OMNIBUS AMENDMENT [AMENDMENT NO. 9 TO RECEIVABLES PURCHASE AGREEMENT AND AMENDMENT NO. 4 TO RECEIVABLES SALE AGREEMENT]
Exhibit
10.2
OMNIBUS
AMENDMENT
[AMENDMENT
NO. 9 TO RECEIVABLES PURCHASE AGREEMENT AND
AMENDMENT
NO. 4 TO RECEIVABLES SALE AGREEMENT]
THIS
OMNIBUS AMENDMENT (this “Amendment”)
is entered into as of March 31, 2009, by and among Xxxxxxxx Funding Corporation,
a Delaware corporation, (the “Seller”),
Xxxxxxxx Corporation, an Iowa corporation (“Meredith”),
as Originator and as initial Servicer (the Servicer, together with Seller, the
“Seller
Parties” and each, a “Seller
Party”), JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA,
in its individual capacity as the sole “Financial
Institution”, Falcon Asset Securitization Company LLC, formerly known as
Falcon Asset Securitization Corporation (the “Conduit”
and, together with the sole Financial Institution, the “Purchasers”),
and JPMorgan Chase Bank, N.A., successor by merger to Bank One, NA, as agent
(together with its successors and assigns hereunder, the “Agent”),
with respect to (a) that certain Receivables Purchase Agreement among the
parties hereto dated as of April 9, 2002, as heretofore amended (the “Existing
RPA”), and (b) that certain Receivables Sale Agreement between the Seller
and Xxxxxxxx dated as of April 9, 2002, as heretofore amended (the “Existing
RSA” and, together with the Existing RPA, the “Existing
Agreements”).
W
I T N E S S E T H :
WHEREAS,
Xxxxxxxx and the Seller are parties to the Existing RSA;
WHEREAS,
the Seller Parties, the Purchasers and the Agent are parties to the Existing
RPA; and
WHEREAS,
the parties desire to amend the Existing Agreements as hereinafter set
forth;
NOW, THEREFORE,
in consideration of the premises herein contained, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1. Defined
Terms. Capitalized terms
used herein and not otherwise defined shall have their meanings as attributed to
such terms in the Existing Agreements.
2. Amendments.
2.1. Amendments
to the Existing RSA.
2.1.1. The
definitions of “Excluded
Receivables” in
Exhibit I to the Existing RSA is hereby amended and restated in its entirety to
read as follows:
“Excluded
Receivables” means indebtedness and other obligations owed to an
Originator in connection with the sales of goods or services described on
Schedule B, as such Schedule may be modified from time to time by such
Originator upon delivery of such revised Schedule to the Buyer and the Agent;
provided
that the Buyer’s and the Agent’s consent shall be required prior to
giving effect to a modification to Schedule B if such modification would exclude
an incremental aggregate amount of Receivables representing more than
10% of the Receivables originated by all Originators in the calendar year most
recently ended.
2.1.2. Schedule
B of the Existing RSA is hereby amended and restated in its entirety to read as
set forth in Annex A hereto
2.2. Amendments to the Existing
RPA.
2.2.1. Section 9.1(f) of
the Existing RPA is hereby amended and restated in its entirety to read as
follows:
“(f) (i)
As at the end of the month of November, December or January of any calendar
year, the average of the Delinquency Ratios as at the end of such month and the
two preceding months shall exceed 25%, (ii) as at the end of any other calendar
month, the average of the Delinquency Ratios as at the end of such month and the
two preceding months shall exceed 22%, (iii) as at the end of any calendar
month, the average of the Default Ratios as at the end of such month and the two
preceding months shall exceed 12%, (iv) as at the end of any calendar month, the
average of the Dilution Ratios as at the end of such month and the two preceding
months shall exceed 3.00%, or (v) as at the end of any calendar month, the
average of the Day Sales Outstanding as at the end of such month and the two
preceding months shall exceed 80.0.”
