Exhibit 10.2
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RECEIVABLES PURCHASE AGREEMENT
DATED AS OF APRIL 9, 2002
AMONG
XXXXXXXX FUNDING CORPORATION AS SELLER,
XXXXXXXX CORPORATION, AS SERVICER,
FALCON ASSET SECURITIZATION CORPORATION,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO
AND
BANK ONE, NA (MAIN OFFICE CHICAGO), AS AGENT
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TABLE OF CONTENTS
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Page
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ARTICLE I. PURCHASE ARRANGEMENTS................................. 1
Section 1.1 Purchase Facility................................. 1
Section 1.2 Increases......................................... 2
Section 1.3 Decreases......................................... 2
Section 1.4 Payment Requirements.............................. 2
ARTICLE II. PAYMENTS AND COLLECTIONS............................. 3
Section 2.1 Payments.......................................... 3
Section 2.2 Collections Prior to Amortization................. 3
Section 2.3 Collections Following Amortization................ 4
Section 2.4 Application of Collections........................ 4
Section 2.5 Payment Rescission................................ 5
Section 2.6 Maximum Purchaser Interests....................... 5
Section 2.7 Clean Up Call..................................... 5
ARTICLE III. CONDUIT FUNDING..................................... 5
Section 3.1 CP Costs.......................................... 5
Section 3.2 CP Costs Payments................................. 5
Section 3.3 Calculation of CP Costs........................... 6
ARTICLE IV. FINANCIAL INSTITUTION FUNDING........................ 6
Section 4.1 Financial Institution Funding..................... 6
Section 4.2 Yield Payments.................................... 6
Section 4.3 Selection and Continuation of Tranche Periods..... 6
Section 4.4 Financial Institution Discount Rates.............. 6
Section 4.5 Suspension of the LIBO Rate....................... 7
ARTICLE V. REPRESENTATIONS AND WARRANTIES........................ 7
Section 5.1 Representations and Warranties
of the Seller Parties............................. 7
Section 5.2 Financial Institution Representations
and Warranties.................................... 11
ARTICLE VI. CONDITIONS OF PURCHASES.............................. 12
Section 6.1 Conditions Precedent to Initial
Incremental Purchase.............................. 12
Section 6.2 Conditions Precedent to All Purchases
and Reinvestments................................. 13
ARTICLE VII. COVENANTS........................................... 13
Section 7.1 Affirmative Covenants of The Seller Parties....... 13
Section 7.2 Negative Covenants of The Seller Parties.......... 20
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ARTICLE VIII. ADMINISTRATION AND COLLECTION...................... 22
Section 8.1 Designation of Servicer........................... 22
Section 8.2 Duties of Servicer................................ 22
Section 8.3 Collection Notices................................ 24
Section 8.4 Responsibilities of Seller........................ 24
Section 8.5 Reports........................................... 24
Section 8.6 Servicing Fees.................................... 24
ARTICLE IX. AMORTIZATION EVENTS.................................. 25
Section 9.1 Amortization Events............................... 25
Section 9.2 Remedies.......................................... 26
ARTICLE X. INDEMNIFICATION....................................... 27
Section 10.1 Indemnities by The Seller Parties................ 27
Section 10.2 Increased Cost and Reduced Return................ 30
Section 10.3 Other Costs and Expenses......................... 30
ARTICLE XI. THE AGENT............................................ 31
Section 11.1 Authorization and Action......................... 31
Section 11.2 Delegation of Duties............................. 31
Section 11.3 Exculpatory Provisions........................... 31
Section 11.4 Reliance by Agent................................ 32
Section 11.5 Non-Reliance on Agent and Other Purchasers....... 32
Section 11.6 Reimbursement and Indemnification................ 32
Section 11.7 Agent in its Individual Capacity................. 33
Section 11.8 Successor Agent.................................. 33
ARTICLE XII. ASSIGNMENTS; PARTICIPATIONS......................... 33
Section 12.1 Assignments...................................... 33
Section 12.2 Participations................................... 34
ARTICLE XIII. LIQUIDITY FACILITY................................. 35
Section 13.1 Transfer to Financial Institutions............... 35
Section 13.2 Transfer Price Reduction Yield................... 35
Section 13.3 Payments to Conduit.............................. 35
Section 13.4 Limitation on Commitment
to Purchase from Conduit......................... 35
Section 13.5 Defaulting Financial Institutions................ 36
Section 13.6 Terminating Financial Institutions............... 36
ARTICLE XIV. MISCELLANEOUS....................................... 37
Section 14.1 Waivers and Amendments........................... 37
Section 14.2 Notices.......................................... 38
Section 14.3 Ratable Payments................................. 38
Section 14.4 Protection of Ownership Interests
of the Purchasers................................ 39
Section 14.5 Confidentiality.................................. 39
Section 14.6 Bankruptcy Petition.............................. 40
Section 14.7 Limitation of Liability.......................... 40
Section 14.8 CHOICE OF LAW.................................... 40
Section 14.9 CONSENT TO JURISDICTION.......................... 40
Section 14.10 WAIVER OF JURY TRIAL............................ 41
Section 14.11 Integration; Binding Effect; Survival of Terms.. 41
Section 14.12 Counterparts; Severability; Section References.. 41
Section 14.13 Bank One Roles.................................. 42
Section 14.14 Characterization................................ 42
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EXHIBITS AND SCHEDULES
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(Exhibits and Schedules to this receivables purchase agreement are not included
in this filing.)
Exhibit I Definitions
Exhibit II Form of Purchase Notice
Exhibit III Places of Business of the Seller Parties; Locations of Records;
Federal Employer Identification Number(s)
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Form of Collection Account Agreement
Exhibit VII Form of Assignment Agreement
Exhibit VIII Credit and Collection Policy
Exhibit IX Form of Contract(s)
Exhibit X Form of Monthly Report
Schedule A Commitments
Schedule B Closing Documents
Schedule C Special Concentration Limits
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RECEIVABLES PURCHASE AGREEMENT
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THIS RECEIVABLES PURCHASE AGREEMENT dated as of April 9, 2002 is among Xxxxxxxx
Funding Corporation, a Delaware corporation ("Seller"), Xxxxxxxx Corporation,
an Iowa corporation ("Meredith"), as initial Servicer, the entities listed on
Schedule A to this Agreement (together with any of their respective successors
and assigns hereunder, the "Financial Institutions"), Falcon Asset
Securitization Corporation ("Conduit") and Bank One, NA (Main Office Chicago),
as agent for the Purchasers hereunder or any successor agent hereunder
(together with its successors and assigns hereunder, the "Agent"). Unless
defined elsewhere herein, capitalized terms used in this Agreement shall have
the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Purchaser Interests to the Purchasers
from time to time.
Conduit may, in its absolute and sole discretion, purchase Purchaser Interests
from Seller from time to time.
In the event that Conduit declines to make any purchase, the Financial
Institutions shall, at the request of Seller, purchase Purchaser Interests from
time to time. In addition, the Financial Institutions have agreed to provide a
liquidity facility to Conduit in accordance with the terms hereof.
Bank One, NA (Main Office Chicago) has been requested and is willing to act as
Agent on behalf of Conduit and the Financial Institutions in accordance with
the terms hereof.
ARTICLE I.
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PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
(a) Upon the terms and subject to the conditions hereof, Seller may, at
its option, sell and assign Purchaser Interests to the Agent for the benefit of
one or more of the Purchasers. In accordance with the terms and conditions set
forth herein, Conduit may, at its option, instruct the Agent to purchase on
behalf of Conduit, or if Conduit shall decline to purchase, the Agent shall
purchase, on behalf of the Financial Institutions, Purchaser Interests from
time to time in an aggregate amount not to exceed at such time the lesser of
(i) the Purchase Limit and (ii) the aggregate amount of the
Commitments during the period from the date hereof to but not including
the Facility Termination Date.
(b) Seller may, upon at least 10 Business Days' written notice to the
Agent, terminate in whole or reduce in part, ratably among the Financial
Institutions, the unused portion of the Purchase Limit; provided that each
partial reduction of the Purchase Limit shall be in an amount equal to
$5,000,000 or an integral multiple thereof.
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Section 1.2 Increases.
Seller shall provide the Agent with at least two (2) Business Days' prior
notice in the form set forth as Exhibit II hereto of each Incremental Purchase
(a "Purchase Notice"). Each Purchase Notice shall be subject to Section 6.2
hereof and, except as set forth below, shall be irrevocable and shall specify
the requested Purchase Price (which shall not be less than $1,000,000) and date
of purchase and, in the case of an Incremental Purchase to be funded by the
Financial Institutions, the requested Discount Rate and Tranche Period.
Following receipt of a Purchase Notice, the Agent will determine whether
Conduit agrees to make the purchase. If Conduit declines to make a proposed
purchase, the Agent will promptly notify Seller of such fact, whereupon Seller
may cancel the Purchase Notice or, in the absence of such a cancellation, the
Incremental Purchase of the Purchaser Interest will be made by the Financial
Institutions. On the date of each Incremental Purchase, upon satisfaction of
the applicable conditions precedent set forth in Article VI, Conduit or the
Financial Institutions, as applicable, shall wire transfer to the account
specified in the applicable Purchase Notice, in immediately available funds, no
later than 12:00 noon (Chicago time), an amount equal to (i) in the case of
Conduit, the aggregate Purchase Price of the Purchaser Interests Conduit is
then purchasing or (ii) in the case of a Financial Institution, such Financial
Institution's Pro Rata Share of the aggregate Purchase Price of the Purchaser
Interests the Financial Institutions are purchasing.
Section 1.3 Decreases.
Seller shall provide the Agent with at least two (2) Business Days' prior
written notice (each, a "Reduction Notice") of any proposed reduction of
Aggregate Capital from Collections. Such Reduction Notice shall designate (i)
the date (the "Proposed Reduction Date") upon which any such reduction of
Aggregate Capital shall occur (which date shall not be less than two (2)
Business Days after the date such Reduction Notice is received by the Agent),
and (ii) the amount of Aggregate Capital to be reduced which shall be applied
ratably to the Purchaser Interests of Conduit and the Financial Institutions in
accordance with the amount of Capital (if any) owing to Conduit, on the one
hand, and the amount of Capital (if any) owing to the Financial Institutions
(ratably, based on their respective Pro Rata Shares), on the other hand (the
"Aggregate Reduction"). Only one (1) Reduction Notice shall be outstanding at
any time.
Section 1.4 Payment Requirements.
All amounts to be paid or deposited by any Seller Party pursuant to any
provision of this Agreement shall be paid or deposited in accordance with the
terms hereof no later than 12:00 noon. (Chicago time) on the day when due in
immediately available funds, and if not received before 12:00 noon. (Chicago
time) shall be deemed to be received on the next succeeding Business Day. If
such amounts are payable to a Purchaser they shall be paid to the Agent, for
the account of such Purchaser, at 1 Bank Xxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000
until otherwise notified by the Agent. All computations of Yield, per annum
fees calculated as part of any CP Costs, per annum fees hereunder and per annum
fees under the Fee Letter shall be made on the basis of a year of 360 days for
the actual number of days elapsed. If any amount hereunder shall be payable on
a day which is not a Business Day, such amount shall be payable on the next
succeeding Business Day.
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ARTICLE II.
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PAYMENTS AND COLLECTIONS
Section 2.1 Payments.
Notwithstanding any limitation on recourse contained in this Agreement, Seller
shall immediately pay to the Agent when due, for the account of the relevant
Purchaser or Purchasers on a full recourse basis, (i) such fees as set forth in
the Fee Letter (which fees shall be sufficient to pay all fees owing to the
Financial Institutions), (ii) all CP Costs, (iii) all amounts payable as Yield,
(iv) all amounts payable as Deemed Collections (which shall be due and payable
by Seller on the Settlement Date immediately succeeding the event giving rise
to such Deemed Collection and applied to reduce outstanding Aggregate Capital
hereunder in accordance with Sections 2.2 and 2.3 hereof), (v) all amounts
payable to reduce the Purchaser Interests, if required pursuant to Section 2.6,
(vi) all amounts payable pursuant to Article X, if any, (vii) all Servicer
costs and expenses, including the Servicing Fee, in connection with servicing,
administering and collecting the Receivables, (viii) all Broken Funding Costs
and (ix) all Default Fees (collectively, the "Obligations"). If Seller fails
to pay any of the Obligations when due, or if Servicer fails to make any
deposit required to be made by it under this Agreement when due, such Person
agrees to pay, on demand, the Default Fee in respect thereof until paid.
Notwithstanding the foregoing, no provision of this Agreement or the Fee Letter
shall require the payment or permit the collection of any amounts hereunder in
excess of the maximum permitted by applicable law. If at any xxxx Xxxxxx
receives any Collections or is deemed to receive any Collections, Seller shall
immediately pay such Collections or Deemed Collections to the Servicer for
application in accordance with the terms and conditions hereof and, at all
times prior to such payment, such Collections or Deemed Collections shall be
held in trust by Seller for the exclusive benefit of the Purchasers and the
Agent.
Section 2.2 Collections Prior to Amortization.
