[Execution Copy]
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U.S. $150,000,000
RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of October 6, 1995
among
SNAP-ON CREDIT CORPORATION
as Seller
and
THE BANKS SET FORTH ON THE SIGNATURES PAGES HEREOF
as the Banks
and
CITICORP NORTH AMERICA, INC.
Individually and as Agent
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TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . . . 2
SECTION 1.02. Other Terms . . . . . . . . . . . . . . . . . 23
SECTION 1.03. Computation of Time Periods . . . . . . . . . 23
ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Commitment . . . . . . . . . . . . . . . . . . 23
SECTION 2.02. Making Purchases from the Seller . . . . . . . 23
SECTION 2.03. Termination or Reduction of the Commitment . . 25
SECTION 2.04. Eligible Asset . . . . . . . . . . . . . . . . 25
SECTION 2.05. Non-Liquidation Settlement Procedures . . . . 26
SECTION 2.06. Liquidation Settlement Procedures . . . . . . 27
SECTION 2.07. General Settlement Procedures . . . . . . . . 28
SECTION 2.08. Payments and Computations, Etc. . . . . . . . 28
SECTION 2.09. Dividing or Combining of Eligible Assets . . . 29
SECTION 2.10. Yield and Fees . . . . . . . . . . . . . . . . 30
SECTION 2.11. Yield Protection . . . . . . . . . . . . . . . 31
SECTION 2.12. Increased Capital . . . . . . . . . . . . . . 32
SECTION 2.13. Taxes and Other Taxes . . . . . . . . . . . . 33
SECTION 2.14. Sharing of Payments, Etc. . . . . . . . . . . 34
SECTION 2.15. Agreement to Assign . . . . . . . . . . . . . 35
ARTICLE III CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to the Effectiveness
of this Agreement . . . . . . . . . . . . . . 37
SECTION 3.02. Conditions Precedent to All Purchases
and Reinvestments . . . . . . . . . . . . . . 39
ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of
the Seller . . . . . . . . . . . . . . . . . . 40
ARTICLE V GENERAL COVENANTS OF THE SELLER
SECTION 5.01. Affirmative Covenants of the Seller . . . . . 44
SECTION 5.02. Reporting Requirements of the Seller . . . . . 46
SECTION 5.03. Negative Covenants of the Seller . . . . . . . 48
ARTICLE VI ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent . . . . . . . 50
SECTION 6.02. Duties of the Collection Agent . . . . . . . . 51
SECTION 6.03. Rights of the Agent . . . . . . . . . . . . . 52
SECTION 6.04. Responsibilities of the Seller . . . . . . . . 53
SECTION 6.05. Possession by the Seller as Trustee;
Further Action Evidencing Purchases . . . . . 53
SECTION 6.06. Delivery of Contracts to Agent . . . . . . . . 54
SECTION 6.07. Application of Collections . . . . . . . . . . 55
ARTICLE VII EVENTS OF TERMINATION
SECTION 7.01. Events of Termination . . . . . . . . . . . . 55
ARTICLE VIII THE AGENT
SECTION 8.01. Authorization and Action . . . . . . . . . . . 59
SECTION 8.02. UCC Filings . . . . . . . . . . . . . . . . . 59
SECTION 8.03. Agent's Reliance. Etc. . . . . . . . . . . . . 59
SECTION 8.04. Agent and Affiliates . . . . . . . . . . . . . 60
SECTION 8.05. Purchase Decision . . . . . . . . . . . . . . 60
SECTION 8.06. Indemnification . . . . . . . . . . . . . . . 61
SECTION 8.07. Successor Agent . . . . . . . . . . . . . . . 61
ARTICLE IX ASSIGNMENT OF PERCENTAGE INTERESTS
SECTION 9.01. Register . . . . . . . . . . . . . . . . . . . 62
SECTION 9.02. Assignment . . . . . . . . . . . . . . . . . . 62
ARTICLE X INDEMNIFICATION
SECTION 10.01. Indemnities by the Seller . . . . . . . . . . 63
ARTICLE XI MISCELLANEOUS
SECTION 11.01. Amendments, Etc. . . . . . . . . . . . . . . 66
SECTION 11.02. Notices, Etc. . . . . . . . . . . . . . . . . 68
SECTION 11.03. No Waiver; Remedies . . . . . . . . . . . . . 69
SECTION 11.04. Binding Effect; Assignability . . . . . . . . 70
SECTION 11.05. Governing Law . . . . . . . . . . . . . . . . 71
SECTION 11.06. Costs, Expenses and Taxes . . . . . . . . . . 71
SECTION 11.07. [Reserved] . . . . . . . . . . . . . . . . . 72
SECTION 11.08. [Reserved] . . . . . . . . . . . . . . . . . 72
SECTION 11.09. Confidentiality . . . . . . . . . . . . . . . 72
SECTION 11.10. Execution in Counterparts; Severability . . . 72
LIST OF EXHIBITS
EXHIBIT A Form of Assignment of Purchase Commitment
EXHIBIT B Form of Contracts
EXHIBIT C Description of Credit and Collection Policy
EXHIBIT D Trade Names, Fictitious Names and "Doing Business As" Names
EXHIBIT E Investor Report
EXHIBIT F List of Offices of Seller where Records
are Kept
RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of October 6, 1995
SNAP-ON CREDIT CORPORATION, a Wisconsin corporation (the
"Seller"), THE BANKS SET FORTH ON THE SIGNATURE PAGES HEREOF (as such
group may be comprised from time to time after giving effect to
assignments and other transfers permitted hereunder, the "Banks"), and
CITICORP NORTH AMERICA, INC., a Delaware corporation, individually
("CNAI"), and as agent (the "Agent") for the Banks, agree as follows:
PRELIMINARY STATEMENTS. (1) Certain terms which are capitalized
and used throughout this Agreement (in addition to those defined above)
are defined in Article I of this Agreement.
(2) This Agreement is being entered into by the parties hereto
in connection with the Receivables Purchase and Sale Agreement dated as of
October 6, 1995 (as the same may be amended, supplemented or otherwise
modified from time to time thereafter, the "Investor Agreement") among the
Seller, Corporate Asset Funding Company, Inc. and the other "Investors"
(as defined therein) parties thereto, and CNAI, individually and as agent
for the "Owners" (as defined therein), and any capitalized terms used and
not otherwise defined herein shall have the meanings assigned to such
terms in the Investor Agreement.
(3) The Seller has, and expects to have, Receivables in which
the Seller intends to sell interests referred to herein as Eligible
Assets.
(3) The Banks desire to purchase such Eligible Assets from the
Seller.
(4) In consideration of the reinvestment by the Banks in Pool
Receivables of daily Collections of the Eligible Assets (other than, in
certain circumstances, with regard to accrued Yield), the Seller will sell
additional interests in the Pool Receivables as part of such Eligible
Assets until such reinvestment is terminated.
(5) CNAI has been requested and is willing to act as Agent.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Additional Reduction Amount" means, at any time, the sum of (a)
the amount by which the aggregate Outstanding Balance of all Receivables
owing from Sales Representatives exceeds $500,000, plus (b) the amount by
which the aggregate Outstanding Balance of all Receivables required,
according to the related Contract, to be paid in full within more than 36
months but no more than 60 months of the Original Date of such Contract,
exceeds $500,000, plus (c) the amount by which the aggregate Outstanding
Balance of all Receivables owing from and Canadian Obligors and Mexican
Obligors exceeds $500,000.
"Adjusted LIBO Rate" for any Bank with respect to any Eligible
Asset for any Fixed Period means an interest rate per annum equal to
(a) 0.125% per annum, plus (b) the rate of interest per annum (the "LIBO
Rate") at which deposits in U.S. Dollars are offered by the principal
office of Citibank in London, England to prime banks in the London
interbank market at 11:00 a.m. (London time) two "LIBO Business Days" (as
defined below) before the first day of such Fixed Period in an amount
approximately equal or comparable to the Capital of such Eligible Asset
and for a period equal to such Fixed Period plus (c) the remainder
obtained by subtracting (i) the LIBO Rate for such Fixed Period from
(ii) the rate obtained by dividing such LIBO Rate by the percentage equal
to 100% minus the "Eurodollar Reserve Percentage" (as defined below) for
such Fixed Period. "LIBO Business Day" means a day of the year on which
dealings are carried on in the London interbank market and banks are open
for business in London and are not required or authorized to close in New
York City. "Eurodollar Reserve Percentage" for any Fixed Period means the
reserve percentage applicable to Citibank during such Fixed Period under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) (or if more than one such
percentage shall be so applicable, the daily average of such percentages
for those days in such Fixed Period during which any such percentage shall
be so applicable) under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for Citibank in respect of liabilities or assets consisting
of or including "Eurocurrency liabilities" (as that term is used in
Regulation D of the Board of Governors of the Federal Reserve System as in
effect from time to time) having a term equal to such Fixed Period.
"Adverse Claim" means a lien, security interest, charge or other
encumbrance.
"Affected Person" means each of the Agent, CNAI, the Banks, any
entity which enters into a commitment to purchase Eligible Assets or
interests therein, or any of their respective Affiliates.
"Affiliate" means, with respect to any Person, a Person: (a)
that directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such Person; (b)
that beneficially owns or holds 5% or more of any class of the voting
stock (or, in the case of a Person that is not a corporation, 5% or more
of the equity interest) of such Person; or (c) 5% or more of the voting
stock (or, in the case of a Person that is not a corporation, 5% or more
of the equity interest) of which is beneficially owned or held, directly
or indirectly, by such Person; provided, however, that neither the Agent
nor any Bank shall be deemed to be an Affiliate of the Seller. The term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting stock or an equity interest, by
contract, or otherwise.
"Affiliated Obligor" means any Obligor that is an Affiliate of
another Obligor.
"Alternate Base Rate" means a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall
at all times be equal to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time as Citibank's base rate;
(b) 0.50% per annum above the latest three-week moving average
of secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average being determined weekly on each
Monday (or, if any such day is not a Business Day on the next succeeding
Business Day) for the three-week period ending on the previous Friday by
Citibank on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New York or, if
such publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by
Citibank, in either case adjusted to the nearest 0.25% or, if there is no
nearest 1/4 of one percent, to the next higher 0.25%; and
(c) 0.50% per annum above the Federal Funds Rate.
"Asset Purchase Agreement" means the asset purchase agreement,
if any, among the Agent and the Banks, pursuant to which the Banks shall
commit to purchase undivided interests owned by Corporate Asset Funding
Company, Inc., from time to time.
"Assignee Rate" for any Bank with respect to any Fixed Period
for any Eligible Asset means an interest rate per annum equal to the
Adjusted LIBO Rate; provided, however, that (a) in the case of any Fixed
Period of less than one month (measured as described in the definition of
"Fixed Period" with reference to Eligible Assets on which Yield is
calculated based upon the Adjusted LIBO Rate), the "Assignee Rate" for
such Fixed Period for such Eligible Asset shall be calculated using an
interest rate per annum equal to the Alternate Base Rate; (b) if any Bank
shall have notified the Agent on or before the first day of such Fixed
Period that a LIBO Rate Disruption Event has occurred and is continuing,
then the "Assignee Rate" for such Fixed Period for such Eligible Asset
shall be calculated using an interest rate per annum equal to the
Alternate Base Rate; (c) in the case of any Fixed Period for an Eligible
Asset the Capital of which is less than $500,000, the "Assignee Rate" for
such Fixed Period for such Eligible Asset shall be calculated using an
interest rate per annum equal to the Alternate Base Rate; and (d) if an
Event of Termination has occurred and is continuing, the "Assignee Rate"
for any Fixed Period for such Eligible Asset shall be the sum of the
applicable interest rate per annum determined pursuant to the provisions
set forth above plus 1.00% per annum.
"Assignment of Purchase Commitment" means an Assignment of
Purchase Commitment in substantially the form of Exhibit A, to be
delivered to the Agent for recordation in the Register in connection with
the assignment by any Bank of any of its rights or obligations hereunder
or interests herein.
"Benefit Plan" means a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of
which the Seller or any ERISA Affiliate is, or at any time during the
immediately preceding six years was, an "employer" as defined in Section
3(5) of ERISA.
"Business Day" means (a) any day other than a Saturday, Sunday
or public holiday or the equivalent for banks in New York City, and (b) if
the term "Business Day" is used in connection with the Adjusted LIBO Rate,
a LIBO Business Day.
"Canadian Obligor" means any Obligor that is a resident of
Canada but whose place of employment is located in the United States.
"Capital" of any Eligible Asset means (i) the original amount
paid to the Seller for such Eligible Asset at the time of its acquisition
by the Banks pursuant to Sections 2.01 and 2.02, or (ii) in the case of an
assignment of an "Eligible Asset" (under and as defined in the Investor
Agreement) from the Owners under Section 2.15, the amount of "Capital" of
such "Eligible Asset" as computed at the time of such assignment under the
Investor Agreement, in each case reduced from time to time by Collections
received and distributed on account of such Capital pursuant to Section
2.06 below. If any Bank or the Agent is required (or believes in good
faith that it is required) by law to repay (as a preference or otherwise,
and to the Seller, an Obligor, a trustee for the Seller or any Obligor, a
court or any other Person) any amount that previously caused a reduction
in Capital, then, to the extent that such amount is so repaid, Capital
shall be reinstated by the amount of such repayment and the Seller will
(but without duplication of any recovery made as a result of any related
reinstatement of Capital) indemnify and hold such Bank or the Agent
harmless for the amount of such repayment, interest thereon required (or
believed in good faith by such Bank or the Agent to be required) to be
paid in connection therewith and all losses, liabilities, costs and
expenses related thereto (including but not limited to reasonable
attorneys' fees and expenses). The "Capital" of the Percentage Interest
of a Bank in a Eligible Asset means the product of the Capital of such
Eligible Asset, multiplied by the Percentage of such Bank with respect to
such Eligible Asset.
"Capital Increase Purchase" means any Purchase by the Banks
which, pursuant to Section 2.02 or 2.15, causes the aggregate outstanding
Capital hereunder to increase.
"Citibank" means Citibank, N.A., a national banking association.
"Collection Agent" means at any time the Person then authorized
pursuant to Article VI to service, administer and collect Receivables.
"Collection Agent Fee" has the meaning assigned to that term in
Section 2.10.
"Collection Date" means the earliest date following the initial
Purchase hereunder on which all Banks have received the accrued Yield for
their respective Percentage Interests, the Capital of such Percentage
Interests and all other amounts payable to such Banks pursuant to this
Agreement, and the Collection Agent has received the accrued Collection
Agent Fee for all such Percentage Interest.
"Collections" means, (a) with respect to any Receivable, all
cash collections and other cash proceeds of such Receivable, including,
without limitation, all cash proceeds of Related Security with respect to
such Receivable, and any Collection of such Receivable deemed to have been
received pursuant to Section 2.07 (it being understood that the Seller
shall pay all such deemed Collection amounts to the Collection Agent) and
(b) any amounts paid to the Agent pursuant to the terms of the Parent
Support Agreement.
"Commitment" means, at any time, $150,000,000, as such amount
may be reduced pursuant to Section 2.03; provided, however, that at all
times on and after the Termination Date, the "Commitment" shall mean the
aggregate Capital for all Eligible Assets.
"Concentration Limit" for any Obligor means, at any time, (a)
1.67% of the aggregate outstanding Capital hereunder at such time, or (b)
such higher amount for any Obligor designated by Agent in a writing
delivered to Seller from time to time; provided, however, that in the case
of an Obligor with any Affiliated Obligors, the Concentration Limit and
the Receivables related thereto shall be calculated as if such Obligor and
such one or more Affiliated Obligors were one Obligor.
"Contract" means an agreement in substantially the form of one
of the forms of written contract set forth in Exhibit B or otherwise
approved by the Agent, initially executed between a Dealer or the Parent
and an Obligor, and subsequently assigned, as applicable, (a) by such
Dealer either directly to the Seller or to the Parent and subsequently by
the Parent to the Seller or (b) by the Parent to the Seller, pursuant to
or under which agreement such Obligor shall be obligated to pay for
merchandise sold or services rendered by such Dealer or the Parent, as
applicable.
"Contract Rider" means, with respect to any Contract, any rider
thereto executed and delivered by the Obligor thereunder evidencing the
purchase by such Obligor of additional goods or merchandise manufactured
by the Seller and a resulting increase in the Outstanding Balance of the
Receivable arising under such Contract, which increased Outstanding
Balance has been refinanced as of the date of such rider under terms
providing for the payment in full of such increased Outstanding Balance by
way of substantially equal installments payable no less frequently than
monthly within no more than 60 months of the date of such rider.
"Credit and Collection Policy" means those credit and collection
policies and practices relating to Contracts and Receivables described in
Exhibit C, as modified in compliance with Section 5.03(c).
"Dealer" means any Person, authorized pursuant to an effective
Dealer Agreement with the Parent, to act as a dealer for Equipment
manufactured and/or sold or distributed by the Parent.
"Dealer Agreement" means an agreement (as amended, supplemented
or otherwise modified from time to time) between any Person and the Parent
authorizing such Person to act as a dealer for the Parent, including,
without limitation, if the relevant Dealer is a franchise dealer, a
"Dealer Franchise Agreement" or "Conversion Dealer Franchise Agreement."
"Debt" of any Person means (a) indebtedness of such Person for
borrowed money, (b) obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) obligations of such
Person to pay the deferred purchase price of property or services,
(d) obligations of such Person as lessee under leases which shall have
been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (e) obligations secured by any
lien or other charge upon property or assets owned by such Person, even
though such Person has not assumed or become liable for the payment of
such obligations, (f) obligations of such Person in connection with any
letter of credit issued for the account of such Person and (g) obligations
of such Person under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (f)
above.
"Default Ratio" means for any month, the average of the Monthly
Default Ratios for such month and each of the immediately preceding two
consecutive months.
