covering the Pool Assets, other than any UCC
financing statement relating to the security interest granted to the Issuer
hereunder or that has been terminated. Seller is not aware of any judgment,
ERISA or tax lien filings against the Seller. With respect to any Pool
Receivable that constitutes "tangible chattel paper", the Servicer is in
possession of the original copies of the tangible chattel paper that constitutes
or evidences such Pool Receivables, and the Seller has filed or will cause to be
filed within ten (10) days after the date hereof the financing statements
described in this section above, each of which will contain a statement that "A
purchase of or a grant of a security interest in any property described in this
financing statement will violate the rights of the Issuer." The Pool Receivables
to the extent they are evidenced by "tangible chattel paper" do not have any
marks or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Seller or the Issuer.
(h) Each Information Package (if prepared by the Seller or one of its
Affiliates, or to the extent that information contained therein is supplied by
the Seller or an Affiliate), information, exhibit, financial statement,
document, book, record or report furnished or to be furnished at any time by or
on behalf of the Seller to the Administrator in connection with the Agreement or
any other Transaction Document to which it is a party is or will be complete and
accurate in all material respects as of its date or (except as otherwise
disclosed to the Administrator at such time) as of the date so furnished.
III-2
(i) The Seller's state of formation (as such term is used in the UCC)
and the office where it keeps its records concerning the Receivables are located
at the address referred to in Sections l(b) and 2(b) of Exhibit IV to the
Agreement.
(j) The names and addresses of all the Lock-Box Banks, together with
the account numbers of the Lock-Box Accounts at such Lock-Box Banks, are
specified in Schedule II to the Agreement (or at such other Lock-Box Banks
and/or with such other Lock-Box Accounts as have been notified to the
Administrator in accordance with the Agreement) and all Lock-Box Accounts are
subject to Lock-Box Agreements. With respect to all Lock-Box Accounts (and
related lock-boxes), the Seller has delivered to the Administrator, on behalf of
the Issuer, a fully executed Lock-Box Agreement pursuant to which the applicable
Lock-Box Bank has agreed, following the occurrence and continuation of a
Termination Event, to comply with all instructions given by the Administrator
with respect to all funds on deposit in such Lock-Box Account (and all funds
sent to the respective lock-box), without further consent by the Seller or the
Servicer. None of the Lock-Box Accounts (and the related lock-boxes) are in the
name of any Person other than the Seller or the Issuer. The Seller has not
consented to any Lock-Box Bank's complying with instructions of any person other
than the Administrator with respect to any Lock-Box Accounts administered by
such Lock-Box Bank.
(k) The Seller is not in violation of any material order of any court,
arbitrator or Governmental Authority.
(l) No proceeds of any purchase or reinvestment will be used for any
purpose that violates any applicable law, rule or regulation, including
Regulations T, U or X of the Federal Reserve Board.
(m) Each Pool Receivable included as an Eligible Receivable in the
calculation of the Net Receivables Pool Balance is an Eligible Receivable.
(n) No event has occurred and is continuing, or would result from a
purchase in respect of, or reinvestment in respect of, the Purchased Interest or
from the application of the proceeds therefrom, that constitutes a Termination
Event or an Unmatured Termination Event.
(o) The Seller has accounted for each of its purchases of Receivables
from the Originator in its books and financial statements as sales, consistent
with generally accepted accounting principles.
(p) The Seller has complied in all material respects with the
provisions of the Credit and Collection Policy of the Originator with regard to
each Receivable originated by the Originator.
(q) The Seller has complied in all material respects with all of the
terms, covenants and agreements contained in the Agreement and the other
Transaction Documents that are applicable to it.
(r) The Seller's complete organizational name is set forth in the
preamble to the Agreement, and it does not use and has not during the last six
years used any other organizational name, trade name, doing-business name or
fictitious name, except as set forth on Schedule III to
III-3
the Agreement and except for names first used after the date of the Agreement
and set forth in a notice delivered to the Administrator pursuant to Section
1(1)(iv) of Exhibit IV to the Agreement.
(s) The Seller is not an "investment company," or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. In addition, the Seller is not a "holding
company," a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
2. Representations and Warranties of Church & Xxxxxx (in its capacity
as the Servicer). Church & Xxxxxx in its capacity and for so long as it serves
as the Servicer, represents and warrants as follows:
(a) Church & Xxxxxx is a corporation duly formed, 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 as a foreign corporation in every
jurisdiction where the nature of its business requires it to be so qualified,
except where the failure to be so qualified would not have a Material Adverse
Effect.
(b) The execution, delivery and performance by Church & Xxxxxx of the
Agreement and the other Transaction Documents to which it is a party, including
the Servicer's use of the proceeds of purchases and reinvestments: (i) are
within its organizational powers; (ii) have been duly authorized by all
necessary organizational action; (iii) do not contravene or result in a default
under or conflict with: (A) its certificate of incorporation, formation, limited
liability company agreement or any other organizational document of Church &
Xxxxxx, (B) any material law, rule or regulation applicable to it, (C) any
indenture, loan agreement, mortgage, deed of trust or other material agreement
or instrument to which it is a party or by which it is bound, or (D) any
material order, writ, judgment, award, injunction or decree binding on or
affecting it or any of its property; and (iv) do not result in or require the
creation of any Adverse Claim upon or with respect to any of its properties. The
Agreement and the other Transaction Documents to which Church & Xxxxxx is a
party have been duly executed and delivered by Church & Xxxxxx.
(c) No authorization, approval or other action by, and no notice to or
filing with any Governmental Authority or other Person, is required for the due
execution, delivery and performance by Church & Xxxxxx of the Agreement or any
other Transaction Document to which it is a party.