Prior to the Amortization Date, any Collections and/or Deemed Collections
received by the Servicer shall be paid to the Agent in accordance with this
Agreement in payment of any accrued and unpaid Aggregate Unpaids or used for a
Reinvestment as provided in this Section 2.2. If at any time any Collections
or Deemed Collections are received by the Servicer prior to the Amortization
Date, (i) the Servicer shall set aside the Termination Percentage (hereinafter
defined) of Collections and Deemed Collections evidenced by the Purchaser
Interests of each Terminating Financial Institution and (ii) Seller hereby
requests and the Purchasers (other than any Terminating Financial Institutions)
hereby agree to make (subject to the conditions precedent set forth in Section
6.2), simultaneously with such receipt, a reinvestment (each, a "Reinvestment")
with that portion of the balance of each and every Collection received by the
Servicer that is part of any Purchaser Interest (other than any Purchaser
Interests of Terminating Financial Institutions), such that after giving effect
to such Reinvestment, the amount of Capital of such Purchaser Interest
immediately after such receipt and corresponding Reinvestment shall be equal to
the amount of Capital immediately prior to such receipt. On each Settlement
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Date prior to the occurrence of the Amortization Date, the Servicer shall remit
to the Agent's account the amounts set aside during the preceding Settlement
Period that have not been subject to a Reinvestment and apply such amounts (if
not previously paid in accordance with Section 2.1) first, to reduce unpaid CP
Costs, Yield and other Obligations and second, to reduce the Capital of all
Purchaser Interests of Terminating Financial Institutions, applied ratably to
each Terminating Financial Institution according to its respective Termination
Percentage. If such Capital, CP Costs, Yield and other Obligations shall be
reduced to zero, any additional Collections and Deemed Collections received by
the Servicer (i) if applicable, shall be remitted to the Agent's account no
later than 12:00 noon. (Chicago time) to the extent required to fund any
Aggregate Reduction on such Settlement Date and (ii) any balance remaining
thereafter shall be remitted from the Servicer to Seller on such Settlement
Date. Each Terminating Financial Institution shall be allocated a ratable
portion of Collections and Deemed Collections from the date of any assignment
by Conduit pursuant to Section 13.6 (the "Termination Date") until such
Terminating Financing Institution's Capital shall be paid in full. This
ratable portion shall be calculated on the Termination Date of each Terminating
Financial Institution as a percentage equal to (i) Capital of such Terminating
Financial Institution outstanding on its Termination Date, divided by (ii) the
Aggregate Capital outstanding on such Termination Date (the "Termination
Percentage"). Each Terminating Financial Institution's Termination Percentage
shall remain constant prior to the Amortization Date. On and after the
Amortization Date, each Termination Percentage shall be disregarded, and each
Terminating Financial Institution's Capital shall be reduced ratably with all
Financial Institutions in accordance with Section 2.3.
Section 2.3 Collections Following Amortization.
On the Amortization Date and on each day thereafter, the Servicer shall set
aside and hold in trust, for the holder of each Purchaser Interest, a
percentage of all Collections received on such day equal to the aggregate
Purchaser Interests and an additional amount for the payment of any accrued and
unpaid Obligations owed by Seller and not previously paid by Seller in
accordance with Section 2.1. On and after the Amortization Date, the Servicer
shall, at any time upon the request from time to time by (or pursuant to
standing instructions from) the Agent (i) remit to the Agent's account the
amounts set aside pursuant to the preceding sentence, and (ii) apply such
amounts to reduce the Capital associated with each such Purchaser Interest and
any other Aggregate Unpaids.
Section 2.4 Application of Collections.
If there shall be insufficient funds on deposit for the Servicer to distribute
funds in payment in full of the aforementioned amounts pursuant to Section 2.2
or 2.3 (as applicable), the Servicer shall distribute funds:
-- first, to the payment of the Servicer's reasonable out-of-pocket costs
and expenses in connection with servicing, administering and collecting
the Receivables, including the Servicing Fee,
-- second, to the reimbursement of the Agent's costs of collection and
enforcement of this Agreement,
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-- third, ratably to the payment of all accrued and unpaid fees under the
Fee Letter, CP Costs and Yield,
-- fourth, (to the extent applicable) to the ratable reduction of the
Aggregate Capital (without regard to any Termination Percentage),
-- fifth, for the ratable payment of all other unpaid Obligations, and
-- sixth, after the Aggregate Unpaids have been indefeasibly reduced to
zero, to Seller.
Collections applied to the payment of Aggregate Unpaids shall be distributed in
accordance with the aforementioned provisions, and, giving effect to each of
the priorities set forth above in this Section 2.4 shall be shared ratably
(within each priority) among the Agent and the Purchasers in accordance with
the amount of such Aggregate Unpaids owing to each of them in respect of each
such priority.
Section 2.5 Payment Rescission.
No payment of any of the Aggregate Unpaids shall be considered paid or applied
hereunder to the extent that, at any time, all or any portion of such payment
or application is rescinded by application of law or judicial authority, or
must otherwise be returned or refunded for any reason. Seller shall remain
obligated for the amount of any payment or application so rescinded, returned
or refunded, and shall promptly pay to the Agent (for application to the Person
or Persons who suffered such rescission, return or refund) the full amount
thereof, plus the Default Fee from the date of any such rescission, return or
refunding.
Section 2.6 Maximum Purchaser Interests.
Seller shall ensure that the Purchaser Interests of the Purchasers shall at no
time exceed in the aggregate 100%. If the aggregate of the Purchaser Interests
of the Purchasers exceeds 100%, Seller shall pay to the Agent within two (2)
Business Days after discovery of such excess, an amount to be applied to reduce
the Aggregate Capital (as allocated by the Agent), such that after giving
effect to such payment the aggregate of the Purchaser Interests equals or is
less than 100%.
Section 2.7 Clean Up Call.
In addition to Seller's rights pursuant to Section 1.3, Seller shall have the
right (after providing at least two (2) Business Days' written notice to the
Agent), at any time following the reduction of the Aggregate Capital to a level
that is less than 25.0% of the original Purchase Limit, to purchase from the
Purchasers all, but not less than all, of the then outstanding Purchaser
Interests. The purchase price in respect thereof shall be an amount equal to
the Aggregate Unpaids through the date of such repurchase, payable in
immediately available funds. Such purchase shall be without representation,
warranty or recourse of any kind by, on the part of, or against any Purchaser
or the Agent.
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ARTICLE III.
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CONDUIT FUNDING
Section 3.1 CP Costs.
Seller shall pay CP Costs with respect to the Capital associated with each
Purchaser Interest of Conduit for each day that any Capital in respect of such
Purchaser Interest is outstanding. Each Purchaser Interest funded
substantially with Pooled Commercial Paper will accrue CP Costs each day on a
pro rata basis, based upon the percentage share the Capital in respect of such
Purchaser Interest represents in relation to all assets held by Conduit and
funded substantially with related Pooled Commercial Paper.
Section 3.2 CP Costs Payments.
On each Settlement Date, Seller shall pay to the Agent (for the benefit of
Conduit) an aggregate amount equal to all accrued and unpaid CP Costs in
respect of the Capital associated with all Purchaser Interests of Conduit for
the immediately preceding Accrual Period in accordance with Article II.
Section 3.3 Calculation of CP Costs.
Not later than the 3rd Business Day prior to each Settlement Date, Conduit
shall calculate the aggregate amount of CP Costs for the applicable Accrual
Period and shall notify Seller of such aggregate amount.
ARTICLE IV.
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FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding.
Each Purchaser Interest of the Financial Institutions shall accrue Yield for
each day during its Tranche Period at either the LIBO Rate or the Prime Rate in
accordance with the terms and conditions hereof. Until Seller gives notice to
the Agent of another Discount Rate in accordance with Section 4.4, the initial
Discount Rate for any Purchaser Interest transferred to the Financial
Institutions by Conduit pursuant to the terms and conditions hereof shall be
the Prime Rate. If the Financial Institutions acquire by assignment from
Conduit any Purchaser Interest pursuant to Article XIII, each Purchaser
Interest so assigned shall each be deemed to have a new Tranche Period
commencing on the date of any such assignment. The Agent shall give prompt
notice to Seller of any assignment made by Conduit to the Financial
Institutions.
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Section 4.2 Yield Payments.
On the Settlement Date for each Purchaser Interest of the Financial
Institutions, Seller shall pay to the Agent (for the benefit of the Financial
Institutions) an aggregate amount equal to the accrued and unpaid Yield for the
entire Tranche Period of each such Purchaser Interest in accordance with
Article II.
Section 4.3 Selection and Continuation of Tranche Periods.
(a) Seller shall from time to time in its discretion select Tranche
Periods for the Purchaser Interests of the Financial Institutions (if any),
provided that, if at any time the Financial Institutions shall have a Purchaser
Interest, Seller shall always select Tranche Periods such that at least one
Tranche Period shall end on the date specified in clause (A) of the definition
of Settlement Date.
(b) Seller, upon notice to the Agent received at least three (3) Business
Days prior to the end of a Tranche Period (the "Terminating Tranche") for any
Purchaser Interest, may, effective on the last day of the Terminating Tranche:
(i) divide any such Purchaser Interest into multiple Purchaser Interests, (ii)
combine any such Purchaser Interest with one or more other Purchaser Interests
that have a Terminating Tranche ending on the same day as such Terminating
Tranche or (iii) combine any such Purchaser Interest with one or more new
Purchaser Interests to be purchased on the day such Terminating Tranche ends,
provided, that in no event may a Purchaser Interest of Conduit be combined with
a Purchaser Interest of the Financial Institutions.
Section 4.4 Financial Institution Discount Rates.
Seller may select the LIBO Rate or the Prime Rate for each Purchaser Interest
of the Financial Institutions. Seller shall by 12:00 noon. (Chicago time): (i)
at least three (3) Business Days prior to the expiration of any Terminating
Tranche with respect to which the LIBO Rate is being selected as a new Discount
Rate and (ii) except as provided in Section 4.1 and the last sentence of this
Section 4.4, at least one (1) Business Day prior to the expiration of any
Terminating Tranche with respect to which the Prime Rate is being selected as
the Discount Rate, give the Agent irrevocable notice of such Discount Rate for
the Purchaser Interest associated with such Terminating Tranche. Until Seller
gives notice to the Agent of another Discount Rate, the initial Discount Rate
for any Purchaser Interest transferred to the Financial Institutions pursuant
to the terms and conditions hereof shall be the Prime Rate.
Section 4.5 Suspension of the LIBO Rate.
(a) If any Financial Institution notifies the Agent that it has
determined that (i) funding its Pro Rata Share of the Purchaser Interests of
the Financial Institutions at a LIBO Rate would violate any applicable law,
rule, regulation, or directive of any governmental or regulatory authority,
whether or not having the force of law, (ii) deposits of a type and maturity
appropriate to match fund its Purchaser Interests at such LIBO Rate are not
available or (iii) such LIBO Rate does not accurately reflect the cost of
acquiring or maintaining a Purchaser Interest at such LIBO Rate, then the Agent
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shall suspend the availability of such LIBO Rate and require Seller to select
the Prime Rate for any Purchaser Interest accruing Yield at such LIBO Rate;
provided that before making any such suspension, the applicable Financial
Institution shall use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, in its reasonable discretion, in any legal, economic or
regulatory manner) to designate a different LIBO Rate lending office if the
making of such designation would allow such Financial Institution or its LIBO
Rate lending office to continue to fund its Pro Rata Share of the Purchaser
Interests at a LIBO Rate and avoid the situations set forth in clauses
(i)-(iii) in this Section 4.5(a).
(b) If less than all of the Financial Institutions give a notice to the
Agent pursuant to Section 4.5(a), each Financial Institution which gave such a
notice shall be obliged, at the request of Seller, Conduit or the Agent, to
assign all of its rights and obligations hereunder to (i) another Financial
Institution or (ii) another funding entity nominated by Seller or the Agent
that is acceptable to Conduit and willing to participate in this Agreement
through the Liquidity Termination Date in the place of such notifying Financial
Institution; provided that (i) the notifying Financial Institution receives
payment in full, pursuant to an Assignment Agreement, of an amount equal to
such notifying Financial Institution's Pro Rata Share of the Capital and Yield
owing to all of the Financial Institutions and all accrued but unpaid fees and
other costs and expenses payable in respect of its Pro Rata Share of the
Purchaser Interests of the Financial Institutions, and (ii) the replacement
Financial Institution otherwise satisfies the requirements of Section 12.1(b).
ARTICLE V.
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REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Seller Parties.
Each Seller Party hereby represents and warrants to the Agent and the
Purchasers, as to itself, as of the date hereof and as of the date of each
Incremental Purchase and the date of each Reinvestment that:
(a) Existence and Power. Such Seller Party is a corporation duly
organized, validly existing and in good standing under the laws of its state of
organization. Such Seller Party is duly qualified to do business and is in
good standing as a foreign corporation, and has and holds all corporate power
and all governmental licenses, authorizations, consents and approvals required
to carry on its business in each jurisdiction in which its business is
conducted except where the failure to so qualify or so hold could not
reasonably be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and Delivery. The
execution and delivery by such Seller Party of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and, in the case of Seller, Seller's use
of the proceeds of purchases made hereunder, are within its corporate powers
and authority and have been duly authorized by all necessary corporate action
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on its part. This Agreement and each other Transaction Document to which such
Seller Party is a party has been duly executed and delivered by such Seller
Party.
(c) No Conflict. The execution and delivery by such Seller Party of this
Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate or articles of incorporation or by-laws, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or by which it or any
of its property is bound, or (iv) any order, writ, judgment, award, injunction
or decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of such Seller Party or
its Subsidiaries (except as created under the Transaction Documents), except,
in any case, where such contravention or violation could not reasonably be
expected to have a Material Adverse Effect; and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by such Seller Party of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. Except as reported on the most recent SEC Form 10-Q
or 10-K filed by Xxxxxxxx with the SEC, there are no actions, suits or
proceedings pending, or to the best of such Seller Party's knowledge,
threatened, against or affecting such Seller Party, or any of its properties,
in or before any court, arbitrator or other body, that could reasonably be
expected to have a Material Adverse Effect. Such Seller Party is not in
default with respect to any order of any court, arbitrator or governmental
body.
(f) Binding Effect. This Agreement and each other Transaction Document
to which such Seller Party is a party constitute the legal, valid and binding
obligations of such Seller Party enforceable against such Seller Party in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished by
such Seller Party or any of its Affiliates to the Agent or the Purchasers for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by such Seller Party or any of its Affiliates
to the Agent or the Purchasers will be, true and accurate in every material
respect on the date such information is stated or certified and will not, on
the date such information is stated or certified, be otherwise misleading in
light of the circumstances under which such information is so furnished.