"Defaulted Receivable" means a Receivable, other than a Write-
off: (a) as to which any payment, or part thereof, remains unpaid for
more than 90 days from the scheduled due date for such payment (determined
by reference to the payment schedule with respect to such Receivable
established as of the Original Date of the related Contract) or (b) as to
which the Obligor thereof has taken any action, or suffered any event to
occur, of the type described in Section 7.01(g).
"Delinquency Ratio" means for any month the average of the
Monthly Delinquency Ratios for such month and each of immediately
preceding two consecutive months.
"Delinquent Receivable" means a Receivable that is not a
Defaulted Receivable and (a) as to which any payment, or part thereof,
remains unpaid for more than 30 days from the scheduled due date for such
payment (determined by reference to the payment schedule with respect to
such Receivable established as of the Original Date of the related
Contract) or (b) which, consistent with the Credit and Collection Policy,
has been or should be classified as delinquent by the Seller.
"Designated Obligor" means, at any time, any Obligor of any
Receivable, unless the Agent, in the exercise of its reasonable credit
judgment, has advised the Seller following three Business Days' notice
that such Obligor shall not be considered a Designated Obligor.
"Dilution Factors" means, with respect to the Receivables, any
credits, rebates (including, without limitation, in connection with any
prepayment or acceleration of any Receivable), freight charges, cash
discounts, volume discounts, cooperative advertising expenses, royalty
payments, warranties, cost of parts required to be maintained by agreement
(whether express or implied), allowances, disputes, chargebacks, returned
or repossessed goods, inventory transfers, allowances for early payments
and other allowances that are made or coordinated with the Seller's usual
practices.
"Eligible Asset" means, at any time, an undivided percentage
ownership interest at such time in (a) all then outstanding Pool
Receivables arising prior to the time of the most recent computation or
recomputation of such undivided percentage interest pursuant to Section
2.04, (b) all Related Security with respect to such Pool Receivables and
(c) all Collections with respect to, and other proceeds of, such Pool
Receivables. Such undivided percentage interest for such Eligible Asset
shall be computed as
C + YR + LR
NRPB
where:
C = the Capital of such Eligible Asset at the time of such
computation.
YR = the Yield Reserve of such Eligible Asset at the time of
such computation.
LR = the Loss Reserve of such Eligible Asset at the time of such
computation.
NRPB = the Net Receivables Pool Balance at the time of such
computation.
Each Eligible Asset shall be determined from time to time pursuant to the
provisions of Section 2.04. The sum of all Eligible Assets shall equal,
at all times, 100% of the interests described in clauses (a), (b) and (c)
above.
"Eligible Receivable" means, at any time and with respect to any
Eligible Asset, a Receivable:
(a) the Obligor of which, if not a Sales Representative, is not
an Affiliate of any of the parties hereto;
(b) the Obligor of which is a Designated Obligor;
(c) the Obligor of which is not the Obligor of any Defaulted
Receivables;
(d) which is not a Defaulted Receivable;
(e) which, according to the Contract related thereto, is (i)
required to be paid in full within 60 months of the Original Date of such
Contract and (ii) payable in substantially equal installments to be made
no less frequently than monthly;
(f) which arises under a Contract, the performance of which has
been completed by all other applicable parties other than the Obligor, and
which Receivable is fully assignable and has been properly documented in
accordance with the requirements of the Credit and Collection Policy, and
all Equipment, other goods or services in connection therewith have been
delivered to or performed for the Obligor;
(g) which is indebtedness representing all or part of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended;
(h) a purchase of which with the proceeds of notes would
constitute a "current transaction" within the meaning of Section 3(a)(3)
of the Securities Act of 1933, as amended;
(i) which constitutes "chattel paper" within the meaning of the
UCC of all applicable jurisdictions and in respect of which only one set
of instruments and other documents evidencing such Receivable has been
executed;
(j) which is denominated and payable only in United States
Dollars in the United States;
(k) which arises under a Contract which has been duly
authorized and which, together with such Receivable (which shall not in
any event satisfy this clause (k) if such Receivable has been paid by the
Obligor thereof), is in full force and effect and constitutes the legal,
valid and binding obligation of the Obligor of such Receivable enforceable
against such Obligor in accordance with its terms and is not subject (at
the time each determination of eligibility is made hereunder) to any
dispute, offset, counterclaim or defense whatsoever;
(l) which was (i) originated by a Dealer and acquired from such
Dealer in the ordinary course of business (A) by the Seller, together with
a security interest in the related Equipment or (B) by the Parent and
subsequently assigned in the ordinary course of business by the Parent to
the Seller, together with a security interest in the related Equipment,
pursuant to the Transfer Agreement or (ii) originated by the Parent and
acquired from the Parent in the ordinary course of business by the Seller,
together with a security interest in the related Equipment, pursuant to
the Transfer Agreement;
(m) which has not been compromised, adjusted, rescheduled or
otherwise modified (including by extension of time of payment) as a result
of delinquency or other negative credit reasons;
(n) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto (including, to the extent applicable, but 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 with respect to which no party to
the Contract related thereto is in violation of any such law, rule or
regulation in any material respect;
(o) which (i) satisfies in all material respects all applicable
requirements of the Credit and Collection Policy and (ii) complies with
such other criteria and requirements as the Agent may, in the exercise of
its reasonable credit judgment, from time to time specify to the Seller
following 30 days' notice;
(p) with respect to which, to the extent required by the Credit
and Collection Policy, the Seller has received a valid, first security
interest in the Equipment, the sale of which gave rise to such Receivable,
and all steps necessary to perfect such security interest in all
applicable jurisdictions shall have been taken, including the filing of
UCC financing statements;
(q) with respect to which the related Equipment is insured, for
the benefit of the Seller, against loss as a result of fire or other
casualty, in accordance with the requirements of Section 5.01(m);
(r) with respect to which none of the related Equipment has
been returned, rejected or repossessed;
(s) the Obligor of which is a United States resident, a
Canadian Obligor or a Mexican Obligor, and is not a government or a
governmental subdivision or agency; and
(t) as to which the Agent has not notified the Seller that the
Agent has determined, in its reasonable credit judgement, that such
Receivable (or class of Receivables) is not acceptable for purchase
hereunder.
"ERISA" means the U.S. Employee Retirement Income Security Act
of 1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" means any (a) corporation which is a member of
the same controlled group of corporations (within the meaning of Section
414(b) of the IRC) as the Seller; (b) partnership or other trade or
business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the IRC) with the Seller or (c) member of the
same affiliated service group (within the meaning of Section 414(m) of the
IRC) as the Seller, any corporation described in clause (a) above or any
partnership or other trade or business described in clause (b) above.
"Equipment" means tools and equipment manufactured and/or sold
by the Parent and/or Dealers, and any attachments thereto, and "related
Equipment" means, when used in reference to any Receivable, the Equipment
financed under the related Contract.
"Facility Fee" has the meaning assigned to that term in Section
2.10.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers,
as published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day for such transactions received by
Citibank from three Federal funds brokers of recognized standing selected
by it.
"Fee Letter" means the letter agreement of even date herewith
among the Seller, Corporate Asset Funding Company, Inc., Citibank, CNAI,
the Agent and the "Agent" under and as defined in the Investor Agreement.
"Fixed Period" means with respect to any Eligible Asset:
(a) the period commencing on the date of the creation of such
Eligible Asset pursuant to Section 2.02 or 2.09 and ending on (i) if Yield
thereon is to be calculated at the Assignee Rate using the Adjusted LIBO
Rate for such Fixed Period, the numerically corresponding date occurring
one, two, three or six months thereafter, as selected by the Seller and
approved by the Agent pursuant to Section 2.02 or Section 2.09; and (ii)
if Yield thereon is to be calculated at the Assignee Rate using the
Alternate Base Rate for such Fixed Period, such number of days as the
Seller shall select and the Agent shall approve pursuant to Section 2.02
or Section 2.09, as the case may be, up to 30 days from such date; and
(b) thereafter, each period commencing on the last day of the
immediately preceding Fixed Period for such Eligible Asset and ending on
(i) if Yield thereon is to be calculated at the Assignee Rate using the
Adjusted LIBO Rate for such Fixed Period, the numerically corresponding
date occurring one, two, three or six months thereafter, as selected by
the Seller and approved by the Agent on notice by the Seller received by
the Agent (including notice by telephone, confirmed in writing) not later
than or 10:00 a.m. (New York City time) on the third LIBO Business Day
prior to the first day of such subsequent Fixed Period; and (ii) if Yield
thereon is to be calculated at the Assignee Rate using the Alternate Base
Rate for such Fixed Period, such number of days, not to exceed 30, as the
Seller shall select and the Agent shall approve on notice by the Seller
received by the Agent (including notice by telephone, confirmed in
writing) not later than 11:00 a.m. (New York City time) on such last day;
provided, however, that
(1) any such Fixed Period (other than of one day) which would
otherwise end on a day which is not a Business Day shall be extended to
the next succeeding Business Day (except that if Yield in respect of such
Fixed Period is computed by reference to the Adjusted LIBO Rate, and such
next succeeding Business Day is in the next calendar month, then such
Fixed Period shall end on the next preceding Business Day);
(2) in the case of Fixed Periods of one day for any Eligible
Asset, (A) the initial Fixed Period shall be the day of the creation of
such Eligible Asset pursuant to Section 2.02 or Section 2.09; (B) any
subsequently occurring Fixed Period which is one day shall, if the
immediately preceding Fixed Period is more than one day, be the last day
of such immediately preceding Fixed Period, and if the immediately
preceding Fixed Period is one day, be the day next following such
immediately preceding Fixed Period; and (C) any Fixed Period of one day
which occurs on a day immediately preceding a day which is not a Business
Day shall be extended to the next succeeding Business Day;
(3) in the case of any Fixed Period for any Eligible Asset,
which commences before the Termination Date and would otherwise end on a
date occurring after such Termination Date, such Fixed Period shall end on
such Termination Date and the duration of each such Fixed Period which
commences on or after the Termination Date shall be of such duration as
shall be selected by the Agent; and
(4) from time to time until the Termination Date, subject to
the exceptions and limitations described above and in Sections 2.02 and
2.09, and the Agent's approval in accordance with the procedures above and
in Sections 2.02 and 2.09, the Seller shall select Fixed Periods for each
Eligible Asset so that the outstanding Capital of all Eligible Assets is
at all times allocated to a Fixed Period.
"Interim Procedures Letter" means a letter agreement of even
date herewith among the Seller, the Parent, Corporate Asset Funding
Company, Inc., Citibank, CNAI, the Agent and the "Agent" under and as
defined in the Investor Agreement.
"Investor Agreement" has the meaning assigned to that term in
the Preliminary Statements to this Agreement.
"Investor Capital" means, at any time, the then aggregate
"Capital" of all "Eligible Assets" purchased and outstanding at such time
under or pursuant to the Investor Agreement.
"Investor Report" means a report, in substantially the form of
Exhibit E, furnished by the Collection Agent to the Agent for each Bank
pursuant to Section 2.07.
"Involuntary Proceeding" has the meaning assigned to that term
in Section 7.01.
"IRC" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute.
"LIBO Rate Disruption Event" means, for any Bank with respect to
any Percentage Interest in an Eligible Asset for any Fixed Period, any of
the following: (a) a determination by such Bank that it would be contrary
to law or to the directive of any central bank or other governmental
authority (whether or not having the force of law) to obtain United States
dollars in the London interbank market for the purchase or maintenance of
such Percentage Interest for such Fixed Period, (b) the inability of
Citibank to furnish a LIBO Rate quotation to such Bank prior to 1:00 p.m.
(London time) on the second Business Day before the first day of such
Fixed Period, (c) a determination by such Bank that the rate at which
deposits of United States dollars are being offered to such Bank in the
London interbank market does not accurately reflect the cost to such Bank
of funding its purchase or maintenance of such Percentage Interest for
such Fixed Period or (d) the inability of such Bank, by reason of
circumstances affecting the London interbank market generally, to obtain
United States dollars in such market to fund its purchase or maintenance
of such Percentage Interest for such Fixed Period.
"Liquidation Fee" means, for each Eligible Asset (or Bank's
interest therein) for the Fixed Period (computed without regard to clause
(3) of the definition of "Fixed Period") during which the Capital for such
Eligible Asset is reduced, the amount, if any, by which (a) the additional
Yield (calculated without taking into account any Liquidation Fee) which
would have accrued on the reductions of Capital of such Eligible Asset (or
Bank's interest therein) during such Fixed Period (as so computed) if such
reductions had remained as Capital exceeds (b) the income received by the
Bank of such Eligible Asset (or interest therein) from such Bank's
investing the proceeds of such reductions of Capital to the extent it may
reasonably do so in the circumstances.
"Liquidation Yield" means, for any Eligible Asset at any time,
an amount equal to the Rate Variance Factor multiplied by the product of
(a) the Capital of such Eligible Asset and (b) the product of (i) the
Assignee Rate for such Eligible Asset for a Fixed Period deemed to
commence at such time for a period of one month and (ii) a fraction having
the number of months in the period equal to the Weighted Average Life, as
numerator, and 12, as denominator.
"Loss-to-Liquidation Ratio" means, for any month, the ratio
(expressed as a percentage) computed by dividing (a) the aggregate
Outstanding Balance of all Receivables that became Write-offs during each
of the immediately preceding twelve months (net of recoveries of Write-
offs received during each of the immediately preceding twelve months) by
(b) the aggregate amount of all Collections received during each of the
immediately preceding twelve months.
"Loss Percentage" for any Eligible Asset means on any day during
any Fixed Period for such Eligible Asset the greatest of (a) three times
the highest Monthly Default Ratio on any day during the three months
preceding such day, (b) three times the Loss-to-Liquidation Ratio for the
current month and (c) 5.00%.
"Loss Reserve" of any Eligible Asset at any time means an amount
equal to
LP x (C + YR)
where:
LP = the Loss Percentage for such Eligible Asset at such
time.
C = the Capital of such Eligible Asset at such time.
YR = the Yield Reserve for such Eligible Asset at such
time.
"Mexican Obligor" means any Obligor that is a resident of Mexico
but whose place of employment is located in the United States.
"Majority Banks" means, at any time, such Banks as shall then
have outstanding Capital of Percentage Interests in an aggregate amount
exceeding 66-2/3% of the aggregate amount of Capital outstanding
hereunder, and if at such time no Capital is outstanding hereunder, such
Banks as shall have Percentages aggregating more than 66-2/3%.
"Maximum Purchase" means, with respect to any Bank, the maximum
amount of Capital of Percentage Interests that a Bank is obligated to
purchase hereunder. The Maximum Purchase of any Bank shall at all times
equal such Bank's Percentage of the Commitment (as in effect from time to
time). Each Bank's initial Maximum Purchase is set forth opposite the
name of such Bank on the signature pages hereof, or in the relevant
Assignment of Purchase Commitment, as appropriate.
"Material Subsidiary" means any Subsidiary of the Parent except
a Subsidiary that has neither (a) assets with a book value in excess of
$10,000,000 nor (b) annual revenues for the most recently completed
calendar year in excess of $10,000,000.
"Monthly Default Ratio" means for any month the ratio (expressed
as a percentage) computed as of the last day of the immediately preceding
month by dividing (a) the aggregate Outstanding Balance of all Receivables
that were Defaulted Receivables on such last day or that became Write-offs
at any time during such immediately preceding month by (b) the aggregate
Outstanding Balance of all Receivables on such last day.
"Monthly Delinquency Ratio" means for any month the ratio
(expressed as a percentage) computed as of the last day of the immediately
preceding month by dividing (a) the aggregate Outstanding Balance of all
Receivables that were Delinquent Receivables on such last day by (b) the
aggregate Outstanding Balance of all Receivables on such last day.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is, or within the immediately preceding
six years was, contributed to by the Seller or any ERISA Affiliate.
"Net Receivables Pool Balance" means at any time the Outstanding
Balance of the Eligible Receivables in the Receivables Pool at such time,
reduced by the sum of (a) the sum of the aggregate amount by which the
Outstanding Balance of all Pool Receivables of each Obligor exceeds the
Concentration Limit for such Obligor at such time and (b) the Additional
Reduction Amount at such time.
"Obligor" means a Person obligated to make payments pursuant to
a Contract.
"Original Date" means, with respect to any Contract, the later
of (a) the original date of such Contract and (b) the date of the most
recent Contract Rider entered into in compliance with the requirements of
Section 5.03(b).
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal balance thereof excluding therefrom any
available cash discounts.
"Parent" means Snap-on Incorporated, a Delaware corporation.
"Parent Support Agreement" means the Support Agreement of even
date herewith between the Parent and the Agent, as the same may be
amended, supplemented or otherwise modified from time to time.
"Payment Date" means for any Eligible Asset for any Settlement
Period, the last day of such Settlement Period.