(d) Each of the Agreement and the other Transaction Documents to which
Church & Xxxxxx is a party constitutes the legal, valid and binding obligation
of Church & Xxxxxx enforceable against Church & Xxxxxx in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws from time to time in effect affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
(e) The balance sheets of Church & Xxxxxx and its consolidated
Subsidiaries as at December 31, 2001, and the related statements of income and
retained earnings for the fiscal
III-4
year then ended, copies of which have been furnished to the Administrator,
fairly present the financial condition of Church & Xxxxxx and its consolidated
Subsidiaries as at such date and the results of the operations of Church &
Xxxxxx and its Subsidiaries for the period ended on such date, all in accordance
with generally accepted accounting principles consistently applied, and since
December 31, 2001, there has been no event or circumstances which have had a
Material Adverse Effect.
(f) Except as disclosed in the most recent audited financial statements
of Church & Xxxxxx furnished to the Administrator, there is no action, suit,
proceeding or investigation pending before any court, regulatory body,
arbitrator, administrative agency, or other tribunal or governmental
instrumentality (a) asserting the invalidity of any Transaction Document, (b)
seeking to prevent the consummation of any of the transactions contemplated by
any Transaction Document or (c) seeking any determination or ruling that is
reasonably likely to have a Material Adverse Effect.
(g) No proceeds of any purchase or reinvestment will be used to acquire
any equity security of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934. No proceeds of any purchase or reinvestment
will be used for any purpose that violates any applicable law, rule or
regulation, including Regulations T, U or X of the Federal Reserve Board.
(h) Each Information Package (if prepared by Church & Xxxxxx or one of
its Affiliates, or to the extent that information contained therein is supplied
by Church & Xxxxxx or an Affiliate), written information, exhibit, financial
statement, document, book, record or report furnished or to be furnished at any
time by or on behalf of the Servicer to the Administrator in connection with the
Agreement is or will be complete and accurate in all material respects as of its
date or (except as otherwise disclosed to the Administrator at such time) as of
the date so furnished.
(i) As of the Closing Date, the principal place of business, chief
executive office and state of formation (as such terms are used in the UCC) of
Church & Xxxxxx and the office where it keeps its records concerning the
Receivables are located at the address referred to in Section 2(b) of Exhibit IV
to the Agreement.
(j) Church & Xxxxxx is not in violation of any order of any court,
arbitrator or Governmental Authority, which could have a Material Adverse
Effect.
(k) The Servicer has complied in all material respects with the Credit
and Collection Policy of the Originator with regard to each Receivable
originated by the Originator.
(l) Church & Xxxxxx is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended. In addition, Church & Xxxxxx is not a "holding
company," a "subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
III-5
EXHIBIT IV
COVENANTS
1. Covenants of the Seller. Until the latest of the Facility
Termination Date, the date on which no Capital of or Discount in respect of the
Purchased Interest shall be outstanding or the date all other amounts owed by
the Seller under the Agreement to the Issuer, the Administrator and any other
Indemnified Party or Affected Person shall be paid in full:
(a) Compliance with Laws, Etc. The Seller shall comply in all material
respects with all applicable laws, rules, regulations and orders, and preserve
and maintain its organizational existence, rights, franchises, qualifications
and privileges, except to the extent that the failure so to comply with such
laws, rules and regulations or the failure so to preserve and maintain such
rights, franchises, qualifications and privileges would not have a Material
Adverse Effect.
(b) Offices, Records and Books of Account, Etc. The Seller: (i) shall
keep its state of formation (as such term or similar terms are used in the UCC)
and the office where it keeps its records concerning the Receivables at the
address of the Seller set forth on Schedule IV or, pursuant to clause (1)(iv)
below, at any other locations in jurisdictions where all actions reasonably
requested by the Administrator to protect and perfect the interest of the Issuer
in the Receivables and related items (including the Pool Assets) have been taken
and completed and (ii) shall provide the Administrator with at least 30 days'
written notice before making any change in the Seller's name or making any other
change in the Seller's identity or organizational structure (including a Change
in Control) that could render any UCC financing statement filed in connection
with this Agreement "seriously misleading" as such term (or similar term) is
used in the UCC; each notice to the Administrator pursuant to this sentence
shall set forth the applicable change and the effective date thereof. The Seller
also will maintain and implement (or cause the Servicer to maintain and
implement) administrative and operating procedures (including an ability to
recreate records evidencing Receivables and related Contracts 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, computer tapes and
disks and other information reasonably necessary or advisable for the collection
of all Receivables (including records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to each
existing Receivable).
(c) Performance and Compliance with Contracts and Credit and Collection
Policy. Subject to clause (f), the Seller shall (and shall cause the Servicer
to), at its expense, timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by it under the
Contracts related to the Receivables, and timely and fully comply in all
material respects with the Originator's Credit and Collection Policy with regard
to each Receivable and the related Contract.
(d) Ownership Interest, Etc. The Seller shall (and shall cause the
Servicer to), at its expense, take all action necessary or desirable to
establish and maintain a valid and enforceable undivided percentage ownership or
security interest, to the extent of the Purchased Interest, in the Pool
Receivables, the Related Security and Collections with respect thereto, and a
first priority perfected security interest in the Pool Assets, in each case free
and clear of any Adverse Claim, in favor of the Issuer, including taking such
action to perfect, protect or more fully
IV-1
evidence the interest of the Issuer as the Issuer, through the Administrator,
may reasonably request.
(e) Sales, Liens, Etc. Except as otherwise provided herein or in any
other Transaction Document, Seller shall not sell, assign (by operation of law
or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to, any or all of its right, title or interest in, to
or under any Pool Assets (including the Seller's undivided interest in any
Receivable, Related Security or Collections, or upon or with respect to any
account to which any Collections of any Receivables are sent), or assign any
right to receive income in respect of any items contemplated by this paragraph.