(h) Use of Proceeds. No proceeds of any purchase hereunder will be used
(i) for a purpose that violates, or would be inconsistent with, Regulation T, U
or X promulgated by the Board of Governors of the Federal Reserve System from
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time to time or (ii) to acquire any security in any transaction (other than any
repurchase by Xxxxxxxx of any class of its own stock) which is subject to
Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) Good Title. Immediately prior to each purchase hereunder, Seller
shall be the legal and beneficial owner of the Receivables and Related Security
with respect thereto, free and clear of any Adverse Claim, except as created by
the Transaction Documents. There have been duly filed (or delivered to the
Agent in form suitable for filing) all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect Seller's ownership interest in each
Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to, and shall, upon each
purchase hereunder, transfer to the Agent for the benefit of the relevant
Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or
Purchasers shall acquire from Seller) a valid and perfected first priority
undivided percentage ownership or security interest in each Receivable existing
or hereafter arising and in the Related Security (to the extent covered by
Article 9 of the UCC) and Collections with respect thereto, free and clear of
any Adverse Claim, except as created by the Transaction Documents. There have
been duly filed (or delivered to the Agent in form suitable for filing) all
financing statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to perfect the
Agent's (on behalf of the Purchasers) ownership or security interest in the
Receivables, the Related Security (to the extent covered by Article 9 of the
UCC) and the Collections.
(k) Places of Business and Locations of Records. The principal places of
business and chief executive office of such Seller Party and the offices where
it keeps all of its Records are located at the address(es) listed on Exhibit
III or such other locations of which the Agent has been notified in accordance
with Section 7.2(a) in jurisdictions where all action required by Section
14.4(a) has been taken and completed. Seller's Federal Employer Identification
Number and Delaware organizational identification number are correctly set
forth on Exhibit III.
(l) Collections. Within 30 days after the date hereof (or, in the case
of any Collections which are deposited in an account at Bank of America, N.A.,
within 90 days after the date hereof), the conditions and requirements set
forth in Section 7.1(j) and Section 8.2 will have been satisfied and duly
performed. The names and addresses of all Collection Banks, together with the
account numbers of the Collection Accounts of Seller at each Collection Bank
and the post office box number of each Lock-Box, are listed on Exhibit IV.
Seller has not granted any Person, other than the Agent as contemplated by this
Agreement, dominion and control of any Lock-Box or Collection Account, or the
right to take dominion and control of any such Lock-Box or Collection Account
at a future time or upon the occurrence of a future event.
(m) Material Adverse Effect. (i) The initial Servicer represents and
warrants that since December 31, 2001, no event has occurred that would have a
material adverse effect on the financial condition or operations of the initial
Servicer and its Subsidiaries, taken as a whole, or the ability of the initial
Servicer to perform its obligations under this Agreement, and (ii) Seller
represents and warrants that since the date of this Agreement, no event has
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occurred that would have a material adverse effect on (A) the financial
condition or operations of Seller, (B) the ability of Seller to perform its
obligations under the Transaction Documents, or (C) the collectibility of the
Receivables generally or any material portion of the Receivables.
(n) Names. Since its formation, Seller has not used any legal names,
trade names or assumed names other than the name in which it has executed this
Agreement.
(o ) Ownership of Seller. Xxxxxxxx owns, directly or indirectly, 100% of
the issued and outstanding capital stock of Seller, free and clear of any
Adverse Claim. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Seller.
(p) Not a Holding Company or an Investment Company. Such Seller Party is
not a "holding company" or a "subsidiary holding company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or any successor statute. Such Seller Party is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) Compliance with Law. Such Seller Party has complied in all respects
with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material
Adverse Effect. Seller represents and warrants that each Receivable, together
with the Contract related thereto, does not contravene any laws, rules or
regulations applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy), and no part of such Contract is in violation of any such law, rule or
regulation, except where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Seller Party has
complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract, and has not made any change
to such Credit and Collection Policy, other than as permitted under Section 7.2
(c) and in compliance with the notification requirements in Section
7.1(a)(vii).
(s) Payments to the Applicable Originator. With respect to each
Receivable transferred to Seller under the Receivables Sale Agreement, Seller
has given reasonably equivalent value to the applicable Originator in
consideration therefor and such transfer was not made for or on account of an
antecedent debt.
(t) Enforceability of Contracts. Seller represents and warrants that
each Contract with respect to each Receivable is effective to create, and has
created, a legal, valid and binding obligation of the related Obligor to pay
the Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon, enforceable against the Obligor in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
- 15 -
generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(u) Eligible Receivables. Seller represents and warrants that each
Receivable included in the Net Receivables Balance as an Eligible Receivable on
the date of its purchase under the Receivables Sale Agreement was an Eligible
Receivable on such purchase date.
(v) Net Receivables Balance. Seller has determined that, immediately
after giving effect to each purchase hereunder, the Net Receivables Balance is
at least equal to the sum of (i) the Aggregate Capital, plus (ii) the Aggregate
Reserves.
(w) Accounting. The manner in which such Seller Party accounts for the
transactions contemplated by this Agreement and the Receivables Sale Agreement
does not jeopardize the true sale analysis.
(x) Purpose. Seller has determined that, from a business viewpoint, the
purchases of the Receivables and related interests thereto from the Originators
under the Receivables Sale Agreement, and the sales of Purchaser Interests and
other transactions contemplated herein, are in the best interests of Seller.
Section 5.2 Financial Institution Representations and Warranties.
Each Financial Institution hereby represents and warrants to the Agent, Conduit
and each Seller Party that:
(a) Existence and Power. Such Financial Institution is a corporation or
a banking association duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, and has
all corporate or association power to perform its obligations hereunder.
(b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate or association powers, have been duly authorized by
all necessary corporate or association action, do not contravene or violate (i)
its certificate or articles of incorporation or association or by-laws, (ii)
any law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or any of its property
is bound, or (iv) any order, writ, judgment, award, injunction or decree
binding on or affecting it or its property, and do not result in the creation
or imposition of any Adverse Claim on its assets.
(c) Governmental Authorization. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such
Financial Institution of this Agreement and the performance of its obligations
hereunder.
(d) Binding Effect. This Agreement has been duly authorized, executed
and delivered by such Financial Institution. This Agreement constitutes the
legal, valid and binding obligation of such Financial Institution enforceable
against such Financial Institution in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
- 16 -
or other similar laws relating to or limiting creditors' rights generally and
by general principles of equity (regardless of whether such enforcement is
sought in a proceeding in equity or at law).
ARTICLE VI.
-----------
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Incremental Purchase.
The initial Incremental Purchase of a Purchaser Interest under this Agreement
is subject to the conditions precedent that the Agent shall have received on or
before the date of such purchase (a) those documents listed on Schedule B, and
(b) all fees and expenses required to be paid on such date pursuant to the
terms of this Agreement and the Fee Letter.
Section 6.2 Conditions Precedent to All Purchases and Reinvestments.
Each purchase of a Purchaser Interest (other than pursuant to Section 13.1) and
each Reinvestment shall be subject to the further conditions precedent that (a)
in the case of each such purchase or Reinvestment: the Servicer shall have
delivered to the Agent on or prior to the date of such purchase, in form and
substance satisfactory to the Agent, all Monthly Reports as and when due under
Section 8.5; (b) the Facility Termination Date shall not have occurred; (c) the
Agent shall have received such other opinions or documents as it may reasonably
request; provided that the Agent has requested such opinions or documents (i)
pursuant to Section 7.2(a) or (ii) in connection with a change in law which the
Agent determines in its reasonable business judgment to have an adverse effect
on the interests of the Purchasers hereunder; and (d) on the date of each such
Incremental Purchase or Reinvestment, the following statements shall be true
(and acceptance of the proceeds of such Incremental Purchase or Reinvestment
shall be deemed a representation and warranty by Seller that such statements
are then true):
(i) the representations and warranties set forth in Section 5.1 are
true and correct on and as of the date of such Incremental Purchase or
Reinvestment as though made on and as of such date;
(ii) (A) no event has occurred and is continuing, or would result
from such Incremental Purchase or Reinvestment, that will constitute an
Amortization Event, and (B), in the case of an Incremental Purchase, no
event has occurred and is continuing, or would result from such
Incremental Purchase that would constitute a Potential Amortization Event;
and
(iii) the Aggregate Capital does not exceed the Purchase Limit and
the aggregate Purchaser Interests do not exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that
the Servicer shall receive any Collections without the requirement that any
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further action be taken on the part of any Person and notwithstanding the
failure of Seller to satisfy any of the foregoing conditions precedent in
respect of such Reinvestment. The failure of Seller to satisfy any of the
foregoing conditions precedent in respect of any Reinvestment shall give rise
to a right of the Agent, which right may be exercised at any time on demand of
the Agent, to rescind the related purchase and direct Seller to pay to the
Agent for the benefit of the Purchasers an amount equal to the Collections
prior to the Amortization Date that shall have been applied to the affected
Reinvestment.
ARTICLE VII.
------------
COVENANTS
Section 7.1 Affirmative Covenants of The Seller Parties.
Until the date on which the Aggregate Unpaids have been indefeasibly paid in
full and this Agreement terminates in accordance with its terms, each Seller
Party hereby covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will maintain, for itself and
each of its Subsidiaries, a system of accounting established and administered
in accordance with GAAP, and furnish or cause to be furnished to the Agent:
(i) Annual Reporting. Within 90 days after the close of each of its
respective fiscal years, (A) audited, unqualified financial statements
(which shall include consolidated balance sheets, statements of income and
retained earnings and a statement of cash flows) for the Servicer for such
fiscal year certified in a manner acceptable to the Agent by a nationally
recognized independent public accounting firm; provided that Meredith's
delivery to the Agent of its filing with the SEC of SEC Form 10-K for each
fiscal year shall satisfy this Section 7.1(a)(i)(A) for the Servicer, and
(B) unaudited financial statements (which shall include balance sheets,
statements of income and retained earnings and a statement of cash flows)
for Seller for such fiscal year certified by Seller's chief financial
officer.
(ii) Quarterly Reporting. Within 45 days after the close of the
first three (3) quarterly periods of each of its respective fiscal years,
(A) unaudited consolidated balance sheets of the Servicer as at the close
of each such period and statements of income and retained earnings and a
statement of cash flows for the Servicer for the period from the beginning
of such fiscal year to the end of such quarter, all certified by the
Servicer's chief financial officer; provided that Meredith's delivery to
the Agent of its filing with the SEC of SEC Form 10-Q for each of the
first three quarters of each fiscal year shall satisfy this Section
7.1(a)(ii)(A) for the Servicer, and (B) unaudited balance sheets of Seller
as at the close of each such period and statements of income and retained
earnings and a statement of cash flows for Seller for the period from the
beginning of such fiscal year to the end of such quarter, all certified by
Seller's chief financial officer.
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(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate in substantially
the form of Exhibit V signed by such Seller Party's Authorized Officer and
dated the date of such annual financial statement or such quarterly
financial statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of such Seller Party copies of all
financial statements, reports and proxy statements so furnished.
(v) SEC Filings. Promptly upon the filing thereof, copies of all
financial statements and regular, periodical or special reports (other
than SEC Forms 10-K and 10-Q filed by Xxxxxxxx and delivered in accordance
with Sections 7.1(a)(i) and (ii) and other than SEC Forms 3, 4 or 5) that
Xxxxxxxx or any Subsidiary may make to, or file with, the Securities and
Exchange Commission.
(vi) Copies of Notices. Promptly upon its receipt of any notice,
request for consent, financial statements, certification, report or other
communication under or in connection with any Transaction Document from
any Person other than the Agent or Conduit, copies of the same.
(vii) Change in Credit and Collection Policy. At least thirty (30)
days prior to the effectiveness of any material change in or material
amendment to the Credit and Collection Policy, a copy of the Credit and
Collection Policy then in effect and a notice (A) indicating such change
or amendment, and (B) if such proposed change or amendment would be
reasonably likely to adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created
Receivables, requesting the Agent's consent thereto.
(viii) Other Information. Promptly, from time to time, such other
information, documents, records or reports relating to the Receivables or
the condition or operations, financial or otherwise, of such Seller Party
as the Agent may from time to time reasonably request in order to protect
the interests of the Agent and the Purchasers under or as contemplated by
this Agreement.
(b) Notices. Such Seller Party will notify the Agent in writing of any
of the following promptly upon an Authorized Officer learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
(i) Amortization Events or Potential Amortization Events. The
occurrence of each Amortization Event and each Potential Amortization
Event, by a statement of an Authorized Officer of such Seller Party.
(ii) Judgment and Proceedings. (A) (1) The entry of any judgment or
decree against the Servicer or any of its respective Subsidiaries if the
aggregate amount of all judgments and decrees then outstanding against the
Servicer and its Subsidiaries exceeds $10,000,000 after deducting (a) the
amount with respect to which the Servicer or any such Subsidiary is
insured and with respect to which the insurer has assumed responsibility
in writing, and (b) the amount for which the Servicer or any such
Subsidiary is otherwise indemnified if the terms of such indemnification
- 19 -
are satisfactory to the Agent, and (2) the institution of any litigation,
arbitration proceeding or governmental proceeding against the Servicer
which, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect; and (B) the entry of any judgment or
decree or the institution of any litigation, arbitration proceeding or
governmental proceeding against Seller.
(iii) Material Adverse Effect. The occurrence of any event or
condition that has had, or could reasonably be expected to have, a
Material Adverse Effect.
(iv) Termination Date. The occurrence of the "Termination Date"
under and as defined in the Receivables Sale Agreement.
(v) Defaults Under Other Agreements. The occurrence of a default or
an event of default under any other financing arrangement pursuant to
which such Seller Party is a debtor or an obligor.
(c) Compliance with Laws and Preservation of Corporate Existence. Such
Seller Party will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably
be expected to have a Material Adverse Effect. Such Seller Party will preserve
and maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where its business is
conducted, except where the failure to so preserve and maintain or qualify
could not reasonably be expected to have a Material Adverse Effect.