2.2.2. Section
9.1(k) of
the Existing RPA is hereby amended and restated in its entirety to read as
follows:
“(k) (i)
The Consolidated Leverage Ratio (as defined in the Credit Agreement) as of the
last day of any Fiscal Quarter (as defined in the Credit Agreement) exceeds 3.75
to 1.00 or (ii) the Consolidated Interest Coverage Ratio (as defined in the
Credit Agreement) as of the last day of any Fiscal Quarter (as defined in the
Credit Agreement) is less than 2.75 to 1.00.”
2.2.3. The
following two new Sections are hereby added to the Existing RPA:
Section
10.4. Accounting
Based Consolidation Event. If
an Accounting Based Consolidation Event shall at any time occur then, upon
demand by the Agent, Seller shall pay to the Agent, for the benefit of the
relevant Affected Entity, such amounts as such Affected Entity reasonably
determines will compensate or reimburse such Affected Entity for any resulting
(i) fee, expense or increased cost charged to, incurred or otherwise suffered by
such Affected Entity, (ii) reduction in the rate of return on such
Affected Entity’s capital or reduction in the amount of any sum received or
receivable by such Affected Entity or (iii) internal capital charge or other
imputed cost determined by such Affected Entity to be allocable to Seller or the
transactions contemplated in this Agreement in connection therewith; provided,
however,
that in no event may any Affected Entity (or the Agent on its behalf) claim or
receive reimbursement or compensation for amounts under this Section 10.4 that
would result in its total compensation (inclusive of Yield and fees) exceeding
the total compensation that would be payable to a Financial Institution that had
purchased Purchaser Interests in the amount of the Purchase Limit from the date
such Accounting Based Consolidation Event occurs. Subject to the limitation
above, amounts under this Section 10.4 may be demanded at any time without
regard to the timing of issuance of any financial statement by any Conduit or by
any Affected Entity.
Section
12.3. Federal
Reserve. Notwithstanding any other provision of this
Agreement to the contrary, any Purchaser may at any time pledge or grant a
security interest in all or any portion of its rights (including, without
limitation, any Purchaser Interest and any rights to payment of Capital
and Yield) under this Agreement to secure obligations of such Purchaser to a
Federal Reserve Bank, without notice to or consent of the Seller, any other
Purchaser or the Agent; provided
that no such pledge or grant of a security interest shall release a
Purchaser from any of its obligations hereunder, or substitute any such pledgee
or grantee for such Purchaser as a party hereto.
2.2.4. All
references in the Existing RPA to the “Prime Rate” (other than the definition of
such term in Exhibit I to the Existing RPA and the use of the term in the
definition of “Alternate Base Rate”) are hereby replaced with “Alternate Base
Rate.”
2.2.5. Clause
(xiv) of the definition of “Eligible
Receivable” in the Existing RPA is hereby amended and restated in its
entirety to read as follows:
(xiv) which
is not subject to any right of rescission, set-off, counterclaim, any other
defense (other than potential discharge in bankruptcy, but including defenses
arising out of violations of usury laws) (it being understood that only a
portion of a Receivable equal to the amount of such set-off, counterclaim or
defense shall be deemed not to be an Eligible Receivable) of the applicable
Obligor against the applicable Originator or any other Adverse Claim, and the
Obligor thereon holds no right as against the applicable Originator to cause
such Originator to repurchase the goods or merchandise the sale of which shall
have given rise to such Receivable (except with respect to sale discounts
effected pursuant to the Contract, or defective goods returned in accordance
with the terms of the Contract),
2.2.6. Each
of the following new defined terms is hereby inserted into Exhibit I to the
Existing RPA in its appropriate alphabetical order:
“Accounting Based
Consolidation Event” means the consolidation, for financial and/or
regulatory accounting purposes, of all or any portion of the assets and
liabilities of the Conduit that are subject to this Agreement or any other
Transaction Document with all or any portion of the assets and liabilities of an
Affected Entity. An Accounting Based Consolidation Event shall be
deemed to occur on the date any Affected Entity shall acknowledge in writing
that any such consolidation of the assets and liabilities of the Conduit shall
occur.
