Exhibit 4(v)
EXECUTION COPY
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RECEIVABLES PURCHASE AGREEMENT
dated as of August 7, 2001
among
AGC FUNDING CORPORATION,
AMERICAN GREETINGS CORPORATION,
as Servicer
THE MEMBERS OF VARIOUS PURCHASER GROUPS
FROM TIME TO TIME PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
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TABLE OF CONTENTS
PAGE
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ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 Purchase Facility ..............................................1
Section 1.2 Making Purchases ...............................................2
Section 1.3 Purchased Interest Computation .................................4
Section 1.4 Settlement Procedures ..........................................4
Section 1.5 Fees ..........................................................10
Section 1.6 Payments and Computations, Etc ................................10
Section 1.7 Increased Costs ...............................................11
Section 1.8 Requirements of Law ...........................................12
Section 1.9 Inability to Determine Euro-Rate ..............................12
Section 1.10 Extension of Termination Date .................................13
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
Section 2.1 Representations and Warranties; Covenants .....................14
Section 2.2 Termination Events ............................................14
ARTICLE III
INDEMNIFICATION
Section 3.1 Indemnities by the Seller .....................................14
Section 3.2 Indemnities by the Servicer ...................................16
ARTICLE IV
ADMINISTRATION AND COLLECTIONS
Section 4.1 Appointment of the Servicer ...................................17
Section 4.2 Duties of the Servicer ........................................18
Section 4.3 Lock-Box Account Arrangements .................................19
Section 4.4 Enforcement Rights ............................................19
Section 4.5 Responsibilities of the Seller ................................21
Section 4.6 Servicing Fee .................................................21
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ARTICLE V
THE AGENTS
Section 5.1 Appointment and Authorization .................................21
Section 5.2 Delegation of Duties ..........................................23
Section 5.3 Exculpatory Provisions ........................................23
Section 5.4 Reliance by Agents ............................................23
Section 5.5 Notice of Termination Events ..................................24
Section 5.6 Non-Reliance on Administrator, Purchaser Agents and Other
Purchasers ....................................................25
Section 5.8 Indemnification ...............................................25
Section 5.9 Successor Administrator .......................................25
ARTICLE VI
MISCELLANEOUS
Section 6.1 Amendments, Etc ...............................................26
Section 6.2 Notices, Etc ..................................................27
Section 6.3 Successors and Assigns; Participations; Assignments ...........27
Section 6.4 Costs, Expenses and Taxes .....................................29
Section 6.5 No Proceedings; Limitation on Payments ........................29
Section 6.6 GOVERNING LAW AND JURISDICTION ................................30
Section 6.7 Execution in Counterparts .....................................30
Section 6.8 Survival of Termination .......................................30
Section 6.9 WAIVER OF JURY TRIAL ..........................................30
Section 6.10 Sharing of Recoveries .........................................31
Section 6.11 Right of Setoff ...............................................31
Section 6.12 Entire Agreement ..............................................31
Section 6.13 Headings ......................................................31
Section 6.14 Purchaser Groups' Liabilities .................................31
Section 6.15 Call Option ...................................................32
EXHIBIT I Definitions
EXHIBIT II Conditions of Purchases
EXHIBIT III Representations and Warranties
EXHIBIT IV Covenants
EXHIBIT V Termination Events
SCHEDULE I Credit and Collection Policy
SCHEDULE II Lock-Box Banks and Lock-Box Accounts
SCHEDULE III Trade Names
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ANNEX A Form of Information Package
ANNEX B Form of Purchase Notice
ANNEX C Form of Assumption Agreement
ANNEX D Form of Transfer Supplement
ANNEX E Form of Paydown Notice
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This RECEIVABLES PURCHASE AGREEMENT (as amended, supplemented or
otherwise modified from time to time, this "AGREEMENT ") is entered into as of
August 7, 2001, among AGC FUNDING CORPORATION, a Delaware corporation, as seller
(the "SELLER"), American Greetings Corp., an Ohio Corporation ("Greetings"), as
initial servicer (in such capacity, together with its successors and permitted
assigns in such capacity, the "SERVICER"), MARKET STREET FUNDING CORPORATION
("MARKET STREET "), a Delaware corporation, as a Conduit Purchaser, PNC BANK,
NATIONAL ASSOCIATION ("PNC"), as agent for Market Street, and as Administrator
for each Purchaser Group (in such capacity, the "ADMINISTRATOR "), and each of
the other members of each Purchaser Group party hereto or that become parties
hereto by executing an Assumption Agreement or a Transfer Supplement.
PRELIMINARY STATEMENTS. Certain terms that are capitalized and used
throughout this Agreement are defined in EXHIBIT I. References in the Exhibits
hereto to the "Agreement" refer to this Agreement, as amended, supplemented or
otherwise modified from time to time.
The Seller desires to sell, transfer and assign an undivided variable
percentage interest in a pool of receivables, and the Purchasers desire to
acquire such undivided variable percentage interest, as such percentage interest
shall be adjusted from time to time based upon, in part, reinvestment payments
that are made by such Purchasers.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. PURCHASE FACILITY.
(a) On the terms and subject to the conditions hereof, the
Seller may, from time to time before the Facility Termination Date,
request that the Conduit Purchasers, or, only if a Conduit Purchaser
denies such request or is unable to fund (and provides notice of such
denial or inability to the Seller, the Administrator and its Purchaser
Agent), ratably request that the Related Committed Purchasers, make
purchases of and reinvestments in undivided percentage ownership
interests with regard to the Purchased Interest from the Seller from
time to time from the date hereof to the Facility Termination Date.
Subject to SECTION 1.4(b), concerning reinvestments, at no time will a
Conduit Purchaser that is not also a Related Committed Purchaser have
any obligation to make a purchase. Each Related Committed Purchaser
severally hereby agrees, on the terms and subject to the conditions
hereof, to make Purchases before the Facility Termination Date, based
on the applicable Purchaser Group's Ratable Share of each purchase
requested pursuant to SECTION 1.2(a) (each a "PURCHASE ") (and, in the
case of each Related Committed Purchaser, its Commitment Percentage of
its
Purchaser Group's Ratable Share of such Purchase) to the extent its
Investment would not thereby exceed its Commitment and the Aggregate
Investment would not (after giving effect to all Purchases on such
date) exceed the Purchase Limit.
(b) The Seller may, upon at least 60 days' written notice to
the Administrator and each Purchaser Agent terminate the purchase
facility provided for in this Section in whole or, upon 30 days'
written notice to the Administrator and each Purchaser Agent, from time
to time, irrevocably reduce in part the unfunded portion of the
Purchase Limit (but not below the amount which would cause the Group
Investment of any Purchaser Group to exceed its Group Commitment (after
giving effect to such reduction)); provided that each partial reduction
shall be in the amount of at least $10,000,000, or an integral multiple
of $1,000,000 in excess thereof and unless terminated in whole, the
Purchase Limit shall in no event be reduced below $50,000,000. Such
reduction shall at the option of the Seller be applied either (i)
ratably to reduce the Group Commitment of each Purchaser Group or (ii)
to terminate the Group Commitment of any one Purchaser Group.
Section 1.2. MAKING PURCHASES.
(a) Each purchase (but not reinvestment) of undivided
percentage ownership interests with regard to the Purchased Interest
hereunder shall be made upon the Seller's irrevocable written notice in
the form of Annex B delivered to the Administrator and each Purchaser
Agent in accordance with SECTION 6.2 (which notice must be received by
the Administrator and each Purchaser Agent before 11:00 a.m., New York
City time) at least three Business Days before the requested Purchase
Date, which notice shall specify: (A) the amount requested to be paid
to the Seller (such amount, which shall not be less than $1,000,000, or
an integral multiple of $100,000 in excess thereof with respect to each
Purchaser Group, being the aggregate of the Investments of each
Purchaser within such Purchaser Group, relating to the undivided
percentage ownership interest then being purchased), (B) the date of
such purchase (which shall be a Business Day), and (C) a pro forma
calculation of the Purchased Interest after giving effect to the
increase in the Aggregate Investment. If the Purchase is requested from
a Conduit Purchaser and such Conduit Purchaser determines, in its sole
discretion, to make the requested Purchase, such Conduit Purchaser
shall transfer to the account of the Seller described in SECTION
1.2(b), below (the "DISBURSEMENT ACCOUNT "), an amount equal to such
Conduit Purchaser's Purchaser Group Ratable Share of such Purchase on
the requested Purchase Date. If the Purchase is requested from the
Related Committed Purchasers for a Purchaser Group (in the case where
the related Conduit Purchaser determined not to or was unable to make
such Purchase), subject to the terms and conditions hereof, such
Related Committed Purchasers for a Purchaser Group shall transfer the
applicable Purchaser Group's Ratable Share of each Purchase (and, in
the case of each Related Committed Purchaser, its Commitment Percentage
of its Purchaser Group's Ratable Share of such Purchase) into the
Disbursement Account by no later than 4:00 p.m. (New York time) on the
Purchase Date.
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(b) On the date of each Purchase, each Purchaser (or the
related Purchaser Agent on its behalf), shall make available to the
Seller in same day funds, at National City Bank, Cleveland, Ohio,
account number 657364116, ABA #000000000, an amount equal to the
proceeds of such Purchase.
(c) Effective on the date of each Purchase pursuant to this
SECTION 1.2 and each reinvestment pursuant to SECTION 1.4, the Seller
hereby sells and assigns to the Administrator for the benefit of the
Purchasers (ratably, according to each such Purchaser's Investment) an
undivided percentage ownership interest in: (i) each Pool Receivable
then existing, (ii) all Related Security with respect to such Pool
Receivables, and (iii) all Collections with respect to, and other
proceeds of, such Pool Receivables and Related Security.
(d) To secure all of the Seller's obligations (monetary or
otherwise) under this Agreement and the other Transaction Documents to
which it is a party, whether now or hereafter existing or arising, due
or to become due, direct or indirect, absolute or contingent, the
Seller hereby grants to the Administrator, for the benefit of the
Purchasers, a security interest in all of the Seller's right, title and
interest (including any undivided interest of the Seller) in, to and
under all of the following, whether now or hereafter owned, existing or
arising: (i) all Pool Receivables, (ii) all Related Security with
respect to such Pool Receivables, (iii) all Collections with respect to
such Pool Receivables, (iv) the Lock-Box Accounts and all amounts on
deposit therein, and all certificates and instruments, if any, from
time to time evidencing such Lock-Box Accounts and amounts on deposit
therein, (v) all books and records of each Receivable, and all
Transaction Documents to which the Seller is a party, together with all
rights (but none of the obligations) of the Seller thereunder and (vi)
all proceeds and products of, and all amounts received or receivable
under any or all of, the foregoing (collectively, the "POOL ASSETS").
The Administrator, for the benefit of the Purchasers, shall have, with
respect to the Pool Assets, and in addition to all the other rights and
remedies available to the Administrator and the Purchasers, all the
rights and remedies of a secured party under any applicable UCC.
(e) The Seller may, with the written consent of the
Administrator and each Purchaser, add additional Persons as Purchasers
(either to an existing Purchaser Group or by creating new Purchaser
Groups) or cause an existing Purchaser to increase its Commitment in
connection with a corresponding increase in the Purchase Limit;
PROVIDED, HOWEVER, that the Commitment of any Purchaser may only be
increased with the consent of such Purchaser. Each new Purchaser (or
Purchaser Group) and each Purchaser increasing its Commitment shall
become a party hereto or increase its Commitment, as the case may be,
by executing and delivering to the Administrator and the Seller an
Assumption Agreement in the form of Annex C hereto (which Assumption
Agreement shall, in the case of any new Purchaser or Purchasers be
executed by each Person in such new Purchaser's Purchaser Group).
(f) Each Related Committed Purchaser's obligation hereunder
shall be several, such that the failure of any Related Committed
Purchaser to make a payment in connection
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with any purchase hereunder shall not relieve any other Related
Committed Purchaser of its obligation hereunder to make payment for any
Purchase. Further, in the event any Related Committed Purchaser fails
to satisfy its obligation to make a purchase as required hereunder,
upon receipt of notice of such failure from the Administrator (or any
relevant Purchaser Agent), subject to the limitations set forth herein,
the non-defaulting Related Committed Purchasers in such defaulting
Related Committed Purchaser's Purchaser Group shall purchase the
defaulting Related Committed Purchaser's Commitment Percentage of the
related Purchase PRO RATA in proportion to their relative Commitment
Percentages (determined without regard to the Commitment Percentage of
the defaulting Related Committed Purchaser; it being understood that a
defaulting Related Committed Purchaser's Commitment Percentage of any
Purchase shall be first put to the Related Committed Purchasers in such
defaulting Related Committed Purchaser's Purchaser Group and thereafter
if there are no other Related Committed Purchasers in such Purchaser
Group or if such other Related Committed Purchasers are also defaulting
Related Committed Purchasers, then such defaulting Related Committed
Purchaser's Commitment Percentage of such Purchase shall be put to each
other Purchaser Group ratably and applied in accordance with this
paragraph (f)). Notwithstanding anything in this paragraph (f) to the
contrary, no Related Committed Purchaser shall be required to make a
Purchase pursuant to this paragraph for an amount which would cause (i)
the aggregate Investment of such Related Committed Purchaser (after
giving effect to such Purchase) to exceed its Commitment or (ii) the
sum of the aggregate Investments of all Purchasers in the Purchaser
Group of such Related Committed Purchaser (after giving effect to such
Purchase) to exceed the sum of the Commitments of all of the Purchasers
in such Purchaser Group.
Section 1.3. PURCHASED INTEREST COMPUTATION. The Purchased Interest
shall be initially computed on the date of the initial Purchase hereunder.
Thereafter, until the Facility Termination Date, such Purchased Interest shall
be automatically recomputed (or deemed to be recomputed) on each Business Day
other than a Termination Day. From and after the occurrence of any Termination
Day, the Purchased Interest shall (until the event(s) giving rise to such
Termination Day are satisfied or are waived by the Administrator and a Simple
Majority of the Purchasers) be deemed to be 100%. The Purchased Interest shall
become zero when the Aggregate Investment thereof and Aggregate Discount thereon
shall have been paid in full, all the amounts owed by the Seller, each
Originator, AGSC, Greetings and the Servicer hereunder or under any other
Transaction Document to each Purchaser, the Administrator and any other
Indemnified Party or Affected Person are paid in full, and the Servicer shall
have received the accrued Servicing Fee thereon.
Section 1.4. SETTLEMENT PROCEDURES.
(a) The collection of the Pool Receivables shall be
administered by the Servicer in accordance with this Agreement. The
Seller shall provide to the Servicer on a timely basis all information
needed for such administration, including notice of the occurrence of
any Termination Day and current computations of the Purchased Interest.
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(b) The Servicer shall, on each day on which Collections of
Pool Receivables are received (or deemed received) by the Seller or the
Servicer:
(i) set aside and hold in trust (and shall, at the request
of the Administrator (with the consent or at the direction of
the Majority Purchasers), segregate in a separate account
approved by the Administrator if, at the time of such request,
there exists an Unmatured Termination Event or a Termination
Event (or if the failure to so segregate reasonably could be
expected to cause a Material Adverse Effect)) for the benefit
of each Purchaser Group, out of the Purchasers' Share of such
Collections, first, an amount equal to the Aggregate Discount
accrued through such day for each Portion of Investment and
not previously set aside, second, an amount equal to the fees
set forth in each Purchaser Group Fee Letter accrued and
unpaid through such day, and third, to the extent funds are
available therefor, an amount equal to the aggregate of each
Purchaser Group's Ratable Share of the Purchasers' Share of
the Servicing Fee accrued through such day and not previously
set aside,
(ii) subject to SECTION 1.4(f), if such day is not a
Termination Day, remit to the Seller, ratably, on behalf of
each Purchaser Group, the remainder of the Purchasers' Share
of such Collections. Such remainder shall, to the extent
representing a return on the Aggregate Investment, ratably,
according to each Purchaser's Investment, be automatically
reinvested in Pool Receivables, and in the Related Security,
Collections and other proceeds with respect thereto; PROVIDED,
HOWEVER, that if the Purchased Interest would exceed 100%,
then the Servicer shall not reinvest, but shall set aside and
hold in trust for the benefit of the Purchasers (and shall, at
the request of the Administrator (with the consent or at the
direction of the Majority Purchasers), segregate in a separate
account approved by the Administrator if, at the time of such
request, there exists an Unmatured Termination Event or a
Termination Event (or if the failure to so segregate
reasonably could be expected to cause a Material Adverse
Effect)) a portion of such Collections that, together with the
other Collections set aside pursuant to this paragraph, shall
equal the amount necessary to reduce the Purchased Interest to
100%; PROVIDED, FURTHER, that in the case of any Purchaser
that has provided notice (an "EXITING NOTICE") to its
Purchaser Agent of its refusal, pursuant to SECTION 1.10, to
extend its Commitment hereunder (an "EXITING PURCHASER "),
then such Purchaser's ratable share of such Collections based
on its Investment shall not be reinvested and shall instead be
held in trust for the benefit of such Purchaser and applied in
accordance with CLAUSE (iii) below,
(iii) if such day is a Termination Day (or any day
following the provision of an Exiting Notice), set aside,
segregate and hold in trust (and shall, at the request of the
Administrator (with the consent or at the direction of a
Simple Majority of the Purchasers), segregate in a separate
account approved by the Administrator) for the benefit of each
Purchaser Group the entire remainder of the Purchasers' Share
of the Collections (or in the case of an Exiting Purchaser an
amount equal to such
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Purchaser's ratable share of such Collections based on its
Investment; provided, that solely for the purpose of
determining such Purchaser's ratable share of such
Collections, such Purchaser's Investment shall be deemed to
remain constant from the date of the provision of an Exiting
Notice until the date such Purchaser's Investment has been
paid in full; it being understood that if such day is also a
Termination Day, such Exiting Purchaser's Investment shall be
recalculated taking into account amounts received by such
Purchaser in respect of this parenthetical and thereafter
Collections shall be set aside for such Purchaser ratably in
respect of its Investment (as recalculated)); provided, that
if amounts are set aside and held in trust on any Termination
Day of the type described in clause (a) of the definition of
"Termination Day" (or any day following the provision of an
Exiting Notice) and, thereafter, the conditions set forth in
SECTION 2 of EXHIBIT II are satisfied or waived by the
Administrator and a Simple Majority of the Purchasers (or in
the case of an Exiting Notice, such Exiting Notice has been
revoked by the related Exiting Purchaser, and written notice
thereof has been provided to the Administrator, the related
Purchaser Agent and the Servicer), such previously set-aside
amounts shall, to the extent representing a return on
Aggregate Investment (or the Investment of the Exiting
Purchaser) and ratably in accordance with each Purchaser's
Investment, be reinvested in accordance with CLAUSE (ii) on
the day of such subsequent satisfaction or waiver of
conditions or revocation of Exiting Notice, and
(iv) release to the Seller (subject to SECTION 1.4(f)) for
its own account any Collections in excess of: (x) amounts
required to be reinvested in accordance with CLAUSE (ii) or
the proviso to CLAUSE (iii) plus (y) the amounts that are
required to be set aside pursuant to CLAUSE (i), the proviso
to CLAUSE (ii) and CLAUSE (iii) plus (z) the Seller's Share of
the Servicing Fee accrued and unpaid through such day and all
reasonable and appropriate out-of-pocket costs and expenses of
the Servicer for servicing, collecting and administering the
Pool Receivables.
(c) The Servicer shall, in accordance with the priorities set
forth in SECTION 1.4(d), below, deposit into each applicable
Purchaser's account (or such other account designated by such
applicable Purchaser or its Purchaser Agent), on each Settlement Date,
Collections held for each Purchaser with respect to such Purchaser's
Portion(s) of Investment pursuant to CLAUSE (b)(i) or (f) of Section
1.4 plus the amount of Collections then held for such Purchaser
pursuant to CLAUSES (b)(ii) and (iii) of SECTION 1.4; PROVIDED, that if
Greetings, any Originator, AGSC or an Affiliate thereof is the
Servicer, such day is not a Termination Day and the Administrator has
not notified Greetings, AGSC or such Originator (or such Affiliate)
that such right is revoked, Greetings, AGSC or such Originator (or such
Affiliate) may retain the portion of the Collections set aside pursuant
to CLAUSE (b)(i) that represents the aggregate of each Purchaser
Group's Ratable Share of the Purchasers' Share of the Servicing Fee. On
or before the last day of each Yield Period with respect to any Portion
of Investment, the applicable Purchaser Agent will notify the Servicer
by facsimile
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of the amount of the Discount accrued with respect to each such Portion
of Investment during the related Yield Period then ending.