"Percentage" means, for each Bank, the percentage set forth for
such Bank under the heading "Percentages" opposite its signature line set
forth below, as such percentage may be modified by assignments made from
time to time hereunder, as set forth in the relevant Assignment of
Purchase Commitment and recorded in the Register; provided, however, that
in the event this Agreement is amended to increase the amount of the
Commitment, each Bank's Percentage shall be proportionately reduced (and,
therefore, the amount of each Bank's Maximum Purchase shall remain the
same as prior to such amendment), except that a Bank may elect to maintain
its Percentage hereunder (and, therefore, increase the amount of its
Maximum Purchase) by executing and delivering, within ten days after
receipt of notice of such amendment, an agreement in favor of the Seller
and the Agent (in form and substance satisfactory to the Agent)
reaffirming its Percentage and indicating its new Maximum Purchase amount;
provided further, however, that in the event any Bank is required to
participate in a Capital Increase Purchase under Section 2.02 or Section
2.15, and such Bank (the "Defaulting Bank") fails, for any reason, to make
available to the Agent its Percentage of the amount of Capital of the
Eligible Asset(s) to be purchased pursuant to such Capital Increase
Purchase, then the Defaulting Bank's Percentage with respect to such
Eligible Asset(s) shall be zero, and
(i) if the Agent has not made available to the Seller the
amount of Capital which the Defaulting Bank was required to provide (or if
the Agent has made such amount of Capital available to the Seller, and the
Seller thereafter repays to the Agent the amount of such Capital along
with all interest accrued thereon in accordance with Section 2.02 or 2.15,
as appropriate), the Percentages of each of the other Banks with respect
to such Eligible Asset(s) shall be proportionately increased so that such
Percentages aggregate to 100%, and
(ii) if the Agent has made available to the Seller the amount of
Capital which the Defaulting Bank was required to provide, unless and
until such amount of Capital (along with any interest accrued thereon in
accordance with Section 2.02 or 2.15, as appropriate) is reimbursed to the
Agent by the Seller or the Defaulting Bank, the Agent shall be a "Bank"
hereunder for all purposes relevant to such Eligible Asset(s) and,
notwithstanding anything herein to the contrary, the Agent's Percentage
with respect to such Eligible Asset(s) shall equal the Defaulting Bank's
Percentage (determined without giving effect to this proviso) and the
Defaulting Bank's Percentage with respect to such Eligible Asset(s) shall
be reduced to zero until such time as the Agent is reimbursed by the
Defaulting Bank.
Notwithstanding anything in the foregoing, in Sections 2.02 or 2.15, or
elsewhere in this Agreement to the contrary, the Agent shall have no
commitment whatsoever to make any purchase of a Percentage Interest in an
Eligible Asset, and no Bank shall have any obligation to make available to
the Agent in connection with any Purchase of an Eligible Asset, an amount
of Capital (x) which exceeds the aggregate Capital of such Eligible Asset
multiplied by the Percentage of such Bank (determined without giving
effect to the proviso in the foregoing sentence) or (y) which, when added
to the aggregate outstanding Capital of all Percentage Interests held by
such Bank hereunder, exceeds such Bank's Maximum Purchase.
"Percentage Interest" means, for each Bank, with respect to an
Eligible Asset, its undivided percentage ownership interest in such
Eligible Asset, which percentage shall be equal to such Bank's Percentage
of such Eligible Asset.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, government (or any agency or political
subdivision thereof) or other entity.
"Pool Receivable" means a Receivable in the Receivables Pool.
"Program Fee" has the meaning assigned to that term in Section
2.10.
"Purchase" means a purchase by the Banks of an Eligible Asset
from the Seller or the Owners pursuant to Article II, including, without
limitation, the initial purchase of an Eligible Asset under Section 2.02,
the purchase by the Banks of Eligible Assets from the Owners under Section
2.15 and the remittance by the Collection Agent to the Seller of
Collections of Receivables pursuant to Section 2.05.
"Purchase Commitment" means, with respect to any Bank, such
Bank's obligation to purchase Percentage Interests in Eligible Assets
offered for sale hereunder.
"Rate Variance Factor" means 1.25.
"Ratings Requirement" means the requirement that the senior
unsecured long-term debt of the Parent be rated at least A- by Standard &
Poor's Ratings Group and A3 by Xxxxx'x Investors Service, Inc.
"Receivable" means the indebtedness of any Obligor under a
Contract whether constituting an account, chattel paper, instrument or
general intangible, arising from a sale of merchandise or the performance
of services by a Dealer or the Parent, and includes the right to payment
of any interest or finance charges and other obligations of such Obligor
with respect thereto.
"Receivables Pool" means at any time all the outstanding
Receivables of the respective Obligors existing or arising at any time
such respective Obligors are Designated Obligors.
"Records" means all Contracts and other documents, books,
records and other information (including, without limitation, computer
programs, tapes, discs, punch cards, data processing software and related
property and rights) maintained with respect to Receivables and the
related Obligors.
"Register" has the meaning assigned to that term in Section
9.01.
"Reinvestment Termination Date" means that Business Day which
the Seller designates as the Reinvestment Termination Date by notice to
the Agent at least ten Business Days prior to such Business Day or, if any
of the conditions precedent in Section 3.02 are not satisfied, such
earlier Business Day which the Agent designates as the Reinvestment
Termination Date by notice to the Seller at least one Business Day prior
to such Business Day.
"Related Security" means with respect to any Receivable:
(a) all of the Seller's interest in the merchandise (including
returned, repossessed or foreclosed merchandise), if any, relating to the
sale which gave rise to such Receivable;
(b) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise;
(c) the assignment to the Agent, for the benefit of any Bank,
of all UCC financing statements, if any, covering any collateral securing
payment of such Receivable;
(d) all of the Seller's right and title to, and interest in,
all guarantees, indemnities, warranties, insurance policies and proceeds
and premium refunds thereof and other agreements or arrangements of
whatever character from time to time supporting or securing payment of
such Receivable whether pursuant to the Contract related to such
Receivable or otherwise, including, without limitation, all recourse
rights of the Seller, howsoever arising, against the Dealer that
originated such Receivable and the related Contract or the Parent;
(e) all Records; and
(f) all proceeds of the foregoing.
"Sales Representative" means any individual duly employed by the
Parent as a sales representative for merchandise manufactured by the
Parent.
"Settlement Period" for any Eligible Asset means each period
commencing on the first day of each Fixed Period for such Eligible Asset
and ending on the last day of such Fixed Period, and, on and after the
Termination Date, such period (including, without limitation, a daily
period) as shall be selected from time to time by the Agent or, in absence
of any such selection, each period of thirty days from the last day of the
immediately preceding Settlement Period; provided, however, that with
respect to any Fixed Period of one day as described in clauses (2)(A) and
(B) of the proviso clause of the definition of "Fixed Period," the related
Settlement Period shall be the first day following such Fixed Period.
"Subsidiary" means, as to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the Board of Directors or other
Persons performing similar functions are at the time directly or
indirectly owned by such Person.
"Termination Date" means the earliest of (a) the Reinvestment
Termination Date, (b) the reduction of the Commitment to zero pursuant to
Section 2.03, (c) the declaration or automatic occurrence of the
Termination Date pursuant to Section 7.01, (d) the date that the Seller
reduces the Purchase Limit to zero and (e) October 4, 1996.
"Transfer Agreement" means the Transfer Agreement of even date
herewith among the Parent, the Seller and Snap-on Financial Services,
Inc., a Nevada corporation, as in effect on the date of the initial
Purchase hereunder.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
"Weighted Average Life" means, on any day, that period
(expressed in months and rounded up to the next full month) equal to the
sum of (a) the weighted average remaining maturity of the Receivables as
of the end of the most recently ended calendar month, plus (b) one month,
as calculated by the Collection Agent and set forth in the Investor Report
prepared as of the end of such most recently ended calendar month;
provided, however, if the Agent shall disagree with any such calculation,
the Agent may recalculate the Weighted Average Life for such day.
"Write-off" means a Receivable that, in accordance with the
Credit and Collection Policy, has been or should be (a) assigned to a
category reserved for doubtful Receivables or otherwise recorded on the
Seller's books as a Receivable the collectibility of which is doubtful or
(b) written off the Seller's books as uncollectible. A Write-off shall
continue to constitute a Receivable for purposes of this Agreement until
the indebtedness of the Obligor related thereto shall have been paid in
full, extinguished by agreement between the Seller and such Obligor or
otherwise extinguished pursuant to applicable law.
"Yield" means for each Eligible Asset for any Fixed Period:
AR x C x ED
360
where:
AR = the Assignee Rate for such Eligible Asset for such Fixed
Period,
C = the Capital of such Eligible Asset during such Fixed
Period, and
ED = the actual number of days elapsed during such Fixed Period;
provided, however that (a) no provision of this Agreement shall require
the payment or permit the collection of Yield in excess of the maximum
permitted by applicable law and (b) Yield for any Eligible Asset shall not
be considered paid by any distribution if at any time such distribution is
rescinded or must otherwise be returned for any reason. The "Yield" for
each Bank's Percentage Interest in any Eligible Asset during any Fixed
Period means the product of (x) the Yield for such Eligible Asset and (y)
the Percentage of such Bank with respect to such eligible Asset.
"Yield Reserve" for any Eligible Asset means (a) so long as the
Ratings Requirement is satisfied, zero and (b) at any time when the
Ratings Requirement is not satisfied, the sum of (i) the Liquidation Yield
for such Eligible Asset and (ii) the accrued and unpaid Yield for such
Eligible Asset.
SECTION 1.02. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles. All terms used in Article 9 of
the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
SECTION 1.03. Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Commitment. On the terms and conditions
hereinafter set forth, the Banks shall purchase undivided percentage
ownership interests in Pool Receivables from the Seller by making
Purchases of Eligible Assets from time to time during the period from the
"Termination Date" under and as defined in the Investor Agreement to the
Termination Date. Each Bank's interest in an Eligible Asset purchased
hereunder shall equal such Bank' Percentage Interest in such Eligible
Asset. Under no circumstances shall the Banks make any Purchase of any
Eligible Asset if, after giving effect to such Purchase, the aggregate
Capital for all Eligible Assets hereunder would exceed and amount equal to
(i) the Commitment then in effect, minus (ii) the Investor Capital at such
time. In addition, the Banks shall, but subject to the terms and
conditions of this Agreement, with the proceeds of Collections in respect
of each of the Eligible Assets, purchase from the Seller, pursuant to
Section 2.05, additional undivided percentage ownership interests in Pool
Receivables by making appropriate readjustments of such Eligible Assets.
SECTION 2.02. Making Purchases from the Seller. Each Capital
Increase Purchase from the Seller by the Banks shall be made on at least
three Business Days' notice from the Seller to the Agent. Each such
notice of a proposed Capital Increase Purchase shall specify the desired
amount and date of such Capital Increase Purchase and the desired duration
of the initial Fixed Period for the Eligible Asset or Eligible Assets to
be purchased. The Agent shall promptly thereafter notify the Seller
whether the desired duration of the initial Fixed Period for the Eligible
Asset or Eligible Assets to be purchased is acceptable. In the event that
the Seller and the Agent fail to agree on the duration of any Fixed Period
for a Capital Increase Purchase prior to the Business Day of such Capital
Increase Purchase, the duration of such Fixed Period shall be selected by
the Agent in its sole discretion. On the date of each Capital Increase
Purchase, each Bank shall make available to the Agent at its address
referred to in Section 2.08 such Bank's Percentage of the aggregate
Capital of the Eligible Assets to be purchased pursuant to such Capital
Increase Purchase in same day funds, and following receipt by the Agent of
such funds, the Agent will, upon satisfaction of the applicable conditions
set forth in Article III, make such funds immediately available to the
Seller at Citibank's address at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, and
each Bank shall thereupon become the owner of its respective Percentage
Interest in each of the Eligible Assets purchased by the Banks pursuant to
such Capital Increase Purchase.
(b) Unless the Agent shall have received notice from a Bank
prior to the date of any Capital Increase Purchase that such Bank will not
make available to the Agent such Bank's ratable portion of such Capital
Increase Purchase, the Agent may assume that such Bank has made such
portion available to the Agent on the date of such Capital Increase
Purchase in accordance with Section 2.02(a) and the Agent may, in reliance
upon such assumption, make available to the Seller on such date a
corresponding amount. If and to the extent that such Bank shall not have
so made such ratable portion of such Capital Increase Purchase available
to the Agent, such Bank and the Seller severally agree to repay to the
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Seller until the date such amount is repaid to the Agent, at (i) in the
case of the Seller, a rate per annum equal to the Assignee Rate then in
effect for the purposes of determining Yield in respect of the Eligible
Asset(s) relating to such Capital Increase Purchase and (ii) in the case
of such Bank, the Federal Funds Rate, and until the Agent is so repaid,
the Agent shall be deemed to own Percentage Interest(s) in such Eligible
Asset(s) corresponding to the Percentage Interest(s) which would have been
owned by such Bank if it had made such ratable portion available to the
Agent, and the Agent shall be deemed to be a "Bank" hereunder for all
purposes relevant to such Eligible Asset(s). If such Bank shall repay to
the Agent such corresponding amount of Capital, together with interest
thereon accrued at the Federal Funds Rate, such amount of Capital so
repaid shall constitute the Capital of such Bank's Percentage Interest in
the Eligible Asset(s) purchased pursuant to such Capital Increase Purchase
for purposes of this Agreement.
(c) The failure of any Bank to pay its Percentage of the amount
of Capital of any Eligible Asset to be purchased pursuant to a Capital
Increase Purchase hereunder shall not relieve any other Bank of its
obligation, if any, hereunder to pay its corresponding Percentage of such
amount of Capital, but no Bank shall be responsible for the failure of any
other Bank to pay the Percentage of Capital required to be paid by such
other Bank on the date of any such Capital Increase Purchase.
SECTION 2.03. Termination or Reduction of the Commitment. The
Seller may, upon at least five Business Days' notice to the Agent,
terminate in whole or reduce in part the unused portion of the Commitment;
provided, however, that each partial reduction shall be in an amount equal
to $1,000,000 or an integral multiple thereof. On each day on which the
Seller shall, pursuant to Section 2.03 of the Investor Agreement, reduce
in part the unused portion of the Purchase Limit, the Commitment shall
reduce automatically by an equal amount. Each reduction in the Commitment
shall be applied to reduce each Bank's Maximum Purchase ratably in
accordance with each Bank's Percentage.
SECTION 2.04. Eligible Asset. (a) Each Eligible Asset shall be
initially computed as of the opening of business of the Collection Agent
on the date of Purchase of such Eligible Asset from the Seller.
Thereafter until the Termination Date, such Eligible Asset shall be
automatically recomputed as of (i) the opening of business of the
Collection Agent on any day on which the aggregate Capital of all Eligible
Assets hereunder is increased and (ii) the close of business of the
Collection Agent on each day. An Eligible Asset shall become zero at such
time as each of the Banks shall have received the accrued Yield with
respect to its Percentage Interest in such Eligible Asset, shall have
recovered its Percentage Interest of the Capital of such Eligible Asset
and shall have received all other amounts payable to such Bank pursuant to
this Agreement. Each Eligible Asset shall remain constant from the time
as of which any such computation or recomputation is made until the time
as of which the next such recomputation, if any, shall be made.
(b) The Agent shall maintain books and records in which shall
be recorded (i) the date and amount of each Capital Increase Purchase
hereunder and each Eligible Asset purchased pursuant thereto (and each
Percentage Interest purchased therein), (ii) the date and amount of and
parties to any assignment of rights and obligations hereunder pursuant to
Article IX or Section 11.04 notified to it, (iii) the amount of any Yield,
fees or other amounts due and payable or to become due from the Seller to
the Agent, any Bank or the Collection Agent hereunder and (iv) the amount
and date of any reduction in the Capital of any Eligible Asset. The
entries made in the Agent's books and records as described in this Section
2.04(b) shall be conclusive and binding for all purposes absent manifest
error.
SECTION 2.05. Non-Liquidation Settlement Procedures. Prior to
the Termination Date, on each day during each Settlement Period for each
Eligible Asset, the Collection Agent shall, out of Collections of Pool
Receivables allocable in respect of such Eligible Asset received on such
day, to the extent that the Ratings Requirement is not satisfied on such
day, set aside and hold in trust for the benefit of each Bank (ratably in
accordance with each such Bank's Percentage of each such Eligible Asset)
an amount equal to the Yield accrued through such day for such Eligible
Asset and not so previously set aside (the amount of such Yield to be set
aside on any day to be determined in consultation with the Agent at such
time as the Ratings Requirement shall no longer be satisfied) and
(b) apply the remainder of such Collections to the purchase, for the
benefit of the Banks (ratably in accordance with each Bank's respective
Percentage of each applicable Eligible Asset), of certain additional
undivided interests in Pool Receivables. Such remainder of Collections
shall be paid to the Seller and such Eligible Asset shall be recomputed as
described in Section 2.04(a). The recomputed Eligible Asset shall
constitute a percentage ownership interest in Pool Receivables (determined
pursuant to Section 2.04(a)) on such day held by all Banks, and each
Bank's undivided percentage interest of such recomputed Eligible Asset
shall constitute such Bank's undivided percentage interest in such
Eligible Asset on such day. On each Payment Date for each Eligible Asset
occurring prior to the Termination Date, but without limitation to the
obligations of the Seller pursuant to Section 2.10(a) of this Agreement,
the Collection Agent shall deposit to the Agent's account, as described in
Section 2.08, the amounts set aside or required to be set aside with
respect to such Eligible Asset pursuant to clause (a) of the first
sentence of this Section 2.05, but only to the extent that the Seller has
not satisfied its obligations under Section 2.10(a) with respect to such
Payment Date. Upon receipt of such funds by the Agent, the Agent shall
distribute them to the Banks, ratably in accordance with each such Bank's
Percentage of such Eligible Asset in payment of the accrued and unpaid
Yield for such Eligible Asset. Notwithstanding anything to the contrary
in this Section 2.05, the Collection Agent shall not be required to
segregate Collections set aside for the benefit of the Banks preceding
remittance thereof to the Agent unless the Agent shall have so requested
as contemplated in Section 6.02(b).