(f) Extension or Amendment of Receivables. Except as provided in the
Agreement or otherwise pursuant to the terms of the Credit and Collection
Policy, the Seller shall not, and shall not permit the Servicer to, extend the
maturity or adjust the Outstanding Balance or otherwise modify the terms of any
Pool Receivable in any material respect, or amend, modify or waive, in any
material respect, any term or condition of any related Contract (which term or
condition relates to payments under, or the enforcement of, such Contract),
provided that any modification to a Pool Receivable made pursuant to this clause
(f) may be reflected in an amendment, modification or waiver of the Contract
governing such Receivable.
(g) Change in Business or Credit and Collection Policy. Except as
provided in the Agreement, the Seller shall not make (or permit the Originator
to make) any material change in the character of its business, materially alter
its Credit and Collection Policy, or make any change in the Credit and
Collection Policy that would have a Material Adverse Effect with respect to the
Receivables. The Seller shall not make (or permit the Originator to make) any
other change in the Credit and Collection Policy without giving prior written
notice thereof to the Administrator.
(h) Audits. The Seller shall (and shall cause the Originator to), from
time to time during regular business hours as reasonably requested in advance
(unless a Termination Event or Unmatured Termination Event exists) by the
Administrator, permit the Administrator, or its agents or representatives: (i)
to examine and make copies of and abstracts from all books, records and
documents (including computer tapes and disks) in the possession or under the
control of the Seller (or the Originator) relating to Receivables and the
Related Security, including the related Contracts (subject to any
confidentiality provisions contained therein), provided that, upon reasonable
request by the Administrator, the Seller shall (or shall cause the Originator
to) make copies of the general ledger, the trial balance or other information
relating to the Receivables and the Related Security that have been reasonably
requested by the Administrator, and send such copies (via electronic mail) to
the Administrator, (ii) to visit the offices and properties of the Seller and
the Originator for the purpose of examining such materials described in clause
(i) above, and to discuss matters relating to Receivables and the Related
Security or the Seller's, Church & Xxxxxx' or the Originator's performance under
the Transaction Documents or under the Contracts with any of the officers,
employees, agents or contractors of the Seller, Church & Xxxxxx or the
Originator having knowledge of such matters and (iii) without limiting the
clauses (i) and (ii) above, to engage certified public accountants or other
auditors acceptable to the Seller and the Administrator to conduct, at the
Seller's expense annually, or if a Termination Event occurs and is continuing,
from time to time on the reasonable
IV-2
request of the Administrator, a review of the Seller's books and records with
respect to such Receivables; provided, however the Administrator may, at its
expense, engage certified public accountants or other auditors to conduct
reviews of the Seller's books and records relating to the Receivables from time
to time as the Administrator reasonably decides is necessary.
(i) Change in Lock-Box Banks, Lock-Box Accounts and Payment
Instructions to Obligors. The Seller shall not, and shall not permit the
Servicer or the Originator to, add or terminate any bank as a Lock-Box Bank or
any account as a Lock-Box Account from those listed in Schedule II to the
Agreement, or make any change in its instructions to Obligors regarding payments
to be made to the Seller, the Originator, the Servicer or any Lock-Box Account
(or related post office box), unless the Administrator shall have consented
thereto in writing and the Administrator shall have received copies of all
agreements and documents (including Lock-Box Agreements) that it may request in
connection therewith.
(j) Deposits to Lock-Box Accounts. The Seller shall (or shall cause the
Servicer to): (i) instruct (or shall have previously instructed) all Obligors to
make payments of all Receivables to one or more Lock-Box Accounts or to post
office boxes to which only Lock-Box Banks have access (and shall instruct the
Lock-Box Banks to cause all items and amounts relating to such Receivables
received in such post office boxes to be removed and deposited into a Lock-Box
Account on a daily basis), and (ii) deposit, or cause to be deposited, any
Collections received by it, the Servicer or the Originator into one or more
Lock-Box Accounts or to post office boxes to which only Lock-Box Banks have
access not later than three (3) Business Days after receipt thereof. Each
Lock-Box Account shall at all times be subject to a Lock-Box Agreement. The
Seller will not (and will not permit the Servicer to) deposit or otherwise
credit, or cause or permit to be so deposited or credited, to any Lock-Box
Account cash or cash proceeds other than Collections.
(k) Marking of Records. At its expense, the Seller shall enforce the
obligations of the Originator to xxxx its master data processing records
pursuant to the Sale Agreement.
(l) Reporting Requirements. The Seller will provide to the
Administrator (in multiple copies, if requested by the Administrator) the
following:
(i) as soon as available and in any event within 90 days after
the end of each fiscal year of the Seller, a copy of the unaudited
financial statements for such year certified as to accuracy by the
chief financial officer or treasurer of the Seller;
(ii) as soon as possible and in any event within 5 Business
Days after a Responsible Officer has actual knowledge of the occurrence
of each Termination Event or Unmatured Termination Event, a statement
of the chief financial officer or treasurer of the Seller setting forth
details of such Termination Event or Unmatured Termination Event and
the action that the Seller has taken and proposes to take with respect
thereto;
(iii) promptly after the filing or receiving thereof, copies
of all reports and notices that the Seller or any Affiliate files under
ERISA with the Internal Revenue Service, the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or that the Seller or any
Affiliate receives from any of the foregoing or from any
IV-3
multiemployer plan (within the meaning of Section 400l(a)(3) of ERISA)
to which the Seller or any of its Affiliates is or was, within the
preceding five years, a contributing employer, in each case in respect
of the assessment of withdrawal liability or an event or condition that
could, in the aggregate, result in the imposition of liability on the
Seller and/or any such Affiliate;
(iv) at least fifteen days before any change in the Seller's
name or any other change requiring the amendment of UCC financing
statements, a notice setting forth such changes and the effective date
thereof;
(v) promptly after the Seller obtains knowledge thereof,
notice of any: (A) material litigation, investigation or proceeding
that may exist at any time between the Seller and any Person or (B)
material litigation or proceeding relating to any Transaction Document;
(vi) promptly after a Responsible Officer of the Seller
obtains knowledge of the occurrence thereof, notice of a material
adverse change in the business, operations, property or financial or
other condition of the Seller, the Servicer or the Originator; and
(vii) such other information respecting the Receivables or the
condition or operations, financial or otherwise, of the Seller or any
of its Affiliates as the Administrator may from time to time reasonably
request.