(d) The Servicer shall distribute the amounts described (and
at the times set forth) in SECTION 1.4(c), as follows:
(i) if such distribution occurs on a day that is not a
Termination Day and the Purchased Interest does not exceed
100%, first to each Purchaser Agent ratably according to the
Discount accrued during such Yield Period (for the benefit of
the relevant Purchasers within such Purchaser Agent's
Purchaser Group) in payment in full of all accrued Discount
and fees (other than Servicing Fees) with respect to each
Portion of Investment maintained by such Purchasers; it being
understood that each Purchaser Agent shall distribute such
amounts to the Purchasers within its Purchaser Group ratably
according to Discount, and second, if the Servicer has set
aside amounts in respect of the Servicing Fee pursuant to
CLAUSE (b)(i) and has not retained such amounts pursuant to
CLAUSE (c), to the Servicer's own account (payable in arrears
on each Settlement Date) in payment in full of the aggregate
of each Purchaser Group's Ratable Share of the Purchasers'
Share of accrued Servicing Fees so set aside, and
(ii) if such distribution occurs on a Termination Day or
on a day when the Purchased Interest exceeds 100%, FIRST if
Greetings, AGSC or any Originator or an Affiliate thereof is
not the Servicer, to the Servicer's own account in payment in
full of all accrued Servicing Fees, SECOND to each Purchaser
Agent ratably according to Discount (for the benefit of the
relevant Purchasers within such Purchaser Agent's Purchaser
Group) in payment in full of all accrued Discount with respect
to each Portion of Investment funded or maintained by the
Purchasers within such Purchaser Agent's Purchaser Group,
THIRD to each Purchaser Agent ratably according to the
aggregate of the Investment of each Purchaser in each such
Purchaser Agent's Purchaser Group (for the benefit of the
relevant Purchasers within such Purchaser Agent's Purchaser
Group) in payment in full of each Purchaser's Investment (or,
if such day is not a Termination Day, the amount necessary to
reduce the Purchased Interest to 100%); it being understood
that each Purchaser Agent shall distribute the amounts
described in the first and second clauses of this SECTION
1.4(d)(ii) to the Purchasers within its Purchaser Group
ratably according to Discount and Investment, respectively,
FOURTH, if the Aggregate Investment and accrued Aggregate
Discount with respect to each Portion of Investment for all
Purchaser Groups have been reduced to zero or if such day is
not a Termination Day, the Purchased Interest is reduced to
100%, and all accrued Servicing Fees payable to the Servicer
(if other than Greetings, AGSC or any Originator or an
Affiliate thereof) have been paid in full, to each Purchaser
Group ratably (for the benefit of the Purchasers within such
Purchaser Group) in accordance with its Ratable Share, the
Administrator and any other Indemnified Party or Affected
Person in payment in full of any other amounts owed
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thereto by the Seller or Servicer hereunder and, FIFTH, to the
Servicer's own account (if the Servicer is Greetings, AGSC or
any Originator or an Affiliate thereof) in payment in full of
the Aggregate of each Purchaser Group's Ratable Share of all
accrued Servicing Fees.
After the Aggregate Investment, Aggregate Discount, fees payable pursuant to
each Purchaser Group Fee Letter and Servicing Fees with respect to the Purchased
Interest, and any other amounts payable by the Seller and the Servicer to each
Purchaser Group, the Administrator or any other Indemnified Party or Affected
Person hereunder, have been paid in full, all additional Collections with
respect to the Purchased Interest shall be paid to the Seller for its own
account.
(e) For the purposes of this SECTION 1.4:
(i) if on any day the Outstanding Balance of any Pool
Receivable is reduced or adjusted as a result of any
defective, rejected, returned, repossessed or foreclosed goods
or services, or any revision, cancellation, allowance,
discount or other adjustment made by the Seller or any
Affiliate of the Seller, or the Servicer or any Affiliate of
the Servicer, or any setoff or dispute between the Seller or
any Affiliate of the Seller, or the Servicer or any Affiliate
of the Servicer and an Obligor, the Seller shall be deemed to
have received on such day a Collection of such Pool Receivable
in the amount of such reduction or adjustment; PROVIDED THAT
Seller shall be deemed to have received a Collection due to a
reduction or adjustment made to the Outstanding Balance of a
Seasonal Receivable in connection with the return of unsold
goods only to the extent Seller shall have a claim under
SECTION 3.3(c) of the Sale and Contribution Agreement in
connection with such Seasonal Receivable.
(ii) if on any day any of the representations or
warranties in SECTION 1(g) or (n) of EXHIBIT III is not true
with respect to any Pool Receivable, the Seller shall be
deemed to have received on such day a Collection of such Pool
Receivable in full;
(iii) except as provided in CLAUSE (i) or (ii), or as
otherwise required by applicable law or the relevant Contract,
all Collections received from an Obligor of any Receivable
shall be applied to the Receivables of such Obligor in the
order of the age of such Receivables, starting with the oldest
such Receivable, unless such Obligor designates in writing its
payment for application to specific Receivables; and
(iv) if and to the extent the Administrator, any
Purchaser Agent or any Purchaser shall be required for any
reason to pay over to an Obligor (or any trustee, receiver,
custodian or similar official in any Insolvency Proceeding)
any amount received by it hereunder, such amount shall be
deemed not to have been so received by such Person but rather
to have been retained by the Seller and, accordingly, such
Person shall have a claim against the Seller for such amount,
payable when and to the
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extent that any distribution from or on behalf of such Obligor
is made in respect thereof.
(f) If at any time the Seller shall wish to cause the
reduction of Aggregate Investment (but not to commence the liquidation,
or reduction to zero, of the entire Aggregate Investment), the Seller
may do so as follows:
(i) the Seller shall give the Administrator, each
Purchaser Agent and the Servicer (A) at least two Business
Days' prior written notice thereof for any reduction of
Aggregate Investment less than or equal to $10,000,000 and (B)
at least ten Business Days' prior written notice thereof for
any reduction of Aggregate Investment greater than $10,000,000
(in each case such notice shall include the amount of such
proposed reduction and the proposed date on which such
reduction will commence);
(ii) on the proposed date of commencement of such
reduction and on each day thereafter, the Servicer shall cause
Collections not to be reinvested until the amount thereof not
so reinvested shall equal the desired amount of reduction; and
(iii) the Servicer shall hold such Collections in trust
for the benefit of each Purchaser ratably according to its
Investment, for payment to each such Purchaser (or its related
Purchaser Agent for the benefit of such Purchaser) on the (i)
next Settlement Date with respect to any Portions of
Investment maintained by such Purchaser immediately following
the related current Yield Period or (ii) such other date
approved by the Administrator, and the Aggregate Investment
(together with the Investment of any related Purchaser) shall
be deemed reduced in the amount to be paid to such Purchaser
(or its related Purchaser Agent for the benefit of such
Purchaser) only when in fact finally so paid;
PROVIDED, that:
(A) the amount of any such reduction shall be not less than
$1,000,000 for each Purchaser Group and shall be an integral multiple
of $100,000, and the entire Aggregate Investment after giving effect to
such reduction shall be not less than $50,000,000 and shall be in an
integral multiple of $1,000,000 (unless the Aggregate Investment shall
have been reduced to zero); and
(B) with respect to any Portion of Investment, the Seller
shall choose a reduction amount, and the date of commencement thereof,
so that to the extent practicable such reduction shall commence and
conclude in the same Yield Period.
Section 1.5. FEES. The Seller shall pay to each Purchaser Agent for the
benefit of the related Purchasers certain fees in the amounts and on the dates
set forth in letters, dated the date
9
hereof, each such letter (as amended, supplemented, or otherwise modified from
time to time, a "PURCHASER GROUP FEE LETTER") in each case among the Seller, the
Servicer, the Administrator and the related Purchaser Agent.
Section 1.6. PAYMENTS AND COMPUTATIONS, ETC. All amounts to be paid or
deposited by the Seller or the Servicer hereunder shall be made without
reduction for offset or counterclaim and shall be paid or deposited no later
than noon (New York City time) on the day when due in same day funds to the
applicable Purchaser's account (as such account is identified in the related
Purchaser Group Fee Letter). All amounts received after noon (New York City
time) will be deemed to have been received on the next Business Day.
(a) The Seller or the Servicer, as the case may be, shall, to
the extent permitted by law, pay interest on any amount not paid or
deposited by the Seller or the Servicer, as the case may be, when due
hereunder, at an interest rate equal to the Base Rate, payable on
demand.
(b) All computations of interest under CLAUSE (b) and all
computations of Discount, fees and other amounts hereunder shall be
made on the basis of a year of 360 (or 365 or 366, as applicable, with
respect to Discount or other amounts calculated by reference to the
Base Rate) days for the actual number of days elapsed. Whenever any
payment or deposit to be made hereunder shall be due on a day other
than a Business Day, such payment or deposit shall be made on the next
Business Day and such extension of time shall be included in the
computation of such payment or deposit.
(c) Each Affected Person will notify Seller and the applicable
Purchaser Agent promptly after it has actual knowledge of any event
which will entitle such Affected Person to such additional amounts as
compensation pursuant to this SECTION 1.7. Such additional amounts
shall accrue from the date as to which such Affected Person becomes
subject to such additional costs as a result of such event (or if such
notice of such event is not given to Seller by such Affected Person
within 90 days after such Affected Person has actual knowledge of such
event, from the date which is 90 days prior to the date such notice is
given to Seller by such Affected Person).
Section 1.7. INCREASED COSTS.
(a) If any Purchaser Agent, Purchaser, Liquidity Provider, the
Administrator or any other Program Support Provider or any of their
respective Affiliates (each an "AFFECTED PERSON") reasonably determines
that the existence of or compliance with: (i) any law or regulation or
any change therein or in the interpretation or application thereof, in
each case adopted, issued or occurring after the date hereof, or (ii)
any request, guideline or directive from any central bank or other
Governmental Authority (whether or not having the force of law) issued
or occurring after the date of this Agreement, affects or would affect
the amount of capital required or expected to be maintained by such
Affected Person, and such Affected
10
Person determines that the amount of such capital is increased by or
based upon the existence of any commitment to make purchases of (or
otherwise to maintain the investment in) Pool Receivables related to
this Agreement or any related liquidity facility, credit enhancement
facility or other commitments of the same type, then, upon demand by
such Affected Person (with a copy to the Administrator), the Seller
shall promptly pay to the Administrator, for the account of such
Affected Person, from time to time as specified by such Affected
Person, additional amounts sufficient to compensate such Affected
Person in the light of such circumstances, to the extent that such
Affected Person reasonably determines such increase in capital to be
allocable to the existence of any of such commitments. A certificate as
to such amounts submitted to the Seller and the Administrator by such
Affected Person shall be conclusive and binding for all purposes,
absent manifest error.
(b) If, due to either: (i) the introduction of or any change
in or in the interpretation of any law or regulation or (ii) compliance
with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to any Affected Person of agreeing to
purchase or purchasing, or maintaining the ownership of, the Purchased
Interest or any portion thereof in respect of which Discount is
computed by reference to the Euro-Rate, then, upon demand by such
Affected Person, the Seller shall promptly pay to such Affected Person,
from time to time as specified by such Affected Person, additional
amounts sufficient to compensate such Affected Person for such
increased costs. A certificate as to such amounts submitted to the
Seller and the Administrator by such Affected Person shall be
conclusive and binding for all purposes, absent manifest error.
(c) If such increased costs affect the related Affected
Person's portfolio of financing transactions, such Affected Person
shall use reasonable averaging and attribution methods to allocate such
increased costs to the transactions contemplated by this Agreement.
Section 1.8. REQUIREMENTS OF LAW.
If any Affected Person reasonably determines that the
existence of or compliance with: (a) any law or regulation or any
change therein or in the interpretation or application thereof, in each
case adopted, issued or occurring after the date hereof, or (b) any
request, guideline or directive from any central bank or other
Governmental Authority (whether or not having the force of law) issued
or occurring after the date of this Agreement:
(i) does or shall subject such Affected Person to any tax of
any kind whatsoever with respect to this Agreement, any increase in the
Purchased Interest or any portion thereof or in the amount of such
Person's Investment relating thereto, or does or shall change the basis
of taxation of payments to such Affected Person on account of
Collections, Discount or any other amounts payable hereunder (excluding
taxes imposed on the overall pre-tax net income of such Affected
Person, and franchise taxes imposed on such Affected Person, by the
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jurisdiction under the laws of which such Affected Person is organized
or a political subdivision thereof),
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the
account of, purchases, advances or loans by, or other credit extended
by, or any other acquisition of funds by, any office of such Affected
Person that are not otherwise included in the determination of the
Euro-Rate or the Base Rate hereunder, or
(iii) does or shall impose on such Affected Person any other
condition,
and the result of any of the foregoing is: (A) to increase the cost to such
Affected Person of acting as Administrator or as a Purchaser Agent, or of
agreeing to purchase or purchasing or maintaining the ownership of undivided
percentage ownership interests with regard to the Purchased Interest (or
interests therein) or any Portion of Investment, or (B) to reduce any amount
receivable hereunder (whether directly or indirectly), then, in any such case,
upon demand by such Affected Person, the Seller shall promptly pay to such
Affected Person additional amounts necessary to compensate such Affected Person
for such additional cost or reduced amount receivable. All such amounts shall be
payable as incurred. A certificate from such Affected Person to the Seller and
the Administrator certifying, in reasonably specific detail, the basis for,
calculation of, and amount of such additional costs or reduced amount receivable
shall be conclusive and binding for all purposes, absent manifest error;
PROVIDED, HOWEVER, that no Affected Person shall be required to disclose any
confidential or tax planning information in any such certificate.
Section 1.9. INABILITY TO DETERMINE EURO-RATE. (a) If the Administrator
(or any Purchaser Agent) determines before the first day of any Yield Period
(which determination shall be final and conclusive) that, by reason of
circumstances affecting the interbank eurodollar market generally, deposits in
dollars (in the relevant amounts for such Yield Period) are not being offered to
banks in the interbank eurodollar market for such Yield Period, or adequate
means do not exist for ascertaining the Euro-Rate for such Yield Period, then
the Administrator shall give notice thereof to the Seller. Thereafter, until the
Administrator or such Purchaser Agent notifies the Seller that the circumstances
giving rise to such suspension no longer exist, (a) no Portion of Investment
shall be funded at the Yield Rate determined by reference to the Euro-Rate and
(b) the Discount for any outstanding Portions of Investment then funded at the
Yield Rate determined by reference to the Euro-Rate shall, on the last day of
the then current Yield Period, be converted to the Yield Rate determined by
reference to the Base Rate.
(b) If, on or before the first day of any Yield Period, the
Administrator shall have been notified by any Purchaser, Purchaser Agent or
Liquidity Provider that, such Person has determined (which determination shall
be final and conclusive) that, any enactment, promulgation or adoption of or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by a governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Person with any guideline, request
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or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for such
Person to fund or maintain any Portion of Investment at the Yield Rate and based
upon the Euro-Rate, the Administrator shall notify the Seller thereof. Upon
receipt of such notice, until the Administrator notifies the Seller that the
circumstances giving rise to such determination no longer apply, (a) no Portion
of Investment shall be funded at the Yield Rate determined by reference to the
Euro-Rate and (b) the Discount for any outstanding Portions of Investment then
funded at the Yield Rate determined by reference to the Euro-Rate shall be
converted to the Yield Rate determined by reference to the Base Rate either (i)
on the last day of the then current Yield Period if such Person may lawfully
continue to maintain such Portion of Investment at the Yield Rate determined by
reference to the Euro-Rate to such day, or (ii) immediately, if such Person may
not lawfully continue to maintain such Portion of Investment at the Yield Rate
determined by reference to the Euro-Rate to such day.
Section 1.10. EXTENSION OF TERMINATION DATE. The Seller may advise the
Administrator and each Purchaser Agent in writing of its desire to extend the
Facility Termination Date for an additional 364 days, provided such request is
made not more than 90 days prior to, and not less than 60 days prior to, the
then current Facility Termination Date. In the event that the Purchaser Agents
are all agreeable to such extension, the Administrator shall so notify the
Seller in writing (it being understood that the Purchaser Agents may accept or
decline such a request in their sole discretion and on such terms as they may
elect) not less than 30 days prior to the then current Facility Termination Date
and the Seller, the Administrator, the Purchaser Agents and the Purchasers shall
enter into such documents as the Purchasers may deem necessary or appropriate to
reflect such extension, and all reasonable costs and expenses incurred by the
Purchasers, the Administrator and the Purchaser Agents in connection therewith
(including reasonable Attorneys' Costs) shall be paid by the Seller. In the
event the Purchaser Agents decline the request for such extension, the
Administrator shall so notify the Seller of such determination; provided,
however, that the failure of the Administrator to notify the Seller of the
determination to decline such extension shall not affect the understanding and
agreement that the Purchaser Agents shall be deemed to have refused to grant the
requested extension in the event the Administrator fails to affirmatively notify
the Seller, in writing, of their agreement to accept the requested extension.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
Section 2.1. REPRESENTATIONS AND WARRANTIES; COVENANTS. Each of the
Seller, Greetings and the Servicer hereby makes the representations and
warranties, and hereby agrees to perform and observe the covenants, applicable
to it set forth in EXHIBITS III and IV, respectively.
Section 2.2. TERMINATION EVENTS. If any of the Termination Events set
forth in EXHIBIT V shall occur, the Administrator may (with the consent of a
Simple Majority of the Purchasers) or shall
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(at the direction of a Simple Majority of the Purchasers), by notice to the
Seller, declare the Facility Termination Date to have occurred (in which case
the Facility Termination Date shall be deemed to have occurred); PROVIDED, that
automatically upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice) described in PARAGRAPH (f) of EXHIBIT
V, the Facility Termination Date shall occur. Upon any such declaration,
occurrence or deemed occurrence of the Facility Termination Date, the
Administrator, each Purchaser Agent and each Purchaser shall have, in addition
to the rights and remedies that they may have under this Agreement, all other
rights and remedies provided after default under the New York UCC and under
other applicable law, which rights and remedies shall be cumulative.
ARTICLE III
INDEMNIFICATION
Section 3.1. INDEMNITIES BY THE SELLER. Without limiting any other
rights that the any Purchaser Agent, Purchaser, Liquidity Provider, the
Administrator or any Program Support Provider or any of their respective
Affiliates, employees, officers, directors, agents, counsel, successors,
transferees or assigns (each, an "INDEMNIFIED PARTY ") may have hereunder or
under applicable law, the Seller hereby agrees to indemnify each Indemnified
Party from and against any and all claims, damages, expenses, costs, losses and
liabilities (including Attorney Costs) (all of the foregoing being collectively
referred to as "INDEMNIFIED AMOUNTS ") arising out of or resulting from this
Agreement (whether directly or indirectly), the use of proceeds of purchases or
reinvestments, the ownership of the Purchased Interest, or any interest therein,
or in respect of any Receivable, Related Security or Contract, excluding,
however: (a) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of such Indemnified Party or its officers,
directors, agents or counsel, (b) recourse with respect to any Receivable to the
extent that such Receivable is uncollectible on account of the insolvency,
bankruptcy or lack of credit worthiness of the related Obligor, or (c) any
overall net income taxes or franchise taxes imposed on such Indemnified Party by
the jurisdiction under the laws of which such Indemnified Party is organized or
otherwise is considered doing business (unless the Indemnified Party would not
be considered doing business in such jurisdiction, but for having entered into,
or engaged in the transactions in connection with this Agreement or any other
Transaction Document) or any political subdivision thereof. Without limiting or
being limited by the foregoing, and subject to the exclusions set forth in the
preceding sentence, the Seller shall pay on demand (which demand shall be
accompanied by documentation of the Indemnified Amounts, in reasonable detail)
to each Indemnified Party any and all amounts necessary to indemnify such
Indemnified Party from and against any and all Indemnified Amounts relating to
or resulting from any of the following:
(i) the failure of any Receivable included in the
calculation of the Net Receivables Pool Balance as an Eligible
Receivable to be an Eligible Receivable, the failure of any
information contained in an Information Package to be true and
correct, or the failure of any other information provided to
such Indemnified Party by the
14
Seller or Servicer with respect to Receivables or this
Agreement to be true and correct,
(ii) the failure of any representation, warranty or
statement made or deemed made by the Seller (or any of its
officers) under or in connection with this Agreement to have
been true and correct as of the date made or deemed made in
all respects when made,
(iii) the failure by the Seller to comply with any
applicable law, rule or regulation with respect to any Pool
Receivable or the related Contract, or the failure of any Pool
Receivable or the related Contract to conform to any such
applicable law, rule or regulation,
(iv) the failure to vest in the Administrator (for the
benefit of the Purchasers) a valid and enforceable: (A)
perfected undivided percentage ownership interest, to the
extent of the Purchased Interest, in the Receivables in, or
purporting to be in, the Receivables Pool and the other Pool
Assets, or (B) first priority perfected security interest in
the Pool Assets, in each case, free and clear of any Adverse
Claim,
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Receivables in, or
purporting to be in, the Receivables Pool and the other Pool
Assets, whether at the time of any purchase or reinvestment or
at any subsequent time,
(vi) any dispute, claim, offset or defense (other than any
reduction, revision or discharge in bankruptcy of or other
Insolvency Event in respect of the Obligor) of the Obligor to
the payment of any Receivable in, or purporting to be in, the
Receivables Pool (including a defense (not connected with any
Insolvency Event) based on such Receivable or the related
Contract not being a legal, valid and binding obligation of
such Obligor enforceable against it in accordance with its
terms), or any other claim resulting from the sale of the
goods or services related to such Receivable or the furnishing
or failure to furnish such goods or services or relating to
collection activities with respect to such Receivable,
(vii) any failure of the Seller, any Affiliate of the
Seller or the Servicer to perform its duties or obligations in
accordance with the provisions hereof or under the Contracts,
(viii) any products liability or other claim,
investigation, litigation or proceeding arising out of or in
connection with merchandise, insurance or services that are
the subject of any Contract,
15
(ix) the commingling of Collections at any time with
other funds,
(x) the use of proceeds of purchases or reinvestments, or
(xi) any reduction in the Aggregate Investment as a result
of the distribution of Collections pursuant to SECTION 1.4(d),
if all or a portion of such distributions shall thereafter be
rescinded or otherwise must be returned for any reason.