SECTION 2.06. Liquidation Settlement Procedures. On the
Termination Date and on each day thereafter, with respect to each Eligible
Asset, the Collection Agent shall set aside and hold in trust for the
Banks (ratably in accordance with each such Bank's Percentage of each such
Eligible Asset), the Collections of Pool Receivables allocable in respect
of such Eligible Asset received on such day. On each Payment Date for
each Eligible Asset occurring on or after the Termination Date, but
without limitation to the Seller's obligations under Section 2.10(a) of
this Agreement, the Collection Agent shall deposit to the Agent's account,
as described in Section 2.08 below, the amounts set aside pursuant to the
preceding sentence with respect to such Eligible Asset, together with any
remaining amounts set aside pursuant to Section 2.05 prior to the
Termination Date, but not to exceed the sum of (a) the accrued Yield for
such Eligible Asset, (b) the Capital of such Eligible Asset and (c) the
aggregate amount of other amounts owed hereunder by the Seller to any
Bank. Upon receipt of funds deposited to the Agent's account pursuant to
the preceding sentences, the Agent shall distribute them to the Banks
(x) ratably in accordance with each Bank's Percentage of such Eligible
Asset (i) if the Ratings Requirement was not satisfied as of the
Termination Date, in payment of the accrued Yield for such Eligible Asset,
but only to the extent that the Seller has not satisfied its obligations
under Section 2.10(a) with respect to such Payment Date, (ii) in reduction
(to zero) of the Capital of such Eligible Asset, and (iii) if the Ratings
Requirement was satisfied as of the Termination Date, in payment of the
accrued Yield for such Eligible Asset, but only to the extent that the
Seller has not satisfied its obligations under Section 2.10(a) with
respect to such Payment Date, and (y) in payment of any other amounts owed
by the Seller hereunder to any Bank. If there shall be insufficient funds
on deposit for the Agent to distribute funds in payment in full of the
aforementioned amounts, the Agent shall distribute funds, first, if the
Ratings Requirement was not satisfied as of the Termination Date, in
payment of the accrued Yield for such Eligible Asset, second, in reduction
of Capital of such Eligible Asset, third, if the Ratings Requirement was
satisfied as of the Termination Date, in payment of the accrued Yield for
such Eligible Asset, and fourth, in payment of other amounts payable to
any Bank. On the first Business Day following the Collection Date, the
Collection Agent shall pay to the Seller any remaining Collections set
aside and held by the Collection Agent pursuant to the first sentence of
this Section 2.06. Notwithstanding anything to the contrary in this
Section 2.06, the Collection Agent shall not be required to segregate
Collections set aside for the benefit of the Banks preceding remittance
thereof to the Agent unless the Agent shall have so requested as
contemplated in Section 6.02(b).
SECTION 2.07. General Settlement Procedures.
(a) If on any day the Outstanding Balance of any Pool
Receivable is either (i) reduced or adjusted as a result of any defective,
rejected, returned, repossessed or foreclosed merchandise, any defective
or rejected services, any cash discount or any other adjustment made or
performed by the Seller or any other Person (including, without
limitation, those described in the definition of "Dilution Factors") or
(ii) reduced or canceled as a result of a set-off in respect of any claim
by the Obligor thereof against the Seller or any other Person (whether
such claim arises out of the same or a related transaction or an unrelated
transaction), for purposes of this Agreement, the Seller shall be deemed
to have received on such day a Collection of such Pool Receivable in the
amount of such reduction, cancellation or adjustment. If on any day any
of the representations or warranties in the first sentence of Section
4.01(h) is no longer true with respect to a Pool Receivable, the Seller
shall be deemed to have received on such day a Collection of such Pool
Receivable in full. If on any day the representation and warranty in the
second sentence of Section 4.01(h) is no longer true the Seller shall be
deemed to have received on such day Collections of Pool Receivables in an
amount necessary to make such representation true and accurate.
(b) Prior to the 15th day of each calendar month, the
Collection Agent shall prepare and forward to the Agent for each Bank, an
Investor Report, relating to all Eligible Assets, as of the close of
business of the Collection Agent on the last day of the immediately
preceding calendar month.
SECTION 2.08. Payments and Computations, Etc. All amounts to
be paid or deposited by the Seller or the Collection Agent hereunder
(including, without limitation, Yield, Liquidation Fee and other fees and
expenses) shall be paid or deposited in accordance with the terms hereof
no later than 11:00 a.m. (New York City time) on the day when due in
lawful money of the United States of America in immediately available
funds to a special account (having an account number to be specified by
the Agent to the Seller in writing) in the name of Agent and maintained at
Citibank's office at 000 Xxxx Xxxxxx in New York City. The Seller shall,
to the extent permitted by law, pay to the Agent, on demand, interest on
all amounts not paid or deposited when due hereunder (whether owing by the
Seller individually or as Collection Agent) at 2% per annum above the
Alternate Base Rate; provided, however, that such interest rate shall not
at any time exceed the maximum rate permitted by applicable law. Such
interest shall be retained by the Agent except to the extent that such
failure to make a timely payment or deposit has continued beyond the date
for distribution by the Agent of such overdue amount to the Banks, in
which case such interest accruing after such date shall be for the account
of, and distributed by the Agent to the Banks ratably in accordance with
their respective Percentages of the relevant Eligible Assets. All
computations of interest and all computations of Yield, Liquidation Yield,
Liquidation Fee and other fees hereunder shall be made on the basis of a
year of 360 days for the actual number of days (including the first but
excluding the last day) elapsed.
SECTION 2.09. Dividing or Combining of Eligible Assets. The
Seller may, prior to the Termination Date, on notice received by the Agent
not later than 11:00 a.m. (New York City time) three Business Days before
the last day of any Fixed Period for any then existing Eligible Asset
("Existing Eligible Asset"), divide such Existing Eligible Asset on such
last day into two or more new Eligible Assets, each such new Eligible
Asset having Capital as designated in such notice and all such new
Eligible Assets collectively having aggregate Capital equal to the Capital
of such Existing Eligible Asset. The Seller may, prior to the Termination
Date, on notice received by the Agent not later than 11:00 a.m. (New York
City time) three Business Days before the last day of any Fixed Period for
two or more Existing Eligible Assets (owned in the same proportions by the
same Banks) in the same proportions) or the date of any proposed Purchase
of an Eligible Asset pursuant to Section 2.02 or Section 2.15 (to be owned
in the same proportions by the same Banks), either (a) combine such
Existing Eligible Assets or (b) combine such Existing Eligible Asset or
Eligible Assets and such Eligible Asset proposed to be purchased on such
last day into one new Eligible Asset, such new Eligible Asset having
Capital equal to the aggregate Capital of such Existing Eligible Assets,
or such Existing Eligible Asset or Eligible Assets and such Eligible Asset
proposed to be purchased, as the case may be. Each such notice of a
proposed division or combination of Eligible Assets as described above
shall, in addition, specify the desired duration of the initial Fixed
Period for each of the new Eligible Assets resulting from such division or
combination. The Agent shall notify the Seller whether the desired
duration of the initial Fixed Periods for each such new Eligible Asset is
acceptable or, if not acceptable, will advise the Seller of such Fixed
Periods, if any, as may be acceptable. In the event that the Seller and
the Agent fail to agree on the duration of the Fixed Period for any new
Eligible Asset resulting from a division or combination pursuant to this
Section 2.09 prior to the Business Day of such division or combination,
the duration of such Fixed Period shall be selected by the Agent in its
sole discretion. On and after any division or combination of Eligible
Assets as described above, each of the new Eligible Assets resulting from
such division, or the new Eligible Asset resulting from such combination,
as the case may be, shall be a separate Eligible Asset having Capital as
set forth above, and shall take the place of such Existing Eligible Asset
or Eligible Assets or Eligible Asset proposed to be purchased, as the case
may be, in each case under and for all purposes of this Agreement. On and
after the Termination Date, the Agent shall have the right to divide
and/or combine Eligible Assets in any manner which it may select in its
sole discretion.
SECTION 2.10. Yield and Fees. (a) From and after the date of
the initial Purchase until the later of the Termination Date and the
Collection Date, the Seller shall, on the Payment Date in respect of each
Settlement Period for each Eligible Asset, pay to the Agent for the
account of the Banks (ratably in accordance with their Percentages of such
Eligible Asset), (i) an amount equal to the accrued and unpaid Yield for
such Eligible Asset and (ii) an amount equal to the Liquidation Fee, if
applicable, for such Eligible Asset.
(b) From and after the date hereof until the later of the
Termination Date or the Collection Date, the Seller shall pay:
(i) to the Agent, for the account of each Bank, a facility fee
(the "Facility Fee") equal to the product of (i) the average daily amount
of such Bank's Maximum Purchase, whether used or unused, and (ii) the per
annum rate specified in the Fee Letter; and
(ii) to CNAI, in consideration for its support of the program
contemplated herein, a fee (the "Program Fee") equal to the product of (i)
the average daily amount of the aggregate outstanding Capital of all
Eligible Assets hereunder and (ii) the per annum rate specified in the Fee
Letter.
(c) The Seller shall be entitled to a credit against the
Facility Fee payable under this Agreement for any month by the full amount
of the "Facility Fee" (under and as defined in the Investor Agreement)
actually paid by the Seller under the Investor Agreement for such month.
The Facility Fee and the Program Fee are payable monthly in arrears for
each calendar month (or portion thereof) on the third Business Day of the
immediately succeeding calendar month during the term of this Agreement
and on the later of the Termination Date and the Collection Date.
(d) As part of the consideration for the Purchases hereunder,
the Seller agrees to perform the duties of the Collection Agent hereunder
until the Agent designates a new Collection Agent as described in Section
6.01. If at any time the Seller is not the Collection Agent, the Seller
shall pay, for the account of the Collection Agent, a fee (the "Collection
Agent Fee") equal to 110% of the reasonable and appropriate costs and ex-
penses incurred by the Collection Agent in connection with servicing,
collecting and administering the Receivables or paying another Person to
do so.
SECTION 2.11. Yield Protection. If due to either: (a) the
introduction of or any change (including, without limitation, any change
by way of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation or (b) the compliance by any
Affected Person with any guideline or request issued or made by or
otherwise emanating from any central bank or other governmental authority
after the date of this Agreement (whether or not having the force of law),
(i) there shall be an increase in the cost to an Affected Person of
making, funding or maintaining any Purchase hereunder or agreeing to
purchase, purchasing or maintaining an investment in an Eligible Asset or
any interest therein, as the case may be (other than by reason of any
interpretation of or change in laws or regulations relating to income
taxes), (ii) there shall be a reduction in the amount receivable with
regard to any Pool Receivable, or (iii) an Affected Person shall be
required to make a payment calculated by reference to the Pool Receivables
in which it has agreed to purchase, has purchased or maintains an interest
or Yield (or other fees calculated on the basis of Yield) received by it
(other than by reason of any interpretation of or change in laws or
regulations relating to income taxes), the Seller shall, from time to
time, within fifteen days after demand by such Affected Person (with a
copy to the Agent), pay to such Affected Person, that portion of such
increased costs incurred, amounts not received or receivable or required
payment made or to be made, which such Affected Person reasonably
determines is attributable to making, funding or maintaining any Purchase
hereunder or agreeing to purchase, purchasing or maintaining an investment
in an Eligible Asset or any interest therein, as the case may be. In
determining such amount, such Affected Person may use any reasonable
averaging and attribution methods. Such Affected Person shall submit to
the Seller and the Agent a certificate as to such increased costs
incurred, amounts not received or receivable or required payment made or
to be made, which certificate, setting forth the calculation thereof,
shall be conclusive and binding for all purposes absent manifest error.
Each Affected Person that determines to seek compensation under this
Section 2.11 shall notify the Seller of the circumstances that entitle
such Affected Person to such compensation pursuant to this Section 2.11,
and will take such action as such Affected Person may determine in its
sole and absolute discretion will avoid the need for or reduce the amount
of such compensation without disadvantage of any kind to such Affected
Person. Notwithstanding the provisions of this Section 2.11, the Seller
shall not be required to compensate any Affected Person for amounts
claimed under this Section 2.11 to the extent that those amounts were
incurred more than three months prior to the date that such Affected
Person (or the Agent on its behalf) notifies the Seller thereof.
SECTION 2.12. Increased Capital. If either (a) the
introduction of or any change in or in the interpretation of any law or
regulation or (b) compliance by any Affected Person with any guideline or
request issued or made by or otherwise emanating from any central bank or
other governmental authority after the date of this Agreement (whether or
not having the force of law) affects or would affect the amount of capital
required or expected to be maintained by any Affected Person, and such
Affected Person determines that the amount of such capital is increased by
or based upon (x) the existence of such Affected Person's agreement to
make or maintain Purchases hereunder and other similar agreements or
facilities, or (y) the existence of any agreement by Affected Persons to
make purchases of or otherwise maintain an investment in Eligible Assets
or interests therein related to this Agreement or to the funding thereof
and any other commitments of the same type, then, within fifteen days
following demand by such Affected Person (with a copy to the Agent), the
Seller shall immediately pay to such Affected Person from time to time, as
specified by such Affected Person, additional amounts sufficient to
compensate such Affected Person in light of such circumstances, to the
extent that such Affected Person reasonably determines such increase in
capital to be allocable to the existence of its agreement described in
clause (x) above or the commitments of certain other Affected Persons
described in clause (y) above. A certificate as to such amounts submitted
to the Seller and the Agent by such Affected Person, setting forth the
calculation thereof, shall be conclusive and binding for all purposes
absent manifest error. Each Affected Person agrees, but without
limitation to its rights hereunder, that promptly after becoming aware of
any event or circumstance described in clause (a) or (b) of the first
sentence of this Section 2.12 that is likely to give rise to a payment
liability on the part of the Seller under this Section 2.12, such Affected
Person will notify the Seller of such event or circumstance. Each
Affected Person that determines to seek compensation under this
Section 2.12 shall notify the Seller of the circumstances that entitle
such Affected Person to such compensation pursuant to this Section 2.12,
and will take such action as such Affected Person may determine in its
sole and absolute discretion will avoid the need for or reduce the amount
of such compensation without disadvantage of any kind to such Affected
Person. Notwithstanding the provisions of this Section 2.12, the Seller
shall not be required to compensate any Affected Person for amounts
claimed under this Section 2.12 to the extent that those amounts were
incurred more than three months prior to the date that such Affected
Person (or the Agent on its behalf) notifies the Seller thereof.
SECTION 2.13. Taxes and Other Taxes. (a) Any and all payments
and deposits required to be made hereunder or under any instrument
delivered hereunder by the Seller and/or the Collection Agent (if the
Seller or appointed by the Seller) shall be made free and clear of and
without deduction for any present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding taxes imposed on net income and all income and
franchise taxes of the United States and any political subdivisions
thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Seller and/or the Collection Agent (if the Seller or
appointed by the Seller) shall be required by law to deduct any Taxes from
or in respect of any sum required to be paid or deposited hereunder or
under any instrument delivered hereunder, (i) such sum shall be increased
as may be necessary so that after making all required deductions
(including deductions applicable to additional sums required to be paid or
deposited under this Section 2.13) the amount received by the relevant
Affected Person, or otherwise deposited hereunder or under such
instrument, shall be equal to the sum which would have been so received or
deposited had no such deductions been made, (ii) the Seller or the
Collection Agent (as appropriate) shall make such deductions and (iii) the
Seller or the Collection Agent (as appropriate) shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) In addition, the Seller agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or under any
instrument delivered hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
instrument delivered hereunder (hereinafter referred to as "Other Taxes").
(c) The Seller will indemnify each Affected Person for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.13) paid by such Affected Person and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto whether or not such Taxes or Other Taxes were correctly or legally
asserted. This indemnification shall be made within 30 days from the date
the Affected Person makes written demand therefor. A certificate as to
the amount of such indemnification submitted to the Seller and the Agent
by such Affected Person, setting forth the calculation thereof, shall be
conclusive and binding for all purposes absent manifest error.
(d) Within 30 days after the date of any payment of Taxes the
Seller will furnish to the Agent the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of
the Seller or the Collection Agent hereunder, the agreements and
obligations of the Seller and the Collection Agent (if the Seller or
appointed by the Seller) contained in this Section 2.13 shall survive the
Collection Date.
SECTION 2.14. Sharing of Payments, Etc. If any Bank shall
obtain any payment (whether voluntary, involuntary, through the exercise
of any right of setoff, or otherwise) on account of Percentage Interests
owned by it in Eligible Assets (other than pursuant to Section 2.10, 2.11,
2.12, 2.13, or 10.01 and other than as a result of the differences in the
timing of the application of Collections pursuant to Section 2.05 or 2.06)
in excess of its ratable share of payments on account of Eligible Assets
obtained by all the Banks, such Bank shall forthwith purchase from the
other Banks such participations in the Percentage Interests owned by them
as shall be necessary to cause such purchasing Bank to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each Bank shall be rescinded and each
other Bank shall repay to the purchasing Bank the purchase price to the
extent of such recovery together with an amount equal to each other Bank's
ratable share (according to the proportion of (i) the amount of such other
Bank's required payment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered.