(m) Certain Agreements. Without the prior written consent of the
Administrator, the Seller will not (and will not permit the Originator to)
amend, modify, waive, revoke or terminate any Transaction Document to which it
is a party or any provision of Seller's certificate of formation, limited
liability company agreement or other organizational document of the Seller.
(n) Restricted Payments. (i) Except pursuant to clause (ii) below, the
Seller will not: (A) purchase or redeem any shares of its capital stock, (B)
declare or pay any dividend or set aside any funds for any such purpose, (C)
prepay, purchase or redeem any Debt, (D) lend or advance any funds or (E) repay
any loans or advances to, for or from any of its Affiliates (the amounts
described in clauses (A) through (E) being referred to as "Restricted
Payments").
(ii) Subject to the limitations set forth in clause (iii)
below, the Seller may make Restricted Payments so long as such
Restricted Payments are made only in one or more of the following ways:
(A) the Seller may make cash payments (including prepayments) on the
Company Note in accordance with its terms and cash purchases as
provided in Section 3.2(a) of the Sale Agreement, and (B) if no amounts
are then outstanding under the Company Note, the Seller may declare and
pay dividends or other distributions.
(iii) The Seller may make Restricted Payments only out of the
Seller's property and the funds it receives pursuant to Sections
1.4(b)(ii) and (iv) of the Agreement and that are available (x) after
the application of Section 1.4(b)(i). Furthermore, the Seller shall not
pay, make or declare: (A) any distributions if, after giving effect
thereto, the Seller's tangible net worth would be less than
$10,000,000.00, or (B) any Restricted
IV-4
Payment (including any dividend) if, after giving effect thereto, any
Termination Event or Unmatured Termination Event shall have occurred
and be continuing.
(o) Other Business. The Seller will not: (i) engage in any business
other than the transactions contemplated by the Transaction Documents; (ii)
create, incur or permit to exist any Debt of any kind (or cause or permit to be
issued for its account any letters of credit or bankers' acceptances) other than
pursuant to or contemplated by the Transaction Documents or the Company Note; or
(iii) form any Subsidiary or make any investments in any other Person; provided,
however, that the Seller shall be permitted to incur minimal obligations to the
extent necessary for the day-to-day operations of the Seller (such as expenses
for stationery, audits, maintenance of legal status, etc.).
(p) Use of Seller's Share of Collections. The Seller shall apply the
Seller's Share of Collections to make payments in the following order of
priority: (i) the payment of its expenses then due and payable (including all
obligations payable to the Issuer and the Administrator under the Agreement and
under the Fee Letter); (ii) the payment of accrued and unpaid interest on the
Company Note; and (iii) other legal and valid organizational purposes.
(q) Tangible Net Worth. The Seller will not permit its tangible net
worth, at any time, to be less than $10,000,000.00.
2. Covenants of the Servicer and Church & Xxxxxx. Until the latest of
the Facility Termination Date, the date on which no Capital of or Discount in
respect of the Purchased Interest shall be outstanding or the date all other
amounts owed by the Seller under the Agreement to the Issuer, the Administrator
and any other Indemnified Party or Affected Person shall be paid in full:
(a) Compliance with Laws, Etc. The Servicer and, to the extent that it
ceases to be the Servicer, Church & Xxxxxx shall comply (and shall cause the
Originator to comply) in all material respects with all applicable laws, rules,
regulations and orders, and preserve and maintain its organizational existence,
rights, franchises, qualifications and privileges, except to the extent that the
failure so to comply with such laws, rules and regulations or the failure so to
preserve and maintain such existence, rights, franchises, qualifications and
privileges would not have a Material Adverse Effect.
(b) Offices, Records and Books of Account, Etc. The Servicer and, to
the extent that it ceases to be the Servicer, Church & Xxxxxx, shall keep (and
shall cause the Originator to keep) its state of formation (as such terms or
similar terms are used in the applicable UCC) and the office where it keeps its
records concerning the Receivables at the address(es) set forth on Schedule IV
or upon at least 30 days' prior written notice of a proposed change to the
Administrator, at any other locations in jurisdictions where all actions
reasonably requested by the Administrator to protect and perfect the interest of
the Issuer in the Receivables and related items (including the Pool Assets) have
been taken and completed. The Servicer and, to the extent that it ceases to be
the Servicer, Church & Xxxxxx, also will (and will cause the Originator to)
maintain and implement administrative and operating procedures (including an
ability to recreate records evidencing Receivables and related Contracts in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records, computer tapes and
IV-5
disks and other information reasonably necessary or advisable for the collection
of all Receivables (including records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to each
existing Receivable).
(c) Performance and Compliance with Contracts and Credit and Collection
Policy. Subject to clause (d), the Servicer and, to the extent that it ceases to
be the Servicer, Church & Xxxxxx, shall (and shall cause the Originators to), at
its expense, timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it as Servicer under the
Contracts related to the Receivables, and timely and fully comply in all
material respects with the Credit and Collection Policy with regard to each
Receivable and the related Contract.
(d) Extension or Amendment of Receivables. Except as provided in the
Agreement or otherwise pursuant to the terms of the Credit and Collection
Policy, the Servicer and, to the extent that it ceases to be the Servicer,
Church & Xxxxxx, shall not extend (and shall not permit the Originators to
extend), the maturity or adjust the Outstanding Balance or otherwise modify the
terms of any Pool Receivable in any material respect, or amend, modify or waive,
in any material respect, any term or condition of any related Contract (which
term or condition relates to payments under, or the enforcement of, such
Contract), provided that any modification to a Pool Receivable made pursuant to
this clause (d) may be reflected in an amendment, modification or waiver of the
Contract governing such Receivable.