“Affected
Entity” means (i) any Funding Source, (ii) any agent, administrator or
manager of the Conduit, or (iii) any bank holding company in respect of any of
the foregoing.
“Alternate Base
Rate” means, for any day, a rate per annum equal to the sum of
(a) the greatest of (i) the Prime Rate in effect for such day, (ii) the sum of
(A) the Federal Funds Effective Rate in effect on such day plus (B) 0.50%, and,
if available, (iii) the sum of (A) the Base LIBO Rate for a Tranche Period of
one month at approximately 11:00 a.m. London time on such day plus (B) 1.00%,
plus
(b) 2.50%. Any change in the Alternate Base Rate due to a change in
the Prime Rate, the Federal Funds Effective Rate or the Base LIBO Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Federal Funds Effective Rate or the Base LIBO Rate, respectively.
“Base LIBO
Rate” means the rate per annum equal to (a) the
applicable British Bankers’ Association Interest Settlement Rate for deposits in
U.S. dollars appearing on Reuters BBA Libor Rates Page 3750 (or on any successor
or substitute page of such page providing rate quotations comparable to those
currently provided on such page , as determined by the Agent from time to time
for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) as of 11:00 a.m. (London
time) two Business Days prior to the first day of the relevant Tranche Period,
and having a maturity equal to such Tranche Period, provided
that (i) if Reuters BBA Libor Rates Page 3750 (or on any successor or substitute
page of such page providing rate quotations comparable to those currently
provided on such page, as determined by the Agent from time to time for purposes
of providing quotations of interest rates applicable to dollar deposits in the
London interbank market) is not available to the
Agent for any reason, the applicable LIBO Rate for the relevant Tranche Period
shall instead be the applicable British Bankers’ Association Interest Settlement
Rate for deposits in U.S. dollars as reported by any other generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Tranche Period, and having a maturity equal to
such Tranche Period, and (ii) if no such British Bankers’ Association Interest
Settlement Rate is available to the Agent, the applicable LIBO Rate for the
relevant Tranche Period shall instead be the rate determined by the Agent to be
the rate at which JPMorgan Chase offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Tranche Period,
in the approximate amount to be funded at the LIBO Rate and having a maturity
equal to such Tranche Period, divided by (b) one minus the maximum aggregate
reserve requirement (including all basic, supplemental, marginal or other
reserves) which is imposed against the Agent in respect of Eurocurrency
liabilities, as defined in Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time (expressed as a decimal),
applicable to such Tranche Period. The Base LIBO Rate shall be
rounded, if necessary, to the next higher 1/16 of 1%.
“Commingling
Reserve” means:
(a) at
any time during which the calculations below are based on Meredith’s quarterly
financial statements for the quarter ending June 30, 2009, if either (i) the sum
of (A) the cash balance as represented on Meredith’s quarterly financial
statements for the quarter ending June 30, 2009, plus (B) the aggregate
availability of the Total Commitment (as defined in the Credit
Agreement) as of June 30, 2009 as represented in such quarterly financial
statements is less than $25,000,000, or (ii) the Consolidated Leverage Ratio (as
defined in the Credit Agreement) for the quarter ending June 30, 2009 as
represented in such quarterly financial statements is higher than 2.50 to 1.00,
10% of the Net Receivables Balance;
(b) at
any other times if either (i) the sum of (A) the cash balance as of the end of
the applicable quarter as represented on Meredith’s most recent quarterly
financial statements plus (B) the aggregate availability of the Total Commitment
(as defined in the Credit Agreement) as of the end of such quarter as
represented in such quarterly financial statements is less than $50,000,000, or
(ii) the Consolidated Leverage Ratio (as defined in the Credit Agreement) as of
the end of such quarter as represented in such quarterly financial statements is
higher than 2.50 to 1.00, 10% of the Net Receivables Balance; and
(c) at
all times when the 10% reserve is not applicable under the foregoing clause (a)
or clause (b), 0% of the Net Receivables Balance.