(d) Audits. Such Seller Party will furnish to the Agent from time to
time such information with respect to it and the Receivables as the Agent may
reasonably request. Such Seller Party will, from time to time during regular
business hours as requested by the Agent upon reasonable notice and at the sole
cost of such Seller Party, permit the Agent, or its agents or representatives
(and shall require each Originator to permit the Agent or its agents or
representatives), (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Person relating to the
Receivables and the Related Security, including, without limitation, the
related Contracts, and (ii) to visit the offices and properties of such Person
for the purpose of examining such materials described in clause (i) above, and
to discuss matters relating to such Person's financial condition or the
Receivables and the Related Security or any Person's performance under any of
the Transaction Documents or any Person's performance under the Contracts and,
in each case, with any of the officers or employees of Seller or the Servicer
having knowledge of such matters; provided, however, that, prior to the
occurrence and continuance of an Amortization Event, no Seller Party shall be
required to pay the costs of any such audit if it, the other Seller Party or
any Originator has paid the costs of one audit performed at Meredith's office
in Des Moines, Iowa in any one fiscal year.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will (and will cause each Originator to) maintain
and implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables in the
- 20 -
event of the destruction of the originals thereof), and keep and maintain
all documents, books, records and other information reasonably necessary
or advisable for the collection of all Receivables (including, without
limitation, records adequate to permit the immediate identification of
each new Receivable and all Collections of and adjustments to each
existing Receivable). The Servicer will (and will cause each Originator
to) give the Agent notice of any material change in the administrative and
operating procedures referred to in the previous sentence other than a
change in the type of software used by the Servicer or such Originator.
(ii) Such Seller Party will (and will cause or require each
Originator to) (A) on or prior to the date hereof, xxxx its master data
processing records and other books and records relating to the Purchaser
Interests with a legend, acceptable to the Agent, describing the Purchaser
Interests; provided that such Seller Party shall have 30 days from the
date hereof to xxxx the data processing records related to the Receivables
arising from the sale of advertising on television stations and (B) upon
the request of the Agent following the occurrence of an Amortization
Event: (x) xxxx each Contract with a legend describing the Purchaser
Interests and (y) deliver to the Agent all Contracts (including, without
limitation, all multiple originals of any such Contract) relating to the
Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such
Seller Party will (and will cause or require each Originator to) timely and
fully (i) perform and comply with all provisions, covenants and other promises
required to be observed by it under the Contracts related to the Receivables,
and (ii) comply in all material respects with the Credit and Collection Policy
in regard to each Receivable and the related Contract.
(g) Performance and Enforcement of Receivables Sale Agreement. Seller
will, and will require Originator to, perform each of their respective
obligations and undertakings under and pursuant to the Receivables Sale
Agreement, will purchase Receivables thereunder in strict compliance with the
terms thereof and will vigorously enforce the rights and remedies accorded to
Seller under the Receivables Sale Agreement. Seller will take all actions to
perfect and enforce its rights and interests (and the rights and interests of
the Agent and the Purchasers as assignees of Seller) under the Receivables Sale
Agreement as the Agent may from time to time reasonably request, including,
without limitation, making claims to which it may be entitled under any
indemnity, reimbursement or similar provision contained in the Receivables Sale
Agreement.
(h) Ownership. Seller will (or will require each Originator to) take all
necessary action to (i) vest legal and equitable title to the Receivables, the
Related Security and the Collections purchased under the Receivables Sale
Agreement irrevocably in Seller, free and clear of any Adverse Claims other
than Adverse Claims in favor of the Agent and the Purchasers (including,
without limitation, the filing of all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect Seller's interest in such Receivables,
Related Security (to the extent covered by Article 9 of the UCC) and
Collections and such other action to perfect, protect or more fully evidence
the interest of Seller therein as the Agent may reasonably request), and (ii)
establish and maintain, in favor of the Agent, for the benefit of the
Purchasers, a valid and perfected first priority undivided percentage ownership
- 21 -
interest (and/or a valid and perfected first priority security interest) in all
Receivables, Related Security (to the extent covered by Article 9 of the UCC)
and Collections to the full extent contemplated herein, free and clear of any
Adverse Claims other than Adverse Claims in favor of the Agent for the benefit
of the Purchasers (including, without limitation, the filing of all financing
statements or other similar instruments or documents necessary under the UCC
(or any comparable law) of all appropriate jurisdictions to perfect the Agent's
(for the benefit of the Purchasers) interest in such Receivables, Related
Security (to the extent covered by Article 9 of the UCC) and Collections and
such other action to perfect, protect or more fully evidence the interest of
the Agent for the benefit of the Purchasers as the Agent may reasonably
request).
(i) Purchasers' Reliance. Seller acknowledges that the Purchasers are
entering into the transactions contemplated by this Agreement in reliance upon
Seller's identity as a legal entity that is separate from each Originator and
its other Affiliates (collectively, the "Xxxxxxxx Group"). Therefore, from and
after the date of execution and delivery of this Agreement, Seller shall take
all reasonable steps, including, without limitation, all steps that the Agent
or any Purchaser may from time to time reasonably request, to maintain Seller's
identity as a separate legal entity and to make it manifest to third parties
that Seller is an entity with assets and liabilities distinct from those of any
member of the Xxxxxxxx Group and not just a division of any such member.
Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, Seller will:
(A) conduct its own business in its own name and require that all
full-time employees of Seller, if any, identify themselves as such and not
as employees of any member of the Xxxxxxxx Group (including, without
limitation, by means of providing appropriate employees with business or
identification cards identifying such employees as Seller's employees);
(B) compensate all employees, consultants and agents directly, from
Seller's own funds, for services provided to Seller by such employees,
consultants and agents and, to the extent any employee, consultant or
agent of Seller is also an employee, consultant or agent of any member of
the Xxxxxxxx Group, allocate the compensation of such employee, consultant
or agent between Seller and the members of the Xxxxxxxx Group on a basis
that reflects the services rendered to Seller and the Xxxxxxxx Group;
(C) clearly identify its offices (by signage or otherwise) as its
offices and, if such office is located in the offices of any member of the
Xxxxxxxx Group, Seller shall lease such office at a fair market rent;
(D) have a separate telephone number, which will be answered only in
its name and separate stationery, invoices and checks in its own name;
(E) conduct all transactions with any member of the Xxxxxxxx Group
strictly on an arm's-length basis, allocate all overhead expenses
(including, without limitation, telephone and other utility charges) for
items shared between Seller and any member of the Xxxxxxxx Group on the
basis of actual use to the extent practicable and, to the extent such
allocation is not practicable, on a basis reasonably related to actual
use;
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(F) at all times have a Board of Directors consisting of three
members, at least one member of which is an Independent Director;
(G) observe all corporate formalities as a distinct entity, and
ensure that all corporate actions relating to (A) the selection,
maintenance or replacement of the Independent Director, (B) the
dissolution or liquidation of Seller or (C) the initiation of,
participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving Seller, are
duly authorized by unanimous vote of its Board of Directors (including the
Independent Director);
(H) maintain Seller's books and records separate from those of the
members of the Xxxxxxxx Group and otherwise readily identifiable as its
own assets rather than assets of any member of the Xxxxxxxx Group;
(I) prepare its financial statements separately from those of the
Xxxxxxxx Group and insure that any consolidated financial statements of
Xxxxxxxx or the Xxxxxxxx Group that include Seller and that are filed with
the Securities and Exchange Commission or any other governmental agency
have notes clearly stating that Seller is a separate corporate entity and
that its assets have been pledged to the Agent for the benefit of the
Purchasers hereunder;
(J) except as herein specifically otherwise provided, maintain the
funds or other assets of Seller separate from, and not commingled with,
those of any member of the Xxxxxxxx Group and only maintain bank accounts
or other depository accounts to which Seller alone is the account party,
into which Seller alone makes deposits and from which Seller alone (or the
Agent hereunder) has the power to make withdrawals;
(K) pay all of Seller's operating expenses from Seller's own assets
(except for certain payments by an Originator or other Persons pursuant to
allocation arrangements that comply with the requirements of this Section
7.1(i));
(L) operate its business and activities such that: it does not
engage in any business or activity of any kind, or enter into any
transaction or indenture, mortgage, instrument, agreement, contract, lease
or other undertaking, other than the transactions contemplated and
authorized by this Agreement and the Receivables Sale Agreement; and does
not create, incur, guarantee, assume or suffer to exist any indebtedness
or other liabilities, whether direct or contingent, other than (1) as a
result of the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business, (2)
the incurrence of obligations under this Agreement, (3) the incurrence of
obligations, as expressly contemplated in the Receivables Sale Agreement,
to make payment to the Originators thereunder for the purchase of
Receivables from the Originators under the Receivables Sale Agreement, and
(4) the incurrence of operating expenses in the ordinary course of
business of the type otherwise contemplated by this Agreement;
(M) maintain its corporate charter in conformity with this
Agreement, such that it does not amend, restate, supplement or otherwise
modify its Certificate of Incorporation or By-Laws in any respect that
- 23 -
would impair its ability to comply with the terms or provisions of any of
the Transaction Documents, including, without limitation, this Section
7.1(i);
(N) maintain the effectiveness of, and continue to perform under the
Receivables Sale Agreement and from and after the time, if any, when it is
required to be delivered, the Performance Undertaking, such that it does
not amend, restate, supplement, cancel, terminate or otherwise modify the
Receivables Sale Agreement or, when applicable, the Performance
Undertaking, or give any consent, waiver, directive or approval thereunder
or waive any default, action, omission or breach under the Receivables
Sale Agreement or, when applicable, the Performance Undertaking or
otherwise grant any indulgence thereunder, without (in each case) the
prior written consent of the Agent;
(O) maintain its corporate separateness such that it does not merge
or consolidate with or into, or convey, transfer, lease or otherwise
dispose of (whether in one transaction or in a series of transactions, and
except as otherwise contemplated herein) all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets of, any Person, nor at any time create,
have, acquire, maintain or hold any interest in any Subsidiary;
(P) maintain at all times the Required Capital Amount (as defined in
the Receivables Sale Agreement) and refrain from making any dividend,
distribution, redemption of capital stock or payment of any subordinated
indebtedness which would cause the Required Capital Amount to cease to be
so maintained; and
(Q) take such other actions as are necessary on its part to ensure
that the facts and assumptions set forth in the opinion issued by Sidley
Xxxxxx Xxxxx & Xxxx, as counsel for Seller, in connection with the closing
or initial Incremental Purchase under this Agreement and relating to
substantive consolidation issues, and in the certificates accompanying
such opinion, remain true and correct in all material respects at all
times.
(j) Collections. Such Seller Party will cause (1) all proceeds from all
Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account and (2) within 30 days after the date hereof, each Lock-Box and
Collection Account (other than any Lock-Box or Collection Account at or
serviced by Bank of America, N.A.) to be subject at all times to a Collection
Account Agreement that is in full force and effect. In the event any payments
relating to Receivables are remitted directly to Seller or any Affiliate of
Seller, Seller will remit (or will cause all such payments to be remitted)
directly to a Collection Bank and deposited into a Collection Account within
two (2) Business Days following receipt thereof, and, at all times prior to
such remittance, Seller will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of the Agent and the
Purchasers. Seller will maintain exclusive ownership, dominion and control
(subject to the terms of this Agreement) of each Lock-Box and Collection
Account (other than any Lock-Box or Collection Account at or serviced by Bank
of America, N.A.) and shall not grant the right to take dominion and control of
any Lock-Box or Collection Account at a future time or upon the occurrence of a
future event to any Person, except to the Agent as contemplated by this
Agreement.
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(k) Taxes. Such Seller Party will file all tax returns and reports
required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing, except any such taxes which are not yet
delinquent or are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. Seller will pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of Conduit, the Agent or any Financial Institution.
(l) Insurance. Seller will maintain in effect, or cause to be maintained
in effect, at Seller's own expense, such casualty and liability insurance as
Seller shall deem appropriate in its good faith business judgment.
(m) Payment to the Applicable Originator. With respect to any Receivable
purchased by Seller from any Originator, such sale shall be effected under, and
in strict compliance with the terms of, the Receivables Sale Agreement,
including, without limitation, the terms relating to the amount and timing of
payments to be made to the applicable Originator in respect of the purchase
price for such Receivable.
Section 7.2 Negative Covenants of The Seller Parties. Until the date on which
the Aggregate Unpaids have been indefeasibly paid in full and this Agreement
terminates in accordance with its terms, each Seller Party hereby covenants, as
to itself, that:
(a) Name Change, Offices and Records. Such Seller Party will not
change its name, identity or corporate structure (within the meaning of
Section 9-507(c) of any applicable enactment of the UCC) or relocate its
chief executive office or any office where Records are kept unless it
shall have: (i) given the Agent at least fifteen (15) days' prior written
notice thereof and (ii) delivered to the Agent all financing statements,
instruments and other documents requested by the Agent in connection with
such change or relocation.
(b) Change in Payment Instructions to Obligors. Except as may be
required by the Agent pursuant to Section 8.2(b), such Seller Party will
not add or terminate any bank as a Collection Bank, or make any change in
the instructions to Obligors regarding payments to be made to any Lock-Box
or Collection Account, unless the Agent shall have received, at least ten
(10) days before the proposed effective date therefor, (i) written notice
of such addition, termination or change and (ii) with respect to the
addition of a Collection Bank or a Collection Account or Lock-Box, an
executed Collection Account Agreement with respect to the new Collection
Account or Lock-Box; provided, however, that the Servicer may make changes
in instructions to Obligors regarding payments if such new instructions
require such Obligor to make payments to another existing Collection
Account; and provided further that Seller and Servicer may terminate Bank
of America, N.A. as a Collection Bank and direct Obligors as contemplated
in Section 8.2(b).
(c) Modifications to Contracts and Credit and Collection Policy.
Without the consent of the Agent, such Seller Party will not, and will not
permit any Originator to, make any change to the Credit and Collection
Policy that could materially adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created
Receivables. Except as provided in Section 8.2(d), the Servicer will not,
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and will not permit any Originator to, extend, amend or otherwise modify
the terms of any Receivable or any Contract related thereto other than in
accordance with the Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation of law
or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect
to, any Receivable, Related Security or Collections, or upon or with
respect to any Contract under which any Receivable arises, or any Lock-Box
or Collection Account, or assign any right to receive income with respect
thereto (other than, in each case, the creation of the interests therein
in favor of the Agent and the Purchasers provided for herein), and Seller
will defend the right, title and interest of the Agent and the Purchasers
in, to and under any of the foregoing property, against all claims of
third parties claiming through or under Seller or Originator. Seller will
not create or suffer to exist any mortgage, pledge, security interest,
encumbrance, lien, charge or other similar arrangement on any of its
inventory.