(e) Change in Business or Credit and Collection Policy. The Servicer
and, to the extent that it ceases to be the Servicer, Church & Xxxxxx, shall not
make (and shall not permit the Originator to make) any material change in the
character of its business, materially alter the Credit and Collection Policy, or
make any change in the Credit and Collection Policy that would have a Material
Adverse Effect. The Servicer and, to the extent that it ceases to be the
Servicer, Church & Xxxxxx, shall not make (and shall not permit the Originator
to make) any other change in the Credit and Collection Policy without giving
prior written notice thereof to the Administrator.
(f) Audits. The Servicer and, to the extent that it ceases to be the
Servicer, Church & Xxxxxx, shall (and shall cause the Originator to), from time
to time during regular business hours as reasonably requested in advance (unless
a Termination Event or Unmatured Termination Event exists) by the Administrator,
permit the Administrator, or its agents or representatives: (i) to examine and
make copies of and abstracts from all books, records and documents (including
computer tapes and disks) in its possession or under its control relating to
Receivables and the Related Security, including the related Contracts (subject
to any confidentiality provisions therein), provided that, upon reasonable
request by the Administrator, the Servicer shall (or shall cause the Seller to)
make copies of the general ledger, the trial balance or other information
relating to the Receivables and the Related Security that have been reasonably
requested by the Administrator, and send such copies (via electronic mail) to
the Administrator; (ii) to visit its offices and properties for the purpose of
examining such materials described in clause (i) above, and to discuss matters
relating to Receivables and the Related Security or its performance hereunder or
under the Contracts with any of its officers, employees, agents or contractors
having knowledge of such matters and (iii), without limiting the clauses (i) and
(ii) above, to engage certified public accountants or other auditors acceptable
to the Servicer and the
IV-6
Administrator to conduct, at the Servicer's expense annually, or if a
Termination Event occurs and is continuing, from time to time on the reasonable
request of the Administrator, a review of the Servicer's books and records with
respect to such Receivables provided, however the Administrator may, at its
expense, engage certified public accountants or other auditors to conduct
reviews of the Servicer's books and records relating to the Receivables from
time to time as the Administrator reasonably decides is necessary.
(g) Change in Lock-Box Banks, Lock-Box Accounts and Payment
Instructions to Obligors. The Servicer and, to the extent that it ceases to be
the Servicer, Church & Xxxxxx, shall not (and shall not permit the Originator
to) add or terminate any bank as a Lock-Box Bank or any account as a Lock-Box
Account from those listed in Schedule II to the Agreement, or make any change in
its instructions to Obligors regarding payments to be made to the Servicer or
any Lock-Box Account (or related post office box), unless the Administrator
shall have consented thereto in writing and the Administrator shall have
received copies of all agreements and documents (including Lock-Box Agreements)
that it may request in connection therewith.
(h) Deposits to Lock-Box Accounts. The Servicer shall: (i) instruct all
Obligors to make payments of all Receivables to one or more Lock-Box Accounts or
to post office boxes to which only Lock-Box Banks have access (and shall
instruct the Lock-Box Banks to cause all items and amounts relating to such
Receivables received in such post office boxes to be removed and deposited into
a Lock-Box Account on a daily basis); and (ii) deposit, or cause to be
deposited, any Collections received by it into one or more Lock-Box Accounts or
to post office boxes to which only Lock-Box Banks have access not later than
three (3) Business Days after receipt thereof; Each Lock-Box Account shall at
all times be subject to a Lock-Box Agreement. The Servicer will not (and will
not permit the Seller to) deposit or otherwise credit, or cause or permit to be
so deposited or credited, to any Lock-Box Account cash or cash proceeds other
than Collections.
(i) Marking of Records. At its expense, the Servicer shall xxxx its
master data processing records relating to Pool Receivables and related
Contracts, including with a legend evidencing that the undivided percentage
ownership interests with regard to the Purchased Interest related to such
Receivables and related Contracts have been sold in accordance with the
Agreement.