SECTION 2.15. Agreement to Assign. On any Business Day on or
before the Termination Date, upon the written request of the Seller to the
Agent, each of the Banks shall request, in writing, that the Owners assign
to each of the Banks (in accordance with each such Bank's Percentage), on
the "Termination Date" under the Investor Agreement, all of their
respective right and title to, and interest in, all "Eligible Assets" (as
defined in the Investor Agreement) then owned by the Owners upon tender by
the Owners to the Agent of an appropriate written assignment duly executed
by the Owners, in form and substance satisfactory to the Agent, each Bank
shall tender to the Agent, for the benefit of the Owners, consideration
(in immediately available funds) equal to such Bank's Percentage of the
"Capital" of the Owners' "Eligible Assets" (as defined in the Investor
Agreement). It shall be a condition precedent to the effectiveness of
such assignment by the Owners that the Owners shall have received all
amounts of "Capital" and "Yield" (as defined in the Investor Agreement)
and all other amounts then accrued and unpaid or otherwise outstanding
under the Investor Agreement with respect to all such "Eligible Assets" by
no later than 2:30 P.M. (New York City Time) (or such later time as may be
agreed to by each of the Owners) on the "Termination Date" under the
Investor Agreement, and upon timely receipt of all such amounts by the
Owners, the assignment by the Owners and the acceptance by the Banks of
such "Eligible Assets" shall become effective, such "Eligible Assets"
shall be deemed to be Eligible Assets for all purposes of this Agreement
and each Bank shall own a Percentage Interest therein corresponding to its
Percentage hereunder, and the underlying "Purchased Interest," "Purchased
Receivables," "Related Security," and related "Contracts" and
"Collections," under and as defined in the Investor Agreement, shall be
deemed to be the Purchased Interest, Purchased Receivables, Related
Security, and related Contracts and Collections, respectively, under and
as defined in this Agreement; provided, however, that in the event that
(A) the Seller and/or the Collection Agent have not paid to the Owners all
amounts of "Yield" (as defined in the Investor Agreement) and all other
amounts then accrued and unpaid or otherwise outstanding under the
Investor Agreement with respect to all such "Eligible Assets," or (B) the
Banks have not paid to the Owners all amounts of "Capital" (as defined in
the Investor Agreement) outstanding under the Investor Agreement with
respect to all such "Eligible Assets," in each case by no later than 2:30
P.M. (New York City Time) (or such later time as may be agreed to by each
of the Owners) on the "Termination Date" under the Investor Agreement,
then the requests of the Seller and each of the Banks described in the
first sentence of this Section 2.15 shall be deemed to have been withdrawn
and the Agent shall return to each Bank all amounts of consideration paid
by such Bank pursuant to such requests. To the extent that any such
assignment by the Owners to each Bank pursuant this Section 2.15 which,
pursuant to the foregoing terms, purports to be an effective assignment,
is not effective to transfer to each such Bank its Percentage Interest in
the Eligible Assets or the underlying Purchased Interest, Purchased
Receivables, Related Security and related Contracts and Collections,
respectively, under and as defined in this Agreement, the Seller hereby
sells to such Bank, upon the closing of such assignment pursuant to this
Section 2.15 (including, without limitation, payment of the amounts
specified above in this Section 2.15 in connection with such assignment),
its Percentage Interest in such Eligible Assets, and the underlying
Purchased Interest, Purchased Receivables, Related Security and related
Contracts and Collections. Notwithstanding anything in the foregoing to
the contrary, the Banks shall have no obligation to consummate any such
requested assignment of Eligible Assets if an event has occurred and is
continuing, or would result from such requested assignment of Eligible
Assets, which constitutes an Event of Termination (or Termination Date) or
would constitute an Event of Termination (or Termination Date) but for the
requirement that notice be given or time elapse or both. Initial Fixed
Periods for all such Eligible Assets shall commence upon the effective
date of such assignment and acceptance. All such assignments shall be
without recourse or warranty, express or implied, except in respect of
Adverse Claims against the "Eligible Assets" (as defined in respect of
Adverse Claims against the "Eligible Assets" (as defined in the Investor
Agreement) created in favor of the Owners.
(b) Unless the Agent shall have received notice from a Bank
prior to the closing of the assignment and acceptance to Section 2.15(a)
that such Bank will not make available to the Agent such Bank's Percentage
of the "Capital" of the Owners' "Eligible Assets" (as defined in the
Investor Agreement), the Agent may assume that such Bank has made such
portion available to the Agent on the date of such assignment and
acceptance in accordance with this Section 2.15(a), and the Agent may, in
reliance upon such assumption, make available to the Owners on such date a
corresponding amount. If and to the extent that such Bank shall not have
so made its Percentage of "Capital" (as defined in the Investor Agreement)
available to the Agent, such Bank agrees to repay to the Agent forthwith
on demand such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the Owners until
the date such amount is repaid to the Agent, at the Federal Funds Rate,
and until the Agent is so repaid, the Agent shall be deemed to own
Percentage Interest(s) in the Eligible Asset(s) so acquired by the Banks
corresponding to the Percentage Interest(s) which would have been owned by
such Bank if it had made such Percentage of Capital available to the
Agent, and the Agent shall be deemed to be a "Bank" hereunder for all
purposes relevant to such Eligible Asset(s). If such Bank shall repay to
the Agent such corresponding amount of Capital, together with interest
thereon accrued at the Federal Funds Rate, such amount of Capital so
repaid shall constitute the Capital of such Bank's Percentage Interest in
the Eligible Asset(s) acquired pursuant to such assignment and acceptance
for purposes of this Agreement.
(c) The failure of any Bank to pay its Percentage of the amount
of "Capital" of the "Eligible Assets" (as defined in the Investor
Agreement) to be assigned pursuant to a Section 2.15(a) shall not relieve
any other Bank of its obligation, if any, hereunder to pay its
corresponding Percentage of such amount of "Capital" (as defined in the
Investor Agreement), but no Bank shall be responsible for the failure of
any other Bank to pay the Percentage of "Capital" (as defined in the
Investor Agreement) required to be paid by such other Bank on the date of
any such assignment.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01. Conditions Precedent to the Effectiveness of this
Agreement. The effectiveness of this Agreement is subject to the
condition precedent that the Agent shall have received on or before the
date of such effectiveness the following (it being understood that the
delivery of any of such following items to the Agent pursuant to the
Investor Agreement shall constitute delivery hereunder), each (unless
otherwise indicated) dated such date, in form and substance satisfactory
to the Agent:
(a) A copy of the resolutions of the Board of Directors of the
Seller approving this Agreement and the other documents to be delivered by
it hereunder and the transactions contemplated hereby, certified by its
Secretary or Assistant Secretary;
(b) The Articles of Incorporation of the Seller certified by
the Secretary of State of Wisconsin.
(c) Good Standing Certificates for the Seller issued by the
Secretaries of State of New Jersey, Minnesota, Indiana and Wisconsin.
(d) A certificate of the Secretary or Assistant Secretary of
the Seller certifying (i) the names and true signatures of the officers
authorized on its behalf to sign this Agreement and the other documents to
be delivered by it hereunder (on which certificate the Agent and the Banks
may conclusively rely until such time as the Agent shall receive from the
Seller a revised certificate meeting the requirements of this subsection
(d)) and (ii) a copy of the Seller's by-laws;
(e) Acknowledgment copies of proper Financing Statements (Form
UCC-1), dated a date reasonably near to the date of the effectiveness of
this Agreement, naming the Seller as the assignor of Receivables and
Related Security and CNAI, as Agent, as assignee, or other, similar
instruments or documents, as may be necessary or, in the opinion of the
Agent, desirable under the UCC of all appropriate jurisdictions or any
comparable law to perfect the Banks' ownership interests in all
Receivables and Related Security;
(f) Acknowledgment copies of proper Financing Statements (Form
UCC-3), if any, necessary to release all security interests and other
rights of any Person in the Receivables and Related Security previously
granted by the Seller;
(g) Certified copies of Requests for Information or Copies
(Form UCC-11) (or a similar search report certified by a party acceptable
to the Agent), dated a date reasonably near to the date of the
effectiveness of this Agreement, listing all effective financing
statements which name the Seller (under its present name and any previous
name) as debtor and which are filed in the jurisdictions in which filings
were made pursuant to subsection (f) above, together with copies of such
financing statements (none of which shall cover any Receivables or
Contracts);
(h) A copy of the Investor Agreement and the other instruments,
agreements and documents required to be delivered thereunder;
(i) A copy of the resolutions of the Board of Directors of the
Parent approving the Parent Support Agreement and the other documents to
be delivered by it hereunder and the transactions contemplated hereby,
certified by its Secretary or Assistant Secretary;
(j) The Articles of Incorporation of the Parent certified by
the Secretary of State of Delaware;
(k) Good Standing Certificates for the Parent issued by the
Secretaries of State of Delaware and Wisconsin;
(l) A certificate of the Secretary or Assistant Secretary of
the Parent certifying (i) the names and true signatures of the officers
authorized on its behalf to sign the Parent Support Agreement and the
other documents to be delivered by it hereunder (on which certificate the
Agent and the Banks may conclusively rely until such time as the Agent
shall receive from the Parent a revised certificate meeting the
requirements of this subsection (l)) and (ii) a copy of the Parent's
by-laws;
(m) Opinions of (i) Xxxxx X. Xxxxxxxx, General Counsel of the
Parent acting on behalf the Parent and the Seller and (ii) Xxxxx &
Lardner, counsel for the Seller and the Parent, in each case, as to such
matters as the Agent may reasonably request;
(n) A copy of the Fee Letter;
(o) A copy of the Interim Procedures Letter; and
(p) An opinion of Sidley & Austin, counsel for the Agent, as
the Agent may reasonably request.
SECTION 3.02. Conditions Precedent to All Purchases and
Reinvestments. The rights of the Seller to receive the proceeds of any
Purchase hereunder (including, without limitation, the initial Capital
Increase Purchase and each remittance of Collections by the Collection
Agent to the Seller pursuant to Section 2.06) shall be subject to the
further conditions precedent that (a) with respect to any such Purchase
(other than the initial Capital Increase Purchase), on or prior to the
date of such Purchase, the Collection Agent shall have delivered to the
Agent, in form and substance satisfactory to the Agent, a completed
Investor Report dated within thirty days prior to the date of such
Purchase and containing such additional information as may be reasonably
requested by the Agent; (b) on the date of such Purchase the following
statements shall be true and the Seller by accepting the amount of such
Capital Increase Purchase or by receiving the proceeds of such Collections
shall be deemed to have certified that:
(i) The representations and warranties contained in Section
4.01 (other than in Sections 4.01(e) and 4,01(f)) are correct on and as of
such day as though made on and as of such date,
(ii) No event has occurred and is continuing, or would result
from such Purchase or reinvestment, which constitutes an Event of
Termination or would constitute an Event of Termination but for the
requirement that notice be given or time elapse or both,
(iii) The Termination Date shall not have become effective,
whether pursuant to the designation by the Seller of a Reinvestment
Termination Date or otherwise;
and (c) the Agent shall have received such other approvals, opinions or
documents as the Agent may reasonably request.
Notwithstanding the fact that any of the above-described conditions
precedent may not, in fact, have been satisfied in connection with any
Purchase hereunder, (x) such failure shall not impair the effectiveness of
the related Purchase, (y) the Purchase of the relevant Eligible Assets
shall be deemed to have been made automatically pursuant to Section 2.01
and Section 2.06 and (z) the relevant Eligible Assets shall be computed
initially pursuant to Section 2.05, but in each case with respect to the
foregoing clauses (x), (y) and (z), without waiver of any claim that the
Agent or any Bank may have against the Seller for failure to satisfy such
condition precedent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller.
The Seller represents and warrants as follows:
(a) The Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction named at
the beginning hereof and is duly qualified to do business, and is in good
standing, in every jurisdiction in which the nature of its business
requires it to be so qualified, except to the extent that the failure to
be qualified to do business or in good standing in any jurisdiction would
not, when taken together with all similar failures, materially adversely
affect the financial condition or operations of the Seller, the
collectibility of any Receivable or the rights of the Agent or any Bank
hereunder. The Seller has no Subsidiaries.
(b) The execution, delivery and performance by the Seller of
this Agreement, the Transfer Agreement and all other instruments and
documents to be delivered hereunder and thereunder, and the transactions
contemplated hereby and thereby, are within the Seller's corporate powers,
have been duly authorized by all necessary corporate action, do not
contravene (i) the Seller's charter or by-laws, (ii) any law, rule or
regulation applicable to the Seller, other than any such laws, rules or
regulations the contravention of which on an aggregate basis would not
materially adversely affect the financial condition or operations of the
Seller, the collectibility of any Receivable or the rights of the Agent or
any Bank hereunder (iii) any contractual restriction contained in any
indenture, loan or credit agreement, lease, mortgage, security agreement,
bond, note, or other agreement or instrument binding on or affecting the
Seller or its property or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting the Seller or its property,
and do not result in or require the creation of any Adverse Claim upon or
with respect to any of its properties (other than as contemplated herein
and in the Investor Agreement with respect to the Pool Receivables and
Related Security); and no transaction contemplated hereby requires
compliance with any bulk sales act or similar law. This Agreement has
been duly executed and delivered on behalf of the Seller.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Seller of
this Agreement, the Transfer Agreement or any other document or instrument
to be delivered hereunder or thereunder, except for the filing of the
financing statements referred to in Article III, all of which, at the time
required in Article III, shall have been duly made and shall be in full
force and effect.
(d) This Agreement and the Transfer Agreement constitute the
legal, valid and binding obligations of the Seller enforceable against the
Seller in accordance with their respective terms.
(e) The consolidated balance sheets of the Parent and its
consolidated Subsidiaries as at December 31, 1994, and the related
consolidated statements of cash flows and consolidated statements of
changes in financial position of the Parent and its consolidated
Subsidiaries for the fiscal year then ended, certified by Xxxxxx Xxxxxxxx
LLP, independent public accountants, copies of which have been furnished
to the Agent, fairly present the consolidated financial condition of the
Parent and its consolidated Subsidiaries as at such date and the
consolidated results of the operations of the Parent and its consolidated
Subsidiaries for the period ended on such date, all in accordance with
generally accepted accounting principles consistently applied, and since
December 31, 1994, there has been no material adverse change in any such
condition or operations.
(f) There are no actions, suits or proceedings pending, or to
the knowledge of the Seller threatened, against or affecting the Parent,
the Seller or any other Subsidiary of the Parent, or the property of the
Parent, the Seller or of any other Subsidiary of the Parent, in any court,
or before any arbitrator of any kind, or before or by any governmental
body, which may reasonably be expected to materially adversely affect the
financial condition or operations of the Seller or the Parent or the
Parent and its consolidated Subsidiaries taken as a whole, or materially
adversely affect the ability of the Seller or the Parent to perform their
respective obligations under this Agreement and the Transfer Agreement.
None of the Parent, the Seller or any Subsidiary of the Parent, is in
default with respect to any order of any court, arbitrator or governmental
body except for defaults with respect to orders of governmental agencies
which defaults are not material to the business or operations of the
Seller or the Parent or the Parent and its consolidated Subsidiaries taken
as a whole.
(g) No proceeds of any Purchase will be used by the Seller to
acquire any security in any transaction which is subject to Section 13 or
14 of the Securities Exchange Act of 1934, as amended.
(h) Each Receivable, together with the Contract related
thereto, is owned by the Seller free and clear of any Adverse Claim except
as provided herein and upon each Purchase and reinvestment, each Bank
shall acquire a valid and perfected first priority undivided percentage
ownership interest, to the extent of its Percentage Interest in the
Eligible Asset(s) purchased by the Banks, in each Pool Receivable then
existing or thereafter arising and in the Related Security and Collections
with respect thereto, free and clear of any Adverse Claim except as
provided hereunder; and no effective financing statement or other
instrument similar in effect covering any Receivable or the Related
Security or Collections with respect thereto shall at any time be on file
in any recording office except such as may be filed in favor of the Agent
in accordance with this Agreement. The sum of all Eligible Assets and all
"Eligible Assets" under and as defined in the Investor Agreement shall at
no time exceed 100%.
(i) No Investor Report (if prepared by the Seller, or, if not
prepared by the Seller, to the extent that information contained therein
is supplied by the Seller), information, exhibit, financial statement,
document, book, record or report furnished or to be furnished by the
Seller to the Agent or any Bank in connection with this Agreement is or
shall be inaccurate in any material respect as of the date it is or shall
be dated or (except as otherwise disclosed to the Agent or such Bank, as
the case may be, at such time) as of the date so furnished, or contains or
shall contain any material misstatement of fact or omits or shall omit to
state a material fact or any fact necessary to make the statements
contained therein not materially misleading.
(j) The chief place of business and chief executive office of
the Seller are located at the address of the Seller referred to in Section
11.02 hereof and the locations of the offices where the Seller keeps all
the Records are listed on Exhibit F (or at such other locations, notified
to the Agent in accordance with Section 5.01(f), in jurisdictions where
all action required by Section 6.05 has been taken and completed).
(k) The "Purchase" of "Eligible Assets" and the Investors'
acquisition of interests in "Pool Receivables" under the Investor
Agreement will constitute (i) a "current transaction" within the meaning
of Section 3(a)(3) of the Securities Act of 1933, as amended, and (ii) a
purchase or other acquisition of notes, drafts, acceptances, open accounts
receivable or other obligations representing part or all of the sales
price of merchandise, insurance or services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended.
(l) As of the date hereof, except as described on Exhibit D,
the Seller has no trade names, fictitious names, assumed names or "doing
business as" names.
(m) The Seller or the Parent, as applicable, shall have given
reasonably equivalent value to each Dealer in consideration for the
transfer to the Seller or the Parent, as applicable of the Receivables and
related Contracts from such Dealer or the Parent, as applicable, and none
of such transfers is or may be voidable under Sections 544, 545, 548, 549
or 724(a) of the Bankruptcy Code.
(n) Each Receivable and related Contract that has been
transferred to the Seller by the Parent has been purchased by the Seller
from the Parent pursuant to the Transfer Agreement.
ARTICLE V
GENERAL COVENANTS OF THE SELLER
SECTION 5.01. Affirmative Covenants of the Seller.
From the date hereof until the later of the Termination Date or the
Collection Date, the Seller will, unless the Agent shall otherwise consent
in writing:
(a) Compliance with Laws, Etc. Comply in all material respects
with all applicable laws, rules, regulations and orders with respect to
its business and properties or the Receivables and related Contracts,
except to the extent that any failure to so comply, when taken together
with all similar failures, would not materially adversely affect the
financial condition or operations of the Seller, the collectibility of any
Receivable or the rights and remedies of the Agent or any Bank hereunder.
(b) Preservation of Corporate Existence. Preserve and maintain
its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in
good standing in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualifications
would materially adversely affect (i) the interests hereunder of the Agent
or any Bank, (ii) the collectibility of any Receivable or (iii) the
ability of the Seller or the Collection Agent to perform their respective
obligations hereunder.