Section 3.2. INDEMNITIES BY THE SERVICER. Without limiting any other
rights that any Indemnified Party may have hereunder or under applicable law,
the Servicer hereby agrees to indemnify each Indemnified Party from and against
any and all Indemnified Amounts arising out of or resulting from (whether
directly or indirectly): (a) the failure of any information contained in an
Information Package to be true and correct, or the failure of any other
information provided to such Indemnified Party by, or on behalf of, the Servicer
to be true and correct, (b) the failure of any representation, warranty or
statement made or deemed made by the Servicer (or any of its officers) under or
in connection with this Agreement or any other Transaction Document to which it
is a party to have been true and correct as of the date made or deemed made in
all respects when made, (c) the failure by the Servicer to comply with any
applicable law, rule or regulation with respect to any Pool Receivable or the
related Contract, (d) any dispute, claim, offset or defense of the Obligor to
the payment of any Receivable in, or purporting to be in, the Receivables Pool
resulting from or related to the collection activities with respect to such
Receivable, (e) any failure of the Servicer to perform its duties or obligations
in accordance with the provisions hereof or any other Transaction Document to
which it is a party, (f) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Receivables in, or purporting to be in, the Receivables Pool and the other Pool
Assets, whether at the time of any purchase or reinvestment or at any subsequent
time, or (g) any commingling by the Servicer of Collections at any time with
other funds.
ARTICLE IV
ADMINISTRATION AND COLLECTIONS
Section 4.1. APPOINTMENT OF THE SERVICER.
(a) The servicing, administering and collection of the Pool
Receivables shall be conducted by the Person so designated from time to
time as the Servicer in accordance with this Section. Until the
Administrator gives notice to Greetings (in accordance with this
SECTION 4.1) of the designation of a new Servicer, Greetings is hereby
designated as, and hereby agrees to perform the duties and obligations
of, the Servicer pursuant to the terms hereof. Upon the occurrence of a
Termination Event, the Administrator may (with the consent of the
Majority Purchasers) or shall (at the direction of the Majority
Purchasers)
16
designate as Servicer any Person (including itself) to succeed
Greetings or any successor Servicer, on the condition in each case that
any such Person so designated shall agree to perform the duties and
obligations of the Servicer pursuant to the terms hereof.
(b) Upon the designation of a successor Servicer as set forth
in CLAUSE (a), Greetings agrees that it will terminate its activities
as Servicer hereunder in a manner that the Administrator determines
will facilitate the transition of the performance of such activities to
the new Servicer, and Greetings shall cooperate with and assist such
new Servicer. Such cooperation shall include access to and transfer of
related records (including all Contracts) and use by the new Servicer
of all licenses, hardware or software necessary or desirable to collect
the Pool Receivables and the Related Security.
(c) Greetings acknowledges that, in making their decision to
execute and deliver this Agreement, the Administrator and each
Purchaser Group have relied on Greetings's agreement to act as Servicer
hereunder. Accordingly, Greetings agrees that it will not voluntarily
resign as Servicer without the consent of the Majority Purchasers.
(d) The Servicer may delegate its duties and obligations
hereunder to any subservicer (each a "SUB-SERVICER "); PROVIDED, that,
in each such delegation: (i) such Sub- Servicer shall agree in writing
to perform the duties and obligations of the Servicer pursuant to the
terms hereof, (ii) the Servicer shall remain primarily liable for the
performance of the duties and obligations so delegated, (iii) the
Seller, the Administrator and each Purchaser Group shall have the right
to look solely to the Servicer for performance, and (iv) the terms of
any agreement with any Sub-Servicer shall provide that the
Administrator may terminate such agreement upon the termination of the
Servicer hereunder by giving notice of its desire to terminate such
agreement to the Servicer (and the Servicer shall provide appropriate
notice to each such Sub-Servicer); PROVIDED, HOWEVER, that if any such
delegation is to any Person other than an Originator or an Affiliate
thereof, the Administrator and the Majority Purchasers shall have
consented in writing in advance to such delegation; PROVIDED FURTHER
that the parties agree that AGSC and each Originator shall serve as
initial Sub-Servicers.
Section 4.2. DUTIES OF THE SERVICER.
(a) The Servicer shall take or cause to be taken all such
action as may be necessary or advisable to administer and collect each
Pool Receivable from time to time, all in accordance with this
Agreement and all applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and
Collection Policies. The Servicer shall set aside, for the account of
each Purchaser Group, the amount of the Collections to which each such
Purchaser Group is entitled in accordance with ARTICLE I. The Servicer
may, in accordance with the applicable Credit and Collection Policy,
take such action as the Servicer may determine to be appropriate to
maximize Collections thereof or reflect adjustments required under the
applicable Contract; PROVIDED, HOWEVER, that: (i) such action shall not
change the number of days such Pool Receivable has remained unpaid from
17
the date of the original due date related to such Pool Receivable and
(ii) such action shall not alter the status of such Pool Receivable as
a Delinquent Receivable or a Defaulted Receivable or limit the rights
of the Administrator or any Purchaser Group under this Agreement. The
Seller shall deliver to the Servicer and the Servicer shall hold for
the benefit of the Seller and the Administrator (individually and for
the benefit of each Purchaser Group), in accordance with their
respective interests, all records and documents (including computer
tapes or disks) with respect to each Pool Receivable. Notwithstanding
anything to the contrary contained herein, the Administrator may direct
the Servicer (whether the Servicer is Greetings, AGSC, any Originator
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; PROVIDED, HOWEVER, that no such direction may be
given unless either: (A) a Termination Event has occurred or (B) the
Administrator believes in good faith that failure to commence, settle
or effect such legal action, foreclosure or repossession could
adversely affect Receivables constituting a material portion of the
Pool Receivables.
(b) The Servicer shall, as soon as practicable following
actual receipt of collected funds, turn over to the Seller the
collections of any indebtedness that is not a Pool Receivable, less, if
Greetings, AGSC, any Originator or an Affiliate thereof is not the
Servicer, all reasonable and appropriate out-of-pocket costs and
expenses of such Servicer of servicing, collecting and administering
such collections. The Servicer, if other than Greetings, AGSC, any
Originator or an Affiliate thereof, shall, as soon as practicable upon
demand, deliver to the Seller all records in its possession that
evidence or relate to any indebtedness that is not a Pool Receivable,
and copies of records in its possession that evidence or relate to any
indebtedness that is a Pool Receivable.
(c) The Servicer's obligations hereunder shall terminate on
the later of: (i) the Facility Termination Date and (ii) the date on
which all amounts required to be paid to the Purchaser Agents, each
Purchaser, the Administrator and any other Indemnified Party or
Affected Person hereunder shall have been paid in full.
After such termination, if Greetings, AGSC, any Originator or an
Affiliate thereof was not the Servicer on the date of such termination, the
Servicer shall promptly deliver to the Seller all books, records and related
materials that the Seller previously provided to the Servicer, or that have been
obtained by the Servicer, in connection with this Agreement.
Section 4.3. LOCK-BOX ACCOUNT ARRANGEMENTS. On the Closing Date (or,
solely in the case of Lock-Box Banks used solely for Plus Xxxx, Inc.
Receivables, the Plus Xxxx Addition Date), the Seller shall have entered into
Lock-Box Agreements with all of the Lock-Box Banks and delivered original
counterparts of each to the Administrator and each Purchaser Agent. Upon the
occurrence of a Termination Event, the Administrator may (with the consent of a
Simple Majority of the Purchasers) or shall (upon the direction of a Simple
Majority of the Purchasers) at any time thereafter give notice to each Lock-Box
Bank that the Administrator is exercising its rights under the Lock-Box
Agreements to do any or all of the following: (a) to have the exclusive
ownership and control of the
18
Lock-Box Accounts transferred to the Administrator (for the benefit of the
Purchasers) and to exercise exclusive dominion and control over the funds
deposited therein, (b) to have the proceeds that are sent to the respective
Lock-Box Accounts redirected pursuant to the Administrator's instructions rather
than deposited in the applicable Lock-Box Account, and (c) to take any or all
other actions permitted under the applicable Lock-Box Agreement. The Seller
hereby agrees that if the Administrator at any time takes any action set forth
in the preceding sentence, the Administrator shall have exclusive control (for
the benefit of the Purchasers) of the proceeds (including Collections) of all
Pool Receivables and the Seller hereby further agrees to take any other action
that the Administrator or any Purchaser Agent may reasonably request to transfer
such control. Any proceeds of Pool Receivables received by the Seller or the
Servicer thereafter shall be sent immediately to the Administrator. The parties
hereto hereby acknowledge that if at any time the Administrator takes control of
any Lock-Box Account, the Administrator shall not have any rights to the funds
therein in excess of the unpaid amounts due to the Administrator, the Purchaser
Groups, any Indemnified Party or any other Person hereunder, and the
Administrator shall distribute or cause to be distributed such funds in
accordance with SECTION 4.2(b) and ARTICLE I (in each case as if such funds were
held by the Servicer thereunder).
Section 4.4. ENFORCEMENT RIGHTS.
(a) At any time following the occurrence of a Termination
Event:
(i) the Administrator may (with the consent or at the
direction of the Majority Purchasers) direct the Obligors that
payment of all amounts payable under any Pool Receivable is to
be made directly to the Administrator or its designee,
(ii) the Administrator may (with the consent or at the
direction of the Majority Purchasers) instruct the Seller or
the Servicer to give notice of the Purchaser Groups' interest
in Pool Receivables to each Obligor, which notice shall direct
that payments be made directly to the Administrator or its
designee (on behalf of such Purchaser Groups), and the Seller
or the Servicer, as the case may be, shall give such notice at
the expense of the Seller or the Servicer, as the case may be;
PROVIDED, that if the Seller or the Servicer, as the case may
be, fails to so notify each Obligor, the Administrator (at the
Seller's or the Servicer's, as the case may be, expense) may
so notify the Obligors, and
(iii) the Administrator may (with the consent or at the
direction of the Majority Purchasers) request the Servicer to,
and upon such request the Servicer shall: (A) assemble all of
the records necessary or desirable to collect the Pool
Receivables and the Related Security, and transfer or license
to a successor Servicer the use of all software necessary or
desirable to collect the Pool Receivables and the Related
Security, and make the same available to the Administrator or
its designee (for the benefit of the Purchasers) at a place
selected by the Administrator, and (B) segregate all cash,
checks and other instruments received by it from time to time
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constituting Collections in a manner acceptable to the
Administrator and, promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Administrator or its designee.
(b) The Seller hereby authorizes the Administrator (on behalf
of each Purchaser Group), and irrevocably appoints the Administrator as
its attorney-in-fact with full power of substitution and with full
authority in the place and stead of the Seller, which appointment is
coupled with an interest, to take any and all steps in the name of the
Seller and on behalf of the Seller necessary or desirable, in the
determination of the Administrator, after the occurrence of a
Termination Event, to collect any and all amounts or portions thereof
due under any and all Pool Assets, including endorsing the name of the
Seller on checks and other instruments representing Collections and
enforcing such Pool Assets. Notwithstanding anything to the contrary
contained in this subsection, none of the powers conferred upon such
attorney-in-fact pursuant to the preceding sentence shall subject such
attorney-in-fact to any liability if any action taken by it shall prove
to be inadequate or invalid, nor shall they confer any obligations upon
such attorney-in-fact in any manner whatsoever.
Section 4.5. RESPONSIBILITIES OF THE SELLER.
(a) Anything herein to the contrary notwithstanding, the
Seller shall: (i) perform all of its obligations, if any, under the
Contracts related to the Pool Receivables to the same extent as if
interests in such Pool Receivables had not been transferred hereunder,
and the exercise by the Administrator, the Purchaser Agents or the
Purchasers of their respective rights hereunder shall not relieve the
Seller from such obligations, and (ii) pay when due any taxes,
including any sales taxes payable in connection with the Pool
Receivables and their creation and satisfaction. The Administrator, the
Purchaser Agents or any of the Purchasers shall not have any obligation
or liability with respect to any Pool Asset, nor shall any of them be
obligated to perform any of the obligations of the Seller, Servicer,
Greetings, AGSC, or the Originators thereunder.
(b) Greetings hereby irrevocably agrees that if at any time it
shall cease to be the Servicer hereunder, it shall act, and shall cause
any former or current Sub-Servicers to act, (if the then-current
Servicer so requests) as the data-processing agent of the Servicer and,
in such capacity, Greetings shall conduct, and shall cause the former
or current Sub-Servicers to conduct, the data-processing functions of
the administration of the Receivables and the Collections thereon in
substantially the same way that Greetings conducted such data-
processing functions while it acted as the Servicer.
Section 4.6. SERVICING FEE. (a) Subject to CLAUSE (b), the Servicer
shall be paid a fee (the "SERVICING FEE") equal to the lesser of (i) 1.50% PER
ANNUM of the daily average aggregate Outstanding Balance of the Pool Receivables
and (ii) 110% of the aggregate reasonable costs and expenses incurred by
Servicer in connection with performance of its obligations as Servicer. The
Aggregate of each Purchaser Group's Ratable Share of such fee shall be paid
through the
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distributions contemplated by SECTION 1.4(d), and the Seller's Share of such fee
shall be paid by the Seller.
(b) If the Servicer ceases to be Greetings or an Affiliate thereof, the
servicing fee shall be the greater of: (i) the amount calculated pursuant to
CLAUSE (a), and (ii) an alternative amount specified by the successor Servicer
not to exceed 110% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.
ARTICLE V
THE AGENTS
Section 5.1. APPOINTMENT AND AUTHORIZATION. (a) Each Purchaser and
Purchaser Agent hereby irrevocably designates and appoints PNC as the
"Administrator" hereunder and authorizes the Administrator to take such actions
and to exercise such powers as are delegated to the Administrator hereby and to
exercise such other powers as are reasonably incidental thereto. The
Administrator shall hold, in its name, for the benefit of each Purchaser,
ratably, the Purchased Interest. The Administrator shall not have any duties
other than those expressly set forth herein or any fiduciary relationship with
any Purchaser or Purchaser Agent, and no implied obligations or liabilities
shall be read into this Agreement, or otherwise exist, against the
Administrator. The Administrator does not assume, nor shall it be deemed to have
assumed, any obligation to, or relationship of trust or agency with, the Seller
or Servicer. Notwithstanding any provision of this Agreement or any other
Transaction Document to the contrary, in no event shall the Administrator ever
be required to take any action which exposes the Administrator to personal
liability or which is contrary to the provision of any Transaction Document or
applicable law.
(b) Each Purchaser hereby irrevocably designates and appoints
the respective institution identified as the Purchaser Agent for such
Purchaser's Purchaser Group on the signature pages hereto or in the Assumption
Agreement or Transfer Supplement pursuant to which such Purchaser becomes a
party hereto, and each authorizes such Purchaser Agent to take such action on
its behalf under the provisions of this Agreement and to exercise such powers
and perform such duties as are expressly delegated to such Purchaser Agent by
the terms of this Agreement, if any, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Purchaser Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser or other Purchaser Agent or the Administrator,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of such Purchaser Agent shall be read into this
Agreement or otherwise exist against such Purchaser Agent.
(c) Except as otherwise specifically provided in this
Agreement, the provisions of this Article V are solely for the benefit of the
Purchaser Agents, the Administrator and the Purchasers,
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and none of the Seller or Servicer shall have any rights as a third-party
beneficiary or otherwise under any of the provisions of this ARTICLE V, except
that this ARTICLE V shall not affect any obligations which any Purchaser Agent,
the Administrator or any Purchaser may have to the Seller or the Servicer under
the other provisions of this Agreement. Furthermore, no Purchaser shall have any
rights as a third-party beneficiary or otherwise under any of the provisions
hereof in respect of a Purchaser Agent which is not the Purchaser Agent for such
Purchaser.
(d) In performing its functions and duties hereunder, the
Administrator shall act solely as the agent of the Purchasers and the Purchaser
Agents and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Seller or Servicer or any of
their successors and assigns. In performing its functions and duties hereunder,
each Purchaser Agent shall act solely as the agent of its respective Purchaser
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Seller, the Servicer, any other
Purchaser, any other Purchaser Agent or the Administrator, or any of their
respective successors and assigns.
Section 5.2. DELEGATION OF DUTIES. The Administrator may execute any
of its duties through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrator shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
Section 5.3. EXCULPATORY PROVISIONS. None of the Purchaser Agents, the
Administrator or any of their directors, officers, agents or employees shall be
liable for any action taken or omitted (i) with the consent or at the direction
of the Majority Purchasers (or in the case of any Purchaser Agent, the
Purchasers within its Purchaser Group that have a majority of the aggregate
Commitment of such Purchaser Group) or (ii) in the absence of such Person's
gross negligence or willful misconduct. The Administrator shall not be
responsible to any Purchaser, Purchaser Agent or other Person for (i) any
recitals, representations, warranties or other statements made by the Seller,
Servicer, or any of their Affiliates, (ii) the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any Transaction Document, (iii)
any failure of the Seller, AGSC, any Originator, Greetings or any of their
Affiliates to perform any obligation or (iv) the satisfaction of any condition
specified in EXHIBIT II. The Administrator shall not have any obligation to any
Purchaser or Purchaser Agent to ascertain or inquire about the observance or
performance of any agreement contained in any Transaction Document or to inspect
the properties, books or records of the Seller, Greetings, Servicer, AGSC, any
Originator or any of their Affiliates.
Section 5.4. RELIANCE BY AGENTS. Each Purchaser Agent and the
Administrator shall in all cases be entitled to rely, and shall be fully
protected in relying, upon any document or other writing or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person and upon advice and statements of legal counsel (including
counsel to the Seller), independent accountants and other experts selected by
the Administrator. Each Purchaser Agent and the Administrator shall in all cases
be fully justified in failing or refusing to take any action under any
Transaction Document unless it shall first receive such advice or concurrence of
the Majority
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Purchasers (or in the case of any Purchaser Agent, the Purchasers within its
Purchaser Group that have a majority of the aggregate Commitment of such
Purchaser Group), and assurance of its indemnification, as it deems appropriate.
(b) The Administrator shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement in accordance with a
request of the Majority Purchasers or the Purchaser Agents, and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
Purchasers, the Administrator and Purchaser Agents.
(c) The Purchasers within each Purchaser Group with a majority
of the Commitment of such Purchaser Group shall be entitled to request or direct
the related Purchaser Agent to take action, or refrain from taking action, under
this Agreement on behalf of such Purchasers. Such Purchaser Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement in accordance with a request of such majority Purchasers, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all of such Purchaser Agent's Purchasers.
(d) Unless otherwise advised in writing by a Purchaser Agent
or by any Purchaser on whose behalf such Purchaser Agent is purportedly acting,
each party to this Agreement may assume that (i) such Purchaser Agent is acting
for the benefit of each of the Purchasers in respect of which such Purchaser
Agent is identified as being the "Purchaser Agent" in the definition of
"Purchaser Agent" hereto, as well as for the benefit of each assignee or other
transferee from any such Person, and (ii) each action taken by such Purchaser
Agent has been duly authorized and approved by all necessary action on the part
of the Purchasers on whose behalf it is purportedly acting. Each Purchaser Agent
and its Purchaser(s) shall agree amongst themselves as to the circumstances and
procedures for removal, resignation and replacement of such Purchaser Agent.