The
applicability of clauses (a), (b) or (c) above shall be determined on March 31,
2009 (based on Meredith’s financial statements for the quarter ended December
31, 2008) and subsequently determined on each date on which Meredith’s financial
statements are delivered pursuant to Section 7.1(a), and such clause shall apply
on and from such date of determination until the subsequent date of
determination. Notwithstanding the foregoing, if at any time during
which clauses (a) or (b) apply, the Monthly Report indicates, in a manner
reasonably satisfactory to the Agent, that less than 5% of total Collections
from the previous calendar month were submitted by Obligors directly to Seller
or Servicer (rather than being submitted directly by such Obligors to a Lock-Box
or Collection Account), then the Commingling Reserve shall be 0% for the
following reporting period.
“Days Sales
Outstanding” means,
for any Accrual Period, (i) the aggregate Outstanding Balance of all Receivables
as of the last day of the Accrual Period ending one Accrual Period prior to such
Accrual Period, divided by (ii) the aggregate amount of Collections received
during such Accrual Period, multiplied by (iii) 30.
2.2.7. The
definitions in Exhibit I to the Existing RPA of the terms set forth below are
hereby amended and restated in their entirety to read as follows:
“Aggregate
Reserves” means, on any date of determination, the sum of the Commingling
Reserve, the Loss Reserve, the Yield & Servicing Reserve and the Dilution
Reserve.
“Concentration
Limit” means,
at any time, for any Obligor, 4.00% of the Eligible Receivables Balance, or such
other amount (a “Special
Concentration Limit”) for
such Obligor designated by the Agent and set forth on Schedule C, as such
schedule may be modified from time to time by the Agent to add Special
Concentration Limits or to cancel any Special Concentration Limit in accordance
with the proviso of this definition; provided
that in the case of an Obligor and any Affiliate of such Obligor, the
Concentration Limit shall be calculated as if such Obligor and such Affiliate
are one Obligor; and provided,
further, that Conduit or the Required Financial Institutions may, upon
not less than three Business Days’ notice to Seller, cancel any Special
Concentration Limit.
“Credit
Agreement” means that certain Credit Agreement dated as of April 5, 2002
among Xxxxxxxx, as borrower, the lenders listed therein, Bank of America, N.A.
(as successor by merger to Fleet National Bank), as Administrative Agent and
Issuing Lender, JPMorgan Chase Bank, N.A. (as successor by merger to Bank One,
N.A.) and Xxxxx Fargo Bank, National Association, each as Co-Syndication Agent,
and SunTrust Bank, Central Florida, National Association, as Documentation
Agent, as in effect on March 31, 2009 and as thereafter amended, restated or
otherwise modified from time to time with the consent of JPMorgan Chase as the
Agent hereunder (it being understood that any amendment, waiver or restatement
entered into after March 31, 2009 to which JPMorgan Chase in such capacity is
not a consenting party shall be disregarded for purposes of this
Agreement).
“Default
Fee” means with respect to any amount due and payable by Seller in
respect of any Aggregate Unpaids, an amount equal to interest on any such unpaid
Aggregate Unpaids at a rate per annum equal to the sum of
the Alternate Base Rate plus 1.00%.
“Default Proxy”
means as of the last day of any calendar month:
(a) on and prior to March 31, 2009,
either (i) the sum of (A) the aggregate Outstanding Balance of all Receivables
as to which any
payment, or part thereof, remains unpaid for 61-90 days from the original due
date for such payments at such time minus 3.0% of the aggregate Outstanding
Balance of all Receivables at such time, and (B) the aggregate Outstanding
Balance of all Receivables which were written off during such month, or (ii) if
such result as computed in clause (i) above is negative, then the last positive
calculation of the Default Proxy shall be used; and
(b) beginning on April 1, 2009, the sum
of (i) the aggregate Outstanding Balance of all Receivables as to which any
payment, or part thereof, remains unpaid for 91-120 days from the original due
date for such payments at such time, and (ii) the aggregate Outstanding Balance
of all Receivables that were written off during such month.