(j) Reporting Requirements. Church & Xxxxxx shall provide to the
Administrator (in multiple copies, if requested by the Administrator) the
following:
(i) as soon as available and in any event within 45 days after
the end of the first three quarters of each fiscal year of Church &
Xxxxxx, balance sheets of Church & Xxxxxx and the consolidated
Subsidiaries of Church & Xxxxxx as of the end of such quarter and
statements of income, retained earnings and cash flow of Church &
Xxxxxx and consolidated Subsidiaries of Church & Xxxxxx for the period
commencing at the end of the previous fiscal year and ending with the
end of such quarter, certified by the chief financial officer of such
Person;
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year of Church & Xxxxxx, a copy of the
annual report for such year for Church &
IV-7
Xxxxxx and its consolidated Subsidiaries, containing financial
statements for such year audited by independent certified public
accountants of nationally recognized standing;
(iii) as to the Servicer only, as soon as available and in any
event not later than 2 days prior to the Monthly Settlement Date, an
Information Package as of the most recently completed fiscal month or,
if in the opinion of the Administrator reasonable grounds for
insecurity exist with respect to the collectibility of the Pool
Receivables or with respect to the Seller or Servicer's performance or
ability to perform its obligations under the Agreement, within 10
Business Days of a request by the Administrator, an Information Package
for such periods as is specified by the Administrator (but in no event
more frequently than weekly);
(iv) as soon as possible and in any event within 5 Business
Days after a Responsible Officer of Church & Xxxxxx becoming aware of
the occurrence of each Termination Event or Unmatured Termination
Event, a statement of the chief financial officer of Church & Xxxxxx
setting forth details of such Termination Event or Unmatured
Termination Event and the action that such Person has taken and
proposes to take with respect thereto;
(v) promptly after the sending or filing thereof, copies of
all reports that Church & Xxxxxx sends to any of its security holders
generally in their capacity as such, and copies of all reports and
registration statements that Church & Xxxxxx or any Subsidiary files
with the Securities and Exchange Commission or any national securities
exchange; provided, that any filings with the Securities and Exchange
Commission that have been granted "confidential" treatment shall be
provided promptly after such filings have become publicly available;
(vi) promptly after the filing or receiving thereof notice of
and, upon the request of the Administrator, copies of all reports and
notices that Church & Xxxxxx or any Affiliate of Church & Xxxxxx files
under ERISA with the Internal Revenue Service, the Pension Benefit
Guaranty Corporation or the U.S. Department of Labor or that such
Person or any of its Affiliates receives from any of the foregoing or
from any multiemployer plan (within the meaning of Section 4001(a)(3)
of ERISA) to which such Person or any Affiliate of Church & Xxxxxx is
or was, within the preceding five years, a contributing employer, in
each case in respect of the assessment of withdrawal liability or an
event or condition that could, in the aggregate, result in the
imposition of liability on Church & Xxxxxx and/or any such Affiliate;
(vii) at least thirty days before any change in Church &
Xxxxxx' or any Originator's name or any other change requiring the
amendment of UCC financing statements, a notice setting forth such
changes and the effective date thereof;
(viii) promptly after Church & Xxxxxx obtains knowledge
thereof, notice of any: (A) litigation, investigation or proceeding
that may exist at any time between Church & Xxxxxx or any of its
Subsidiaries and any Governmental Authority that, if not cured or if
adversely determined, as the case may be, would have a Material Adverse
Effect; (B) litigation or proceeding adversely affecting such Person or
any of its
IV-8
Subsidiaries in which the amount involved is $5,000,000 or more and not
covered by insurance or in which injunctive or similar relief is
sought; or (C) litigation or proceeding relating to any Transaction
Document;
(ix) promptly after the occurrence thereof, notice of a
material adverse change in the business, operations, property or
financial or other condition of Church & Xxxxxx or any of its
Subsidiaries; and
(x) such other information respecting the Receivables or the
condition or operations, financial or otherwise, of Church & Xxxxxx or
any of its Affiliates as the Administrator may from time to time
reasonably request.
3. Separate Existence. Each of the Seller and Church & Xxxxxx hereby
acknowledges that the Purchasers, the Issuer and the Administrator are entering
into the transactions contemplated by this Agreement and the other Transaction
Documents in reliance upon the Seller's identity as a legal entity separate from
Church & Xxxxxx and its Affiliates. Therefore, from and after the date hereof,
each of the Seller and Church & Xxxxxx shall take all steps specifically
required by the Agreement or reasonably required by the Administrator to
continue the Seller's identity as a separate legal entity and to make it
apparent to third Persons that the Seller is an entity with assets and
liabilities distinct from those of Church & Xxxxxx and any other Person, and is
not a division of Church & Xxxxxx, its Affiliates or any other Person. Without
limiting the generality of the foregoing and in addition to and consistent with
the other covenants set forth herein, each of the Seller and Church & Xxxxxx
shall take such actions as shall be required in order that:
(a) The Seller will be a limited purpose entity whose primary
activities are restricted in its operating agreement to: (i) purchasing or
otherwise acquiring from the Originator (or their Affiliates), owning, holding,
granting security interests or selling interests in Pool Assets (or other
receivables originated by the Originator or their Affiliates, and certain
related assets), (ii) entering into agreements for the selling and servicing of
the Receivables Pool (or other receivables pools originated by the Originator or
their Affiliates), and (iii) conducting such other activities as it deems
necessary or appropriate to carry out its primary activities;
(b) The Seller shall not engage in any business or activity, or incur
any indebtedness or liability, other than as expressly permitted by the
Transaction Documents;
(c) Not less than one member of the Seller's Directors (the
"Independent Director") shall be an individual who is not a direct, indirect or
beneficial stockholder, officer, director, employee, affiliate, associate or
supplier of Church & Xxxxxx or any of its Affiliates. The operating agreement of
the Seller shall provide that: (i) the Seller's Board of Directors shall not
approve, or take any other action to cause the filing of, a voluntary bankruptcy
petition with respect to the Seller unless the Independent Director shall
approve the taking of such action in writing before the taking of such action,
and (ii) such provision cannot be amended without the prior written consent of
the Independent Director;
(d) The Independent Director shall not at any time serve as a trustee
in bankruptcy for the Seller, Church & Xxxxxx or any Affiliate thereof;
IV-9
(e) Any employee, consultant or agent of the Seller will be compensated
from the Seller's funds for services provided to the Seller. The Seller will not
engage any agents other than its attorneys, auditors and other professionals,
and a servicer and any other agent contemplated by the Transaction Documents for
the Receivables Pool, which servicer will be fully compensated for its services
by payment of the Servicing Fee, and a manager, which manager will be fully
compensated from the Seller's funds. Church & Xxxxxx shall not enter into, or be
a party to, any transaction with the Seller, except in the ordinary course of
its business and on terms which are intrinsically fair and not less favorable to
it than would be obtained in a comparable arm's-length transaction with an
unrelated third party;
(f) The Seller will contract with the Servicer to perform for the
Seller all operations required on a daily basis to service the Receivables Pool.