(e) Net Receivables Balance. At no time prior to the Amortization
Date shall Seller permit the Net Receivables Balance to be less than an
amount equal to the sum of (i) the Aggregate Capital plus (ii) the
Aggregate Reserves.
(f) Termination Date Determination. Seller will not designate the
Termination Date (as defined in the Receivables Sale Agreement), or send
any written notice to Originator in respect thereof, without the prior
written consent of the Agent, except with respect to the occurrence of
such Termination Date arising pursuant to Section 5.1(d) of the
Receivables Sale Agreement.
(g) Restricted Junior Payments. From and after the occurrence and
during the continuation of any Amortization Event, Seller will not make
any Restricted Junior Payment if, after giving effect thereto, Seller
would fail to meet its obligations set forth in Section 7.2(e).
ARTICLE VIII.
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ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer.
(a) The servicing, administration and collection of the Receivables shall
be conducted by such Person (the "Servicer") so designated from time to time in
accordance with this Section 8.1. Xxxxxxxx is hereby designated as, and hereby
agrees to perform the duties and obligations of, the Servicer pursuant to the
terms of this Agreement. The Agent may at any time following the occurrence of
an Amortization Event designate as Servicer any Person to succeed Xxxxxxxx or
any successor Servicer.
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(b) Xxxxxxxx xxx delegate to any other Originator, as sub-servicer of the
Servicer, certain of its duties and responsibilities as Servicer hereunder in
respect of the Receivables originated by such other Originator. Without the
prior written consent of the Agent and the Required Financial Institutions,
Xxxxxxxx shall not be permitted to delegate any of its duties or
responsibilities as Servicer to any Person other than (i) Seller, (ii) the
other Originators as stated in the immediately preceding sentence, and (iii)
with respect to certain Charged-Off Receivables, outside collection agencies in
accordance with its customary practices. Seller shall not be permitted to
further delegate to any other Person any of the duties or responsibilities of
the Servicer delegated to it by Xxxxxxxx. If at any time following the
occurrence of an Amortization Event, the Agent shall designate as Servicer any
Person other than Xxxxxxxx, all duties and responsibilities theretofore
delegated by Xxxxxxxx to Seller may, at the discretion of the Agent, be
terminated forthwith on notice given by the Agent to Xxxxxxxx and to Seller.
(c) Notwithstanding any delegation by Xxxxxxxx pursuant to the foregoing
subsection (b), (i) Xxxxxxxx shall be and remain primarily liable to the Agent
and the Purchasers for the full and prompt performance of all duties and
responsibilities of the Servicer hereunder and (ii) the Agent and the
Purchasers shall be entitled to deal exclusively with Xxxxxxxx in matters
relating to the discharge by the Servicer of its duties and responsibilities
hereunder. The Agent and the Purchasers shall not be required to give notice,
demand or other communication to any Person other than Xxxxxxxx in order for
communication to the Servicer and its sub-servicer or other delegate with
respect thereto to be accomplished. Xxxxxxxx, at all times that it is the
Servicer, shall be responsible for providing any sub-servicer or other delegate
of the Servicer with any notice given to the Servicer under this Agreement.
Section 8.2 Duties of Servicer.
(a) The Servicer shall take or cause to be taken all such actions as may
be necessary or advisable to collect each Receivable from time to time, all in
accordance with applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Credit and Collection Policy.
(b) Within 30 days after the date hereof, the Servicer will instruct all
Obligors to pay all Collections directly to a Lock-Box or Collection Account;
provided, however, that so long as no Amortization Event has occurred and is
continuing, Collections may be obtained by the applicable Originator at the
offices of Obligors so long as they are deposited within 2 Business Days after
receipt to a Collection Account. Within 30 days after the date hereof, the
Servicer shall effect a Collection Account Agreement substantially in the form
of Exhibit VI with each bank other than Bank of America, N.A. at which a
Collection Account is maintained at any time. Within 90 days after the date
hereof, the Servicer will instruct all Obligors which are paying Collections to
a Lock-Box or a Collection Account at Bank of America, N.A. to pay Collections
to another Lock-Box or Collection Account which is subject to a Collection
Account Agreement. In the case of any remittances received in any Lock-Box or
Collection Account that shall have been identified, to the satisfaction of the
Servicer, to not constitute Collections or other proceeds of the Receivables or
the Related Security, the Servicer shall promptly remit such items to the
Person identified to it as being the owner of such remittances. From and after
the date the Agent delivers to any Collection Bank a Collection Notice pursuant
to Section 8.3, the Agent may request that the Servicer, and the Servicer
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thereupon promptly shall instruct all Obligors with respect to the Receivables,
to remit all payments thereon to a new depositary account specified by the
Agent and, at all times thereafter, Seller and the Servicer shall not deposit
or otherwise credit, and shall not permit any other Person to deposit or
otherwise credit to such new depositary account any cash or payment item other
than Collections.
(c) The Servicer shall administer the Collections in accordance with the
procedures described herein and in Article II. The Servicer shall set aside
and hold in trust for the account of Seller and the Purchasers their respective
shares of the Collections in accordance with Article II. After the occurrence
of an Amortization Event, the Servicer shall, upon the request of the Agent,
segregate, in a manner acceptable to the Agent, all cash, checks and other
instruments received by it from time to time constituting Collections from the
general funds of the Servicer or Seller prior to the remittance thereof in
accordance with Article II. If the Servicer shall be required to segregate
Collections pursuant to the preceding sentence, the Servicer shall segregate
and deposit with a bank designated by the Agent such allocable share of
Collections of Receivables set aside for the Purchasers on the first Business
Day following receipt by the Servicer of such Collections, duly endorsed or
with duly executed instruments of transfer.
(d) The Servicer may, in accordance with the Credit and Collection Policy,
extend the maturity of any Receivable or adjust the Outstanding Balance of any
Receivable as the Servicer determines to be appropriate to maximize Collections
thereof; provided, however, that such extension or adjustment shall not alter
the status of such Receivable as a Delinquent Receivable or Charged-Off
Receivable or limit the rights of the Agent or the Purchasers under this
Agreement. Notwithstanding anything to the contrary contained herein, at any
time after the occurrence of an Amortization Event, the Agent shall have the
absolute and unlimited right to direct the Servicer to commence or settle any
legal action with respect to any Receivable or to foreclose upon or repossess
any Related Security.
(e) The Servicer shall hold in trust for Seller and the Purchasers all
Records that (i) evidence or relate to the Receivables, the related Contracts
and Related Security or (ii) are otherwise necessary or desirable to collect
the Receivables and shall, as soon as practicable upon demand of the Agent,
after the occurrence of an Amortization Event, deliver or make available to the
Agent all such Records, at a place selected by the Agent. The Servicer shall,
as soon as practicable following receipt thereof turn over to Seller any cash
collections or other cash proceeds received with respect to Indebtedness not
constituting Receivables. The Servicer shall, from time to time at the request
of any Purchaser, furnish to the Purchasers (promptly after any such request) a
calculation of the amounts set aside for the Purchasers pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness owed by it to
the applicable Originator or Seller shall, except as otherwise specified by
such Obligor or otherwise required by contract or law and unless otherwise
instructed by the Agent, be applied as a Collection of any Receivable of such
Obligor (starting with the oldest such Receivable) to the extent of any amounts
then due and payable thereunder before being applied to any other receivable or
other obligation of such Obligor.
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Section 8.3 Collection Notices.
The Agent is authorized at any time after the occurrence of an Amortization
Event to date and to deliver to the Collection Banks the Collection Notices.
Seller hereby transfers to the Agent for the benefit of the Purchasers,
effective when the Agent delivers such notice, the exclusive ownership and
control of each Lock-Box and the Collection Accounts. In case any authorized
signatory of Seller whose signature appears on a Collection Account Agreement
shall cease to have such authority before the delivery of such notice, such
Collection Notice shall nevertheless be valid as if such authority had remained
in force. Seller hereby authorizes the Agent, and agrees that the Agent shall
be entitled after the occurrence of an Amortization Event to (i) endorse
Seller's name on checks and other instruments representing Collections, (ii)
enforce the Receivables, the related Contracts and the Related Security and
(iii) take such action as shall be necessary or desirable to cause all cash,
checks and other instruments constituting Collections of Receivables to come
into the possession of the Agent rather than Seller.
Section 8.4 Responsibilities of Seller.
Anything herein to the contrary notwithstanding, the exercise by the Agent and
the Purchasers of their rights hereunder shall not release the Servicer, the
applicable Originator or Seller from any of their duties or obligations with
respect to any Receivables or under the related Contracts. The Purchasers
shall have no obligation or liability with respect to any Receivables or
related Contracts, nor shall any of them be obligated to perform the
obligations of Seller.
Section 8.5 Reports.
The Servicer shall prepare and forward to the Agent (i) on the 15th day of each
month (or if such day is not a Business Day, the next succeeding Business Day),
a Monthly Report and (ii) within three (3) Business Days after the Agent
requests, a listing by Obligor of all Receivables together with an aging of
such Receivables as of the last day of the prior month.
Section 8.6 Servicing Fees. In consideration of Meredith's agreement to act as
Servicer hereunder, the Purchasers hereby agree that, so long as Xxxxxxxx shall
continue to perform as Servicer hereunder, Seller shall pay over to Xxxxxxxx a
fee (the "Servicing Fee") on each Settlement Date, in arrears for the
immediately preceding month, equal to 1/12 of 1.0% per annum times the average
of the Net Receivables Balance at the beginning and the end of such period as
compensation for its servicing activities.
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ARTICLE IX.
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AMORTIZATION EVENTS
Section 9.1 Amortization Events.
The occurrence of any one or more of the following events shall constitute an
Amortization Event:
(a) Any Seller Party shall fail (i) to make any payment or deposit
required hereunder when due, and such failure continues for two (2) Business
Days, or (ii) to perform or observe any term, covenant or agreement hereunder
(other than as referred to in clause (i) of this paragraph (a) and paragraph
9.1(e)) and such failure shall continue for five (5) consecutive Business Days
after the earlier to occur of (A) discovery of such failure by a Seller Party
or (B) notice of such failure from the Agent or any Purchaser.
(b) Any representation, warranty or certification made by any Seller
Party in this Agreement, any other Transaction Document or in any other
document delivered pursuant hereto or thereto shall prove to have been
incorrect in any material respect when made or deemed made which is not
corrected within 5 Business Days after the earliest to occur of (i) discovery
of such error by a Seller Party, or (ii) notice of such error from the Agent or
any Purchaser.
(c) Failure of Seller to pay any Indebtedness when due (after taking into
account any applicable period of grace) in excess of $10,000 or the failure of
any Originator to pay Indebtedness when due (after taking into account any
applicable period of grace) in excess of $25,000,000; or the default by Seller
or any Originator in the performance of any term, provision or condition
contained in any agreement under which any such Indebtedness was created or is
governed, the effect of which is to cause, or to permit the holder or holders
of such Indebtedness to cause, such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of Seller or any Originator shall be
declared to be due and payable or required to be prepaid (other than by a
regularly scheduled payment) prior to the date of maturity thereof.
(d) (i) Seller or Servicer shall generally not pay its debts as such
debts become due or shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors; or
(ii) any proceeding shall be instituted by Seller or Servicer seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official for
it or any substantial part of its property; or (iii) any proceeding shall be
instituted and remain unstayed and undismissed in a court of appropriate
jurisdiction for a period of 60 days against Seller or Servicer seeking to
adjudicate it 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
- 30 -
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official for
it or any substantial part of its property; or (iv) Seller or Servicer shall
take any corporate action to authorize any of the actions set forth in the
foregoing clauses (i), (ii) or (iii) of this subsection (d).
(e) Seller shall fail to comply with the terms of Section 2.6 hereof.
(f) As at the end of any calendar month: (i) the average of the
Delinquency Ratios as at the end of such month and the two preceding months
shall exceed 22%, (ii) the average of the Default Ratios as at the end of such
month and the two preceding months shall exceed 12%, or (iii) the average of
the Dilution Ratios as at the end of such month and the two preceding months
shall exceed 5%
(g) A Change of Control shall occur.
(h) (i) One or more final judgments for the payment of money shall be
entered against Seller or (ii) one or more final judgments for the payment of
money in an amount in excess of $25,000,000, individually or in the aggregate,
shall be entered against the Servicer or, if the Performance Undertaking has
been delivered, Performance Guarantor on claims not covered by insurance or as
to which the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for thirty (30) consecutive days
without a stay of execution.
(i) The "Termination Date" under and as defined in the Receivables Sale
Agreement shall occur with respect to any Material Originator or any Material
Originator shall for any reason cease to transfer, or cease to have the legal
capacity to transfer, or otherwise be incapable of transferring Receivables to
Seller under the Receivables Sale Agreement.
(j) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Seller, or the Agent for the
benefit of the Purchasers shall cease to have a valid and perfected first
priority security interest in the Receivables, the Related Security and the
Collections with respect thereto and the Collection Accounts other than a
Collection Account at Bank of America, N.A. which is described on Exhibit IV on
the date hereof.
(k) There shall occur a breach by Xxxxxxxx of the covenants contained in
Sections 6.03 and 6.04 of that certain Credit Agreement dated as of April 5,
2002 among Xxxxxxxx, as borrower, the lenders listed therein, Fleet National
Bank, as Administrative Agent and Issuing Lender, Bank One, NA and Xxxxx Fargo
Bank, National Association, each as Co-Syndication Agent, and SunTrust Bank,
Central Florida, National Association, as Documentation Agent, as amended,
restated or otherwise modified from time to time with the consent of Bank One
as a lender thereunder (it being understood that any amendment, waiver or
restatement to which Bank One is not a consenting party shall be disregarded
for purposes of this Agreement).
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Section 9.2 Remedies.