(c) Audits. At any time and from time to time during regular
business hours and upon five Business Days' (or if an Event of Termination
has occurred and is continuing one Business Day's) prior notice (which may
be by telephone) to the Seller, permit the Agent, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
Records and (ii) to visit the offices and properties of the Seller for the
purpose of examining such Records, and to discuss matters relating to the
Receivables or the Seller's performance hereunder with any of the officers
or employees of the Seller having knowledge of such matters.
(d) Keeping of Records and Books of Account. Maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing the Receivables in
the event of the destruction of the originals thereof) and keep and
maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Receivables (including,
without limitation, records adequate to permit the daily identification of
each new Pool Receivable and all Collections of and adjustments to each
existing Pool Receivable).
(e) Performance and Compliance with Receivables and Contracts.
At its expense, timely and fully perform and comply with all material
provisions, covenants and other promises required to be observed by it
under the Contracts related to the Receivables.
(f) Location of Records. Keep its chief place of business and
chief executive office, and the offices where it keeps the Records, at the
address(es) of the Seller referred to in Section 4.01(j) or, upon 30 days'
prior written notice to the Agent, at such other locations within the
United States where all action required by Section 6.05 shall have been
taken and completed.
(g) Credit and Collection Policies. Comply in all material
respects with its Credit and Collection Policy in regard to each
Receivable and the related Contract.
(h) Collections. Instruct all Obligors to cause all
Collections to be paid directly to a Dealer or the Parent; instruct all
Dealers or the Parent, as applicable, to remit all Collections to the
Seller within ten days of its receipt thereof from the applicable Obligor;
and remit all Collections to the Collection Agent (including, without
limitation, any Collections deemed to have been received pursuant to
Section 2.07) within one Business Day following the Seller's receipt
thereof.
(i) Identification of Eligible Receivables. Establish and
maintain procedures as are necessary for determining whether each
outstanding Pool Receivable qualifies as an Eligible Receivable.
(j) Returned Equipment. At all times on and after the
Termination Date, whenever possession (whether by return, repossession or
otherwise) of any Equipment relating to any Pool Receivable is obtained by
the Seller, any Affiliate of the Seller or any of their respective agents,
such Person shall hold such Equipment in trust for the benefit of the
Banks to the extent of their interest therein, and following the Agent's
request, clearly identify such equipment as subject to such interest;
provided, however, that the Seller may at any time sell or otherwise
realize upon any such returned or repossessed Equipment in accordance with
the terms of the Credit and Collection Policy, subject to the requirement
the proceeds of such sale or other realization be remitted to the
Collection Agent for application pursuant to the terms of this Agreement.
The Seller will use its best efforts to sell or otherwise realize upon any
returned or repossessed Equipment.
(k) Seller's Acquisition of Receivables. With respect to each
Receivable and related Contract acquired by the Parent from a Dealer,
cause the Parent to take all action necessary to perfect, protect and
evidence the Parent's ownership interest in such Receivable and related
Contract and with respect to each Receivable and related Contract acquired
by the Seller from the Parent or a Dealer, take all action necessary to
perfect, protect and evidence the Seller's interest in such Receivable and
related Contract.
(l) Security Interest In Equipment. With respect to each
Receivable and related Contract, to the extent required by the Credit and
Collection Policy, maintain filed UCC financing statements in all
applicable jurisdictions so that the Seller has a perfected security
interest in the Equipment related to such Receivable and related Contract
free and clear of any Adverse Claim.
(m) Insurance. To the extent required by the Credit and
Collection Policy, maintain or cause to be maintained for the benefit of
the Seller, one or more casualty insurance policies on each item of
Equipment relating to the Pool Receivables and the related Contracts
covering loss thereof and damage thereto in an amount at least equal to
the Outstanding Balance of such Pool Receivable and, upon the Agent's
request, deliver, or cause to be delivered, loss payee endorsements
reflecting the Agent's right to receive any payments payable under any
such policies to the extent of the Banks' interest in the Pool Receivables
and related Contracts.
SECTION 5.02. Reporting Requirements of the Seller.
From the date hereof until the later of the Termination Date or the
Collection Date, the Seller will, unless the Agent shall otherwise consent
in writing, furnish to the Agent:
(a) as soon as available and in any event within 60 days after
the end of each of the first three quarters of each fiscal year of the
Parent, consolidated balance sheets of the Parent and its consolidated
Subsidiaries as of the end of such quarter, and the related consolidated
statements of cash flows and consolidated statements of changes in
financial position of the Parent and its consolidated Subsidiaries each
for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter, certified by the chief financial
officer or chief accounting officer of the Parent;
(b) as soon as available and in any event within 120 days after
the end of each fiscal year of the Parent, a copy of the consolidated
balance sheets of the Parent and its consolidated Subsidiaries as of the
end of such year and the related consolidated statements of cash flows and
consolidated statements of changes in financial position of the Parent and
its consolidated Subsidiaries for such year each reported on by nationally
recognized independent public accountants acceptable to the Agent, all in
reasonable detail and certified without adverse opinion or disclaimer by
nationally recognized independent public accountants acceptable to the
Agent, whose certificate shall be in conformity with generally accepted
accounting principles;
(c) together with the financial statements delivered pursuant
to the foregoing clauses (a) and (b), a certificate of the chief financial
officer or chief accounting officer of the Seller stating that there
exists no Event of Termination or event which, with the passage of time or
the giving of notice or both, would constitute an Event of Termination,
or, if any such event exists, specifying the nature thereof, the period of
existence thereof and what action the Seller proposes to take with respect
thereto;
(d) promptly after the sending or filing thereof, copies of all
reports which the Parent sends to any of its security holders and copies
of all reports and other documents which the Parent files with the
Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended, and, to the extent requested by the Agent, copies of
such other reports and registration statements as the Parent may file with
the Securities and Exchange Commission or any national securities
exchange;
(e) promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any reportable event defined in
Title IV of ERISA which could result in the imposition of any lien and
which the Parent or any ERISA Affiliate of the Parent files under ERISA
with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or which the Parent or any
ERISA Affiliate of the Parent receives from such Corporation;
(f) as soon as possible and in any event within five days after
the occurrence of each Event of Termination or each event which, with the
giving of notice or lapse of time or both, would constitute an Event of
Termination, the statement of the chief financial officer or chief
accounting officer of the Seller setting forth details of such or event
and the action which the Seller proposes to take with respect thereto;
(g) promptly upon the Agent's request therefor, a certificate
of the chief financial officer or chief accounting officer of the Seller
to the effect that, at such time, the sum of the Eligible Asset and all
"Eligible Assets" under and as defined in the Investor Agreement does not
exceed 100%;
(h) promptly after becoming aware thereof, notice of (i) any
pending or threatened actions, suits or proceedings against or affecting
the Parent, the Seller or any other Subsidiary of the Parent, or the
property of the Parent, the Seller or of any other Subsidiary of the
Parent, in any court, or before any arbitrator of any kind, or before or
by any governmental body, which may reasonably be expected to materially
adversely affect the financial condition or operations of the Seller or
the Parent or the Parent and its consolidated Subsidiaries taken as a
whole, or materially adversely affect the ability of the Seller or the
Parent to perform their respective obligations under this Agreement and
the Transfer Agreement and (ii) the existence of any default on the part
of the Parent, the Seller or any Subsidiary of the Parent with respect to
any order of any court, arbitrator or governmental body, other than any
such default that, which when taken together with all other such defaults,
is not material to the business or operations of the Seller or the Parent
or the Parent and its consolidated Subsidiaries taken as a whole.
(i) promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the conditions
or operations, financial or otherwise, of the Seller, the Parent or any
Subsidiary of the Seller or the Parent as the Agent may from time to time
reasonably request in order to protect the interests of the Agent or of
any Bank under or as contemplated by this Agreement.
SECTION 5.03. Negative Covenants of the Seller. From
the date hereof until the later of the Termination Date or the Collection
Date, the Seller will not, without the written consent of the Agent:
(a) Sales, Liens, Etc. Except as otherwise provided herein or
in the Investor Agreement, sell, assign (by operation of law or otherwise)
or otherwise dispose of, or create or suffer to exist any Adverse Claim
upon or with respect to, any Receivable, Related Security or Collections,
or any related Contract, or upon or with respect to any account to which
any Collections of any Receivable are sent, or assign any right to receive
income in respect thereof.
(b) Extension or Amendment of Receivables. Extend, amend or
otherwise modify the terms of any Pool Receivable, or amend, modify or
waive any term or condition of any Contract related thereto, except (i) as
otherwise permitted in Section 6.02 or (ii) prior to the Termination Date,
in accordance with the terms of the applicable Credit and Collection
Policy; it being understood further that the Seller will not at any time,
without the prior written consent of the Agent, enter into any Contract
Rider with respect to any Contract relating to a Pool Receivable if
immediately prior to entering into such Contract Rider such Pool
Receivable is a Defaulted Receivable.
(c) Change in Business or Credit and Collection Policy. Make
or permit the Parent to make any change in the Credit and Collection
Policy, or make or permit the Parent to make any change in the character
of its business, which change would, in either case, impair the
collectibility of any Pool Receivable.
(d) Change in Payment Instructions to Obligors. Make or permit
to be made any change in the instructions made to Obligors, Dealers or the
Parent regarding payments to be made on Pool Receivables, unless the Agent
shall have received ten Business Days' prior notice of such change, and
prior to the effective date of such change deliver to the Agent such
instruments, agreements and other documents (including, to the extent
payments of Obligors are remitted lock-boxes, lock-box notices to the
relevant lock-box banks) as the Agent shall reasonably request.
(e) Merger, etc. (i) Merge with or into or consolidate with
or into, or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions), all or substantially all
of its assets (whether now owned or hereafter acquired), or acquire all or
substantially all of the assets or capital stock or other ownership
interest of, any Person.
(f) Change in Corporate Names. Make any change to its
corporate name or use any tradenames, fictitious names, assumed names or
"doing business as" names other than those described in Exhibit D, unless
prior to the effective date of any such name change or use, the Seller
delivers to the Agent such Financing Statements (Form UCC-1 and UCC-3)
executed by the Seller which the Agent may request to reflect such name
change or use, together with such other documents and instruments that the
Agent may request in connection therewith.
(g) Change in Transfer Agreement. Amend, modify, waive or
terminate, or permit the Parent to amend, modify, waive or terminate, any
term, provision or condition of the Transfer Agreement.
(h) ERISA Matters. (i) Engage or permit any ERISA Affiliate
to engage in any prohibited transaction described in Sections 406 of ERISA
or 4975 of the Internal Revenue Code of 1986 for which an exemption is not
available or has not previously been obtained from the Department of
Labor; (ii) permit to exist any accumulated funding deficiency, as defined
in Section 302(a) of ERISA and Section 412(a) of the Internal Revenue
Code, or funding deficiency with respect to any Benefit Plan other than a
Multiemployer Plan; (iii) fail, or permit any ERISA Affiliate to fail, to
make any payments to any Multiemployer Plan that the Seller or any ERISA
Affiliate may be required to make under the agreement relating to such
Multiemployer Plan or any law pertaining thereto; (iv) terminate, or
permit any ERISA Affiliate to terminate, any Benefit Plan so as to result
in any liability; (v) fail, or permit any ERISA Affiliate to fail, to pay
timely required contributions or annual installments due with respect to
any waived funding deficiency to any Benefit Plan; (vi) fail, or permit
any ERISA Affiliate to fail, to pay any required installment or any other
payment required under Section 412 of the Internal Revenue Code of 1986 on
or before the due date for such installment or other payment; or
(vii) permit to exist any occurrence of any reportable event described in
Title IV of ERISA which represents a material risk of a liability of the
Seller or any ERISA Affiliate under ERISA or the Internal Revenue Code, if
such prohibited transactions, accumulated funding deficiencies, payments,
terminations and reportable events occurring within any fiscal year of the
Seller, in the aggregate, involve a payment of money by or an incurrence
of liability of the Seller or any ERISA Affiliate (collectively, "ERISA
Liabilities") in an amount in excess of $25,000,000.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent. (a)
The servicing, administering and collection of the Receivables shall be
conducted by the Person (the "Collection Agent") so designated from time
to time in accordance with this Section 6.01. Until the Agent gives
notice to the Seller of the designation of a new Collection Agent pursuant
to Section 6.01(b) (a "Servicer Notice"), the Seller is hereby designated
as, and hereby agrees to perform the duties and obligations of, the
Collection Agent pursuant to the terms hereof. The Seller agrees that it
will terminate its activities hereunder as Collection Agent on the day
following the Successor Notice.
(b) At any time following the occurrence of an Event of
Termination, the Agent may designate as Collection Agent any Person
(including itself) to succeed the Seller or any successor Collection
Agent, on the condition in each case that any such Person so designated
shall agree to perform the duties and obligations of the Collection Agent
pursuant to the terms hereof. The Collection Agent may, with the prior
consent of the Agent, subcontract with any other Person for servicing,
administering or collecting the Receivables, provided that the Collection
Agent shall remain liable for the performance of the duties and
obligations of the Collection Agent pursuant to the terms hereof.
SECTION 6.02. Duties of the Collection Agent.
(a) The Collection Agent shall take or cause to be taken all such actions
as may be reasonably 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. Each of the Seller, the Banks and the
Agent hereby appoints as its agent the Collection Agent, from time to time
designated pursuant to Section 6.01, to enforce its respective rights and
interests in and under the Receivables, the Related Security and the
Contracts. The Collection Agent shall set aside for the account of the
Seller and each Bank their respective allocable shares of the Collections
of Receivables in accordance with Section 2.05 and Section 2.06 but shall
not be required (unless the Ratings Requirement is no longer satisfied and
the Agent shall have requested otherwise) to segregate the funds
constituting such portion of such Collections prior to the remittance
thereof in accordance with said Sections. If the Ratings Requirement is
no longer satisfied and the Agent so instructs, the Collection Agent shall
segregate and deposit with a bank (which may be Citibank) designated by
the Agent such allocable share of Collections of Pool Receivables, set
aside for each Bank, on the first Business Day following receipt by the
Collection Agent of such Collections and will, if so requested by the
Agent, provide payment instructions to such bank as directed by the Agent.
Provided that the Termination Date shall not have occurred, the Seller,
while it is Collection Agent, may, in accordance with the Credit and
Collection Policy, (i) extend the maturity or adjust the Outstanding
Balance of any Defaulted Receivable as the Seller may determine to be
appropriate to maximize Collections thereof and/or (ii) adjust the
Outstanding Balance of any Receivable to reflect the reductions or
cancellations described in the first sentence of Section 2.07. The Seller
shall deliver to the Collection Agent, and the Collection Agent shall hold
in trust for the Seller and each Bank in accordance with their respective
interests, all Records. Notwithstanding anything to the contrary
contained herein, so long as the Ratings Requirement is not satisfied the
Agent shall have the absolute and unlimited right to direct the Collection
Agent (whether the Collection Agent is the Seller or any other Person) to
commence or settle any legal action to enforce collection of any Pool
Receivable or to foreclose upon or repossess any Related Security.
(b) The Collection Agent shall as soon as practicable following
receipt turn over to the Seller the Collections of any Receivable which is
not a Pool Receivable less, in the event the Seller is not the Collection
Agent, all reasonable and appropriate out-of-pocket costs and expenses of
such Collection Agent of servicing, collecting and administering the
Receivables to the extent not covered by the Collection Agent Fee received
by it. The Collection Agent, if other than the Seller, shall as soon as
practicable upon demand deliver to the Seller all Records in its
possession relating to Receivables of the Seller other than Pool
Receivables, and copies of Records in its possession relating to Pool
Receivables. The Collection Agent's authorization under this Agreement
shall terminate after the Termination Date on the Collection Date.
(c) Notwithstanding anything to the contrary contained in this
Article VI, the Collection Agent, if the Agent or its designee, shall have
no obligation to collect, enforce or take any other action described in
this Article VI with respect to any Receivable that is not a Pool
Receivable other than as described in the first two sentences of Section
6.02(b).
SECTION 6.03. Rights of the Agent. (a) The Agent
may notify at any time the Obligors of Pool Receivables, or any of them,
of the Banks' ownership of Eligible Assets.
(b) At any time following the designation of a Collection Agent
other than the Seller pursuant to Section 6.01:
(i) the Agent may direct the Obligors of Receivables, or any of
them, that payment of all amounts payable under any Receivable be made
directly to the Agent or its designee;
(ii) the Seller shall, at the Agent's request and at the
Seller's expense, give notice of the Banks' ownership interest in Pool
Receivables to each Obligor and direct that payments be made directly to
the Agent or its designee;
(iii) the Seller shall, at the Agent's request, (A) assemble
all Records, and shall make the same available to the Agent at a place
selected by the Agent or its designee, and (B) segregate all cash, checks
and other instruments received by it from time to time constituting
Collections of Receivables in a manner acceptable to the Agent and shall,
promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Agent or
its designee; and
(iv) each of the Seller and each Bank hereby authorizes the
Agent to take any and all steps in the Seller's name and on behalf of the
Seller and the Banks necessary or desirable, in the determination of the
Agent, to collect all amounts due under any and all Receivables,
including, without limitation, endorsing the Seller's name on checks and
other instruments representing Collections and enforcing such Receivables
and the related Contracts.
SECTION 6.04. Responsibilities of the Seller. Anything
herein to the contrary notwithstanding:
(a) The Seller shall (i) perform all of its obligations under
the Contracts related to the Pool Receivables to the same extent as if
Eligible Assets had not been sold hereunder and the exercise by Agent of
its rights hereunder shall not relieve Seller from such obligations and
(ii) pay when due any taxes (other than taxes based upon or measured by
income of the Agent or any Bank), including without limitation, sales and
excise taxes, payable in connection with the Pool Receivables; and
(b) Except as otherwise contemplated in this Agreement, none of
the Agent or the Banks shall have any obligation or liability with respect
to any Pool Receivables or related Contracts, nor shall any of them be
obligated to perform any of the obligations of the Seller thereunder.