Section 5.5. NOTICE OF TERMINATION EVENTS. Neither any Purchaser Agent
nor the Administrator shall be deemed to have knowledge or notice of the
occurrence of any Termination Event or Unmatured Termination Event unless such
Administrator has received notice from any Purchaser, Purchaser Agent, the
Servicer or the Seller stating that a Termination Event or Unmatured Termination
Event has occurred hereunder and describing such Termination Event or Unmatured
Termination Event. In the event that the Administrator receives such a notice,
it shall promptly give notice thereof to each Purchaser Agent whereupon each
such Purchaser Agent shall promptly give notice thereof to its Purchasers. In
the event that a Purchaser Agent receives such a notice (other than from the
Administrator), it shall promptly give notice thereof to the Administrator. The
Administrator shall take such action concerning a Termination Event or Unmatured
Termination Event as may be directed by the Majority Purchasers unless such
action otherwise requires the consent of all Purchasers), but until the
Administrator receives such directions, the Administrator may (but shall not be
obligated to) take such action, or refrain from taking such action, as the
Administrator deems advisable and in the best interests of the Purchasers and
Purchaser Agents.
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Section 5.6. NON-RELIANCE ON ADMINISTRATOR, PURCHASER AGENTS AND OTHER
PURCHASERS. Each Purchaser expressly acknowledges that none of the
Administrator, the Purchaser Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Administrator, or any
Purchaser Agent hereafter taken, including any review of the affairs of the
Seller, Greetings, Servicer, AGSC, or any Originator, shall be deemed to
constitute any representation or warranty by the Administrator or such Purchaser
Agent, as applicable. Each Purchaser represents and warrants to the
Administrator and the Purchaser Agents that, independently and without reliance
upon the Administrator, Purchaser Agents or any other Purchaser and based on
such documents and information as it has deemed appropriate, it has made and
will continue to make its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and
creditworthiness of the Seller, Greetings, AGSC, Servicer or the Originators,
and the Receivables and its own decision to enter into this Agreement and to
take, or omit, action under any Transaction Document. Except for items
specifically required to be delivered hereunder, the Administrator shall not
have any duty or responsibility to provide any Purchaser Agent with any
information concerning the Seller, Greetings, AGSC, Servicer or the Originators
or any of their Affiliates that comes into the possession of the Administrator
or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
Section 5.7. ADMINISTRATORS AND AFFILIATES. Each of the Purchasers and
the Administrator and their Affiliates may extend credit to, accept deposits
from and generally engage in any kind of banking, trust, debt, equity or other
business with the Seller, Greetings, AGSC, Servicer or any Originator or any of
their Affiliates and PNC may exercise or refrain from exercising its rights and
powers as if it were not the Administrator. With respect to the acquisition of
the Eligible Receivables pursuant to this Agreement, each of the Purchaser
Agents and the Administrator shall have the same rights and powers under this
Agreement as any Purchaser and may exercise the same as though it were not such
an agent, and the terms "Purchaser" and "Purchasers" shall include each of the
Purchaser Agents and the Administrator in their individual capacities.
Section 5.8. INDEMNIFICATION. Each Purchaser Group shall indemnify and
hold harmless the Administrator (but solely in its capacity as Administrator)
and its officers, directors, employees, representatives and agents (to the
extent not reimbursed by the Seller, Greetings AGSC, or Servicer and without
limiting the obligation of the Seller, Greetings, AGSC, or Servicer to do so),
ratably in accordance with its Ratable Share from and against any and all
liabilities, obligations, losses, damages, penalties, judgments, settlements,
costs, expenses and disbursements of any kind whatsoever (including in
connection with any investigative or threatened proceeding, whether or not the
Administrator or such Person shall be designated a party thereto) that may at
any time be imposed on, incurred by or asserted against the Administrator or
such Person as a result of, or related to, any of the transactions contemplated
by the Transaction Documents or the execution, delivery or performance of the
Transaction Documents or any other document furnished in connection therewith
(but excluding any such liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses or disbursements resulting solely from
the gross negligence or willful misconduct of the Administrator or such Person
as finally determined by a court of competent jurisdiction); PROVIDED, that in
the case of each Purchaser that is a commercial paper conduit, such
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indemnity shall be provided solely to the extent of amounts received by such
Purchaser under this Agreement which exceed the amounts required to repay such
Purchaser's outstanding Notes. Notwithstanding anything in this SECTION 5.8 to
the contrary, each of the Administrator, each Purchaser Agent and each Purchaser
hereby covenants and agrees that it shall not institute against, or join any
other Person in instituting against, any Conduit Purchaser any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceedings under any federal or state bankruptcy or similar law, for one year
and a day after the latest maturing Note issued by such Conduit Purchaser is
paid in full.
Section 5.9. SUCCESSOR ADMINISTRATOR. The Administrator may, upon at
least five (5) days notice to the Seller and each Purchaser and Purchaser Agent,
resign as Administrator. Such resignation shall not become effective until a
successor agent is appointed by the Majority Purchasers and has accepted such
appointment. Upon such acceptance of its appointment as Administrator hereunder
by a successor Administrator, such successor Administrator shall succeed to and
become vested with all the rights and duties of the retiring Administrator, and
the retiring Administrator shall be discharged from its duties and obligations
under the Transaction Documents. After any retiring Administrator's resignation
hereunder, the provisions of SECTIONS 3.1 and 3.2 and this Article V shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
the Administrator.
ARTICLE VI
MISCELLANEOUS
Section 6.1. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or any other Transaction Document, or consent to any departure
by the Seller or the Servicer therefrom, shall be effective unless in a writing
signed by the Administrator and each of the Majority Purchasers, and, in the
case of any amendment, by the other parties thereto; and then such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED, HOWEVER, that, if required by any
Conduit Purchaser, no such material amendment shall be effective until both
Xxxxx'x and Standard & Poor's have notified the related Purchaser Agent in
writing that such action will not result in a reduction or withdrawal of the
rating of any Notes; PROVIDED, FURTHER that no such amendment or waiver shall,
without the consent of each affected Purchaser, (A) extend the date of any
payment or deposit of Collections by the Seller or the Servicer, (B) reduce the
rate or extend the time of payment of Yield, (C) reduce any fees payable to the
Administrator, any Purchaser Agent or any Purchaser pursuant to the applicable
Purchaser Group Fee Letter, (D) change (except as contemplated by Section 1.4)
the amount of Investment of any Purchaser, any Purchaser's pro rata share of the
Purchased Interest or (except as contemplated by Section 1.10) any Related
Committed Purchaser's Commitment, (E) amend, modify or waive any provision of
the definition of "Majority Purchaser" or this SECTION 6.1, (F) consent to or
permit the assignment or transfer by the Seller of any of its rights and
obligations under this Agreement, (G) change the definition of "Concentration
Percentage," "Specifically Reserved Dilution Amount," "Sales Based Loss Reserve
25
Percentage," "Receivables Based Loss Reserve Percentage, "Eligible Receivable,"
"Loss Reserve," "Loss Reserve Percentage," "Dilution Reserve," "Dilution Reserve
Percentage," "Termination Event," "Total Reserve," "Yield Reserve," or "Yield
Reserve Percentage", (H) amend or modify any defined term (or any defined term
used directly or indirectly in such defined term) used in clauses (A) through
(G) above in a manner that would circumvent the intention of the restrictions
set forth in such clauses, or (I) otherwise materially and adversely affect the
rights of any such Purchaser hereunder. No failure on the part of the Purchasers
or the Administrator to exercise, and no delay in exercising any right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right.
Section 6.2. NOTICES, ETC. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and be sent or delivered to each party hereto
at its address set forth under its name on the signature pages hereof (or in any
Assumption Agreement pursuant to which it became a party hereto) or at such
other address as shall be designated by such party in a written notice to the
other parties hereto. Notices and communications by facsimile shall be effective
when sent (and shall be followed by hard copy sent by first class mail), and
notices and communications sent by other means shall be effective when received.
Section 6.3. SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS.
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Except as otherwise provided herein, the Seller may not assign or
transfer any of its rights or delegate any of its duties hereunder or under any
Transaction Document without the prior consent of the Administrator, the
Purchaser Agents and the Purchasers.
(b) PARTICIPATIONS. Any Purchaser may sell to one or more Persons (each
a "PARTICIPANT ") participating interests in the interests of such Purchaser
hereunder; provided, however, that no Purchaser shall grant any participation
under which the Participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Transaction Document. Such Purchaser shall
remain solely responsible for performing its obligations hereunder, and the
Seller, each Purchaser Agent and the Administrator shall continue to deal solely
and directly with such Purchaser in connection with such Purchaser's rights and
obligations hereunder. A Purchaser shall not agree with a Participant to
restrict such Purchaser's right to agree to any amendment hereto, except
amendments that require the consent of all Purchasers.
(c) ASSIGNMENTS BY CERTAIN RELATED COMMITTED PURCHASERS. Any Related
Committed Purchaser may assign to one or more Persons (each a "PURCHASING
RELATED COMMITTED PURCHASER "), reasonably acceptable to the related Purchaser
Agent in its sole discretion, any portion of its Commitment pursuant to a
supplement hereto, substantially in the form of ANNEX D with any changes as have
been approved by the parties thereto (a "TRANSFER SUPPLEMENT "), executed by
each such Purchasing Related Committed Purchaser, such selling Related Committed
Purchaser, such
26
related Purchaser Agent. Any such assignment by Related Committed Purchaser
cannot be for an amount less than $10,000,000. Upon (i) the execution of the
Transfer Supplement, (ii) delivery of an executed copy thereof to the Seller,
such related Purchaser Agent and the Administrator and (iii) payment by the
Purchasing Related Committed Purchaser to the selling Related Committed
Purchaser of the agreed purchase price, such selling Related Committed Purchaser
shall be released from its obligations hereunder to the extent of such
assignment and such Purchasing Related Committed Purchaser shall for all
purposes be a Related Committed Purchaser party hereto and shall have all the
rights and obligations of a Related Committed Purchaser hereunder to the same
extent as if it were an original party hereto. The amount of the Commitment of
the selling Related Committed Purchaser allocable to such Purchasing Related
Committed Purchaser shall be equal to the amount of the Commitment of the
selling Related Committed Purchaser transferred regardless of the purchase price
paid therefor. The Transfer Supplement shall be an amendment hereof only to the
extent necessary to reflect the addition of such Purchasing Related Committed
Purchaser as a "Related Committed Purchaser" and any resulting adjustment of the
selling Related Committed Purchaser's Commitment.
(d) REPLACEABLE RELATED COMMITTED PURCHASER. If any Related Committed
Purchaser (a "REPLACEABLE RELATED COMMITTED PURCHASER ") shall (i) petition the
Seller for any amounts under SECTION 1.7 or 1.8 or (ii) cease to have a
short-term debt rating of "A-1" by Standard & Poor's and "P-1" by Xxxxx'x (if
such a rating is required by the related Purchaser's securitization program),
the related Purchaser Agent or the Administrator may designate a replacement
financial institution (a "REPLACEMENT RELATED COMMITTED PURCHASER "), to which
such Replaceable Related Committed Purchaser shall, subject to its receipt of an
amount equal to the aggregate outstanding principal balance of its Investment
and accrued and unpaid Discount thereon (and, if applicable, its receipt (unless
a later date for the remittance thereof shall be agreed upon by the Seller and
such Replaceable Related Committed Purchaser) of all amounts claimed under
SECTION 1.7 and/or 1.8) promptly assign all of its rights, obligations and
Commitment hereunder, together with all of its right, title and interest in, to
and under the Purchased Interest allocable to it, to the Replacement Related
Committed Purchaser in accordance with SECTION 6.3(c), above. Once such
assignment becomes effective, the Replacement Related Committed Purchaser shall
be deemed to be a "Related Committed Purchaser" for all purposes hereof and such
Replaceable Related Committed Purchaser shall cease to be "Related Committed
Purchaser" for all purposes hereof and shall have no further rights or
obligations hereunder.
(e) ASSIGNMENT BY CONDUIT PURCHASERS. Each party hereto agrees and
consents (i) to any Conduit Purchaser's assignment, participation, grant of
security interests in or other transfers of any portion of, or any of its
beneficial interest in, the Purchased Interest (or portion thereof), including
without limitation to any Liquidity Provider or to any collateral agent in
connection with its commercial paper program and (ii) to the complete assignment
by any Conduit Purchaser of all of its rights and obligations hereunder to any
other Person, and upon such assignment such Conduit Purchaser shall be released
from all obligations and duties, if any, hereunder; provided, however, that such
Conduit Purchaser may not, without the prior consent of its Related Committed
Purchasers, make any such transfer of its rights hereunder unless the assignee
(i) is principally engaged in the
27
purchase of assets similar to the assets being purchased hereunder, (ii) has as
its Purchaser Agent the Purchaser Agent of the assigning Conduit Purchaser and
(iii) issues commercial paper or other Notes with credit ratings substantially
comparable to the ratings of the assigning Conduit Purchaser. Any assigning
Conduit Purchaser shall deliver to any assignee a supplement hereto,
substantially in the form of ANNEX D with any changes as have been approved by
the parties thereto (also, a "TRANSFER SUPPLEMENT "), duly executed by such
Conduit Purchaser, assigning any portion of its interest in the Purchased
Interest to its assignee. Such Conduit Purchaser shall promptly (i) notify each
of the other parties hereto of such assignment and (ii) take all further action
that the assignee reasonably requests in order to evidence the assignee's right,
title and interest in such interest in the Purchased Interest and to enable the
assignee to exercise or enforce any rights of such Conduit Purchaser hereunder.
Upon the assignment of any portion of its interest in the Purchased Interest,
the assignee shall have all of the rights hereunder with respect to such
interest (except that the Discount therefor shall thereafter accrue at the rate,
determined with respect to the assigning Conduit Purchaser unless the Seller,
the related Purchaser Agent and the assignee shall have agreed upon a different
Discount).
(f) OPINIONS OF COUNSEL. If required by the Administrator or the
applicable Purchaser Agent or to maintain the ratings of any Conduit Purchaser,
each Transfer Supplement must be accompanied by an opinion of counsel of the
assignee as to such matters as the Administrator or such Purchaser Agent may
reasonably request.
Section 6.4. COSTS, EXPENSES AND TAXES. In addition to the rights of
indemnification granted under SECTION 3.1, the Seller agrees to pay on demand
(which demand shall be accompanied by documentation thereof in reasonable
detail) all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic internal audits by
the Administrator of Pool Receivables) of this Agreement, the other Transaction
Documents and the other documents and agreements to be delivered hereunder (and
all reasonable costs and expenses in connection with any amendment, waiver or
modification of any thereof), including: (i) Attorney Costs for the
Administrator, each Purchaser Group and their respective Affiliates and agents
with respect thereto and with respect to advising the Administrator, each
Purchaser Group and their respective Affiliates and agents as to their rights
and remedies under this Agreement and the other Transaction Documents, and (ii)
all reasonable costs and expenses (including Attorney Costs), if any, of the
Administrator, each Purchaser Group and their respective Affiliates and agents
in connection with the enforcement of this Agreement and the other Transaction
Documents.
(a) In addition, the Seller shall pay on demand any and all
stamp and other taxes and fees payable in connection with the
execution, delivery, filing and recording of this Agreement or the
other documents or agreements to be delivered hereunder, and agrees to
save each Indemnified Party harmless from and against any liabilities
with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
Section 6.5. NO PROCEEDINGS; LIMITATION ON PAYMENTS. Each of the
Seller, Greetings, the Servicer, the Administrator, the Purchaser Agents, the
Purchasers, each assignee of the Purchased Interest or any interest therein, and
each Person that enters into a commitment to purchase the
28
Purchased Interest or interests therein, hereby covenants and agrees that it
will not institute against, or join any other Person in instituting against, any
Conduit Purchaser any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, for one year and one day after the latest maturing
Note issued by such Conduit Purchaser is paid in full. The provision of this
SECTION 6.5 shall survive any termination of this Agreement.
Section 6.6. GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF
ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK; AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE
TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN
RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH OF THE
PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER MEANS PERMITTED
BY NEW YORK LAW.
Section 6.7. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which, when so executed, shall be deemed
to be an original, and all of which, when taken together, shall constitute one
and the same agreement.
Section 6.8. SURVIVAL OF TERMINATION. The provisions of SECTIONS 1.7,
1.8, 3.1, 3.2, 6.4, 6.5, 6.6, 6.9 and 6.14 shall survive any termination of this
Agreement.
Section 6.9. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
29
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION
OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH OF THE
PARTIES HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES
HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
THAT SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section 6.10. SHARING OF RECOVERIES. Each Purchaser agrees that if it
receives any recovery, through set-off, judicial action or otherwise, on any
amount payable or recoverable hereunder in a greater proportion than should have
been received hereunder or otherwise inconsistent with the provisions hereof,
then the recipient of such recovery shall purchase for cash an interest in
amounts owing to the other Purchasers (as return of Investment or otherwise),
without representation or warranty except for the representation and warranty
that such interest is being sold by each such other Purchaser free and clear of
any Adverse Claim created or granted by such other Purchaser, in the amount
necessary to create proportional participation by the Purchaser in such
recovery. If all or any portion of such amount is thereafter recovered from the
recipient, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.
Section 6.11. RIGHT OF SETOFF. During a Termination Event, each
Purchaser is hereby authorized (in addition to any other rights it may have) to
setoff, appropriate and apply (without presentment, demand, protest or other
notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by such Purchaser (including by any branches or
agencies of such Purchaser) to, or for the account of, the Seller against
amounts owing by the Seller hereunder (even if contingent or unmatured).
Section 6.12. ENTIRE AGREEMENT. This Agreement and the other
Transaction Documents embody the entire agreement and understanding between the
parties hereto, and supersede all prior or contemporaneous agreements and
understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
Section 6.13. HEADINGS. The captions and headings of this Agreement and
any Exhibit, Schedule or Annex hereto are for convenience of reference only and
shall not affect the interpretation hereof or thereof.
Section 6.14. PURCHASER GROUPS' LIABILITIES. The obligations of each
Purchaser Agent and each Purchaser under the Transaction Documents are solely
the corporate obligations of such Person.
30
Except with respect to any claim arising out of the willful misconduct or gross
negligence of the Administrator, any Purchaser Agent or any Purchaser, no claim
may be made by the Seller or the Servicer or any other Person against the
Administrator, any Purchaser Agent or any Purchaser or their respective
Affiliates, directors, officers, employees, attorneys or agents for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by the Agreement or any other Transaction Document, or
any act, omission or event occurring in connection therewith; and each of Seller
and Servicer hereby waives, releases, and agrees not to xxx upon any claim for
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor.
Section 6.15. CALL OPTION. The Seller shall have the right to
repurchase the Purchased Interest from the Purchasers on any Settlement Date on
the terms hereinafter set forth in this SECTION 6.15. The Seller shall give the
Administrator at least ten Business Days' prior written notice of such
repurchase and upon payment of the repurchase price for the Purchased Interest,
as hereinafter provided, the Purchasers shall be deemed to have reconveyed the
Purchased Interest to the Seller without recourse, representation or warranty
except for a representation from each Purchaser that the Purchased Interest
assigned is (or concurrently with the Administrator's receipt of such repurchase
price shall become) free of any Adverse Claim created by such Purchaser. The
Seller shall pay such repurchase price for the Purchased Interest in immediately
available funds to the Administrator (for the benefit of the Purchasers or the
Administrator, as the case may be) in an amount equal to the sum of (i) the
aggregate of the Aggregate Discount accrued for each Portion of Investment for
each Purchaser accrued to and including the repurchase date, (ii) the Aggregate
Investment for each Purchaser, (iii) the amounts payable pursuant to SECTIONS
1.5, 1.7 and 1.8, or Article III (of which the Seller has notice) related to the
Purchased Interest accrued to and including the repurchase date, (iv) all other
obligations that are then due and payable and (v) if Greetings is not the
Servicer, the Servicing Fee allocated to the Purchased Interest that has accrued
to and including the repurchase date.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
31
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.
AGC FUNDING CORPORATION, as Seller
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
Address:
Attention:
Telephone:
Facsimile:
AMERICAN GREETINGS CORPORATION, as Servicer
By: Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President & CFO
Address:
Attention:
Telephone:
Facsimile:
S-1
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
Address:
PNC Bank, National Association
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
X-0
XXXXXXXXX
XXXXXX XXXXXX FUNDING CORPORATION, as a
Conduit Purchaser and as a Related Committed Purchaser
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Address:
Market Street Funding Corporation
c/o AMACAR Group, L.L.C.