Upon the occurrence and during the continuation of an Amortization Event, the
Agent may, or upon the direction of the Required Financial Institutions shall,
take any of the following actions: (i) replace the Person then acting as
Servicer, (ii) declare the Amortization Date to have occurred, whereupon the
Amortization Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Seller
Party; provided, however, that upon the occurrence of an Amortization Event
described in Section 9.1(d)(ii), or of an actual or deemed entry of an order
for relief with respect to any Seller Party under the Federal Bankruptcy Code,
the Amortization Date shall automatically occur, without demand, protest or any
notice of any kind, all of which are hereby expressly waived by each Seller
Party, (iii) to the fullest extent permitted by applicable law, declare that
the Default Fee shall accrue with respect to any of the Aggregate Unpaids
outstanding at such time, (iv) deliver the Collection Notices to the Collection
Banks, and (v) notify Obligors of the Purchasers' interest in the Receivables.
The aforementioned rights and remedies shall be without limitation, and shall
be in addition to all other rights and remedies of the Agent and the Purchasers
otherwise available under any other provision of this Agreement, by operation
of law, at equity or otherwise, all of which are hereby expressly preserved,
including, without limitation, all rights and remedies provided under the UCC,
all of which rights shall be cumulative.
ARTICLE X.
----------
INDEMNIFICATION
Section 10.1 Indemnities by The Seller Parties.
Without limiting any other rights that the Agent or any Purchaser may have
hereunder or under applicable law, (A) Seller hereby agrees to indemnify (and
pay upon demand to) the Agent and each Purchaser and their respective assigns,
officers, directors, agents and employees (each, an "Indemnified Party") from
and against any and all damages, losses, claims, taxes, liabilities, costs,
expenses and for all other amounts payable, including reasonable attorneys'
fees (which attorneys may be employees of the Agent or such Purchaser) and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out
of or as a result of this Agreement or the acquisition, either directly or
indirectly, by a Purchaser of an interest in the Receivables, and (B) the
Servicer hereby agrees to indemnify (and pay upon demand to) each Indemnified
Party for Indemnified Amounts awarded against or incurred by any of them
arising out of the Servicer's activities as Servicer hereunder excluding,
however, in all of the foregoing instances under the preceding clauses (A) and
(B):
(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from gross
negligence or willful misconduct on the part of the Indemnified Party seeking
indemnification;
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(b) Indemnified Amounts to the extent the same includes losses in respect
of Receivables that are uncollectible on account of the insolvency, bankruptcy
or lack of creditworthiness of the related Obligor; or
(c) taxes imposed by the United States, the Indemnified Party's
jurisdiction of organization (or, in the case of an individual, primary
residence) or any other jurisdiction in which such Indemnified Party has
established a taxable nexus other than in connection with the transactions
contemplated hereby and by the other Transaction Documents, on or measured by
the overall net income of such Indemnified Party to the extent that the
computation of such taxes is consistent with the characterization for income
tax purposes of the acquisition by the Purchasers of Purchaser Interests as a
loan or loans by the Purchasers to Seller secured by the Receivables, the
Related Security, the Collection Accounts and the Collections;
provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the
generality of the foregoing indemnification, but subject to the exclusions in
clauses (a), (b) and (c) above, Seller shall indemnify each Indemnified Party
for Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to Seller or the Servicer) relating to or resulting from:
(i) any representation or warranty made by any Seller Party or any
Originator (or any officers of any such Person) under or in connection
with this Agreement, any other Transaction Document or any other
information or report delivered by any such Person pursuant hereto or
thereto, which shall have been false or incorrect when made or deemed
made;
(ii) the failure by Seller, the Servicer or any Originator to comply
with any applicable law, rule or regulation with respect to any Receivable
or Contract related thereto, or the nonconformity of any Receivable or
Contract included therein with any such applicable law, rule or regulation
or any failure of any Originator to keep or perform any of its
obligations, express or implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer or any Originator to
perform its duties, covenants or other obligations in accordance with the
provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage suit, or
other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any
Receivable;
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
(including, without limitation, a defense based on such Receivable or the
related Contract not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or service related to
such Receivable or the furnishing or failure to furnish such merchandise
or services;
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(vi) the commingling of Collections of Receivables at any time with
other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, the use of the proceeds of an
Incremental Purchase or a Reinvestment, the ownership of the Purchaser
Interests or any other investigation, litigation or proceeding relating to
Seller, the Servicer (at any time the Servicer is Xxxxxxxx or one of its
Affiliates) or any Originator in which any Indemnified Party becomes
involved as a result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being immune from
civil and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event described in Section 9.1(d);
(x) any failure of Seller to acquire and maintain legal and
equitable title to, and ownership of any Receivable and the Related
Security and Collections with respect thereto from the applicable
Originator, free and clear of any Adverse Claim (other than as created
hereunder); or any failure of Seller to give reasonably equivalent value
to the applicable Originator under the Receivables Sale Agreement in
consideration of the transfer by such Originator of any Receivable, or any
attempt by any Person to void such transfer under statutory provisions or
common law or equitable action;
(xi) any failure to vest and maintain vested in the Agent for the
benefit of the Purchasers, or to transfer to the Agent for the benefit of
the Purchasers, legal and equitable title to, and ownership of, a first
priority perfected undivided percentage ownership interest (to the extent
of the Purchaser Interests contemplated hereunder) or security interest in
the Receivables, the Related Security and the Collections, free and clear
of any Adverse Claim (except as created by the Transaction Documents);
(xii) 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
Receivable, the Related Security and Collections with respect thereto, and
the proceeds of any thereof, whether at the time of any Incremental
Purchase or Reinvestment or at any subsequent time;
(xiii) any action or omission by any Seller Party which reduces or
impairs the rights of the Agent or the Purchasers with respect to any
Receivable or the value of any such Receivable (other than such an action
taken or omission made at the request of the Agent or any Purchaser or any
action taken by the Servicer in accordance with the Credit and Collection
Policy);
(xiv) avoidance by any Person of any Incremental Purchase or
Reinvestment hereunder under statutory provisions or common law or
equitable action; and
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(xv) the failure of any Receivable included in the calculation of
the Net Receivables Balance as an Eligible Receivable to be an Eligible
Receivable at the time so included.
Notwithstanding the foregoing: (1) to the extent that any Indemnified Amounts
arising under clauses (i), (ii), (iii), (vii) and (x) above result from a
misrepresentation, breach, action or omission by any Originator, Seller shall
be obligated to pay such Indemnified Amounts only to the extent it receives a
payment in respect of such amounts pursuant to the Receivables Sale Agreement,
and (2) if any Indemnified Amount arises out of a lawsuit or other adversarial
proceeding, unless an Indemnified Party's business reputation is at issue,
Seller shall be entitled to assume and control the defense thereof in its sole
discretion using counsel approved by the applicable Indemnified Party (such
approval not to be unreasonably withheld or delayed). If Seller does assume
the defense of a lawsuit or other adversarial proceeding pursuant to the
preceding sentence, the applicable Indemnified Party may engage additional
counsel only at such Indemnified Party's sole expense.
Section 10.2 Increased Cost and Reduced Return.
If after the date hereof, any Funding Source shall be charged any fee, expense
or increased cost on account of the adoption of any applicable law, rule or
regulation (including any applicable law, rule or regulation regarding capital
adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency (a "Regulatory
Change"): (i) that subjects any Funding Source to any charge or withholding on
or with respect to any Funding Agreement or a Funding Source's obligations
under a Funding Agreement, or on or with respect to the Receivables, or changes
the basis of taxation of payments to any Funding Source of any amounts payable
under any Funding Agreement (except for changes in the rate of tax on the
overall net income of a Funding Source or taxes excluded by Section 10.1) or
(ii) that imposes, modifies or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of a Funding Source, or credit extended by a
Funding Source pursuant to a Funding Agreement or (iii) that imposes any other
condition the result of which is to increase the cost to a Funding Source of
performing its obligations under a Funding Agreement, or to reduce the rate of
return on a Funding Source's capital as a consequence of its obligations under
a Funding Agreement, or to reduce the amount of any sum received or receivable
by a Funding Source under a Funding Agreement or to require any payment
calculated by reference to the amount of interests or loans held or interest
received by it, then, upon demand by the Agent, Seller shall pay to the Agent,
for the benefit of the relevant Funding Source, such amounts charged to such
Funding Source or such amounts to otherwise compensate such Funding Source for
such increased cost or such reduction.
Section 10.3 Other Costs and Expenses.
Seller shall pay to the Agent and Conduit on demand all costs and out-of-pocket
expenses in connection with the preparation, execution, delivery and
administration of this Agreement, the transactions contemplated hereby and the
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other documents to be delivered hereunder, including without limitation
(subject to Section 7.1(d)), the reasonable costs of Conduit's auditors
auditing the books, records and procedures of Seller, reasonable fees and
out-of-pocket expenses of one legal counsel for both Conduit and the Agent
(which such counsel may be employees of Conduit or the Agent) with respect
thereto and with respect to advising Conduit and the Agent as to their
respective rights and remedies under this Agreement. Seller shall pay to the
Agent on demand any and all costs and expenses of the Agent and the Purchasers,
if any, including reasonable counsel fees and expenses in connection with the
enforcement of this Agreement and the other documents delivered hereunder and
in connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following an Amortization
Event. The provisions of this Article X shall supercede any obligations of the
Seller, the Servicer or Xxxxxxxx arising under the letter agreement dated
January 31, 2002 among the Agent, Banc One Capital Markets, Inc., as Arranger
and Xxxxxxxx.
ARTICLE XI.
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THE AGENT
Section 11.1 Authorization and Action.
Each Purchaser hereby designates and appoints Bank One to act as its agent
hereunder and under each other Transaction Document, and authorizes the Agent
to take such actions as agent on its behalf and to exercise such powers as are
delegated to the Agent by the terms of this Agreement and the other Transaction
Documents together with such powers as are reasonably incidental thereto. The
Agent shall not have any duties or responsibilities, except those expressly set
forth herein or in any other Transaction Document, or any fiduciary
relationship with any Purchaser, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the Agent
shall be read into this Agreement or any other Transaction Document or
otherwise exist for the Agent. In performing its functions and duties
hereunder and under the other Transaction Documents, the Agent shall act solely
as agent for the Purchasers and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for any
Seller Party or any of such Seller Party's successors or assigns. The Agent
shall not be required to take any action that exposes the Agent to personal
liability or that is contrary to this Agreement, any other Transaction Document
or applicable law. The appointment and authority of the Agent hereunder shall
terminate upon the indefeasible payment in full of all Aggregate Unpaids. Each
Purchaser hereby authorizes the Agent to execute each of the Uniform Commercial
Code financing statements and the Collection Account Agreements on behalf of
such Purchaser (the terms of which shall be binding on such Purchaser).
Section 11.2 Delegation of Duties.
The Agent may execute any of its duties under this Agreement and each other
Transaction Document by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
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The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
Section 11.3 Exculpatory Provisions.
Neither the Agent nor any of its directors, officers, agents or employees shall
be (i) liable for any action lawfully taken or omitted to be taken by it or
them under or in connection with this Agreement or any other Transaction
Document (except for its, their or such Person's own gross negligence or
willful misconduct), or (ii) responsible in any manner to any of the Purchasers
for any recitals, statements, representations or warranties made by any Seller
Party contained in this Agreement, any other Transaction Document or any
certificate, report, statement or other document referred to or provided for
in, or received under or in connection with, this Agreement, or any other
Transaction Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any other Transaction
Document or any other document furnished in connection herewith or therewith,
or for any failure of any Seller Party to perform its obligations hereunder or
thereunder, or for the satisfaction of any condition specified in Article VI,
or for the perfection, priority, condition, value or sufficiency of any
collateral pledged in connection herewith. The Agent shall not be under any
obligation to any Purchaser to ascertain or to inquire as to the observance or
performance of any of the agreements or covenants contained in, or conditions
of, this Agreement or any other Transaction Document, or to inspect the
properties, books or records of the Seller Parties. The Agent shall not be
deemed to have knowledge of any Amortization Event or Potential Amortization
Event unless the Agent has received notice from Seller or a Purchaser.
Section 11.4 Reliance by Agent.
The Agent shall in all cases be entitled to rely, and shall be fully protected
in relying, upon any document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to Seller), independent accountants and other experts selected by the
Agent. The Agent shall in all cases be fully justified in failing or refusing
to take any action under this Agreement or any other Transaction Document
unless it shall first receive such advice or concurrence of Conduit or the
Required Financial Institutions or all of the Purchasers, as applicable, as it
deems appropriate and it shall first be indemnified to its satisfaction by the
Purchasers, provided that unless and until the Agent shall have received such
advice, the Agent may take or refrain from taking any action, as the Agent
shall deem advisable and in the best interests of the Purchasers. The Agent
shall in all cases be fully protected in acting, or in refraining from acting,
in accordance with a request of Conduit or the Required Financial Institutions
or all of the Purchasers, as applicable, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Purchasers.
Section 11.5 Non-Reliance on Agent and Other Purchasers.
Each Purchaser expressly acknowledges that neither the Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to it and that no act by the Agent
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hereafter taken, including, without limitation, any review of the affairs of
any Seller Party, shall be deemed to constitute any representation or warranty
by the Agent. Each Purchaser represents and warrants to the Agent that it has
and will, independently and without reliance upon the Agent or any other
Purchaser and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and
creditworthiness of Seller and made its own decision to enter into this
Agreement, the other Transaction Documents and all other documents related
hereto or thereto.
Section 11.6 Reimbursement and Indemnification.
The Financial Institutions agree to reimburse and indemnify the Agent and its
officers, directors, employees, representatives and agents ratably according to
their Pro Rata Shares, to the extent not paid or reimbursed by the Seller
Parties (i) for any amounts for which the Agent, acting in its capacity as
Agent, is entitled to reimbursement by the Seller Parties hereunder and (ii)
for any other expenses incurred by the Agent, in its capacity as Agent and
acting on behalf of the Purchasers, in connection with the administration and
enforcement of this Agreement and the other Transaction Documents.
Section 11.7 Agent in its Individual Capacity.