SECTION 6.05. Possession by the Seller as Trustee; Further
Action Evidencing Purchases. The Seller hereby agrees that
until the Agent requests the Seller to deliver the Contracts relating to
Pool Receivables and/or the documentary items of Related Security to it as
provided in Section 6.06, the Seller shall maintain possession of such
items at its address described in Section 5.01(f) in trust for the benefit
of the Agent and the Banks to the extent of their interests therein. The
Seller agrees that from time to time, at its expense, it will promptly
execute and deliver all further instruments and documents, and take all
further action that the Agent may reasonably request in order to perfect,
protect or more fully evidence the Eligible Assets (and the Percentage
Interests therein) purchased by the Banks hereunder, or to enable any of
the Banks or the Agent to exercise or enforce any of their respective
rights hereunder. Without limiting the generality of the foregoing, the
Seller will upon the request of the Agent: (a) execute and file such
financing or continuation statements, or amendments thereto or assignments
thereof, and such other instruments or notices, as may be necessary or
appropriate or as the Agent may request to evidence, or otherwise in
connection with, this Agreement and the transactions contemplated hereby,
(b) if the Ratings Requirement is no longer satisfied, xxxx conspicuously
each Contract evidencing the Pool Receivables with a legend, acceptable to
the Agent, evidencing that the Banks have purchased all right and title
thereto and interest therein as provided in this Agreement; and (c) xxxx
its master data processing records evidencing such Pool Receivables and
related Contracts with such legend. The Seller hereby authorizes the
Agent to file one or more financing or continuation statements, and
amendments thereto and assignments thereof, relative to all or any of the
Pool Receivables and the Related Security now existing or hereafter
arising, without the signature of the Seller where permitted by law. A
carbon, photographic or other reproduction of this Agreement or any
financing statement covering the Pool Receivables, or any part thereof
shall be sufficient as a financing statement. If the Seller fails to
perform any of its agreements or obligations under this Agreement, the
Agent may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the expenses of the
Agent incurred in connection therewith shall be payable by the Seller upon
the Agent's demand therefor.
SECTION 6.06. Delivery of Contracts to Agent. In
order to perfect, protect or more fully evidence the Eligible Assets
purchased by the Banks hereunder, the Agent may at any time that the
Ratings Requirement is not satisfied request the Seller to, and promptly
following Agent's request the Seller shall promptly deliver to the Agent
the original Contracts relating to Pool Receivables fully executed by the
related Obligor, together with (a) all other original documents,
instruments and agreements that constitute part of the Related Security
and (b) endorsements or assignments in blank satisfactory in form and
substance to the Agent and executed by a duly authorized officer of the
Seller.
SECTION 6.07. Application of Collections. Any
payment by an Obligor in respect of any indebtedness owed by it to the
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 Pool Receivable of such Obligor (in the
order of the age of such Receivables, starting with the oldest such Pool
Receivable) to the extent of any amounts then due and payable thereunder
before being applied to any other Receivable or other indebtedness of such
Obligor.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01. Events of Termination. If any of the
following events ("Events of Termination") shall occur:
(a) (i) The Collection Agent (if the Seller or a Person
designated by the Seller) shall fail to perform or observe any term,
covenant or agreement hereunder in its capacity as the Collection Agent or
the Seller shall fail to perform or observe any term, covenant or
agreement contained in Article VI in its capacity as the Seller (other
than, in either case, as referred to in clause (ii) of this
Section 7.01(a)) and, in either case, any such failure shall remain
unremedied for three Business Days after written notice thereof shall have
been given by the Agent to the Seller or (ii) either the Collection Agent
(if the Seller or a Person designated by the Seller) or the Seller shall
fail to make any payment or deposit to be made by it hereunder when due;
or
(b) Any representation or warranty made or deemed to be made by
the Seller (or any of its officers) under or in connection with this
Agreement or any Investor Report or other information or report delivered
pursuant hereto shall prove to have been false or incorrect in any
material respect when made; provided, however, that except to the extent
that any such falsity or inaccuracy in respect of any of the
representations and warranties set forth in Sections 4.01(a), 4.01(b),
4.01(c), 4.01(g), 4.01(h), 4.01(i) and 4.01(l) would constitute an Event
of Termination under some other subsection of this Section 7.01, if,
within ten Business Days following the earlier of the date on which the
Seller learns of such falsity or inaccuracy (on which date the Seller
shall also give the Agent notice thereof) or the date on which the Agent
gives the Seller notice of such inaccuracy or falsity, the Seller shall
cure such falsity or inaccuracy in respect of any of the representations
and warranties set forth in the Sections specified above in this proviso
clause so as to render such representation and warranty true and accurate,
then such falsity or inaccuracy shall not constitute an Event of
Termination under this Section 7.01(b), subject, however, to the further
conditions that (i) the Seller shall pay to the Agent, on written demand
setting forth in reasonable detail the basis therefor, any amount
necessary to indemnify the Banks, the Agent, CNAI and any of their
respective Affiliates in full for any loss, cost or expense incurred by
any of them as a result of such falsity or inaccuracy and (ii) no
purchases of Eligible Assets shall be made during the pendency of such
cure period; or
(c) The Seller shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be
performed or observed and any such failure shall remain unremedied for ten
Business Days after written notice thereof shall have been given by the
Agent to the Seller; or
(d) A default or defaults or any other event shall occur under
any agreement or instrument relating to any Debt of the Parent, the Seller
or any other Subsidiary of the Parent in an amount exceeding $25,000,000
in the aggregate, and such default, defaults or other event shall result
in a declaration of acceleration of the payment of such Debt; or
(e) Any Purchase of an Eligible Asset shall for any reason,
except to the extent permitted by the terms hereof, cease to create a
valid and perfected first priority undivided percentage interest to the
extent of such Eligible Asset in each Pool Receivable and the Related
Security and Collections with respect thereto, free and clear of any
Adverse Claims (except to the extent contemplated hereunder or under the
Investor Agreement in favor of the Owners or the Banks); or
(f) (i) The Parent, the Seller or any Material Subsidiary
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 against the Parent, the Seller or any Material
Subsidiary (an "Involuntary Proceeding") seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property; or (iii) any proceeding of the
type described in clause (ii) above shall be instituted by the Parent, the
Seller or any Material Subsidiary; or (iv) the Parent, the Seller or any
Material Subsidiary shall take any corporate action to authorize any of
the actions set forth in clauses (i) or (iii) above in this subsection
(f); or
(g) The Loss-to-Liquidation Ratio for any month shall exceed
2.50%, or the Default Ratio for any month shall exceed 2.00%, or the
Delinquency Ratio for any month shall exceed 5.00%; or
(h) The sum of all Eligible Assets hereunder and all "Eligible
Assets" under and as defined in the Investor Agreement shall exceed 100%;
or
(i) The Parent shall cease to own, directly or indirectly, 100%
of the issued and outstanding capital stock of the Seller;
(j) The Parent shall terminate, disaffirm or otherwise fail to
honor or perform any of the terms, provisions or covenants of, or any of
its other obligations under the Parent Support Agreement, or notice is
received by the Agent, CNAI, or any Bank from the Parent of the Parent's
intention to take any of the aforementioned action, or any representation
or warranty made by the Parent under the Parent Support Agreement shall
prove to have been false or incorrect when made in any respect material to
the respective interests of any Bank, the Agent or CNAI thereunder, or the
Parent Support Agreement shall cease to constitute the legal, valid and
binding obligation of the Parent enforceable against the Parent in
accordance with its terms; or
(k) There shall have occurred any event which materially
adversely affects the collectibility of the Receivables or there shall
have occurred any other event which materially adversely affects the
ability of the Seller to collect Receivables or the ability of the Seller
to perform hereunder; or
(l) Since December 31, 1994, there shall have occurred any
material adverse change in the consolidated financial condition of the
Parent and its consolidated Subsidiaries or the consolidated results of
the operations of the Parent and its consolidated Subsidiaries for any
period; or
(m) An Event of Investment Ineligibility shall occur;
then, and in any such event, the Agent may, by notice to the Seller,
declare the Termination Date to have occurred, except that,
(x) in the case of any event described in clause (iii) of
subsection (f) above, the Termination Date shall be deemed to have
occurred automatically upon the occurrence of such event, and
(y) in the case of any event described in clause (ii) of
subsection (f) above, the following shall automatically occur: (A) the
settlement procedures described in Section 2.06 shall become applicable
upon the commencement of an Involuntary Proceeding and no further Capital
Increase Purchases or remittances of Collections pursuant to Section 2.05
shall be made, and (B) if an order for relief is entered against the
Seller or the applicable Subsidiary of the Seller, the Termination Date
shall be deemed to have occurred automatically upon the entry of such
order; provided that if such Involuntary Proceeding is dismissed within 30
days following its commencement, and if no other Event of Termination has
occurred, then following such dismissal, the Banks' Commitment to make
Capital Increase Purchases hereunder and to permit the Collection Agent or
the Agent, as applicable, to make remittances of Collections pursuant to
Section 2.05, shall be reinstated as if the Termination Date had not
occurred,
in each case, such automatic events to occur without demand, protest or
notice of any kind, all of which are hereby waived by the Seller. Upon
any such declaration or automatic occurrence, the Banks' Purchase
Commitments hereunder shall terminate and the Agent and the Banks shall
have, in addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies provided under the UCC of all
applicable jurisdictions and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing or the general applicability
of Article IX or Section 11.04, any Bank may elect to assign any
Percentage Interest in an Eligible Asset owned by such Bank, pursuant to
Section 9.01, following the occurrence of any Event of Termination.
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action. Each Bank hereby
accepts the appointment of and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers as are delegated to the
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto. The Agent reserves the right, in its sole discretion
to exercise any rights and remedies under this Agreement, the Investor
Agreement or any instrument or document executed and delivered pursuant
hereto or thereto, or pursuant to applicable law, and, subject to the
terms of Section 11.01, also to agree to any amendment, notification or
waiver of this Agreement, the Investor Agreement or any instrument or
document executed and delivered pursuant hereto or thereto.
Notwithstanding anything herein or elsewhere to the contrary, the Agent
shall not be required to take any action which exposes the Agent to
personal liability or which is contrary to this Agreement or applicable
law. The appointment and authority of the Agent hereunder shall terminate
at the Collection Date.
SECTION 8.02. UCC Filings. The Banks and the Seller expressly
recognize and agree that the Agent may be listed as the assignee or
secured party of record on the various UCC filings required to be made
hereunder in order to perfect the transfer of the Eligible Assets from the
Seller to the Banks, that such listing shall be for administrative
convenience only in creating a record or nominee owner to take certain
actions hereunder on behalf of the Banks and that such listing will not
affect in any way the status of the Banks as the beneficial owners of the
Eligible Assets. In addition, such listing shall impose no duties on the
Agent other than those expressly and specifically undertaken in accordance
with this Article VIII. In furtherance of the foregoing, each Bank shall
be entitled to enforce its rights created under this Agreement without the
need to conduct such enforcement through the Agent except as provided
herein.
SECTION 8.03. Agent's Reliance. Etc. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them as Agent under or in
connection with this Agreement (including, without limitation, the Agent's
servicing, administering or collecting Receivables as Collection Agent
pursuant to Article VI), except for its or their own gross negligence or
willful misconduct (other than actions taken at the direction of the
Banks). Without limiting the foregoing, the Agent: (i) may consult with
legal counsel (including counsel for the Seller), independent public
accountants and other experts selected by it and shall not liable for any
action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (ii) makes no warranty
or representation to any Bank and shall not be responsible to any Bank for
any statements, warranties or representations made in or in connection
with this Agreement; (iii) shall not have any duty to (A) ascertain or to
inquire as to, and shall not be responsible for, the performance or
observance of any of the terms, covenants or conditions of this Agreement
or any instrument or document furnished pursuant hereto on the part of the
Seller or (B) inspect the property (including the books and records) of
the Seller; (iv) shall not be responsible to any Bank for the due
execution, legality, validity, enforceability, genuineness, sufficiency,
or value of this Agreement or any other instrument or document furnished
pursuant hereto; (v) shall not be deemed to be acting as any Bank's
trustee or otherwise in a fiduciary capacity hereunder or under or in
connection with the Investor Agreement or any Eligible Asset (or
Percentage Interests therein); and (vi) shall incur no liability under or
in respect of this Agreement by acting upon any notice (including notice
by telephone), consent, certificate or other instrument or writing (which
may be by telex) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 8.04. Agent and Affiliates. To the extent that the
Agent or any of its Affiliates shall become a Bank hereunder, the Agent or
such Affiliate, in such capacity, shall have the same rights and powers
under this Agreement as would any Bank hereunder and may exercise the same
as though it were not the Agent. The Agent and its Affiliates may
generally engage in any kind of business with the Seller or any Obligor,
any of their respective Affiliates and any Person who may do business with
or own securities of the Seller or any Obligor or any of their respective
Affiliates, all as if it were not the Agent hereunder and without any duty
to account therefor to the Banks (including, without limitation, acting as
"Agent" under the Investor Agreement).
SECTION 8.05. Purchase Decision. Each Bank acknowledges that
it has, independently and without reliance upon the Agent or any other
Bank and based on such documents and information as it has deemed
appropriate, made its own evaluation and decision to enter into this
Agreement and, if it so determines, to purchase an undivided ownership
interest in the Pool Receivables hereunder. Each Bank also acknowledges
that it will, independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own decisions in taking or
not taking action under this Agreement.
SECTION 8.06. Indemnification. Each Bank agrees to indemnify
the Agent (to the extent not reimbursed by the Seller), ratably according
to its Percentage from time to time, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Agent in any
way relating to or arising out of this Agreement or any other agreement,
document or instrument executed in connection herewith, or any action
taken or omitted by the Agent under this Agreement or any other agreement,
document or instrument executed in connection herewith; provided, however,
that a Bank shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements resulting from the Agent's gross negligence or
willful misconduct (other than actions taken at the directions of the
Banks). Without limitation of the generality of the foregoing, each Bank
agrees to reimburse the Agent, ratably according to its Percentage from
time to time, promptly upon demand, for any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Agent in connection
with the administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice
in respect of rights or responsibilities under, this Agreement.
SECTION 8.07. Successor Agent. The Agent may resign at any
time by giving thirty days' notice thereof to the Banks, the Seller and
the Collection Agent. Upon any such resignation, the Majority Banks shall
have the right to appoint a successor Agent approved by the Seller (which
approval will not be unreasonably withheld or delayed). If no successor
Agent shall have been so appointed by the Majority Banks and accepted such
appointment within thirty days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent approved by the Seller (which approval will not
be unreasonably withheld or delayed), which successor Agent shall be (a)
either (i) a commercial bank having a combined capital and surplus of at
least $250,000,000 or (ii) an Affiliate of such bank and (b) experienced
in the types of transactions contemplated by this Agreement. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all
of the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
ARTICLE IX
ASSIGNMENT OF PERCENTAGE INTERESTS
SECTION 9.01. Register. The Agent shall maintain at its
address, 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention:
Corporate Asset Funding, a copy of this Agreement and the signature pages
hereto and each Assignment of Purchase Commitment delivered to and
accepted by it and a register for the recordation of the names and
addresses of the Banks, their Percentages, Percentage Interests, effective
dates and the aggregate outstanding Capital of Percentage Interests owned
by each Bank from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Seller, the Agent and the Banks may treat each Person whose
name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the
Seller or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
SECTION 9.02. Assignment. Subject to compliance with Section
11.04, each Bank may assign to each other Bank or to any other Person all
or any portion of its rights and title to, and interest in, any Percentage
Interest owned by such Bank. Such assignments shall be upon such terms
and conditions as the assignor and the assignee may mutually agree, and
such assignor shall promptly execute and deliver all further instruments
and documents, and take all further action, that the assignee may
reasonably request, in order to perfect, protect or more fully evidence
the assignee's right and title to, and interest in, such Percentage
Interest, and to enable the assignee to exercise or enforce any rights
hereunder. Not less than five days prior to any such assignment, each
assignor of a Percentage Interest shall notify the Agent and the Seller of
any such assignment, and upon the Agent's receipt of an Assignment of
Purchase Commitment executed by an assigning Bank and its assignee, the
Agent shall (i) accept such Assignment of Purchase Commitment, (ii) record
the information contained therein in the Register and (iii) give prompt
notice thereof to the Seller.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. Indemnities by the Seller. Without limiting any
other rights which CNAI, the Agent, each Bank or their Affiliates may have
hereunder or under applicable law, the Seller hereby agrees to indemnify
each of the Agent, CNAI, the Banks and their Affiliates from and against
any and all damages, losses, claims, liabilities and related costs and
expenses, including reasonable attorneys' fees 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 ownership of Eligible Assets or in respect of any
Receivable or any Contract, excluding, however, (x) Indemnified Amounts to
the extent resulting from gross negligence or willful misconduct on the
part of the Agent, CNAI, such Bank and their Affiliates, (y) recourse
(except as otherwise specifically provided in this Agreement) for
uncollectible Pool Receivables or (z) Indemnified Amounts to the extent
arising solely in connection with a dispute between or among CNAI, the
Agent, any Bank or any of their respective Affiliates as a result of an
alleged default by any such Person in the performance of any obligation
owing to another such Person in connection with this Agreement. Without
limiting the foregoing, Seller shall indemnify the Agent, CNAI, each Bank
and their Affiliates for Indemnified Amounts relating to or resulting
from:
(a) the transfer hereunder of an interest in any Receivable
other than an Eligible Receivable;
(b) reliance on any representation or warranty made or deemed
made by the Seller (or any of its officers) under or in connection with
this Agreement, any Investor Report or any other information or report
delivered by the Seller pursuant hereto, or by the Parent pursuant to the
Parent Support Agreement, which shall have been false or incorrect in any
material respect when made or deemed made or delivered;
(c) the failure by the Seller (individually or as Collection
Agent) to comply with any term, provision or covenant contained in this
Agreement, or with any applicable law, rule or regulation with respect to
any Receivable, the related Contract or the Related Security, or the
nonconformity of any Receivable, the related Contract or the Related
Security with any such applicable law, rule or regulation;
(d) the failure to vest and maintain vested in each Bank or to
transfer to each Bank a valid and perfected first priority undivided
percentage interest, to the extent of each Percentage Interest owned by
such Bank hereunder in each Eligible Asset, in the Receivables which are,
or are intended to be, Pool Receivables, together with all Collections and
Related Security, free and clear of any Adverse Claim whether existing at
the time of the Purchase of such Eligible Asset or at any time thereafter;
(e) the failure at any time on or before the Termination Date
of the sum of all Eligible Assets and all "Eligible Assets" under and as
defined in the Investor Agreement to be less than or equal to 100%;
(f) the failure to perfect or any delay in perfecting as
against the Seller, any of its Affiliates or any Dealer under the UCC of
all applicable jurisdictions or other applicable laws (whether by the
filing of financing statements or other similar instruments or documents
or otherwise) the interests of the Banks and the Agent in all Receivables
that are, or are intended to be, Pool Receivables, whether at the time of
any Purchase or at any subsequent time;
(g) any dispute, claim, offset or defense (other than discharge
in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable which is, or is intended to be, a Pool 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 Equipment or services related to such
Receivable or the furnishing or failure to furnish such Equipment or
services;
(h) any failure of the Seller, as Collection Agent or
otherwise, to perform its duties or obligations in accordance with the
provisions of Article VI;
(i) any products liability claim or personal injury or property
damage suit or other similar or related claim or action of whatever sort
arising out of or in connection with Equipment or services which are the
subject of any Receivable or Contract;
(j) the failure by the Seller, any of its Affiliates or any
Dealer to pay when due any taxes, including without limitation, sales,
excise or personal property taxes payable in connection with the
Receivables;
(k) the failure of the Parent, the Seller, any Dealer or any of
their respective agents and representatives to collect Receivables as
contemplated by the related Contract and the Credit and Collection Policy
or the failure of the Parent, any Dealer or any of their respective agents
or representatives to remit to the Seller Collections of Pool Receivables
remitted to the Parent or any such Dealer, agent or representative, or the
failure of the Seller or any of its agents and representatives to remit to
the Collection Agent or the Agent, Collections of Pool Receivables
remitted to the Seller or such agent or representative;
(l) the termination as a Dealer of any Dealer by the Parent or
any Affiliate;
(m) any claim, litigation or other action asserted or commenced
by a Dealer for the payment to such Dealer of any dealer reserve or other
amounts or other obligations allegedly owing to such Dealer by the Seller,
the Parent or any of their respective Affiliates;
(n) any failure of the Seller or the Parent to give reasonably
equivalent value to any Dealer or the Parent, as applicable in
consideration for the transfer by such Dealer or the Parent, as applicable
of any Receivable and related Contract, or any attempt by any Person to
void any such transfer under any statutory provision or common law or
equitable action, including, without limitation, any provision of the
Bankruptcy Code;
(o) the failure by the Seller, the Parent or any Dealer to be
duly qualified to do business, to be in good standing or to have filed
appropriate fictitious or assumed name registration documents in any
jurisdiction;
(p) the occurrence with respect to any Dealer of any event of
the type described in Section 7.01(f) hereof; or
(q) the commingling of Collections of Pool Receivables at any
time with other funds, whether by a Dealer, the Seller, the Parent or any
of their respective affiliates.