For
purposes of the calculations in clauses (a) and (b) above, all Receivables which
are due and payable within less than 30 days from the original billing date
shall be deemed to have an original due date of 30 days from the original
billing date
“Dilution
Horizon Ratio” means, as of the last day of any calendar month, a
percentage equal to (i) the aggregate Originator Sales during the three (3) most
recently ended calendar months divided by (ii) the Net
Receivables Balance as of such date.
“Dilution
Percentage” means as of the last day of any calendar month, a percentage
equal to the greater of (i) 5.00% and (ii) the following
calculation:
[(2.5x ED) + ((DS-ED) x DS/ED)] x
DHR
where:
ED = the
Expected Dilution Ratio at such time.
DS = the
Dilution Spike Ratio at such time
DHR = the
Dilution Horizon Ratio at such time.
“Eligible
Receivables Balance” means, on any date of determination, the aggregate
Outstanding Balance of all Eligible Receivables.
“LIBO
Rate” means, for any Tranche Period, a rate per annum equal to the sum of
the Base LIBO Rate plus 3.50%.
“Liquidity
Termination Date” means March 30, 2010.
“Loss
Percentage” means, as of the last day of any calendar month, the greater
of (i) 20.00% and (ii)(A) 2.5 times (B) the Loss Ratio as of such date, times
(C) the Loss Horizon Ratio as of such date.
“Loss Horizon
Ratio” means, as of the last day of any calendar month, a percentage
equal to (i) the aggregate Originator Sales during the three-month period ended
on such date, divided by (ii) the Net Receivables Balance as of such
date.
“Net Receivables
Balance” means, at any time, the Eligible Receivables Balance at such
time reduced by the sum of (a) the aggregate amount by which the Eligible
Receivables Balance of each Obligor and its Affiliates exceeds the Concentration
Limit for such Obligor, (b) the amount, if any, by which the Eligible
Receivables Balance which are due and payable 31 or more days and less than 60
days after their original billing dates exceeds 20% of the Eligible Receivables
Balance, (c) the aggregate amount by which the Eligible Receivables Balance of
all Governmental Obligors exceeds the Governmental Concentration Limit, (d) the
aggregate amount by which the Eligible Receivables Balance of all Canadian
Obligors exceeds the Canadian Concentration Limit, and (e) the aggregate amount
by which the Eligible Receivables Balance which arise from an obligation of the
Obligor to make progress payments exceeds 1% of the Eligible Receivables
Balance.
“Tranche
Period” means, with respect to any Purchaser Interest held by a Financial
Institution:
(a) if
Yield for such Purchaser Interest is calculated on the basis of the LIBO Rate
(other than as a component of the definition of “Alternate Base Rate”), a period
of one, two, three or six months, or such other period as may be selected by
Seller, commencing on a Business Day selected by Seller pursuant to this
Agreement. Such Tranche Period shall end on the day in the applicable
succeeding calendar month which corresponds numerically to the beginning day of
such Tranche Period, provided,
however, that if there is no such numerically corresponding day in such
succeeding month, such Tranche Period shall end on the last Business Day of such
succeeding month; or
(b) if
Yield for such Purchaser Interest is calculated on the basis of the Alternate
Base Rate, a period commencing on a Business Day selected by Seller, provided no
such period shall exceed one month.
If any
Tranche Period would end on a day which is not a Business Day, such Tranche
Period shall end on the next succeeding Business Day, provided, however, that in
the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche
Period for any Purchaser Interest which commences before the Amortization Date
and would otherwise end on a date occurring after the Amortization Date, such
Tranche Period shall end on the Amortization Date. The duration of
each Tranche Period which commences after the Amortization Date shall be of such
duration as selected by the Agent.
2.2.8. Schedule
C of the Existing RPA is hereby amended and restated in its entirety to read as
follows:
SCHEDULE
C
SPECIAL
CONCENTRATION LIMITS
|
Obligor
|
Special Concentration
Limit
|
|
Omnicom
Group
|
10.0%
of the Eligible Receivables Balance
|
|
WPP
Group PLC
|
10.0%
of the Eligible Receivables Balance
|
|
Home
Depot, Inc.
|
7.5%
of the Eligible Receivables Balance
|
|
Kraft
Foods Company
|
10.0%
of the Eligible Receivables Balance
|
|
All
other Obligors
|
4.0%
of the Eligible Receivables Balance
|
2.2.9. Exhibit
IV to the Existing RPA is hereby amended and restated in its entirety to read as
set forth in Annex B hereto.