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
PNC Bank, National Association
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Commitment $250,000,000
S-3
PNC BANK, NATIONAL ASSOCIATION,
as Purchaser Agent for Market Street Funding Corporation
By: /s/ Xxxx X. Xxxxxxxx
----------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
Address:
PNC Bank, National Association
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
S-4
EXHIBIT I
DEFINITIONS
As used in the Agreement (including its Exhibits, Schedules and
Annexes), the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined). Unless otherwise indicated, all Section, Annex, Exhibit and Schedule
references in this Exhibit are to Sections of and Annexes, Exhibits and
Schedules to the Agreement.
"ADMINISTRATOR" has the meaning set forth in the preamble to the
Agreement.
"ADMINISTRATOR'S ACCOUNT" means the account (account number 1002422076
ABA 000000000) of the Administrator maintained at the office of PNC at One PNC
Plaza, 000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or such other
account as may be so designated in writing by the Administrator to the Servicer.
"ADVERSE CLAIM" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement; it being understood
that any thereof in favor of the Administrator (for the benefit of the
Purchasers ) shall not constitute an Adverse Claim.
"AFFECTED PERSON" has the meaning set forth in SECTION 1.7 of the
Agreement.
"AFFILIATE" means, as to any Person: (a) any Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in CLAUSE (a), except that, in the case of each Conduit
Purchaser, Affiliate shall mean the holder of its capital stock. For purposes of
this definition, control of a Person shall mean the power, direct or indirect:
(x) to vote 25% or more of the securities having ordinary voting power for the
election of directors of such Person, or (y) to direct or cause the direction of
the management and policies of such Person, in either case whether by ownership
of securities, contract, proxy or otherwise.
"AGGREGATE DISCOUNT" at any time, means the sum of the aggregate for
each Purchaser of the accrued and unpaid Discount with respect to each such
Purchaser's Investment at such time.
"AGGREGATE INVESTMENT" means the amount paid to the Seller in respect
of the Purchased Interest or portion thereof by each Purchaser pursuant to the
Agreement, as reduced from time to time by Collections distributed and applied
on account of such Aggregate Investment pursuant to SECTION 1.4(d) of the
Agreement; PROVIDED, that if such Aggregate Investment shall have been reduced
by any distribution, and thereafter all or a portion of such distribution is
rescinded or must otherwise be returned for any reason, such Aggregate
Investment shall be increased by the amount of such rescinded or returned
distribution as though it had not been made.
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"AGREEMENT" has the meaning set forth in the preamble to the Agreement.
"AGSC" means American Greetings Services Corp., a Delaware
corporation.
"AGSC ASSIGNMENT CERTIFICATE" has the meaning set forth in the Sale
and Contribution Agreement.
"ASSUMPTION AGREEMENT" means an agreement substantially in the form
set forth in Annex C to the Agreement.
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel.
"BANKRUPTCY CODE" means the United States Bankruptcy Reform Act of 1978
(11 U.S.C. ss.101, et seq.), as amended from time to time.
"BASE RATE" means, for any day, (i) in the case of the Purchaser Group
including Market Street, the Market Street Base Rate and (ii) in the case of
each other Purchaser Group, shall mean the rate set forth as the Base Rate for
such Purchaser Group in the related Purchaser Group Fee Letter.
"BBA" means the British Bankers' Association.
"BENEFIT PLAN" means any employee benefit pension plan as defined in
Section 3(2) of ERISA in respect of which the Seller, any Originator, Greetings,
AGSC 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 any day (other than a Saturday or Sunday) on
which: (a) banks are not authorized or required to close in New York City, New
York or Pittsburgh, Pennsylvania and (b) if this definition of "Business Day" is
utilized in connection with the Euro-Rate, dealings are carried out in the
London interbank market.
"CHANGE IN CONTROL" means (i) with respect to Seller, that at any time
Greetings shall fail to own, directly or indirectly through one or more
wholly-owned Subsidiaries free and clear of any Adverse Claim, 100% of the
shares of outstanding voting stock of the Seller on a fully diluted basis, (ii)
with respect to AGSC, that at any time Greetings shall fail to own, directly or
indirectly through one or more wholly-owned subsidiaries, free and clear of any
Adverse Claim, 100% of the shares of outstanding voting stock of AGSC on a fully
diluted basis, (iii) with respect to any Originator other than Greetings, that
at any time Greetings shall fail to own, directly or indirectly through one or
more wholly-owned Subsidiaries free and clear of any Adverse Claim, 100% of the
share of outstanding voting stock of such Originator on a fully diluted basis,
and (iv) with respect to Greetings, the acquisition by any Person or its
Affiliates of 20% or more of the stock (or equivalent
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ownership or controlling interest) having by the terms thereof ordinary voting
power to elect a majority of the directors of Greetings (irrespective of whether
or not at the time the stock of any class or classes of Greetings will have or
might have voting power by reason of the happening or any contingency).
"CLOSING DATE" means August 7, 2001.
"COLLECTIONS" means, with respect to any Pool Receivable: (a) all funds
that are received by any Originator, Greetings, AGSC, the Seller or the Servicer
in payment of any amounts owed in respect of such Receivable (including purchase
price, finance charges, interest and all other charges), or that are applied to
amounts owed in respect of such Receivable (including insurance payments and net
proceeds of the sale or other disposition of repossessed goods or other
collateral or property of the related Obligor or any other Person directly or
indirectly liable for the payment of such Pool Receivable and available to be
applied thereon), (b) all amounts deemed to have been received pursuant to
SECTION 1.4(e) of the Agreement and (c) all other proceeds of such Pool
Receivable.
"COMMITMENT" means, with respect to each Related Committed Purchaser,
the maximum amount which such Purchaser is obligated to pay hereunder on
account of any Purchase, as set forth below its signature to this Agreement or
in the Assumption Agreement pursuant to which it became a Purchaser, as such
amount may be modified in connection with any subsequent assignment pursuant to
SECTION 6.3(c) or in connection with a change in the Purchase Limit pursuant to
SECTIONS 1.1(b) or 1.2(e).
"COMMITMENT PERCENTAGE" means, for each Related Committed Purchaser in
a Purchaser Group, such Related Committed Purchaser's Commitment divided by the
total of all Commitments of all Related Committed Purchasers in such Purchaser
Group.
"CONCENTRATION PERCENTAGE" means for any Obligor which is (i) Target
Corporation, 40%, so long as (a) it would be considered a Group A Obligor and
(b) the sum of the Loss Reserve Percentage and the Dilution Reserve Percentage
is greater than or equal to 40%, (ii) any other Group A Obligor, 30%, (iii) a
Group B Obligor, 20%, (iv) a Group C Obligor, 10%, or (v) a Group D Obligor, 5%.
"CONDUIT PURCHASERS" means each commercial paper conduit that is a
party to the Agreement, as a purchaser, or that becomes a party to the
Agreement, as a purchaser pursuant to an Assumption Agreement.
"CONTRACT" means, with respect to any Receivable, any and all
contracts, instruments, agreements, leases, invoices, notes or other writings
pursuant to which such Receivable arises or that evidence such Receivable or
under which an Obligor becomes or is obligated to make payment in respect of
such Receivable.
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"CP RATE" for any Yield Period for any Portion of Investment (i) in
the case of the Purchaser Group including Market Street, means the Market Street
CP Rate, and (ii) in the case of each other Purchaser Group, shall mean the rate
set forth as the CP Rate for such Purchaser Group in the related Purchaser Group
Fee Letter.
"CREDIT AGREEMENT" means the Credit Agreement dated as August 7, 2001
among American Greetings Corporation, as Borrower, the financial institutions
named therein, as Lenders, National City Bank, as US Agent and Global Agent,
KeyBank National Association, as Documentation Agent, and National City Bank and
Xxxxxxx Xxxxx Credit Partners L.P., as Joint-Lead Arrangers and Co- Syndication
Agents, as it may be amended, supplemented or otherwise modified from time to
time.
"CREDIT AND COLLECTION POLICY" means, as the context may require,
those receivables credit and collection policies and practices of AGSC (with
respect to Receivables sold to it pursuant to the Purchase and Sale Agreement)
and Plus Xxxx, Inc. (with respect to Receivables originated by it) in effect on
the date of the Agreement and described in SCHEDULE I to the Agreement, as
modified in compliance with the Agreement.
"DAYS' SALES OUTSTANDING" means, at any time, an amount computed as of
the last day of each calendar month equal to: (a) the average of the Outstanding
Balance of all Pool Receivables as of the last day of each of the three most
recent calendar months ended on the last day of such calendar month divided by
(b)(i) the aggregate credit sales made by the Originator during the three
calendar months ended on or before the last day of such calendar month divided
by (ii) 90.
"DEBT" means: (a) indebtedness for borrowed money, (b) obligations
evidenced by bonds, debentures, notes or other similar instruments, (c)
obligations to pay the deferred purchase price of property or services, (d)
obligations as lessee under leases that shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, and (e) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in CLAUSES (a) through (d).
"DEFAULTED RECEIVABLE" means a Receivable:
(a) as to which any payment, or part thereof, remains unpaid
for more than 150 days, in each case from the due date for such
payment, or
(b) without duplication (i) as to which an Insolvency
Proceeding shall have occurred with respect to the Obligor thereof or
any other Person obligated thereon or owning any Related Security with
respect thereto, (ii) that has been charged-off as uncollectible or
(iii) that should have been charged-off as uncollectible pursuant to
the Credit and Collection Policy.
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"DELINQUENCY RATIO" means the ratio (expressed as a percentage and
rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed
as of the last day of each calendar month by dividing: (a) the aggregate
Outstanding Balance of all Pool Receivables that were Delinquent Receivables on
such day by (b) the aggregate Outstanding Balance of all Pool Receivables on
such day.
"DELINQUENT RECEIVABLE" means a Receivable (a) as to which any
payment, or part thereof, remains unpaid for more than 90 days from the due date
for such payment or (b) without duplication, which has been (or consistent with
the Credit and Collection Policy, would be) classified as a Delinquent
Receivable by the applicable Originator.
"DILUTION RATIO" means the ratio (expressed as a percentage and
rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward),
computed as of the last day of each calendar month by dividing: (a) the
aggregate amount of payments made or owed by the Seller pursuant to SECTION
1.4(e)(i) of the Agreement (other than Specifically Reserved Dilution Amounts)
during such calendar month, by (b) the aggregate credit sales made by the
Originators during the calendar months that are two and three months prior to
such calendar month.
"DILUTION RESERVE" means, on any day, an amount equal to: (a) the
Aggregate Investment at the close of business of the Servicer on such date
MULTIPLIED BY (b) (i) the Dilution Reserve Percentage on such date, DIVIDED BY
(ii) 100% minus the Dilution Reserve Percentage on such date.
"DILUTION RESERVE PERCENTAGE" means, on any date, the greater of (a)
10.0%, or (b) the percentage determined by the following formula:
(2.0 x ED) + ((DS-ED) x DS/ED)) x DHR + 0.02 x CS
ED = the "Expected Dilution," which shall be equal to the
12-month rolling average Dilution Ratio, expressed
as a percentage;
DS = the "Dilution Spike," which shall be equal to the
highest one month Dilution Ratio over the immediately
preceding 12 months, expressed as a percentage; and
CS = the aggregate credit sales made by the Originators
during the most recent calendar month divided by the
Net Receivables Pool Balance for such calendar month.
DHR = the "Dilution Horizon Ratio," which shall be equal
to the aggregate credit sales made by the Originators
during the two preceding calendar months divided by
the Net Receivables Pool Balance as of the last day
of most recent calendar month.
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"DISCOUNT" means with respect to any Purchaser:
(a) for any Portion of Investment for any Yield Period with
respect to any Purchaser to the extent such Portion of Investment will
be funded by such Purchaser during such Yield Period through the
issuance of Notes:
CPR x I x ED/360
(b) for any Portion of Investment for any Yield Period with
respect to any Purchaser to the extent such Portion of Investment will
not be funded by such Purchaser during such Yield Period through the
issuance of Notes:
YR x I x ED/Year + TF
where:
YR = the Yield Rate, as applicable, for such Portion
of Investment for such Yield Period with respect
to such Purchaser,
I = the Investment with respect to such Portion of
Investment during such Yield Period with respect
to such Purchaser,
CPR = the CP Rate for the Portion of Investment for
such Yield Period with respect to such Purchaser,
ED = the actual number of days during such Yield
Period,
Year = if such Portion of Investment is funded based
upon: (i) the Euro-Rate, 360 days, and (ii) the
Base Rate, 365 or 366 days, as applicable, and
TF = the Termination Fee, if any, for the Portion of
Investment for such Yield Period with respect to
such Purchaser;
PROVIDED, that no provision of the Agreement shall require the payment or
permit the collection of Discount in excess of the maximum permitted by
applicable law; and PROVIDED FURTHER, that Discount for any Portion of
Investment shall not be considered paid by any distribution to the extent that
at any time all or a portion of such distribution is rescinded or must otherwise
be returned for any reason.
"DISPUTED DEFAULT RATIO" means the ratio (expressed as a percentage
and rounded to the nearest 1/100th of 1% with 5/1000th of 1% rounded upwards)
computed as of the last day of each calendar month by dividing: (a) the
aggregate Outstanding Balance of all Pool Receivables identified by the Seller
or Servicer on the most recent Information Package as Receivables relating to
amounts
I-6
categorized as "deductions" or "recharges" that became Defaulted Receivables
during such month, by (b) the aggregate Outstanding Balance of all Pool
Receivables six months prior to such month.
"ELIGIBLE RECEIVABLE" means, at any time, a Pool Receivable:
(a) the Obligor of which is (i) a Person resident in or with a
place of business in the United States, (ii) not a government or a
governmental subdivision, affiliate or agency, (iii) not subject to any
action of the type described in PARAGRAPH (f) of Exhibit V to the
Agreement and (iv) not an Affiliate of Greetings,
(b) that is denominated and payable only in U.S. dollars in
the United States,
(c) that is either a Seasonal Sale or a Receivable in which
the Obligor is Target Corporation, or does not have a stated maturity
which is more than 38 days after the original invoice date of such
Receivable; PROVIDED, HOWEVER, that (i) Receivables not related to
Seasonal Sales in which the Obligor is K Mart and (ii) up to 25% of the
aggregate Outstanding Balance of all Receivables (not including
Receivables with respect to which K Mart or Target is the Obligor) may
have a stated maturity which is more than 38 days but not more than 68
days from the original invoice date of such Receivable.
(d) that arises under a duly authorized Contract for the sale
and delivery of goods and services in the ordinary course of an
Originator's business,
(e) that arises under a duly authorized Contract that is in
full force and effect and that is a legal, valid and binding obligation
of the related Obligor, enforceable against such Obligor in accordance
with its terms,
(f) that conforms in all material respects with all applicable
laws, rulings and regulations in effect,
(g) that is not the subject of any asserted dispute or offset
(but only to the extent of the disputed or offset amount, and only to
the extent such amount has not been deemed a collection pursuant to
Section 1.4(e)) or any hold back defense, Adverse Claim or other
similar claim,
(h) that satisfies all applicable requirements of the
applicable Credit and Collection Policy,
(i) that has not been modified, waived or restructured since
its creation, except as permitted pursuant to SECTION 4.2 of the
Agreement and SECTION 2(d) of EXHIBIT IV to the Agreement,
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(j) in which the Seller owns good and marketable title, free
and clear of any Adverse Claims, and that is freely assignable by the
Seller (including without any consent of the related Obligor),
(k) for which the Administrator (for the benefit of each
Purchaser) shall have a valid and enforceable undivided percentage
ownership or security interest, to the extent of the Purchased
Interest, and a valid and enforceable first priority perfected security
interest therein and in the Related Security and Collections with
respect thereto, in each case free and clear of any Adverse Claim,
(l) that constitutes an account as defined in the UCC, and
that is not evidenced by instruments or chattel paper,
(m) that is not a Defaulted Receivable or a Delinquent
Receivable,
(n) for which none of the Originator thereof, the Seller and
the Servicer has established any offset arrangements with the related
Obligor,
(o) for which Defaulted Receivables of the related Obligor do
not exceed 35% of the Outstanding Balance of all such Obligor's
Receivables; provided that solely for purposes of making such
determination, amounts that would otherwise be considered Defaulted
Receivables which are the subject of disputes between the Obligor and
the Seller or Servicer which continue to be investigated and
negotiated, shall not be considered Defaulted Receivables,
(p) that represents amounts earned and payable by the Obligor
that are not subject to the performance of additional services by the
Originator or Servicer thereof, and
(q) that was acquired or deemed acquired by AGSC pursuant to
the Purchase and Sale Agreement or (at any time on or after a future
date to be set by the Administrator and agreed to by the Servicer) was
originated by Plus Xxxx, Inc. and sold by Greetings pursuant to the
Sale and Contribution Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"ERISA AFFILIATE" means: (a) any corporation that is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Internal Revenue Code) as the Seller, any Originator, AGSC or Greetings, (b)
a trade or business (whether or not incorporated) under common control (within
the meaning of Section 414(c) of the Internal Revenue Code) with the Seller, any
Originator, AGSC or Greetings, or (c) a member of the same affiliated service
group
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(within the meaning of Section 414(m) of the Internal Revenue Code) as the
Greetings, Seller, any Originator, AGSC any corporation described in CLAUSE (a)
or any trade or business described in CLAUSE (b).
"EURO-RATE" means with respect to any Yield Period, the interest rate
per annum determined by the Administrator by dividing (the resulting quotient
rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the
rate of interest determined by the applicable Purchaser Agent in accordance with
its usual procedures (which determination shall be conclusive absent manifest
error) to be the average of the London interbank market offered rates for U.S.
dollars quoted by the BBA as set forth on Dow Xxxxx Markets Service (formerly
known as Telerate) (or appropriate successor or, if BBA or its successor ceases
to provide display page 3750 (or such other display page on the Dow Xxxxx
Markets Service system as may replace display page 3750) at or about 11:00 a.m.
(London time) on the Business Day which is two (2) Business Days prior to the
first day of such Yield Period for an amount comparable to the Portion of
Investment to be funded at the Yield Rate and based upon the Euro-Rate during
such Yield Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage. The Euro-Rate may also be expressed by the following formula:
Average of London interbank offered rates quoted by
BBA as shown on Dow Xxxxx Markets Service display
page 3750 or appropriate successor
Euro-Rate =
---------------------------------------------------------
1.00 - Euro-Rate Reserve Percentage
where "EURO-RATE RESERVE PERCENTAGE" means, the maximum effective percentage in
effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including without limitation, supplemental, marginal, and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
"EUROCURRENCY LIABILITIES "). The Euro-Rate shall be adjusted with respect to
any Portion of Investment funded at the Yield Rate and based upon the Euro-Rate
that is outstanding on the effective date of any change in the Euro-Rate Reserve
Percentage as of such effective date. The applicable Purchaser Agent shall give
prompt notice to the Seller of the Euro-Rate as determined or adjusted in
accordance herewith (which determination shall be conclusive absent manifest
error).
"EVERYDAY DEFAULT RATIO" means the ratio (expressed as a percentage
and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward)
computed as of the last day of each calendar month by dividing: (a) the
aggregate Outstanding Balance of all Pool Receivables identified by the Seller
or the Servicer on the most recent Information Package as Receivables relating
to everyday invoices and manual invoices that became Defaulted Receivables
during such month by (b) the aggregate credit sales other than Seasonal Sales
made by the Originators during the month that is six months before such month.
I-9
"EXCESS CONCENTRATION" means, on any date, the sum of the amounts by
which the Outstanding Balance of Eligible Receivables of each Obligor then in
the Receivables Pool exceeds an amount equal to: (a) the applicable
Concentration Percentage for such Obligor multiplied by (b) the Outstanding
Balance of all Eligible Receivables, on such date.
"EXCESS RETURN AMOUNT" means, for any calendar month, an amount equal
to 106% of the Seasonal Dilution Estimate at the beginning of such calendar
month.
"EXITING PURCHASER" has the meaning set forth in SECTION 1.4(b)(ii).