Any amounts subject to the indemnification provisions of this Section
10.01 shall be paid by Seller to the Agent within two Business Days
following Agent's demand therefor.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc. No amendment, modification or
waiver of any provision of this Agreement nor consent to any departure by
the Seller therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Seller and the Agent, and then such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by
(a) all of the Banks, do any of the following:
(i) amend the definitions of "Eligible Receivable,"
"Defaulted Receivable" or "Delinquent Receivable" or modify the then
existing Concentration Limit or any Special Concentration Limit, or
(ii) amend, modify or waive any provision hereof in any way
which would
(A) reduce the amount of Capital or Yield that is
payable on account of any Eligible Asset or delay any scheduled date for
payment thereof, or
(B) impair any rights expressly granted to an
assignee or participant hereunder, or
(C) reduce the Facility Fee, or delay the dates on
which the Facility Fee is due and payable, or
(D) modify any provisions relating to reserves for
any uncollectible Receivables or Yield, or
(E) release the Parent from any of its obligations
under Parent Support Agreement, or
(b) the Majority Banks, do any of following:
(i) amend the definitions of "Default Ratio," "Delinquency
Ratio," "Loss-to-Liquidation Ratio" or "Net Receivables Pool Balance," or
(ii) amend the Events of Termination to increase the
maximum permitted Default Ratio, Delinquency Ratio or Loss-to-Liquidation
Ratio or permit the sum of the aggregate Capital of all Eligible Assets
hereunder and the Investor Capital to exceed the Net Receivables Pool
Balance, or
(iii) (A) waive violations of the Default Ratio or the
Delinquency Ratio that deviate by more than 10% of the required levels of
such ratios for more than two consecutive months, or
(B) waive a violation of the requirement that the sum
of the Eligible Assets and the "Eligible Assets" under and as defined in
the Investor Agreement not exceed 100% which permits the sum of the
Eligible Assets and the "Eligible Assets" under and as defined in the
Investor Agreement to exceed 105%, for more than one month, unless the
Seller has cured or has agreed to cure such violation within 30 days after
notice from the Agent, or
(C) waive a violation of the Loss-to-Liquidation
Ratio that deviates by more than 10% of the required level of such ratio
for more than two consecutive months unless the Loss Percentage is at
least five times such ratio.
No amendment or waiver of any provision of this Agreement nor consent to
any departure by the Seller therefrom, shall in any event be effective
unless the same shall be in writing and signed by (i) the Seller, CNAI and
the Agent as agent for the Banks (with respect to an amendment) or
(ii) CNAI and the Agent as agent for the Banks (with respect to a waiver
or consent by them) or the Seller (with respect to a waiver or consent by
it), as the case may be, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given. This Agreement contains a 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.
SECTION 11.02. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise stated
herein, be in writing (including telex and facsimile communication) and
mailed, telexed, transmitted or delivered, as to each party hereto, at its
address set forth under its name on the signature pages hereof or
specified in such party's Assignment of Purchase Commitment or at such
other address as shall be designated by such party in a written notice to
the other parties hereto. All such notices and communications shall be
effective, upon receipt, or in the case of delivery by mail, five days
after being deposited in the mails, postage prepaid, or, in the case of
notice by telex, when telexed against receipt of answer back, or in the
case of notice by facsimile copy, when verbal confirmation of receipt is
obtained, in each case addressed as aforesaid, except that notices and
communications pursuant to Article II shall not be effective until
received.
SECTION 11.03. No Waiver; Remedies. No failure on the part of
CNAI, the Agent or any Bank to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Without limiting the foregoing, (x) the Agent is hereby authorized by the
Seller at any time and from time to time following the occurrence of an
Event of Termination to the fullest extent permitted by law, to instruct
Citibank or any Affiliate of Citibank to set-off and apply any and all
deposits (whether general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by
Citibank or such Affiliate to or for the credit or the account of the
Seller against any and all of the obligations of Seller, now or hereafter
existing under this Agreement, to the Agent or any Bank or their
respective successors and assigns and (y) each Bank is hereby authorized
by the Seller at any time and from time to time following the Termination
Date to the fullest extent permitted by law, to set-off and apply any and
all deposits (whether general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such
Bank or an Affiliate of such Bank to or for the credit or the account of
the Seller against any and all of the obligations of Seller, now or
hereafter existing under this Agreement, to the Agent or any Bank or their
respective successors and assigns; in each case, irrespective of whether
or not demand therefor shall have been made under this Agreement and
although such obligations may be contingent and unmatured. The Seller
acknowledges that the rights of the Agent and any Bank or any of their
respective successors and assigns described in this paragraph are in
addition to other rights and remedies (including, without limitation,
other rights of set-off) such parties may have.
SECTION 11.04. Binding Effect; Assignability.
(a) This Agreement shall be binding upon each of the Seller,
CNAI, the Agent, the Banks and their respective successors and permitted
assigns, and shall inure to the benefit of the Seller, CNAI, Citibank, the
Agent, the Banks and any other Affected Persons and their respective
successors and permitted assigns.
(b) Neither the Seller nor any Bank may assign any of its
rights and obligations hereunder or any interest herein (including,
without limitation, any Percentage Interest of such Bank) without the
prior written consent of the Agent (which consent shall not be
unreasonably withheld), except that any Bank may assign its rights and
obligations hereunder and its interest herein to any other Bank, or any
Affiliate of CNAI without such consent. Each of the Banks may, with the
consent of the Seller (such consent not to be unreasonably withheld),
assign its rights and obligations hereunder or interest herein to any
Person. Notwithstanding anything in the foregoing to the contrary, any
such permitted assignment of a Bank's rights and obligations hereunder,
and interests herein (including, without limitation, any Percentage
Interest of such Bank) shall be subject to the following requirements:
(i) each such assignment shall be a constant, and not a
varying, percentage of all rights and obligations under this Agreement,
(ii) the amount being assigned pursuant to each assignment shall
in no event be less than the lesser of $5,000,000 and the assigning Bank's
Maximum Purchase,
(iii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment of Purchase Commitment in the form of Exhibit A attached
hereto, together with a processing and recordation fee of $2,500, and
(iv) concurrently with such assignment, the assignor thereunder
(other than CNAI or any of its Affiliates) shall assign to such assignee
or such other Bank an equal percentage of its rights and obligations under
the Asset Purchase Agreement, if any.
Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in the Assignment of Purchase Commitment, (x)
the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to this
Agreement, have the rights and obligations of a Bank hereunder and (y) the
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to this Agreement, relinquish
its rights and be released from its obligations under this Agreement
(other than its obligations of confidentiality under Section 11.09) (and,
in the case of an assignment covering all or the remaining portion of an
assigning Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).
(c) Furthermore, each Bank and its permitted assigns (as
described above in Section 11.04(b) may, at any time, without the consent
of the Seller, sell undivided participation interests in all or any of its
rights, obligations and interests (including, without limitation, such
Bank's Percentage Interests in the Eligible Assets) hereunder; provided,
however, that (i) such Bank's obligations under this Agreement (including,
without limitation, its Purchase Commitment hereunder) shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Seller,
the Agent and the other Banks shall continue to deal solely and directly
with such Bank in connection with such Bank's rights and obligations under
this Agreement, and (iv) concurrently with such participation, the selling
Bank thereunder shall sell to such bank or other entity a participation in
an equal percentage of its rights and obligations under the Asset Purchase
Agreement, if any.
(d) 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 such time, after the Termination
Date until the Collection Date; provided, however, that all
representations, warranties and indemnities set forth herein, including,
without limitation, in Articles IV, IV, VIII, X, and XI, and Section 2.14,
shall be continuing and shall survive the Collection Date.
SECTION 11.05. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the internal laws (as opposed to
conflict of laws provisions) of the State of New York, except to the
extent that the validity or perfection of the interests of the Banks in
the Pool Receivables, or remedies hereunder, in respect thereof, are
governed by the laws of a jurisdiction other than the State of New York.
SECTION 11.06. Costs, Expenses and Taxes. (a) In addition to
the rights of indemnification granted to CNAI, the Agent, the Banks and
their Affiliates under Article X hereof, the Seller agrees to pay on
demand all costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic auditing) of
this Agreement and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for CNAI, the Agent and Citibank with respect thereto
and with respect to advising CNAI and the Agent as to their respective
rights and remedies under this Agreement, and all costs and expenses, if
any (including reasonable counsel fees and expenses) of each of the Agent,
the Banks, CNAI and their respective Affiliates, in connection with the
enforcement of this Agreement and the other documents to be delivered
hereunder.
(b) In addition, the Seller shall pay any and all stamp, sales,
excise and other taxes (other than taxes based upon or measured by income
of the Agent or any Bank) and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this
Agreement or the other documents to be delivered hereunder, and agrees to
indemnify CNAI, the Agent and each Bank against any liabilities with
respect to or resulting from any delay by the Seller in paying or omission
to pay such taxes and fees.
SECTION 11.07. [Reserved].
SECTION 11.08. [Reserved].
SECTION 11.09. Confidentiality. Unless otherwise required by
applicable law, the Seller agrees to maintain the confidentiality of this
Agreement and all other instruments and documents executed (or proposed to
be executed) in connection herewith (and all drafts thereof) in its
communications with third parties and otherwise; provided, however, that
the Agreement may be disclosed to third parties to the extent such
disclosure is (a) (i) required in connection with a sale of securities of
Seller or (ii) made solely to Persons who are legal counsel for the
purchaser or underwriter of such securities, and (b) made pursuant to a
written agreement of confidentiality in form and substance reasonably
satisfactory to the Agent; provided further, however, that the Agreement
may be disclosed to the Seller's legal counsel or accountants; and
provided further, however, that the Seller shall have no obligation of
confidentiality in respect of any information which may be generally
available to the public or becomes available to the public through no
fault of the Seller.
SECTION 11.10. Execution in Counterparts; Severability. 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. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired
thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
SELLER: SNAP-ON CREDIT CORPORATION
By /s/ Xxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000-0000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
CNAI/AGENT: CITICORP NORTH AMERICA, INC.,
individually and as Agent
By /s/ Xxxxxxx Xxxxx
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, X.X. 00000
Attention: Corporate
Asset Funding Department
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
BANKS: CITIBANK, N.A.
By /s/ Xxxxxxx Xxxxx
Vice President
Percentage: 100.0%
Maximum Purchase: $150,000,000
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, X.X. 00000
Attention: Corporate
Asset Funding Department
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
EXHIBIT A
FORM OF ASSIGNMENT OF PURCHASE COMMITMENT
Attached.
ASSIGNMENT OF PURCHASE COMMITMENT
Reference is made to the Receivables Purchase and Sale Agreement
dated as of October 6, 1995 (the "Purchase Agreement"), among Snap-on
Credit Corporation, the Banks parties thereto (the "Banks") and Citicorp
North America, Inc., individually and as agent (in its capacity as agent,
the "Agent"). Capitalized terms used herein and not otherwise defined
herein shall have the meaning assigned to such terms in the Purchase
Agreement.
1. _____________ (the "Assignor") hereby sells and assigns,
without recourse, to ____________ (the "Assignee"), and Assignee hereby
purchases and assumes, without recourse, representation, warranty of any
kind (except as set forth below) from Assignor, effective as of the
Effective Date set forth below, a ____% interest in the Assignor's rights
and obligations under the Purchase Agreement, including, without
limitation, the Assignor's outstanding Capital on the Effective Date and
the commitment of the Assignor to make Purchases and Capital Increase
Purchases pursuant to the terms and conditions of the Purchase Agreement.
Each of the Assignor and the Assignee hereby makes and agrees to be bound
by all the agreements set forth in Section 11.04 of the Purchase
Agreement, a copy of which Purchase Agreement has been received by each
such party. From and after the Effective Date, (a) Assignee shall be a
party to and be bound by the provisions of the Purchase Agreement and, to
the extent of the interests assigned by this Assignment of Purchase
Commitment, have the rights and obligations of a Bank thereunder and (b)
Assignor shall, to the extent of the interests assigned by this Assignment
of Purchase Commitment, relinquish its rights and be released from its
obligations under the Purchase Agreement.
2. The Assignor represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and
such interest is free and clear of any adverse claim created by the
Assignor, and as of the date hereof (and without giving effect to any
assignment of such interest which has not become effective) (a) the
Assignor's Percentage is ___% and (b) the aggregate outstanding Capital of
the Assignor is $_______.
3. This Assignment of Purchase Commitment is being delivered to
the Agent pursuant to Section 11.04 of the Purchase Agreement.
4. The Assignee hereby represents and warrants that is has,
independently and without reliance on Assignor, any other Purchaser or the
Agent and based on such documents and information as it has deemed
appropriate, made its own evaluation and decision to enter into this
Assignment of Purchase Commitment.
5. Upon the later of the Effective Date and the date upon which
the Agent accepts this Agreement of Purchase Commitment and records the
assignment hereunder in the Register (the "Recording Date"), the Agent
shall make all payments under the Purchase Agreement in respect of the
interest assigned hereby (including, without limitation, all payments of
Capital, Yield and unpaid Facility Fees with respect thereto) to the
Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Purchase Agreement for periods prior to
the later of the Recording Date and the Effective Date directly between
themselves.
6. This Assignment of Purchase Commitment may be executed in
any number of counterparts which, when taken together, shall be deemed to
constitute one and the same instrument.
7. THIS ASSIGNMENT OF PURCHASE AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF NEW YORK, BUT
OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES).
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment:
Percentage of Assignee after giving effect to
this Assignment: ______%
Maximum Purchase of Assignee after giving effect
to this Assignment: $___________________
The terms set forth herein
are hereby agreed to as of this
____ day of __________, ____:
[Name of Assignor], as Assignor
By:___________________
Name:
Title:
[Name of Assignee], as Assignee
By:__________________
Name:
Title:
EXHIBIT B
FORMS OF CONTRACTS
Attached.
EXHIBIT C
DESCRIPTION OF CREDIT AND COLLECTION POLICIES
Attached.
EXHIBIT D
TRADE NAMES, FICTITIOUS NAMES AND
"DOING BUSINESS AS" NAMES
None.
EXHIBIT E
FORM OF INVESTOR REPORT
Attached.
EXHIBIT F
LIST OF OFFICES OF THE SELLER WHERE RECORDS ARE KEPT
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000-0000