The Agent and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with Seller or any Affiliate of Seller
as though the Agent were not the Agent hereunder. With respect to the
acquisition of Purchaser Interests pursuant to this Agreement, the Agent shall
have the same rights and powers under this Agreement in its individual capacity
as any Purchaser and may exercise the same as though it were not the Agent, and
the terms "Financial Institution," "Purchaser," "Financial Institutions" and
"Purchasers" shall include the Agent in its individual capacity.
Section 11.8 Successor Agent.
The Agent may, upon five days' notice to Seller and the Purchasers, and the
Agent will, upon the direction of all of the Purchasers (other than the Agent,
in its individual capacity) resign as Agent. If the Agent shall resign, then
the Required Financial Institutions during such five-day period shall appoint
from among the Purchasers a successor agent. If for any reason no successor
Agent is appointed by the Required Financial Institutions during such five-day
period, then effective upon the termination of such five day period, the
Purchasers shall perform all of the duties of the Agent hereunder and under the
other Transaction Documents and Seller and the Servicer (as applicable) shall
make all payments in respect of the Aggregate Unpaids directly to the
applicable Purchasers and for all purposes shall deal directly with the
Purchasers. After the effectiveness of any retiring Agent's resignation
hereunder as Agent, the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Transaction Documents and the
provisions of this Article XI and Article X shall continue in effect for its
benefit with respect to any actions taken or omitted to be taken by it while it
was Agent under this Agreement and under the other Transaction Documents.
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ARTICLE XII.
------------
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments.
(a) Seller and each Financial Institution hereby agree and consent to the
complete or partial assignment by Conduit of all or any portion of its rights
under, interest in, title to and obligations under this Agreement (i) to the
Financial Institutions pursuant to Section 13.1 or (ii) to any other Person;
provided that, prior to the occurrence of an Amortization Event, Conduit may
not make any such assignment pursuant to this clause (ii) except in the
circumstances covered by Section 12.1(c) without the consent of Seller (which
consent shall not be unreasonably withheld). Upon any such assignment, Conduit
shall be released from its obligations so assigned. Further, Seller and each
Financial Institution hereby agree that any assignee of Conduit of this
Agreement or all or any of the Purchaser Interests of Conduit shall have all of
the rights and benefits under this Agreement as if the term "Conduit"
explicitly referred to such party, and no such assignment shall in any way
impair the rights and benefits of Conduit hereunder. Neither Seller nor the
Servicer shall have the right to assign its rights or obligations under this
Agreement.
(b) Any Financial Institution may at any time and from time to time
assign to one or more Persons ("Purchasing Financial Institutions") all or any
part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
(the "Assignment Agreement") executed by such Purchasing Financial Institution
and such selling Financial Institution. The consent of Conduit, and, prior to
the occurrence of an Amortization Event, the consent of Seller (which consent
of Seller shall not be unreasonably withheld), shall be required prior to the
effectiveness of any such assignment. Each assignee of a Financial Institution
must (i) have a short-term debt rating of A-1 or better by Standard & Poor's
Ratings Group and P-1 by Xxxxx'x Investor Service, Inc. and (ii) agree to
deliver to the Agent, promptly following any request therefor by the Agent or
Conduit, an enforceability opinion in form and substance satisfactory to the
Agent and Conduit. Upon delivery of the executed Assignment Agreement to the
Agent, such selling Financial Institution shall be released from its
obligations hereunder to the extent of such assignment. Thereafter the
Purchasing Financial Institution shall for all purposes be a Financial
Institution party to this Agreement and shall have all the rights and
obligations of a Financial Institution under this Agreement to the same extent
as if it were an original party hereto and no further consent or action by
Seller, the Purchasers or the Agent shall be required.
(c) Each of the Financial Institutions agrees that in the event that it
shall cease to have a short-term debt rating of A-1 or better by Standard &
Poor's Ratings Group and P-1 by Xxxxx'x Investor Service, Inc. (an "Affected
Financial Institution"), such Affected Financial Institution shall be obliged,
at the request of Conduit or the Agent, to assign all of its rights and
obligations hereunder to (x) another Financial Institution or (y) another
funding entity nominated by the Agent and acceptable to Conduit, and willing to
participate in this Agreement through the Liquidity Termination Date in the
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place of such Affected Financial Institution; provided that the Affected
Financial Institution receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such Financial Institution's Pro Rata Share of
the Aggregate Capital and Yield owing to the Financial Institutions and all
accrued but unpaid fees and other costs and expenses payable in respect of its
Pro Rata Share of the Purchaser Interests of the Financial Institutions.
Section 12.2 Participations.
Any Financial Institution may, in the ordinary course of its business at any
time sell to one or more Persons (each a "Participant") participating interests
in its Pro Rata Share of the Purchaser Interests of the Financial Institutions,
its obligation to pay Conduit its Acquisition Amounts or any other interest of
such Financial Institution hereunder. Notwithstanding any such sale by a
Financial Institution of a participating interest to a Participant, such
Financial Institution's rights and obligations under this Agreement shall
remain unchanged, such Financial Institution shall remain solely responsible
for the performance of its obligations hereunder, and Seller, Conduit and the
Agent shall continue to deal solely and directly with such Financial
Institution in connection with such Financial Institution's rights and
obligations under this Agreement. Each Financial Institution agrees that (i)
any agreement between such Financial Institution and any such Participant in
respect of such participating interest shall not restrict such Financial
Institution's right to agree to any amendment, supplement, waiver or
modification to this Agreement, except for any amendment, supplement, waiver or
modification described in Section 14.1(b)(i), and (ii) no such participant
shall be entitled to any reimbursement pursuant to Article X that is greater
than the reimbursement such Financial Institution would be entitled to receive
thereunder.
ARTICLE XIII.
-------------
LIQUIDITY FACILITY
Section 13.1 Transfer to Financial Institutions.
Each Financial Institution hereby agrees, subject to Section 13.4, that
immediately upon written notice from Conduit delivered on or prior to the
Liquidity Termination Date, it shall acquire by assignment from Conduit,
without recourse or warranty, its Pro Rata Share of one or more of the
Purchaser Interests of Conduit as specified by Conduit. Each such assignment
by Conduit shall be made pro rata among all of the Financial Institutions,
except for pro rata assignments to one or more Terminating Financial
Institutions pursuant to Section 13.6. Each such Financial Institution shall,
no later than 1:00 p.m. (Chicago time) on the date of such assignment, pay in
immediately available funds (unless another form of payment is otherwise agreed
between Conduit and any Financial Institution) to the Agent at an account
designated by the Agent, for the benefit of Conduit, its Acquisition Amount.
Unless a Financial Institution has notified the Agent that it does not intend
to pay its Acquisition Amount, the Agent may assume that such payment has been
made and may, but shall not be obligated to, make the amount of such payment
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available to Conduit in reliance upon such assumption. Conduit hereby sells
and assigns to the Agent for the ratable benefit of the Financial Institutions,
and the Agent hereby purchases and assumes from Conduit, effective upon the
receipt by Conduit of the Conduit Transfer Price, the Purchaser Interests of
Conduit which are the subject of any transfer pursuant to this Article XIII.
Section 13.2 Transfer Price Reduction Yield.
If the Adjusted Funded Amount is included in the calculation of the Conduit
Transfer Price for any Purchaser Interest, each Financial Institution agrees
that the Agent shall pay to Conduit the Reduction Percentage of any Yield
received by the Agent with respect to such Purchaser Interest.
Section 13.3 Payments to Conduit.
In consideration for the reduction of the Conduit Transfer Prices by the
Conduit Transfer Price Reductions, effective only at such time as the aggregate
amount of the Capital of the Purchaser Interests of the Financial Institutions
equals the Conduit Residual, each Financial Institution hereby agrees that the
Agent shall not distribute to the Financial Institutions and shall immediately
remit to Conduit any Yield, Collections or other payments received by it to be
applied pursuant to the terms hereof or otherwise to reduce the Capital of the
Purchaser Interests of the Financial Institutions.
Section 13.4 Limitation on Commitment to Purchase from Conduit.
Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have any obligation to purchase any Purchaser Interest from
Conduit, pursuant to Section 13.1 or otherwise, if:
(i) Conduit shall have voluntarily commenced any proceeding or filed
any petition under any bankruptcy, insolvency or similar law seeking the
dissolution, liquidation or reorganization of Conduit or taken any
corporate action for the purpose of effectuating any of the foregoing; or
(ii) involuntary proceedings or an involuntary petition shall have
been commenced or filed against Conduit by any Person under any
bankruptcy, insolvency or similar law seeking the dissolution, liquidation
or reorganization of Conduit and such proceeding or petition shall have
not been dismissed.
Section 13.5 Defaulting Financial Institutions.
If one or more Financial Institutions defaults in its obligation to pay its
Acquisition Amount pursuant to Section 13.1 (each such Financial Institution
shall be called a "Defaulting Financial Institution" and the aggregate amount
of such defaulted obligations being herein called the "Conduit Transfer Price
Deficit"), then upon notice from the Agent, each Financial Institution other
than the Defaulting Financial Institutions (a "Non-Defaulting Financial
Institution") shall promptly pay to the Agent, in immediately available funds,
an amount equal to the lesser of (x) such Non-Defaulting Financial
Institution's proportionate share (based upon the relative Commitments of the
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Non-Defaulting Financial Institutions) of the Conduit Transfer Price Deficit
and (y) the unused portion of such Non-Defaulting Financial Institution's
Commitment. A Defaulting Financial Institution shall forthwith upon demand pay
to the Agent for the account of the Non-Defaulting Financial Institutions all
amounts paid by each Non-Defaulting Financial Institution on behalf of such
Defaulting Financial Institution, together with interest thereon, for each day
from the date a payment was made by a Non-Defaulting Financial Institution
until the date such Non-Defaulting Financial Institution has been paid such
amounts in full, at a rate per annum equal to the Federal Funds Effective Rate
plus two percent (2%). In addition, without prejudice to any other rights that
Conduit may have under applicable law, each Defaulting Financial Institution
shall pay to Conduit forthwith upon demand, the difference between such
Defaulting Financial Institution's unpaid Acquisition Amount and the amount
paid with respect thereto by the Non-Defaulting Financial Institutions,
together with interest thereon, for each day from the date of the Agent's
request for such Defaulting Financial Institution's Acquisition Amount pursuant
to Section 13.1 until the date the requisite amount is paid to Conduit in full,
at a rate per annum equal to the Federal Funds Effective Rate plus two percent
(2%).
Section 13.6 Terminating Financial Institutions.
(a) Each Financial Institution hereby agrees to deliver written notice to
the Agent not more than 30 Business Days and not less than 5 Business Days
prior to the Liquidity Termination Date indicating whether such Financial
Institution intends to renew its Commitment hereunder. If any Financial
Institution fails to deliver such notice on or prior to the date that is 5
Business Days prior to the Liquidity Termination Date, such Financial
Institution will be deemed to have declined to renew its Commitment (each
Financial Institution which has declined or has been deemed to have declined to
renew its Commitment hereunder, a "Non-Renewing Financial Institution"). The
Agent shall promptly notify Conduit and Seller of each Non-Renewing Financial
Institution and Conduit, in its sole discretion, may (A) unless a substitute
Financial Institution having a short-term debt rating of A-1 or better by
Standard & Poor's Ratings Group and P-1 by Xxxxx'x Investor Service, Inc.
agrees to accept an assignment of such Non-Renewing Financial Institution's
Commitment and Purchaser Interests (if any) within 2 Business Days prior to the
existing Liquidity Termination Date, to the extent of Commitment Availability,
declare that such Non-Renewing Financial Institution's Commitment shall, to
such extent, automatically terminate on the Liquidity Termination Date or (B)
upon one (1) Business Days' notice to such Non-Renewing Financial Institution
assign to such Non-Renewing Financial Institution on a date specified by
Conduit its Pro Rata Share of the aggregate Purchaser Interests then held by
Conduit, subject to, and in accordance with, Section 13.1. In addition,
Conduit may, in its sole discretion, at any time (x) to the extent of
Commitment Availability, declare that any Affected Financial Institution's
Commitment shall automatically terminate on a date specified by Conduit, which
date shall not be earlier than the Liquidity Termination Date, or (y) assign to
any Affected Financial Institution on a date specified by Conduit its Pro Rata
Share of the aggregate Purchaser Interests then held by Conduit, subject to,
and in accordance with, Section 13.1 (each Affected Financial Institution or
each Non-Renewing Financial Institution is hereinafter referred to as a
"Terminating Financial Institution"). The parties hereto expressly acknowledge
that any declaration of the termination of any Commitment, any assignment
- 42 -
pursuant to this Section 13.6 and the order of priority of any such termination
or assignment among Terminating Financial Institutions shall be made by Conduit
in its sole and absolute discretion.
(b) Upon any assignment to a Terminating Financial Institution as
provided in this Section 13.6, any remaining Commitment of such Terminating
Financial Institution shall automatically terminate on the Liquidity
Termination Date. Upon reduction to zero of the Capital of all of the
Purchaser Interests of a Terminating Financial Institution (after application
of Collections thereto pursuant to Sections 2.2 and 2.3) all rights and
obligations of such Terminating Financial Institution hereunder shall be
terminated and such Terminating Financial Institution shall no longer be a
"Financial Institution" hereunder; provided, however, that the provisions of
Article X shall continue in effect for its benefit with respect to Purchaser
Interests held by such Terminating Financial Institution prior to its
termination as a Financial Institution.
ARTICLE XIV.
------------
MISCELLANEOUS
Section 14.1 Waivers and Amendments.
(a) No failure or delay on the part of the Agent or any Purchaser in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided
shall be cumulative and nonexclusive of any rights or remedies provided by law.