The Seller will pay the Servicer the Servicing Fee pursuant hereto. To the
extent, if any, that the Seller (or any Affiliate thereof) shares items of
expenses not reflected in the Servicing Fee or the manager's fee, such as legal,
auditing and other professional services, such expenses will be allocated to the
extent practical on the basis of actual use or the value of services rendered,
and otherwise on a basis reasonably related to the actual use or the value of
services rendered; it being understood that Church & Xxxxxx shall pay all
expenses relating to the preparation, negotiation, execution and delivery of the
Transaction Documents, including legal, agency and other fees;
(g) The Seller's operating expenses will not be paid by Church & Xxxxxx
or any other Affiliate thereof;
(h) All of the Seller's business correspondence and other
communications shall be conducted in the Seller's own name and on its own
separate stationery;
(i) The Seller's books and records will be maintained separately from
those of Church & Xxxxxx and any other Affiliate thereof;
(j) All financial statements of Church & Xxxxxx or any Affiliate
thereof that are consolidated to include Seller will contain detailed notes
clearly stating that: (i) a special purpose entity exists as a Subsidiary of
Church & Xxxxxx, and (ii) the Originator have sold receivables and other related
assets to such special purpose Subsidiary that, in turn, has sold undivided
interests therein to certain financial institutions and other entities;
(k) The Seller's assets will be maintained in a manner that facilitates
their identification and segregation from those of Church & Xxxxxx or any
Affiliate thereof;
(l) The Seller will strictly observe organizational formalities in its
dealings with Church & Xxxxxx or any Affiliate thereof, and funds or other
assets of the Seller will not be commingled with those of Church & Xxxxxx or any
Affiliate thereof except as permitted by the Agreement in connection with
servicing the Pool Receivables. The Seller shall not maintain joint bank
accounts or other depository accounts to which Church & Xxxxxx or any Affiliate
thereof has independent access. The Seller is not named, and has not entered
into any agreement to be named, directly or indirectly, as a direct or
contingent beneficiary or loss payee on any insurance policy with respect to any
loss relating to the property of Church & Xxxxxx or any Subsidiary or other
Affiliate of Church & Xxxxxx. The Seller will pay to the appropriate
IV-10
Affiliate the marginal increase or, in the absence of such increase, the market
amount of its portion of the premium payable with respect to any insurance
policy that covers the Seller and such Affiliate;
(m) The Seller will maintain arm's-length relationships with Church &
Xxxxxx (and any Affiliate thereof). Any Person that renders or otherwise
furnishes services to the Seller will be compensated by the Seller at market
rates for such services it renders or otherwise furnishes to the Seller. Neither
the Seller nor Church & Xxxxxx will be or will hold itself out to be responsible
for the debts of the other or the decisions or actions respecting the daily
business and affairs of the other. The Seller and Church & Xxxxxx will
immediately correct any known misrepresentation with respect to the foregoing,
and they will not operate or purport to operate as an integrated single economic
unit with respect to each other or in their dealing with any other entity; and
(n) Church & Xxxxxx shall not pay the salaries of Seller's employees,
if any.
IV-11
EXHIBIT V
TERMINATION EVENTS
Each of the following shall be a "Termination Event":
(a) (i) the Seller, Church & Xxxxxx, the Originator or the Servicer (if
Church & Xxxxxx or any of its Affiliates) shall fail to perform or observe any
term, covenant or agreement under the Agreement or any other Transaction
Document and, except as otherwise provided herein, such failure shall continue
for 30 days after knowledge or notice thereof, (ii) the Seller or the Servicer
shall fail to make when due any payment or deposit to be made by it under the
Agreement and such failure shall continue unremedied for two Business Days or
(iii) Church & Xxxxxx shall resign as Servicer, and no successor Servicer
reasonably satisfactory, to the Administrator shall have been appointed;
(b) Church & Xxxxxx (or any Affiliate thereof) shall fail to transfer
to any successor Servicer when required any rights pursuant to the Agreement
that Church & Xxxxxx (or such Affiliate) then has as Servicer;
(c) any representation or warranty made or deemed made by the Seller,
Church & Xxxxxx or Originator (or any of their respective officers) under or in
connection with the Agreement or any other Transaction Document, or any
information or report delivered by the Seller, Church & Xxxxxx or Originator or
the Servicer pursuant to the Agreement or any other Transaction Document, shall
prove to have been incorrect or untrue in any material respect when made or
deemed made or delivered;
(d) the Seller or the Servicer shall fail to deliver the Information
Package pursuant to the Agreement, and such failure shall remain unremedied for
two Business Days;
(e) the Agreement or any purchase or reinvestment pursuant to the
Agreement shall for any reason: (i) cease to create, or the Purchased Interest
shall for any reason cease to be, a valid and enforceable perfected undivided
percentage ownership or security interest to the extent of the Purchased
Interest in each Pool Receivable, the Related Security and Collections with
respect thereto, free and clear of any Adverse Claim, or (ii) cease to create
with respect to the Pool Assets, or the interest of the Issuer with respect to
such Pool Assets shall cease to be, a valid and enforceable first priority
perfected security interest, free and clear of any Adverse Claim;
(f) the Seller, Church & Xxxxxx, or any Originator shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the Seller,
Church & Xxxxxx, or any Originator seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 60 days, or
V-1
any of the actions sought in such proceeding (including the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its property)
shall occur; or the Seller, Church & Xxxxxx, or any Originator shall take any
corporate or organizational action to authorize any of the actions set forth
above in this paragraph;
(g) (i) the (A) Default Ratio shall exceed 1.5% or (B) the Delinquency
Ratio shall exceed 3.5% or (ii) the average for three consecutive fiscal months
of: (A) the Default Ratio shall exceed 1.0%, (B) the Delinquency Ratio shall
exceed 2.75%, (C) the Dilution Ratio shall exceed 3.5%, or (D) the Specific
Dilution Ratio shall exceed 18%;
(h) a Change in Control shall occur;
(i) at any time (i) the sum of (A) the Capital plus (B) the Total
Reserves, exceeds (ii) the sum of (A) the Net Receivables Pool Balance at such
time plus (B) the Issuer's Share of the amount of Collections then on deposit in
the Lock-Box Accounts (other than amounts held in trust therein representing
Discount and fees), and such circumstance shall not have been cured within two
Business Days;
(j) (i) Church & Xxxxxx or any Originator shall fail to pay any
principal of or premium or interest on any of its Debt that is outstanding in a
principal amount of at least $10,000,000in the aggregate when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement, mortgage, indenture
or instrument relating to such Debt (and shall have not been waived or cured);
or (ii) any other event shall occur or condition shall exist under any
agreement, mortgage, indenture or instrument relating to any such Debt and shall
continue after the applicable grace period, if any, specified in such agreement,
mortgage, indenture or instrument (and shall have not been waived or cured), if,
in either case: (a) the effect of such non-payment, event or condition is to
give the applicable debtholders the right (whether acted upon or not) to
accelerate the maturity of such Debt, or (b) any such Debt shall be declared to
be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), redeemed, purchased or defeased, or an offer to
repay, redeem, purchase or defease such Debt shall be required to be made, in
each case before the stated maturity thereof; or
(k) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Internal Revenue Code)
involving any Benefit Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Benefit Plan or any lien in favor of the Pension Benefit Guaranty
Corporation or a Benefit Plan shall arise on the assets of any Group Member or
any Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Administrator, likely to result in
the termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, or (v) any
V-2
Group Member or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Administrator is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan; and in each case in clauses (i) through (v) above, such event or
condition, together with all other such events or conditions, if any, would, in
the reasonable judgment of the Administrator, reasonably be expected to have a
Material Adverse Effect.