"FACILITY TERMINATION DATE" means the earliest to occur of: (a) with
respect to each Purchaser August 7, 2004, subject to any extension pursuant to
SECTION 1.10 of the Agreement (it being understood that if any such Purchaser
does not extend its Commitment hereunder then the Purchase Limit shall be
reduced ratably with respect to the Purchasers in each Purchaser Group by an
amount equal to the Commitment of such Exiting Purchaser and the Commitment
Percentages and Group Commitments of the Purchasers within each Purchaser Group
shall be appropriately adjusted), (b) the date determined pursuant to SECTION
2.2 of the Agreement, (c) the date the Purchase Limit reduces to zero pursuant
to Section 1.1(b) of the Agreement, (d) with respect to each Purchaser Group,
the date that the commitments of all of the Liquidity Providers terminate under
the related Liquidity Agreements or the date one or more of such Purchaser
Group's Program Support Agreements terminate and (e) with respect to each
Purchaser Group, the date that the commitment, of all of the Related Committed
Purchasers of such Purchaser Group terminate pursuant to SECTION 1.10.
"Federal Funds Rate" means, for any day, the per annum rate set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)." If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective Rate." If
on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be
the arithmetic mean as determined by the applicable Purchaser Agent of the rates
for the last transaction in overnight Federal funds arranged before 9:00 a.m.
(New York time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by such Purchaser Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System, or any entity succeeding to any of its principal functions.
"FEES" means the fees payable by the Seller to each Purchaser Group
pursuant to the applicable Purchaser Group Fee Letter.
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"GAAP" means the generally accepted accounting principles and practices
in the United States, consistently applied.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any court, and any Person owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GREETINGS" has the meaning set forth in the preamble to the Agreement.
"GROUP A OBLIGOR" means an Obligor with a short-term senior unsecured
indebtedness rating
(or, if such Obligor does not have such a short-term rating, a long-term senior
unsecured indebtedness rating) of at least "A-1" (or "A+") by Standard & Poor's
and "P-1" (or "A1") by Moody's.
"GROUP B OBLIGO" means an Obligor with a short-term senior unsecured
indebtedness rating (or, if such Obligor does not have such a short-term
rating, a long-term senior unsecured indebtedness rating) of at least "A-2" (or
"BBB+") by Standard & Poor's and "P-2" (or "Baa1") by Moody's, that is not a
Group A Obligor.
"GROUP C OBLIGOR" means an Obligor with a short-term senior unsecured
indebtedness rating (or, if such Obligor does not have such a short-term rating,
a long-term senior unsecured indebtedness rating) of at least "A-3" (or "BBB-")
by Standard & Poor's and "P-3" (or "Baa3") by Moody's, that is not a Group A
Obligor or a Group B Obligor.
"GROUP COMMITMENT" means with respect to any Purchaser Group the
aggregate of the Commitments of each Purchaser within such Purchaser Group.
"GROUP D OBLIGOR" means an Obligor which is not a Group A Obligor, a
Group B Obligor or a Group C Obligor.
"GROUP INVESTMENT" means with respect to any Purchaser Group, an
amount equal to the aggregate of all Investments of the Purchasers within such
Purchaser Group.
"INDEMNIFIED AMOUNTS" has the meaning set forth in SECTION 3.1 of the
Agreement.
"INDEMNIFIED PARTY" has the meaning set forth in SECTION 3.1 of the
Agreement.
"INDEPENDENT DIRECTOR" has the meaning set forth in PARAGRAPH 3(c) of
EXHIBIT IV to the Agreement.
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"INFORMATION PACKAGE" means a report, in substantially the form of
ANNEX A to the Agreement, furnished to the Administrator pursuant to the
Agreement.
"INSOLVENCY PROCEEDING" means: (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of creditors
of a Person or, composition, marshaling of assets for creditors of a Person, or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors, in each of cases (a) and (b) undertaken
under U.S. Federal, state or foreign law, including the Bankruptcy Code.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of the Internal Revenue Code also refer to any successor
sections.
"INVESTMENT" means with respect to any Purchaser the amount paid to
the Seller by such Purchaser pursuant to the Agreement, or such amount divided
or combined in accordance with the Agreement, in each case reduced from time to
time by Collections distributed and applied on account of such Investment
pursuant to SECTION 1.4(d) of the Agreement; provided, that if such Investment
shall have been reduced by any distribution and thereafter all or a portion of
such distribution is rescinded or must otherwise be returned for any reason,
such Investment shall be increased by the amount of such rescinded or returned
distribution as though it had not been made.
"LIQUIDITY AGENT" means each of the banks acting as agent for the
various Liquidity Banks under each Liquidity Agreement.
"LIQUIDITY AGREEMENT" means any agreement entered into in connection
with this Agreement pursuant to which a Liquidity Provider agrees to make
purchases or advances to, or purchase assets from, any Conduit Purchaser in
order to provide liquidity for such Conduit Purchaser's Purchases.
"LIQUIDITY PROVIDER" means each bank or other financial institution
that provides liquidity support to any Conduit Purchaser pursuant to the terms
of a Liquidity Agreement.
"LOCK-BOX ACCOUNT" means an account maintained at a bank or other
financial institution for the purpose of, directly or indirectly, receiving
Collections.
"LOCK-BOX AGREEMENT" means an agreement among the Seller, the
applicable Originator, the Servicer, the Administrator and a Lock-Box Bank.
"LOCK-BOX BANK" means any of the banks or other financial institutions
holding one or more Lock-Box Accounts.
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"LOSS RESERVE" means, on any date, an amount equal to (a) the Aggregate
Investment at the close of business of the Servicer on such date MULTIPLIED by
(b) (i) the Loss Reserve Percentage on such date DIVIDED by (ii) 100% minus the
Loss Reserve Percentage on such date.
"LOSS RESERVE PERCENTAGE" means, on any date, the greater of 20% or
the sum of the Sales Based Loss Reserve Percentage and the Receivables Based
Loss Reserve Percentage.
"MAJORITY PURCHASERS" means, at any time, Purchasers whose Commitments
aggregate 2/3rds or more of the aggregate of the Commitments of all Purchasers;
provided, however, that so long as any Purchaser's Commitment is greater than
50% of the aggregate Commitments, then "Majority Purchasers" shall mean a
minimum of two Purchasers whose Commitments aggregate more than 50% of the
aggregate Commitments.
"MARKET STREET" has the meaning set forth in the preamble to the
Agreement.
"MARKET STREET BASE RATE" means, in the case of Market Street or any
Purchaser in its Purchaser Group, for any day, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall be at all times
equal to the higher of:
(a) the rate of interest in effect for such day as publicly
announced from time to time by PNC in Pittsburgh, Pennsylvania as its
"prime rate." Such "prime rate" is set by PNC based upon various
factors, including PNC's costs and desired return, general economic
conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above or below such
announced rate, and
(b) 0.50% per annum above the latest Federal Funds Rate.
"MARKET STREET CP RATE" means, with respect to Market Street for any
Yield Period with respect to any Portion of Investment, the per annum rate
equivalent to the "weighted average cost" (as defined below) related to the
issuance of Market Street's Notes that are allocated, in whole or in part, by
Market Street (or by its Purchaser Agent) to fund or maintain such Portion of
Investment (and which may also be allocated in part to the funding of other
Portions of Investment hereunder or of other assets of Market Street); PROVIDED,
HOWEVER, that if any component of such rate is a discount rate, in calculating
the "MARKET STREET CP RATE" for such Portion of Investment for such Yield
Period, Market Street shall for such component use the rate resulting from
converting such discount rate to an interest bearing equivalent rate per annum.
As used in this definition, Market Street's "WEIGHTED AVERAGE COST" shall
consist of (x) the actual interest rate (or discount) paid to purchasers of
Market Street's Notes, together with the commissions of placement agents and
dealers in respect of such Notes, to the extent such commissions are allocated,
in whole or in part, to such Notes by Market Street (or by its Purchaser Agent)
and (y) any incremental carrying costs incurred with respect to Market Street's
Notes maturing on dates other than those on which corresponding funds are
received by Market Street. Notwithstanding the foregoing, the "Market Street CP
Rate"
I-13
for any day while a Termination Event exists shall be an interest rate equal to
2% above the Base Rate in effect on such day.
"MARKET STREET YIELD RATE" for any Yield Period for any Portion of
Investment of the Purchased Interest in the case of Market Street or any
Purchaser in its Purchaser Group, means an interest rate per annum equal to, at
Seller's option: (a) the rate set forth as the "Applicable Margin" in the
Purchaser Group Fee Letter relating to Market Street above the Euro-Rate for
such Yield Period, or (b) the Base Rate for such Yield Period; PROVIDED,
HOWEVER, that in the case of:
(i) any Yield Period on or before the first day of
which the Administrator shall have been notified by any
Purchaser or other Program Support Provider that the
introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or any central bank
or other Governmental Authority asserts that it is unlawful,
for such Person, to fund any Euro-Rate Portion of Investment
(and such Person shall not have subsequently notified the
Administrator that such circumstances no longer exist),
(ii) any Yield Period of one to (and including) 29
days,
(iii) any Yield Period as to which the Administrator
does not receive notice before noon (New York City time) on
the third Business Day preceding the first day of such Yield
Period that the Seller desires that the related Portion of
Investment be a Euro-Rate Portion of Investment, or
(iv) any Yield Period relating to a Portion of
Investment that is less than $5,000,000,
the "Yield Rate" for each such Yield Period shall be an interest rate per annum
equal to the Base Rate in effect on each day of such Yield Period. The "Yield
Rate" for any day while a Termination Event exists shall be an interest rate
equal to 2% per annum above the applicable Base Rate in effect on such day.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on:
(a) the assets, operations, business or financial condition of
the Seller, the Servicer, AGSC, any Originator or Greetings.
(b) the ability of Seller, Servicer, AGSC, Originator or
Greetings to perform its obligations under the Agreement or any other
Transaction Document to which it is a party,
(c) as to Seller, Servicer, AGSC, any Originator or Greetings,
the validity or enforceability of any other Transaction Document, or
the validity, enforceability or collectibility of a material portion of
the Pool Receivables, or
I-14
(d) the status, perfection, enforceability or priority of any
Purchaser's, AGSC's or the Seller's interest in the Pool Assets.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NET RECEIVABLES POOL BALANCE" means, at any time: (a) the Outstanding
Balance of Eligible Receivables then in the Receivables Pool minus (b) the
Excess Concentration; provided that such calculation shall exclude the
Receivables for which the related Obligor has a net credit balance.
"NOTES" means short-term promissory notes issued, or to be issued, by
each Conduit Purchaser to fund its investments in accounts receivable or other
financial assets.
"OBLIGOR" means, with respect to any Receivable, the Person obligated
to make payments pursuant to the Contract relating to such Receivable.
"ORIGINATOR" means the "Originators" party in such capacity to any of
the Receivables Sale Agreement, the Purchase and Sale Agreement or the Sale and
Contribution Agreement from time to time.
"ORIGINATOR ASSIGNMENT CERTIFICATE" means each assignment, (i) in
substantially the form of Exhibit C to the Receivables Sale Agreement, (ii) in
substantially the form of EXHIBIT C to the Purchase and Sale Agreement,
evidencing AGSC's ownership of the Receivables generated by an Originator, (iii)
in substantially the form of EXHIBIT C to the Sale and Contribution Agreement,
evidencing Seller's ownership of the Receivables generated by an Originator or
acquired by AGSC, in each case as the same may be amended, supplemented, amended
and restated, or otherwise modified from time to time in accordance with the
Purchase and Sale Agreement.
"OUTSTANDING BALANCE" of any Receivable at any time means the then
outstanding principal balance thereof.
"PERMITTED LOCK-BOX BANK" means any of the Banks listed on Schedule II
and identified as such.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
"PLUS XXXX ADDITION DATE" means a date determined by the Administrator
and consented to by the Servicer.
"PNC" has the meaning set forth in the preamble to the Agreement.
"POOL ASSETS" has the meaning set forth in SECTION 1.2(d) of the
Agreement.
I-15
"POOL RECEIVABLE" means a Receivable in the Receivables Pool.
"PORTION OF INVESTMENT" means, with respect to any Purchaser and its
related Investment, the portion of such Investment being funded or maintained by
such Purchaser by reference to a particular interest rate basis.
"PROGRAM SUPPORT AGREEMENT" means and includes any Liquidity Agreement
and any other agreement entered into by any Program Support Provider providing
for: (a) the issuance of one or more letters of credit for the account of any
Conduit Purchaser, (b) the issuance of one or more surety bonds for which the
such Conduit Purchaser is obligated to reimburse the applicable Program Support
Provider for any drawings thereunder, (c) the sale by such Conduit Purchaser to
any Program Support Provider of the Purchased Interest (or portions thereof)
maintained by such Conduit Purchaser and/or (d) the making of loans and/or other
extensions of credit to any Conduit Purchaser in connection with such Conduit
Purchaser's securitization program contemplated in the Agreement, together with
any letter of credit, surety bond or other instrument issued thereunder (but
excluding any discretionary advance facility provided by the Administrator).
"PROGRAM SUPPORT PROVIDER" means and includes with respect to each
Conduit Purchaser any Liquidity Provider and any other Person (other than any
customer of such Conduit Purchaser) now or hereafter extending credit or having
a commitment to extend credit to or for the account of, or to make purchases
from, such Conduit Purchaser pursuant to any Program Support Agreement.
"PURCHASE" is defined in SECTION 1.1(a).
"PURCHASE AND SALE AGREEMENT" means the Purchase and Sale Agreement,
dated as of August 7, among AGSC, the Originators party thereto as amended
through the date of the Agreement and as such agreement may be amended, amended
and restated, supplemented or otherwise modified from time to time.
"PURCHASE AND SALE INDEMNIFIED AMOUNTS" has the meaning set forth in
SECTION 9.1 of the Purchase and Sale Agreement.
"PURCHASE AND SALE INDEMNIFIED PARTY" has the meaning set forth in
SECTION 9.1 of the Purchase and Sale Agreement.
"PURCHASE AND SALE TERMINATION DATE" has the meaning set forth in
SECTION 1.4 of the Purchase and Sale Agreement.
"PURCHASE AND SALE TERMINATION EVENT" has the meaning set forth in
SECTION 8.1 of the Purchase and Sale Agreement.
"PURCHASE DATE" means the date of which a Purchase or a reinvestment
is made pursuant to the Agreement.
I-16
"PURCHASE LIMIT" means $250,000,000, as such amount may be reduced
pursuant to SECTIONS 1.1(b) or 1.10 of the Agreement or increased pursuant to
Section 1.2(e) of the Agreement. References to the unused portion of the
Purchase Limit shall mean, at any time, the Purchase Limit minus the then
outstanding Aggregate Investment.
"PURCHASED INTEREST" means, at any time, the undivided percentage
ownership interest in: (a) each and every Pool Receivable now existing or
hereafter arising, (b) all Related Security with respect to such Pool
Receivables and (c) all Collections with respect to, and other proceeds of, such
Pool Receivables and Related Security. Such undivided percentage interest shall
be computed as:
Aggregate Investment + Total Reserves
-------------------------------------
Net Receivables Pool Balance
The Purchased Interest shall be determined from time to time pursuant to SECTION
1.3 of the Agreement.
"PURCHASER" means each Conduit Purchaser and/or each Related Committed
Purchaser, as applicable.
"PURCHASER AGENT" means each Person acting as agent on behalf of a
Purchaser Group and designated as a Purchaser Agent for such Purchaser Group on
the signature pages to the Agreement or any other Person who becomes a party to
this Agreement as a Purchaser Agent pursuant to an Assumption Agreement or a
Transfer Supplement.
"PURCHASER GROUP" means, for each Conduit Purchaser, such Conduit
Purchaser, its Related Committed Purchasers and its related Purchaser Agent.
"PURCHASER GROUP FEE LETTER" has the meaning set forth in SECTION 1.5
of the Agreement. "PURCHASERS' SHARE" of any amount means such amount multiplied
by the Purchased Interest at the time of determination.
"RATABLE SHARE" means, for each Purchaser Group, such Purchaser
Group's aggregate Commitments divided by the aggregate Commitments of all
Purchaser Groups.
"RATING AGENCY CONDITION" means, with respect to any material event or
occurrence, receipt by the Administrator (or the applicable Purchaser Agent) of
written confirmation from each of Standard & Poor's and Moody's that such event
or occurrence shall not cause the rating on the then outstanding Notes of any
applicable Purchaser to be downgraded or withdrawn.
"RECEIVABLE" means any indebtedness and other obligations owed to the
Seller, AGSC or any Originator (excluding, until the Plus Xxxx Addition Date,
Plus Xxxx, Inc.) by, or any right of the Seller, AGSC or any Originator
(excluding, until the Plus Xxxx Addition Date, Plus Xxxx, Inc.) to
I-17
payment from or on behalf of, an Obligor, whether constituting an account,
chattel paper, instrument or general intangible, arising in connection with the
sale of goods or the rendering of services by an Originator (excluding until the
Plus Xxxx Addition Date, Plus Xxxx, Inc.), and includes the obligation to pay
any finance charges, fees and other charges with respect thereto. Indebtedness
and other obligations arising from any one transaction, including indebtedness
and other obligations represented by an individual invoice or agreement, shall
constitute a Receivable separate from a Receivable consisting of the
indebtedness and other obligations arising from any other transaction; provided
that Receivables shall not include obligations in respect of payments
denominated in Canadian dollars due and owing from or on behalf of Obligors in
respect of businesses located in Canada.
"RECEIVABLES BASED LOSS RESERVE PERCENTAGE" means, on any date the
percentage determined by the following formula:
2.0 x (DDR x RP) / NRPB
DDR = the highest Disputed Default Ratio for any three
consecutive calendar months during the twelve most
recent calendar months
RP = the aggregate Outstanding Balance of all Pool
Receivables as of the date of such calculation
NRPB = the Net Receivables Pool Balance as of the date of such
calculation
"RECEIVABLES POOL" means, at any time, all of the then outstanding
Receivables purchased by the Seller pursuant to the Sale and Contribution
Agreement prior to the Facility Termination Date.
"RECEIVABLES SALE AGREEMENT" means the Receivables Sale Agreement,
dated as of August 7, 2001, among Greetings and the Originators party thereto as
such agreement may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"RECEIVABLES SALE INDEMNIFIED AMOUNTS" has the meaning set forth in
SECTION 9.1 of the Receivables and Sale Agreement.
"RECEIVABLES SALE INDEMNIFIED PARTY" has the meaning set forth in
SECTION 9.1 of the Receivables Sale Agreement.
"RECEIVABLES SALE TERMINATION DATE" has the meaning set forth in
SECTION 1.4 of the Receivables Sale Agreement.
"RECEIVABLES SALE TERMINATION EVENT" has the meaning set forth in
SECTION 8.1 of the Receivables Sale Agreement.
I-18
"RELATED COMMITTED PURCHASER" means each Person listed as such (and
its respective Commitment) for each Conduit Purchaser as set forth on the
signature pages of the Agreement or in any Assumption Agreement or Transfer
Supplement.
"RELATED RIGHTS" has the meaning set forth in SECTION 1.1 of the Sale
and Contribution Agreement.
"RELATED SECURITY" means, with respect to any Receivable:
(a) all of the Seller's, AGSC's and the Originator thereof's
interest in any goods (including returned goods), and documentation of
title evidencing the shipment or storage of any goods (including
returned goods), relating to any sale giving rise to such Receivable,
(b) all instruments and chattel paper that may evidence such
Receivable,
(c) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable
or otherwise, together with all UCC financing statements or similar
filings relating thereto, and
(d) all of the Seller's AGSC's and the Originator thereof's
rights, interests and claims under the Contracts and all guaranties,
indemnities, insurance and other agreements (including the related
Contract) or arrangements of whatever character from time to time
supporting or securing payment of such Receivable or otherwise relating
to such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise.
"SALE AND CONTRIBUTION AGREEMENT" means the Sale and Contribution
Agreement dated as of August 7, 2001 between AGSC, and Seller, as amended
through the date of the Agreement and as such agreement may be amended, amended
and restated, supplemented or otherwise modified from time to time.
"SALE AND CONTRIBUTION INDEMNIFIED AMOUNTS" has the meaning set forth
in SECTION 9.1 of the Sale and Contribution Agreement.
"SALE AND CONTRIBUTION INDEMNIFIED PARTY" has the meaning set forth in
SECTION 9.1 of the Sale and Contribution Agreement.
"SALE AND CONTRIBUTION NOTE" has the meaning set forth in SECTION 3.1
of the Sale and Contribution Agreement.
"SALE AND CONTRIBUTION TERMINATION DATE " has the meaning set forth in
SECTION 1.4 of the Sale and Contribution Agreement.
I-19
"SALE AND CONTRIBUTION TERMINATION EVENT" has the meaning set forth in
SECTION 8.1 of the Sale and Contribution Agreement.