Any waiver of this Agreement shall be effective only in the specific instance
and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified
or waived except in writing in accordance with the provisions of this Section
14.1(b). Conduit, Seller, Servicer and the Agent, at the direction of the
Required Financial Institutions, may enter into written modifications or
waivers of any provisions of this Agreement, provided, however, that no such
modification or waiver shall:
(i) without the consent of each affected Purchaser, (A) extend the
Liquidity Termination Date or the date of any payment or deposit of
Collections by Seller or the Servicer, (B) reduce the rate or extend the
time of payment of Yield or any CP Costs (or any component of Yield or CP
Costs), (C) reduce any fee payable to the Agent for the benefit of the
Purchasers, (D) except pursuant to Article XII hereof, change the amount
of the Capital of any Purchaser, any Financial Institution's Pro Rata
Share (except pursuant to Sections 13.1 or 13.5) or any Financial
Institution's Commitment, (E) amend, modify or waive any provision of the
definition of Required Financial Institutions or this Section 14.1(b), (F)
consent to or permit the assignment or transfer by Seller of any of its
rights and obligations under this Agreement, (G) change the definition of
"Default Proxy," "Default Ratio," "Delinquency Ratio," "Dilution Horizon
- 43 -
Ratio," "Dilution Percentage," "Dilution Ratio," "Dilution Reserve,"
"Dilution Spike Ratio," "Expected Dilution Ratio," "Eligible Receivable,"
"Loss Horizon Ratio," "Loss Percentage," "Loss Ratio," "Loss Reserve," or
"Yield and Servicing Reserve", or (H) amend or modify any defined term (or
any defined term used directly or indirectly in such defined term) used in
clauses (A) through (G) above in a manner that would circumvent the
intention of the restrictions set forth in such clauses; or
(ii) without the written consent of the then Agent, amend, modify or
waive any provision of this Agreement if the effect thereof is to affect
the rights or duties of such Agent.
Notwithstanding the foregoing, the Agent, the Required Financial Institutions
and Conduit may enter into amendments to modify any of the terms or provisions
of Article XI, Article XII, Section 14.13 of this Agreement without the consent
of Seller or Servicer, provided that such amendment has no negative impact upon
Seller or Servicer. Any modification or waiver made in accordance with this
Section 14.1 shall apply to each of the Purchasers equally and shall be binding
upon Seller, the Servicer, the Purchasers and the Agent.
Section 14.2 Notices.
Except as provided in this Section 14.2, all communications and notices
provided for hereunder shall be in writing (including bank wire, telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other parties hereto at their respective addresses or telecopy numbers set
forth on the signature pages hereof or at such other address or telecopy number
as such Person may hereafter specify for the purpose of notice to each of the
other parties hereto. Each such notice or other communication shall be
effective (i) if given by telecopy, upon the receipt thereof, (ii) if given by
mail, three (3) Business Days after the time such communication is deposited in
the mail with first class postage prepaid or (iii) if given by any other means,
when received at the address specified in this Section 14.2. Seller hereby
authorizes the Agent to effect purchases and Tranche Period and Discount Rate
selections based on telephonic notices made by any Person whom the Agent in
good faith believes to be acting on behalf of Seller. Seller agrees to deliver
promptly to the Agent a written confirmation of each telephonic notice signed
by an authorized officer of Seller; provided, however, the absence of such
confirmation shall not affect the validity of such notice. If the written
confirmation differs from the action taken by the Agent, the records of the
Agent shall govern absent manifest error.
Section 14.3 Ratable Payments.
If any Purchaser, whether by setoff or otherwise, has payment made to it with
respect to any portion of the Aggregate Unpaids owing to such Purchaser (other
than payments received pursuant to Section 10.2 or 10.3) in a greater
proportion than that received by any other Purchaser entitled to receive a
ratable share of such Aggregate Unpaids, such Purchaser agrees, promptly upon
demand, to purchase for cash without recourse or warranty a portion of such
Aggregate Unpaids held by the other Purchasers so that after such purchase each
Purchaser will hold its ratable proportion of such Aggregate Unpaids; provided
that if all or any portion of such excess amount is thereafter recovered from
such Purchaser, such purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.
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Section 14.4 Protection of Ownership Interests of the Purchasers.
(a) Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may reasonably
request, to perfect, protect or more fully evidence the Purchaser Interests, or
to enable the Agent or the Purchasers to exercise and enforce their rights and
remedies hereunder. At any time after the occurrence of an Amortization Event,
the Agent may, or the Agent may direct Seller or the Servicer to, notify the
Obligors of Receivables, at Seller's expense, of the ownership or security
interests of the Purchasers under this Agreement and may also direct that
payments of all amounts due or that become due under any or all Receivables be
made directly to the Agent or its designee. Seller or the Servicer (as
applicable) shall, at any Purchaser's request, withhold the identity of such
Purchaser in any such notification.
(b) If any Seller Party fails to perform any of its obligations
hereunder, the Agent or any Purchaser may (but shall not be required to)
perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be
payable by Seller as provided in Section 10.3. Each Seller Party irrevocably
authorizes the Agent at any time and from time to time in the sole discretion
of the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf
of such Seller Party (i) to execute on behalf of Seller as debtor and to file
financing statements necessary or desirable in the Agent's sole discretion to
perfect and to maintain the perfection and priority of the interest of the
Purchasers in the Receivables and (ii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Receivables as a financing statement in such offices as the Agent in its sole
discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of the interests of the Purchasers in the Receivables.
This appointment is coupled with an interest and is irrevocable.
Section 14.5 Confidentiality.
(a) Each Seller Party and each Purchaser shall maintain and shall cause
each of its employees and officers to maintain the confidentiality of this
Agreement and the other confidential or proprietary information with respect to
the Agent and Conduit and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions
contemplated herein, except that such Seller Party and such Purchaser and its
officers and employees may disclose such information to such Seller Party's and
such Purchaser's external accountants and attorneys and, except with respect to
the terms of the Fee Letter, financial advisors, and in any case, as required
by any applicable law (including, without limitation, applicable securities
laws) or order of any judicial or administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each Seller Party
hereby consents to the disclosure of any nonpublic information with respect to
it (i) to the Agent, the Financial Institutions or Conduit by each other, (ii)
by the Agent or the Purchasers to any prospective or actual assignee or
participant of any of them and (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or
liquidity enhancement to Conduit or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which Bank One
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acts as the administrative agent and to any officers, directors, employees,
outside accountants and attorneys of any of the foregoing; provided that such
Person is advised of the confidential nature of such information and agrees (to
the extent required under Regulation FD promulgated by the Securities and
Exchange Commission from time to time pursuant to the Securities Act of 1933)
to maintain the confidentiality thereof. In addition, the Purchasers and the
Agent may disclose any such nonpublic information pursuant to any law, rule,
regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings (whether or not having the force or effect
of law).
Section 14.6 Bankruptcy Petition.
Seller, the Servicer, the Agent and each Financial Institution hereby covenants
and agrees that, prior to the date that is one year and one day after the
payment in full of all outstanding senior indebtedness of Conduit, it will not
institute against, or join any other Person in instituting against, Conduit or
any such entity any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the
United States or any state of the United States.
Section 14.7 Limitation of Liability.
Except with respect to any claim arising out of the willful misconduct or gross
negligence of any party hereto, no claim may be made by any other party or any
other Person against such first party or its respective Affiliates, directors,
officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and each party hereby waives, releases, and
agrees not to xxx upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor; provided, however,
that nothing in this Section 14.7 shall limit in any way the indemnification
obligations of the Seller Parties set forth in Article X.
Section 14.8 CHOICE OF LAW.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.
Section 14.9 CONSENT TO JURISDICTION.
EACH SELLER PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO,
ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT
AND EACH SELLER PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH
COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
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AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY
AGAINST THE AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR ANY
PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY
SUCH SELLER PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT
IN CHICAGO, ILLINOIS.
Section 14.10 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS
AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain the final
and complete integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the entire agreement
among the parties hereto with respect to the subject matter hereof superseding
all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns (including
any trustee in bankruptcy). This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms and
shall remain in full force and effect until terminated in accordance with its
terms; provided, however, that the rights and remedies with respect to (i) any
breach of any representation and warranty made by any Seller Party pursuant to
Article V, (ii) the indemnification and payment provisions of Article X, and
Sections 14.5 and 14.6 shall be continuing and shall survive any termination of
this Agreement.
Section 14.12 Counterparts; Severability; Section References.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same Agreement. Any provisions of this Agreement which
are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction. Unless
otherwise expressly indicated, all references herein to "Article," "Section,"
"Schedule" or "Exhibit" shall mean articles and sections of, and schedules and
exhibits to, this Agreement.
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Section 14.13 Bank One Roles.
Each of the Financial Institutions acknowledges that Bank One acts, or may in
the future act, (i) as administrative agent for Conduit or any Financial
Institution, (ii) as issuing and paying agent for the Commercial Paper, (iii)
to provide credit or liquidity enhancement for the timely payment for the
Commercial Paper and (iv) to provide other services from time to time for
Conduit or any Financial Institution (collectively, the "Bank One Roles").
Without limiting the generality of this Section 14.13, each Financial
Institution hereby acknowledges and consents to any and all Bank One Roles and
agrees that in connection with any Bank One Role, Bank One may take, or refrain
from taking, any action that it, in its discretion, deems appropriate,
including, without limitation, in its role as administrative agent for Conduit,
and the giving of notice to the Agent of a mandatory purchase pursuant to
Section 13.1.
Section 14.14 Characterization.
(a) Except as specifically provided in this Agreement, each sale of a
Purchaser Interest hereunder is made without recourse to Seller; provided,
however, that (i) Seller shall be liable to each Purchaser and the Agent for
all representations, warranties, covenants and indemnities made by Seller
pursuant to the terms of this Agreement, and (ii) such sale does not constitute
and is not intended to result in an assumption by any Purchaser or the Agent or
any assignee thereof of any obligation of Seller or any Originator or any other
Person arising in connection with the Receivables, the Related Security, or the
related Contracts, or any other obligations of Seller or any Originator.
(b) In addition to any ownership interest which the Agent may from time
to time acquire pursuant hereto, Seller hereby grants to the Agent for the
ratable benefit of the Purchasers a valid and perfected security interest in
all of Seller's right, title and interest, now owned or hereafter acquired, in,
to and under all Receivables now existing or hereafter arising, the
Collections, each Lock-Box, each Collection Account, all Related Security, all
other rights and payments relating to such Receivables, the Receivables Sale
Agreement and from and after the time, if any, when it is required to be
delivered, the Performance Undertaking (including, without limitation, (a) all
rights to indemnification arising thereunder, and (b) all UCC financing
statements filed pursuant thereto), all proceeds of any thereof and all other
assets in which the Agent on behalf of the Purchasers has acquired, may
hereafter acquire and/or purports to have acquired an interest under this
Agreement prior to all other liens on and security interests therein to secure
the prompt and complete payment of the Aggregate Unpaids. The Agent and the
Purchasers shall have, in addition to the rights and remedies that they may
have under this Agreement, all other rights and remedies provided to a secured
creditor under the UCC and other applicable law, which rights and remedies
shall be cumulative. The Seller hereby authorizes the Agent, within the
meaning of 9-509 of any applicable enactment of the UCC, as secured party for
the benefit of itself and of the Purchasers, to file, without the signature of
the debtor, the UCC financing statements contemplated herein and under the
Receivables Sale Agreement. The Seller hereby assigns its security interests
against the Originators under the Receivables Sale Agreement to the Agent for
the benefit of the Purchasers.
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(c) In connection with Seller's transfer of its right, title and interest
in, to and under the Receivables Sale Agreement and from and after the time, if
any, when it is required to be delivered, the Performance Undertaking, Seller
agrees that the Agent shall have the right to enforce Seller's rights and
remedies under the Receivables Sale Agreement and, when applicable, the
Performance Undertaking, to receive all amounts payable thereunder or in
connection therewith, to consent to amendments, modifications or waivers
thereof, and to direct, instruct or request any action thereunder, but in each
case without any obligation on the part of the Agent or any Purchaser or any of
its or their respective Affiliates to perform any of the obligations of Seller
under the Receivables Sale Agreement or, when applicable, the Performance
Guarantor under the Performance Undertaking. To the extent that Seller
enforces Seller's rights and remedies under the Receivables Sale Agreement or,
when applicable, the Performance Undertaking, from and after the occurrence of
an Amortization Event, and during the continuance thereof, the Agent shall have
the exclusive right to direct such enforcement by Seller.
(d) In the event that either (i) the Termination Date (under and as
defined in the Receivables Sale Agreement) shall occur with respect to any
Originator (other than in connection with the occurrence of a Termination
Event) or (ii) any Originator shall divest, sell, swap or otherwise dispose of
any business unit, division, group, magazine or television station and such
event does not cause a Termination Event, the Agent agrees to deliver, at such
Originator's sole cost and expense, such releases, termination statements and
other documents or instruments (including a letter giving such Originator
authority to file such releases or termination statements) as such Originator
may reasonably request to evidence the release of all security interests and
liens of the Buyer and the Agent under the Receivables Sale Agreement and
hereunder against such Originator's assets or the assets of such business unit,
division, group, magazine or television station to the extent such assets are
not owned by the Buyer.
[SIGNATURE PAGES FOLLOW]
- 49 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date hereof.
XXXXXXXX FUNDING CORPORATION
----------------------------
By: /s/ Suku V. Radia
Name: Suku V. Radia
Title: President
Address: 0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attention: President
Fax: (000) 000-0000
Confirmation: (000) 000-0000
with a copy to: Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
Confirmation: (000) 000-0000
XXXXXXXX CORPORATION, as Servicer
---------------------------------
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Corporate Controller
Address: 0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attention: Corporate Controller
Fax: (000) 000-0000
Confirmation: (000) 000-0000
with a copy to: Xxxxxxxx Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
Confirmation: (000) 000-0000
- 50 -
FALCON ASSET SECURITIZATION CORPORATION
---------------------------------------
By: /s/ Xxx X. Xxxxxxxx
Xxx X. Xxxxxxxx, Authorized Signatory
Address: c/o Bank One, NA (Main Office Chicago), as Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
BANK ONE, NA (MAIN OFFICE CHICAGO), as a Financial Institution and as Agent
---------------------------------------------------------------------------
By: /s/ Xxx X. Xxxxxxxx
Xxx X. Xxxxxxxx, Authorized Signatory
Address: Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0596, 1-21
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
- 51 -