2.2.10. Effective
for all Monthly Reports due on or after May 15, 2009, Exhibit X to the Existing
RPA is hereby amended and restated in its entirety to read as set forth in Annex
C hereto.
3. Representations
and Warranties. In order to
induce the Agent and the Purchasers to enter into this Amendment, each of
Xxxxxxxx and the Seller hereby represents and warrants to the Agent and the
Purchasers that after giving effect to the amendments contained in Section 2
above, (a) no Termination Event, Amortization Event, Potential Termination Event
or Potential Amortization Event exists and is continuing as of the Effective
Date (as defined in Section 4 below), (b) each of Meredith’s representations and
warranties contained in Section 2.1 of the
Existing RSA is true and correct as of the Effective Date, and (c) each of such
Person’s representations and warranties contained in Section 5.1 of the
Existing RPA is true and correct as of the Effective Date.
4. Effective
Date. This Amendment
shall become effective as of the date first above written (the “Effective
Date”) when the Agent has received (a) counterparts of this Amendment,
duly executed by the Seller Parties, the Agent and the Purchasers, (b)
counterparts of a second amendment and restatement of the Fee Letter, duly
executed by the parties thereto, and (c) payment in immediately available funds
of the renewal fee specified in such Fee Letter. Notwithstanding the
foregoing, the parties hereto agree that the amendments set forth in
Sections 2.1, 2.2.1, 2.2.7 with respect to the definitions of “Aggregate
Reserves”, “Concentration Limit”, “Net Receivables
Balance” and the other defined terms used to determine the
Aggregate Reserves or compliance with Section 9.1(f), and 2.2.8 shall not become
effective until April 1, 2009.
5. Ratification. The Existing
Agreements, as modified hereby, are hereby ratified, approved and confirmed in
all respects.
6. Reference
to Agreements. From and after
the Effective Date hereof, each reference in the Existing RSA or Existing RPA or
to “this Agreement”, “hereof”, or “hereunder” or words of like import, and all
references to the Existing RSA or Existing RPA in any and all agreements,
instruments, documents, notes, certificates and other writings of every kind and
nature shall be deemed to mean the Existing RSA or Existing RPA as modified by
this Amendment.
7. Costs and
Expenses. The Seller agrees
to pay all costs, fees, and out-of-pocket expenses (including reasonable
attorneys’ fees and disbursements) incurred by the Agent in connection with the
preparation, execution and enforcement of this Amendment.
8. CHOICE OF
LAW. THIS AMENDMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF ILLINOIS.
9. Execution
in Counterparts. This Amendment
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 taken together shall constitute one and the same
agreement.
<signature
pages follow>
IN WITNESS
WHEREOF, the Seller Parties, the Purchasers and the Agent have executed
this Amendment as of the date first above written.
XXXXXXXX
FUNDING CORPORATION
By: /s/ Xxxxx X.
Xxxxxx
Name: Xxxxx
X. Xxxxxx
Title: President
XXXXXXXX
CORPORATION
By: /s/ Xxxxxx X.
Xxxxxxxx
Name: Xxxxxx
X. Xxxxxxxx
Title: Corporate
Controller
FALCON
ASSET SECURITIZATION COMPANY LLC
By: JPMorgan
Chase Bank, N.A., its attorney in fact
By: /s/ Xxxx X.
Xxxxxxx
Name: Xxxx
X. Xxxxxxx
Title: Executive
Director
JPMORGAN
CHASE BANK, N.A., successor by merger to BANK ONE, NA, as a
Financial Institution and as Agent
By: /s/ Xxxx X.
Xxxxxxx
Name: Xxxx
X. Xxxxxxx
Title: Executive
Director