"SALES BASED LOSS RESERVE PERCENTAGE" means, on any date the
percentage determined by the following formula:
2.0 x ((EDR x ESDH) + (SDR x SSDH)) / NRPB
EDR = the highest Everyday Default Ratio for any three
consecutive calendar months during the twelve most
recent calendar months
ESDH = the aggregate credit sales, other than Seasonal
Sales, made by the Originators during the six most
recent calendar months
SDR = the highest Seasonal Default Ratio for any three
consecutive calendar months during the twelve most
recent calendar months
SSDH = the aggregate Seasonal Sales made by the
Originators during the seven most recent calendar
months
NRPB = the Net Receivables Pool Balance as of the date of
such calculation
"SEASONAL DEFAULT RATIO" means the ratio (expressed as a percentage
and rounded to the nearest 1/100th of 1% with 5/1000th of 1% rounded upwards)
computed as of the last day of each calendar month by dividing (a) the aggregate
Outstanding Balance of all Seasonal Sales that became Defaulted Receivables
during such month, by (b) the aggregate Outstanding Balance of all Seasonal
Sales made by the Originators during the two months that are seven and eight
months before such month.
"SEASONAL DILUTION ESTIMATE "means, at any time, the balance as of the
most recent calendar month-end of reserves or liabilities maintained on the
books and records of the Seller or Servicer in the ordinary course of business
according to policies consistently applied and reported on the Information
Package related to, or in anticipation of, seasonal returns affecting the
Receivables.
"SEASONAL RECEIVABLE" means a Pool Receivable sold pursuant to the
Purchase and Sale Agreement which was included, should have been included or
should be included in the calculation of Seasonal Sales.
"SEASONAL SALES" means those amounts identified by the Seller or
Servicer on the periodic Information Packages as invoices related to specific
seasonal shipments.
"SELLER" has the meaning set forth in the preamble to the Agreement.
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"SELLER'S SHARE" of any amount means the greater of: (a) $0 and (b)
such amount minus the product of (i) such amount multiplied by (ii) the
Purchased Interest.
"SERVICER" has the meaning set forth in the preamble to the Agreement.
"SERVICING FEE" shall mean the fee referred to in SECTION 4.6 of the
Agreement.
"SETTLEMENT DATE" means the 22nd Day of each calendar month or, if such
day is not a Business Day, the first Business Day thereafter or such other
Business Day as otherwise consented to by the Administrator, the Purchasers, the
Seller and the Servicer.
"SIMPLE MAJORITY" means, at any time, Purchasers whose Commitments
aggregate 51% or more of the aggregate of the Commitments of all Purchasers.
"SOLVENT" means, with respect to any Person at any time, a condition
under which:
(i) the fair value and present fair saleable value of such
Person's total assets is, on the date of determination, greater than
such Person's total liabilities (including contingent and unliquidated
liabilities) at such time;
(ii) the fair value and present fair saleable value of such
Person's assets is greater than the amount that will be required to pay
such Person's probable liability on its existing debts as they become
absolute and matured ("debts," for this purpose, includes all legal
liabilities, whether matured or unmatured, liquidated or unliquidated,
absolute, fixed, or contingent);
(iii) such Person is and shall continue to be able to pay all
of its liabilities as such liabilities mature; and
(iv) such Person does not have unreasonably small capital with
which to engage in its current and in its anticipated business.
For purposes of this definition:
(A) the amount of a Person's contingent or unliquidated
liabilities at any time shall be that amount which, in light of all the
facts and circumstances then existing, represents the amount which can
reasonably be expected to become an actual or matured liability;
(B) the "fair value" of an asset shall be the amount which may
be realized within a reasonable time either through collection or sale
of such asset at its regular market value;
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(C) the "regular market value" of an asset shall be the amount
which a capable and diligent business person could obtain for such
asset from an interested buyer who is willing to Purchase such asset
under ordinary selling conditions; and
(D) the "present fair saleable value" of an asset means the
amount which can be obtained if such asset is sold with reasonable
promptness in an arm's-length transaction in an existing and not
theoretical market.
"SPECIFICALLY RESERVED DILUTION AMOUNT" means the greater of (A) the
sum of (i) $15,000,000 and (ii) 75% of the total credits issued for seasonal
returns in the 10th and 11th months prior to the current month or (B) the sum of
(i) the balance as of the most recent calendar month-end of reserves or
liabilities maintained on the books and records of the Seller or Servicer and
reported on the Information Package related to, or in anticipation of, (a)
advertising allowances, (b) volume rebates and (c) Plus Xxxx, Inc. specific
factors affecting the Receivables plus (ii) (a) the Seasonal Dilution Estimate
times (b) 106%.
"STANDARD & POOR'S" means Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc.
"SUBSIDIARY" means, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock of each class
or other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.
"TANGIBLE NET WORTH" means, with respect to any Person, the tangible
net worth of such Person as determined in accordance with GAAP.
"TERMINATION DAY" means: (a) each day on which the conditions set forth
in Section 2 of EXHIBIT II to the Agreement are not satisfied or (b) each day
that occurs on or after the Facility Termination Date.
"TERMINATION EVENT" has the meaning specified in EXHIBIT V to the
Agreement.
"TERMINATION FEE" means, for any Yield Period, with respect to any
Purchaser, the amount, if any, by which: (a) the additional Discount related to
such Purchaser's Investment (calculated without taking into account any
Termination Fee or any shortened duration of such Yield Period) that would have
accrued during such Yield Period on the reductions of Investment relating to
such Yield Period had such reductions not been made, exceeds (b) the income, if
any, received by such Purchaser from investing the proceeds of such reductions
of Investment, as determined by the such Purchaser's Purchaser Agent, which
determination shall be binding and conclusive for all purposes, absent manifest
error.
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"TOTAL RESERVES" means, at any time, the sum of (a) the Yield Reserve,
(b) the sum of the Loss Reserve and the Dilution Reserve and (c) the
Specifically Reserved Dilution Amount.
"TRANSACTION DOCUMENTS" means the Agreement, the Lock-Box Agreements,
each Purchaser Group Fee Letter, the Receivables Sale Agreement, the Purchase
and Sale Agreement, the Sale and Contribution Agreement and all other
certificates, instruments, UCC financing statements, reports, notices,
agreements and documents executed or delivered under or in connection with any
of the foregoing, in each case as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the Agreement.
"TRANSFER SUPPLEMENT" has the respective meanings set forth in
SECTIONS 6.3(c) and 6.3(e).
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction.
"UNMATURED PURCHASE AND SALE TERMINATION EVENT" means any event which,
with the giving of notice or lapse of time, or both, would become a Purchase and
Sale Termination Event.
"UNMATURED RECEIVABLES SALE TERMINATION EVENT" means any event which,
with the giving of notice or lapse of time, or both, would become a Receivables
Sale Termination Event.
"UNMATURED SALE AND CONTRIBUTION TERMINATION EVENT" means any event
which, with the giving of notice or lapse of time, or both, would become a Sale
and Contribution Termination Event.
"UNMATURED TERMINATION EVENT" means an event that, with the giving of
notice or lapse of time, or both, would constitute a Termination Event.
"YIELD PERIOD" means, with respect to each Portion of Investment: (a)
before the Facility Termination Date: (i) initially the period commencing on the
date of the initial Purchase pursuant to SECTION 1.2 of the Agreement (or in the
case of any fees payable hereunder, commencing on the Closing Date) and ending
on (but not including) the next Settlement Date, and (ii) thereafter, each
period commencing on such Settlement Date and ending on (but not including) the
next Settlement Date, and (b) on and after the Facility Termination Date, such
period (including a period of one day) as shall be selected from time to time by
the Administrator or, in the absence of any such selection, each period of 30
days from the last day of the preceding Yield Period.
"YIELD RATE" for any Yield Period for any Portion of Investment of the
Purchased Interest (i) in the case of the Purchaser Group including Market
Street, means the Market Street Yield Rate, and (ii) in the case of each other
Purchaser Group, shall mean the rate set forth as the Yield Rate for such
Purchaser Group in the related Purchaser Group Fee Letter.
"YIELD RESERVE" shall be equal to the Aggregate Investment multiplied
by a percentage equal to (i) the Yield Reserve Percentage divided by (ii) 100%
minus the Yield Reserve Percentage.
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"YIELD RESERVE PERCENTAGE" means, on any date, an amount equal to (i)
the sum of the weighted average Base Rate for the most recent period plus 1.5%,
multiplied by (ii) the product of 1.5 times the Days Sales Outstanding, divided
by (iii) 360.
OTHER TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles.
All terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article 9.
Unless the context otherwise requires, "or" means "and/or," and "including" (and
with correlative meaning "include" and "includes") means including without
limiting the generality of any description preceding such term.
I-24
EXHIBIT II
CONDITIONS OF PURCHASES
1. CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial Purchase
under this Agreement is subject to the following conditions precedent that the
Administrator and each Purchaser Agent shall have received on or before the date
of such Purchase (other than with respect to the condition set forth in
PARAGRAPH (g), which such condition must be satisfied within 30 days of such
Purchase), each in form and substance (including the date thereof) satisfactory
to the Administrator and each Purchaser Agent:
(a) A counterpart of the Agreement and the other Transaction
Documents executed by the parties thereto.
(b) Certified copies of: (i) the resolutions of the Board of
Directors of each of the Seller, the Originators, AGSC and Greetings
authorizing the execution, delivery and performance by the Seller, such
Originator, AGSC and Greetings, as the case may be, of the Agreement
and the other Transaction Documents to which it is a party; (ii) all
documents evidencing other necessary organizational action and
governmental approvals, if any, with respect to the Agreement and the
other Transaction Documents and (iii) the certificate of incorporation
and by-laws or certificate of formation and limited liability company
agreement or any other organizational document, as applicable, of the
Seller, each Originator, AGSC and Greetings.
(c) A certificate of the Secretary or Assistant Secretary of
the Seller, the Originators, AGSC and Greetings certifying the names
and true signatures of its officers who are authorized to sign the
Agreement and the other Transaction Documents. Until the Administrator
and each Purchaser Agent receives a subsequent incumbency certificate
from the Seller, an Originator, AGSC or Greetings, as the case may be,
the Administrator and each Purchaser Agent shall be entitled to rely on
the last such certificate delivered to it by the Seller, such
Originator, AGSC or Greetings, as the case may be.
(d) Acknowledgment copies, or time stamped receipt copies, of
proper financing statements, duly filed on or before the date of such
initial purchase under the UCC of all jurisdictions that the
Administrator may deem necessary or desirable in order to perfect the
interests of the Seller, Greetings and the Administrator (on behalf of
each Purchaser) contemplated by the Agreement, the Sale and
Contribution Agreement, the Receivables Sale Agreement and the Purchase
and Sale Agreement.
(e) Acknowledgment copies, or time-stamped receipt copies, of
proper financing statements, if any, necessary to release all security
interests and other rights of any Person
II-1
in the Receivables, Contracts or Related Security previously granted by
the Originators, AGSC, Greetings or the Seller.
(f) Completed UCC search reports, dated on or shortly before
the date of the initial purchase hereunder, listing the financing
statements filed in all applicable jurisdictions referred to in
SUBSECTION (e) above that name the Originators, AGSC or the Seller as
debtor, together with copies of such other financing statements, and
similar search reports with respect to judgment liens, federal tax
liens and liens of the Pension Benefit Guaranty Corporation in such
jurisdictions, as the Administrator or any Purchaser Agent may request,
showing no Adverse Claims on any Pool Assets.
(g) Copies of executed Lock-Box Agreements with each Lock-Box
Bank (other than Lock-Box Banks with respect to Plus-Xxxx, Inc. prior
to the Plus-Xxxx Addition Date).
(h) Favorable opinions of Xxxxx Day Xxxxxx & Xxxxx, counsel
for the Seller, the Originators, AGSC, Greetings and the Servicer, in
form and substance reasonably satisfactory to the Administrator and
each Purchaser Agent.
(i) Satisfactory results of a review and audit (performed by
representatives of each Purchaser Agent) of the Servicer's collection,
operating and reporting systems, the Credit and Collection Policy of
each Originator (other than Plus Xxxx, Inc.) and AGSC, historical
receivables data and accounts, including satisfactory results of a
review of the Servicer's operating location(s).
(j) A pro forma Information Package representing the
performance of the Receivables Pool for the calendar month before
closing.
(k) Evidence of payment by the Seller of all accrued and
unpaid fees (including those contemplated by each Purchaser Group Fee
Letter), costs and expenses to the extent then due and payable on the
date thereof, including any such costs, fees and expenses arising under
or referenced in SECTION 6.4 of the Agreement and the Fee Letter.
(l) Each Purchaser Group Fee Letter (received only by the
related Purchaser Group Agent) duly executed by the Seller and the
Servicer.
(m) Good standing certificates with respect to each of the
Seller, AGSC, the Originators and the Servicer issued by the Secretary
of State (or similar official) of the state of each such Person's
organization and principal place of business.
(n) To the extent required by each Conduit Purchaser's
commercial paper program, letters from each of the rating agencies then
rating the Notes confirming the rating of such Notes after giving
effect to the transaction contemplated by the Agreement.
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(o) Each Liquidity Agreement (received only by the related
Purchaser Group Agent) and all other Transaction Documents duly
executed by the parties thereto.
(p) A computer file containing all information with respect to
the Receivables as the Administrator or any Purchaser Agent may
reasonably request.
(q) Such other approvals, opinions or documents as the
Administrator or any Purchaser Agent may reasonably request.
2. CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS. Each
Purchase (including the initial Purchase) and each reinvestment shall be subject
to the further conditions precedent that:
(a) in the case of each purchase, the Servicer shall have
delivered to the Administrator and each Purchaser Agent on or before
such purchase, in form and substance satisfactory to the Administrator
and such Purchaser Agent, a completed pro forma Information Package to
reflect the level of Investment with respect to each Purchaser Group
and related reserves and the calculation of the Purchased Interest
after such subsequent purchase and a completed purchase notice in the
form of Annex B; and
(b) on the date of such purchase or reinvestment the following
statements shall be true (and acceptance of the proceeds of such
purchase or reinvestment shall be deemed a representation and warranty
by the Seller that such statements are then true):
(i) the representations and warranties contained in
Exhibit III to the Agreement are true and correct in all
material respects on and as of the date of such purchase or
reinvestment as though made on and as of such date (except to
the extent that such representations and warranties relate
expressly to an earlier date, and in which case such
representations and warranties shall be true and correct in
all material respects as of such earlier date); and
(ii) no event has occurred and is continuing, or
would result from such purchase or reinvestment, that
constitutes a Termination Event or an Unmatured Termination
Event.
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EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. 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 State of Delaware,
and is duly qualified to do business and is in good standing as a
foreign corporation in every jurisdiction where the nature of its
business requires it to be so qualified, except where the failure to be
so qualified would not have a Material Adverse Effect.
(b) The execution, delivery and performance by the Seller of
the Agreement and the other Transaction Documents to which it is a
party, including its use of the proceeds of purchases and
reinvestments: (i) are within its corporate powers; (ii) have been duly
authorized by all necessary corporate action; (iii) do not contravene
or result in a default under or conflict with: (A) its charter or
by-laws, (B) any law, rule or regulation applicable to it, (C) any
indenture, loan agreement, mortgage, deed of trust or other material
agreement or instrument to which it is a party or by which it is bound,
or (D) any order, writ, judgment, award, injunction or decree binding
on or affecting it or any of its property; and (iv) do not result in or
require the creation of any Adverse Claim upon or with respect to any
of its properties. The Agreement and the other Transaction Documents to
which it is a party have been duly executed and delivered by the
Seller.
(c) No authorization, approval or other action by, and no
notice to or filing with, any Governmental Authority or other Person is
required for its due execution, delivery and performance by the Seller
of the Agreement or any other Transaction Document to which it is a
party, other than the Uniform Commercial Code filings referred to in
Exhibit II to the Agreement, all of which shall have been filed on or
before the date of the first purchase hereunder.
(d) Each of the Agreement and the other Transaction Documents
to which the Seller is a party constitutes its legal, valid and binding
obligation of the Seller enforceable against the Seller in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws from time to time in
effect affecting the enforcement of creditors' rights generally and by
general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law.
(e) There is no pending or, to Seller's best knowledge,
threatened action or proceeding affecting Seller or any of its
properties before any Governmental Authority or arbitrator.
III-1
(f) No proceeds of any purchase or reinvestment will be used
to acquire any equity security of a class that is registered pursuant
to Section 12 of the Securities Exchange Act of 1934.
(g) The Seller is the legal and beneficial owner of the Pool
Receivables and Related Security, free and clear of any Adverse Claim.
Upon each purchase or reinvestment, Administrator (for the benefit of
each Purchaser) shall acquire a valid and enforceable perfected
undivided percentage ownership or security interest, to the extent of
the Purchased Interest, in each Pool Receivable then existing or
thereafter arising and in the Related Security, Collections and other
proceeds with respect thereto, free and clear of any Adverse Claim. The
Agreement creates a security interest in favor of the Administrator
(for the benefit of each Purchaser) in the Pool Assets, and the
Administrator (for the benefit of each Purchaser) has a first priority
perfected security interest in the Pool Assets, free and clear of any
Adverse Claims. No effective financing statement or other instrument
similar in effect covering any Pool Asset is on file in any recording
office, except those filed in favor of Greetings pursuant to the
Receivables Sale Agreement, AGSC pursuant to the Purchase and Sale
Agreement, the Seller pursuant to the Sale and Contribution Agreement
and the Administrator (for the benefit of each Purchaser) relating to
the Agreement, or in respect of which the Administrator has received
evidence satisfactory to the Administrator of acknowledgment copies, or
time-stamped receipt copies, of proper financing statements releasing
or terminating, as applicable, all security interests and other rights
of any Person in such Pool Asset.
(h) Each Information Package (if prepared by the Seller or one
of its Affiliates, or to the extent that information contained therein
is supplied by the Seller or an Affiliate), information, exhibit,
financial statement, document, book, record or report furnished or to
be furnished at any time by or on behalf of the Seller to the
Administrator or any Purchaser Agent in connection with the Agreement
or any other Transaction Document to which it is a party is or will be
complete and accurate in all material respects as of its date or as of
the date so furnished, and does not and will not contain any material
misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not misleading.
(i) [RESERVED].
(j) The names and addresses of all the Lock-Box Banks,
together with the account numbers of the Lock-Box Accounts at such
Lock-Box Banks, are specified in Schedule II to the Agreement (or at
such other Lock-Box Banks and/or with such other Lock- Box Accounts as
have been notified to the Administrator in accordance with the
Agreement) and all Lock-Box Accounts are subject to Lock-Box Agreements
(except as otherwise agreed to in writing by the Administrator and each
Purchaser Agent or as provided in SECTION 4.3). Seller has not granted
to any Person, other than the Administrator as contemplated by the
III-2
Agreement, dominion and control of any Lock-Box Account, or the right
to take dominion and control of any such account at a future time or
upon the occurrence of a future event.
(k) The Seller is not in violation of any order of any court,
arbitrator or Governmental Authority.
(l) Neither the Seller nor any of its Affiliates has any
direct or indirect ownership or other financial interest in any
Purchaser.
(m) No proceeds of any purchase or reinvestment will be used
for any purpose that violates any applicable law, rule or regulation,
including Regulations T, U or X of the Federal Reserve Board.
(n) Each Pool Receivable included as an Eligible Receivable in
the calculation of the Net Receivables Pool Balance is an Eligible
Receivable.
(o) No event has occurred and is continuing that constitutes a
Termination Event or an Unmatured Termination Event and no event would
result from a purchase in respect of, or reinvestment in respect of,
the Purchased Interest or from the application of the proceeds
therefrom that constitutes a Termination Event or an Unmatured
Termination Event.
(p) The Seller has complied in all material respects with the
applicable Credit and Collection Policy.
(q) The Seller has complied in all material respects with all
of the terms, covenants and agreements contained in the Agreement and
the other Transaction Documents that are applicable to it and all laws,
rules, regulations and orders that are applicable to it.
(r) The Seller's complete corporate name is set forth in the
preamble to the Agreement, and it does not use and has not during the
last six years used any other corporate name, trade name,
doing-business name or fictitious name, except as set forth on Schedule
III to the Agreement and except for names first used after the date of
the Agreement and set forth in a notice delivered to the Administrator
pursuant to SECTION 1(k)(iv) of EXHIBIT IV to the Agreement.
(s) The Seller is not an "investment company," or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. In addition, the Seller is
not a "holding company," a "subsidiary company" of a "holding company"
or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
III-3
(t) With respect to each Receivable transferred to the Seller
under the Sale and Contribution Agreement, Seller has given reasonably
equivalent value to AGSC thereof in consideration therefor and such
transfer was not made for or on account of an antecedent debt. No
transfer by AGSC of any Receivable under the Sale and Contribution
Agreement is or may be voidable under any section of the Bankruptcy
Code.