V-3
SCHEDULE I
CREDIT AND COLLECTION POLICY
Schedule I-1
SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
Lock-Box Accounts
-------- --------
Schedule II-1
SCHEDULE III
TRADE NAMES
None.
Schedule III-1
SCHEDULE IV
OFFICE LOCATIONS
The Principal Place of Business, Chief Executive Office and State of Formation
of the Seller is:
000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000. Seller is a Delaware limited
liability company.
The Seller maintains its master books and records relating to Receivables at:
000 Xxxxxx Xxxxxx , Xxxxxxxxx, Xxx Xxxxxx 00000.
The Principal Place of Business, Chief Executive Office and State of Formation
of the Servicer:
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000. Servicer is a Delaware
corporation.
The Servicer maintains its master books and records relating to the Receivables
at:
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
Schedule IV-1
SCHEDULE V
PROCEEDINGS
None.
Schedule IV-1
ANNEX A
TO
RECEIVABLES PURCHASE AGREEMENT
FORM OF INFORMATION PACKAGE
Annex A-1
ANNEX B
TO
RECEIVABLES PURCHASE AGREEMENT
FORM OF PURCHASE NOTICE
Annex B-1
FORM OF PURCHASE NOTICE
_______________, [200_]
PNC Bank, National Association
One PNC Plaza, 26th Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
Reference is hereby made to the
Receivables Purchase Agreement, dated
as of January 16, 2003 (as heretofore amended or supplemented, the "
Receivables
Purchase Agreement"), among Xxxxxxxx Street Funding, LLC, ("Seller"), Church &
Xxxxxx Co., Inc., as Servicer, Market Street Funding Corporation ("Issuer'") and
PNC Bank, National Association, (the "Administrator"). Capitalized terms used in
this Purchase Notice and not otherwise defined herein shall have the meanings
assigned thereto in the
Receivables Purchase Agreement.
This letter constitutes a Purchase Notice pursuant to Section 1.2(a) of
the Receivables Purchase Agreement. Seller desires to sell an undivided variable
interest in a pool of receivables on _______________, [200_], for a purchase
price of $_______________. Subsequent to this Purchase, the aggregate
outstanding Capital will be $_______________.
Seller hereby represents and warrants as of the date hereof, and as of
the date of Purchase, as follows:
(i) the representations and warranties contained in Exhibit III of the
Receivables Purchase Agreement are correct on and as of such dates as though
made on and as of such dates and shall be deemed to have been made on such
dates;
(ii) no Termination Event or Unmatured Termination Event has occurred
and is continuing, or would result from such purchase;
(iii) after giving effect to the purchase proposed hereby, the
aggregate outstanding Capital of the Purchased Interest will not exceed 100% and
the Capital will not exceed the Purchase Limit; and
(iv) the Facility Termination Date shall not have occurred.
IN WITNESS WHEREOF, the undersigned has caused this Purchase Notice to
be executed by its duly authorized officer as of the date first above written.
XXXXXXXX STREET FUNDING, LLC
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
S-1
ANNEX C
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF PAYDOWN NOTICE
Annex C-1
EXECUTION
FORM OF PAYDOWN NOTICE
,
---------- ----
PNC Bank, National Association
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention:
--------------
Ladies and Gentlemen:
Reference is hereby made to the Receivables Purchase Agreement, dated
as of January 16, 2003 (as amended, supplemented or otherwise modified, the
"Receivables Purchase Agreement"), among Xxxxxxxx Street Funding, LLC, as
Seller, Church & Xxxxxx Co., Inc., as Servicer, Market Street Funding
Corporation, as Issuer and PNC Bank, National Association, as Administrator.
Capitalized terms used in this paydown notice and not otherwise defined herein
shall have the meanings assigned thereto in the Receivables Purchase Agreement.
This letter constitutes a paydown notice pursuant to Section 1.4(f)(i)
of the Receivables Purchase Agreement. The Seller desires to reduce the Capital
on _______________, _____(1) by the application of $_______________ in cash to
pay Capital and Discount to accrue (until such cash can be used to pay
commercial paper notes) with respect to such Capital, together with all costs
related to such reduction of Capital.
----------
(1) Notice must be given at least three Business Days' prior to the requested
paydown date, in the case of reductions in excess of $10,000,000, or at least
one Business Day prior to the requested paydown date, in the case of reductions
of $10,000,000 or less.
IN WITNESS WHEREOF, the undersigned has caused this paydown notice to
be executed by its duly authorized officer as of the date first above written.
XXXXXXXX STREET FUNDING, LLC
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
S-1