(u) Each Contract with respect to each Receivable is effective
to create, and has created, a legal, valid and binding obligation of
the related Obligor to pay the Outstanding Balance of the Receivable
created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors'
rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(v) Since its most recent fiscal year end, there has been no
material adverse change in the business, operations, financial
condition, properties or assets of the Seller.
2. REPRESENTATIONS AND WARRANTIES OF GREETINGS (INCLUDING IN ITS
CAPACITY AS THE SERVICER). Greetings, individually and in its capacity as the
Servicer, represents and warrants as follows:
(a) Greetings is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Ohio, and
is duly qualified to do business and is in good standing as a foreign
corporation in every jurisdiction where the nature of its business
requires it to be so qualified, except where the failure to be so
qualified would not have a Material Adverse Effect.
(b) The execution, delivery and performance by Greetings, of
the Agreement and the other Transaction Documents to which it is a
party, including the Servicer's use of the proceeds of purchases and
reinvestments: (i) are within its corporate powers; (ii) have been duly
authorized by all necessary corporate action; (iii) do not contravene
or result in a default under or conflict with: (A) its charter or
by-laws, (B) any law, rule or regulation applicable to it, (C) any
material indenture, loan agreement, mortgage, deed of trust or other
material agreement or instrument to which it is a party or by which it
is bound, or (D) any order, writ, judgment, award, injunction or decree
binding on or affecting it or any of its property; and (iv) do not
result in or require the creation of any Adverse Claim upon or with
respect to any of its properties. The Agreement and the other
Transaction Documents to which Greetings is a party have been duly
executed and delivered by Greetings.
(c) No authorization, approval or other action by, and no
notice to or filing with any Governmental Authority or other Person, is
required for the due execution, delivery and performance by Greetings
of the Agreement or any other Transaction Document to which it is a
party.
III-4
(d) Each of the Agreement and the other Transaction Documents
to which Greetings is a party constitutes the legal, valid and binding
obligation of Greetings enforceable against Greetings in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws from time to time in
effect affecting the enforcement of creditors' rights generally and by
general principles of equity, regardless of whether such enforceability
is considered in a proceeding in equity or at law.
(e) The balance sheets of Greetings and its consolidated
Subsidiaries as at February 28, 2001, and the related statements of
income and retained earnings for the fiscal year then ended, copies of
which have been furnished to the Administrator and each Purchaser
Agent, fairly present the financial condition of Greetings and its
consolidated Subsidiaries as at such date and the results of the
operations of Greetings and its Subsidiaries for the period ended on
such date, all in accordance with generally accepted accounting
principles consistently applied, and since February 28, 2001, there has
been no event or circumstances which have had a Material Adverse
Effect.
(f) Except as disclosed in the most recent audited financial
statements of Greetings furnished to the Administrator and each
Purchaser Agent, there is no pending or, to its best knowledge,
threatened action or proceeding affecting it or any of its Subsidiaries
before any Governmental Authority or arbitrator that could reasonably
be expected to have a Material Adverse Effect.
(g) No proceeds of any purchase or reinvestment will be used
to acquire any equity security of a class that is registered pursuant
to Section 12 of the Securities Exchange Act of 1934.
(h) Each Information Package (if prepared by Greetings or one
of its Affiliates, or to the extent that information contained therein
is supplied by Greetings or an Affiliate), information, exhibit,
financial statement, document, book, record or report furnished or to
be furnished at any time by or on behalf of the Servicer to the
Administrator, any Purchaser or any Purchaser Agent in connection with
the Agreement is or will be complete and accurate in all material
respects as of its date or as of the date so furnished and does not and
will not contain any material misstatement of fact or omit to state a
material fact or any fact necessary to make the statements contained
therein not materially misleading.
(i) The principal place of business and chief executive office
(as such terms are used in the UCC) of Greetings and the office where
it keeps its records concerning the Receivables are located at the
address referred to in SECTION 2(b) of EXHIBIT IV to the Agreement.
III-5
(j) Greetings is not in violation of any order of any court,
arbitrator or Governmental Authority, which could have a Material
Adverse Effect.
(k) Neither Greetings nor any of its Affiliates has any direct
or indirect ownership or other financial interest in any Purchaser.
(l) The Servicer has complied in all material respects with
the applicable Credit and Collection Policy.
(m) Greeting has complied in all material respects with all of
the terms, covenants and agreements contained in the Agreement and the
other Transaction Documents that are applicable to it.
(n) Greetings is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. In addition, Greetings is
not a "holding company," a "subsidiary company" of a "holding company,"
or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
(o) Since its most recent fiscal year end, there has been no
change in the business, operations, financial condition, properties or
assets of the Servicer which would have a Material Adverse Effect on
its ability to perform its obligations under the Agreement or any other
Transaction Document to which it is a party or materially and adversely
affect the transactions contemplated under the Agreement or such other
Transaction Documents.
(p) No license or approval is required for the Administrator
or any successor Servicer to use any program used by the Servicer in
the servicing of the Receivables, other than such licenses and
approvals that have been obtained and are in full force and effect.
III-6
EXHIBIT IV
COVENANTS
1. COVENANTS OF THE SELLER. Until the latest of the Facility
Termination Date, the date on which no Investment of or Discount in respect of
the Purchased Interest shall be outstanding or the date all other amounts owed
by the Seller under the Agreement to any Purchaser, Purchaser Agent, the
Administrator and any other Indemnified Party or Affected Person shall be paid
in full:
(a) COMPLIANCE WITH LAWS, ETC. The Seller shall comply with
all applicable laws, rules, regulations and orders, and preserve and
maintain its corporate existence, rights, franchises, qualifications
and privileges, except to the extent that the failure so to comply with
such laws, rules and regulations or the failure so to preserve and
maintain such rights, franchises, qualifications and privileges would
not have a Material Adverse Effect.
(b) OFFICES, RECORDS AND BOOKS OF ACCOUNT, ETC. The Seller:
(i) shall not move its principal place of business and chief executive
office (as such terms or similar terms are used in the UCC) and the
office where it keeps its records concerning the Receivables to an
address other than the address of the Seller set forth under its name
on the signature page to the Agreement or, pursuant to CLAUSE (k)(iv)
below, at any other locations in jurisdictions where all actions
reasonably requested by the Administrator to protect and perfect the
interest of the Administrator (for the benefit of the Purchasers) in
the Receivables and related items (including the Pool Assets) have been
taken and completed and (ii) shall provide the Administrator with at
least 30 days' written notice before making any change in the Seller's
name or making any other change in the Seller's identity or corporate
structure (including a Change in Control) that could render any UCC
financing statement filed in connection with this Agreement "seriously
misleading" as such term (or similar term) is used in the UCC; each
notice to the Administrator pursuant to this sentence shall set forth
the applicable change and the effective date thereof. The Seller also
will maintain and implement (or cause the Servicer to maintain and
implement) administrative and operating procedures (including an
ability to recreate records evidencing Receivables and related
Contracts in the event of the destruction of the originals thereof),
and keep and maintain (or cause the Servicer to keep and maintain) all
documents, books, records, computer tapes and disks and other
information reasonably necessary or advisable for the collection of all
Receivables (including records adequate to permit the daily
identification of each Receivable and all Collections of and
adjustments to each existing Receivable). The Seller will (and will
cause each Originator and AGSC to) on or prior to the date of the
Agreement, xxxx its master data processing records and other books and
records relating to the Purchased Interest (and at all times thereafter
(until the latest of the Facility Termination Date or the date all
other amounts owed by the Seller under the Agreement shall be paid in
full) continue to maintain such records) with a legend, acceptable to
the Administrator, describing the Purchased Interest.
IV-1
(c) PERFORMANCE AND COMPLIANCE WITH CONTRACTS AND CREDIT AND
COLLECTION POLICY. The Seller shall (and shall cause the Servicer to),
at its expense, (i) timely perform and comply in all material respects
with all provisions, covenants and other promises required to be
observed by it under the Contracts related to the Receivables unless
the failure to so perform or comply does not involve a material portion
of such Receivables, and the Seller shall have complied with its
obligations with respect to such Receivables set forth in SECTION
1.4(e), and (ii) timely comply in all material respects with the
applicable Credit and Collection Policies with regard to each
Receivable.
(d) OWNERSHIP INTEREST, ETC. The Seller shall (and shall cause
the Servicer to), at its expense, take all action necessary or
desirable to establish and maintain a valid and enforceable undivided
percentage ownership or security interest, to the extent of the
Purchased Interest which shall not be greater than 100%, in the Pool
Receivables, the Related Security and Collections with respect thereto,
and a first priority perfected security interest in the Pool Assets, in
each case free and clear of any Adverse Claim, in favor of the
Administrator (for the benefit of the Purchasers), including taking
such action to perfect, protect or more fully evidence the interest of
the Administrator (for the benefit of the Purchasers) as the
Administrator, may reasonably request.
(e) SALES, LIENS, ETC. The Seller shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist any Adverse Claim upon or with respect to, any or all
of its right, title or interest in, to or under any Pool Assets
(including the Seller's undivided interest in any Receivable, Related
Security or Collections, or upon or with respect to any account to
which any Collections of any Receivables are sent), or assign any right
to receive income in respect of any items contemplated by this
paragraph.
(f) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as provided
in the Agreement, the Seller shall not, and shall not permit the
Servicer to, extend the maturity or adjust the Outstanding Balance or
otherwise modify the terms of any Pool Receivable, or amend, modify or
waive any term or condition of any related Contract in any manner that
would modify the terms of any Pool Receivable.
(g) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. The
Seller shall not make (or permit any Originator or AGSC to make) any
change in the character of its business or any change in any Credit and
Collection Policy that would have a Material Adverse Effect with
respect to the Receivables. The Seller shall not make (or permit any
Originator or AGSC to make) any other change in any Credit and
Collection Policy without giving prior written notice thereof to the
Administrator and each Purchaser Agent.
(h) AUDITS. The Seller shall (and shall cause each Originator
and AGSC to), from time to time during regular business hours, as
reasonably requested in advance (unless a Termination Event or
Unmatured Termination Event exists) by the Administrator or any
Purchaser, permit the Administrator, any Purchaser, any Purchaser
Agent, or any agent or
IV-2
representatives of the foregoing: (i) to examine and make copies of and
abstracts from all books, records and documents (including computer
tapes and disks) in the possession or under the control of the Seller
(or AGSC or any such Originator) relating to Receivables and the
Related Security, including the related Contracts, and (ii) to visit
the offices and properties of the Seller, AGSC and the Originators for
the purpose of examining such materials described in CLAUSE (i) above,
and to discuss matters relating to Receivables and the Related Security
or the Seller's, Greetings', AGSC's or an Originator's performance
under the Transaction Documents or under the Contracts with any of the
officers, employees, agents or contractors of the Seller, Greetings,
AGSC or an Originator having knowledge of such matters and (iii)
without limiting CLAUSES (i) and (ii) above, to engage certified public
accountants or other auditors acceptable to the Seller and the
Administrator to conduct, at the Seller's expense, a review of the
Seller's books and records with respect to such Receivables.
(i) CHANGE IN LOCK-BOX BANKS, LOCK-BOX ACCOUNTS AND PAYMENT
INSTRUCTIONS TO OBLIGORS. The Seller shall not, and shall not permit
the Servicer, AGSC or any Originator to, add or terminate any bank as a
Lock-Box Bank or any account as a Lock-Box Account from those listed in
SCHEDULE II to the Agreement, or make any change in its instructions to
Obligors regarding payments to be made to the Seller, AGSC the
Originators, the Servicer or any Lock-Box Account (or related post
office box), unless the Administrator and a Simple Majority shall have
consented thereto in writing, which consent shall not be unreasonably
withheld or delayed, and the Administrator shall have received copies
of all agreements and documents (including Lock-Box Agreements) that it
may request in connection therewith. Notwithstanding anything contained
in this PARAGRAPH (i) to the contrary, the Seller may add an account as
a Lock-Box Account at a Lock-Box Bank, without the consent of the
Administrator and the Purchasers upon delivery to the Administrator of
a Lock-Box Agreement in form and substance reasonably acceptable to the
Administrator.
(j) DEPOSITS TO LOCK-BOX ACCOUNTS. The Seller shall (or shall
cause the Servicer to): (i) mail, wire or otherwise transfer, or cause
to be so transferred, any Collections received by it, the Servicer,
AGSC or any Originator to Lock-Box Accounts not later than one Business
Day after receipt thereof and (ii) instruct all Obligors (other than,
for a period no longer than 120 days after the Closing Date, Kinko's)
to make payments of all Receivables to one or more Lock-Box Accounts or
to post office boxes to which only Lock- Box Banks have access (and
shall instruct the Lock-Box Banks to cause all items and amounts
relating to such Receivables received in such post office boxes to be
removed and deposited into a Lock-Box Account on a daily basis). Except
as otherwise agreed to in writing by the Administrator and the Majority
Purchasers, each Lock-Box Account shall at all times be subject to a
Lock-Box Agreement. The Seller will not (and will not permit the
Servicer to) deposit or otherwise credit, or cause or permit to be so
deposited or credited, to any Lock-Box Account cash or cash proceeds
other than Collections.
IV-3
(k) REPORTING REQUIREMENTS. The Seller will provide to the
Administrator (in multiple copies, if requested by the Administrator)
and each Purchaser Agent the following:
(i) as soon as available and in any event within 120 days
after the end of each fiscal year of the Seller, unaudited
financial statements for such year certified as to accuracy by
the president or treasurer of the Seller;
(ii) as soon as possible and in any event within five days
after the occurrence of each Termination Event or Unmatured
Termination Event, a statement of the president or any vice
president of the Seller setting forth details of such
Termination Event or Unmatured Termination Event and the
action that the Seller has taken and proposes to take with
respect thereto;
(iii) promptly after the filing or receiving thereof,
copies of all reports and notices that the Seller or any
Affiliate files under ERISA with the Internal Revenue Service,
the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or that the Seller or any Affiliate
receives from any of the foregoing or from any multiemployer
plan (within the meaning of Section 4001(a)(3) of ERISA) to
which the Seller or any of its Affiliates is or was, within
the preceding five years, a contributing employer, in each
case in respect of the assessment of withdrawal liability or
an event or condition that could result in the imposition of
liability on the Seller and/or any such Affiliate;
(iv) at least 30 days before any change in the Seller's
name or any other change requiring the amendment of UCC
financing statements, a notice setting forth such changes and
the effective date thereof;
(v) promptly after the Seller obtains knowledge thereof,
notice of any: (A) adverse litigation, investigation or
proceeding that may exist at any time between the Seller and
any Person or (B) material litigation or proceeding relating
to any Transaction Document;
(vi) promptly after the occurrence thereof, notice of a
Material Adverse Effect in the business, operations, property
or financial or other condition of the Seller, the Servicer,
any Originator, AGSC or Greetings; and
(vii) such other information respecting the Receivables or
the condition or operations, financial or otherwise, of the
Seller, the Servicer, any Originator, AGSC or any of their
Affiliates as the Administrator or any Purchaser Agent may
from time to time reasonably request.
(l) CERTAIN AGREEMENTS. Without the prior written consent of
the Administrator and the Majority Purchasers, the Seller will not (and
will not permit any Originator,
IV-4
Greetings or AGSC to) amend, modify, waive, revoke or terminate any
Transaction Document to which it is a party or any provision of
Seller's certificate of incorporation or by- laws.
(m) RESTRICTED PAYMENTS. (i) Except pursuant to CLAUSE (ii)
below, the Seller will not: (A) purchase or redeem any shares of its
capital stock, (B) declare or pay any dividend or set aside any funds
for any such purpose, (C) prepay, purchase or redeem any Debt, (D) lend
or advance any funds or (E) repay any loans or advances to, for or from
any of its Affiliates (the amounts described in CLAUSES (A) through (E)
being referred to as "RESTRICTED PAYMENTS ").
(ii) Subject to the limitations set forth in CLAUSE (iii)
below, the Seller may make Restricted Payments so long as such
Restricted Payments are made only in one or more of the
following ways: (A) the Seller may make cash payments
(including prepayments) on the Sale and Contribution Notes in
accordance with their terms, and (B) if no amounts are then
outstanding under the Sale and Contribution Notes, the Seller
may declare and pay dividends.
(iii) The Seller may make Restricted Payments only out of
the funds it receives pursuant to SECTIONS 1.4(b)(ii) and (iv)
of the Agreement. Furthermore, the Seller shall not pay, make
or declare: (A) any dividend if, after giving effect thereto,
the Seller's tangible net worth would be less than $10,000,000
or (B) any Restricted Payment (including any dividend) if,
after giving effect thereto, any Termination Event or
Unmatured Termination Event shall have occurred and be
continuing.
(n) OTHER BUSINESS. The Seller will not: (i) engage in any
business other than the transactions contemplated by the Transaction
Documents; (ii) create, incur or permit to exist any Debt of any kind
(or cause or permit to be issued for its account any letters of credit
or bankers' acceptances) other than pursuant to this Agreement or the
Sale and Contribution Notes; or (iii) form any Subsidiary or make any
investments in any other Person; provided, however, that the Seller
shall be permitted to incur minimal obligations to the extent necessary
for the day-to-day operations of the Seller (such as expenses for
stationery, audits, maintenance of legal status, etc.).
(o) USE OF SELLER'S SHARE OF COLLECTIONS. The Seller shall
apply the Seller's Share of Collections to make payments in the
following order of priority: (i) the payment of its expenses (including
all obligations payable to the Purchaser Groups and the Administrator
under the Agreement and under each Purchaser Group Fee Letter); (ii)
the payment of accrued and unpaid interest on the Sale and Contribution
Notes; and (iii) other legal and valid corporate purposes.
(p) TANGIBLE NET WORTH. The Seller will not permit its
tangible net worth, at any time, to be less than $10,000,000.
IV-5
2. COVENANTS OF THE SERVICER AND GREETINGS. Until the latest of
the Facility Termination Date, the date on which no Investment of or Discount in
respect of the Purchased Interest shall be outstanding or the date all other
amounts owed by the Seller under the Agreement to the Purchaser Agents, the
Purchasers, the Administrator and any other Indemnified Party or Affected Person
shall be paid in full:
(a) COMPLIANCE WITH LAWS, ETC. The Servicer and, to the extent
that it ceases to be the Servicer, Greetings shall comply (and shall
cause each Originator and AGSC to comply) in all material respects with
all applicable laws, rules, regulations and orders, and preserve and
maintain its corporate existence, rights, franchises, qualifications
and privileges, except to the extent that the failure so to comply with
such laws, rules and regulations or the failure so to preserve and
maintain such existence, rights, franchises, qualifications and
privileges would not have a Material Adverse Effect.
(b) OFFICES, RECORDS AND BOOKS OF ACCOUNT, ETC. Servicer and,
to the extent that it ceases to be the Servicer, Greetings, shall keep
(and shall cause each Originator and AGSC to keep) its principal place
of business and chief executive office (as such terms or similar terms
are used in the applicable UCC) and the office where it keeps its
records concerning the Receivables at the address of the Servicer set
forth under its name on the signature page to the Agreement or, upon at
least 30 days' prior written notice of a proposed change to the
Administrator, at any other locations in jurisdictions where all
actions reasonably requested by the Administrator to protect and
perfect the interest of the Administrator (for the benefit of each
Purchaser) in the Receivables and related items (including the Pool
Assets) have been taken and completed. The Servicer and, to the extent
that it ceases to be the Servicer, Greetings, also will (and will cause
each Originator and AGSC to) maintain and implement administrative and
operating procedures (including an ability to recreate records
evidencing Receivables and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain all
documents, books, records, computer tapes and disks and other
information reasonably necessary or advisable for the collection of all
Receivables (including records adequate to permit the daily
identification of each Receivable and all Collections of and
adjustments to each existing Receivable).
(c) PERFORMANCE AND COMPLIANCE WITH CONTRACTS AND CREDIT AND
COLLECTION POLICY. The Servicer and, to the extent that it ceases to be
the Servicer, Greetings, shall (and shall cause each Originator and
AGSC to), at its expense, (i) timely perform and comply in all material
respects with all provisions, covenants and other promises required to
be observed by it under the Contracts related to the Receivables unless
the failure to so perform or comply does not involve a material portion
of such Receivables, and the Seller shall have complied with its
obligations with respect to such Receivables set forth in SECTION
1.4(e), and (ii) timely comply in all material respects with the
applicable Credit and Collection Policies with regard to each
Receivable.
IV-6
(d) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as provided
in the Agreement, the Servicer and, to the extent that it ceases to be
the Servicer, Greetings, shall not extend (and shall not permit any
Originator or AGSC to extend), the maturity or adjust the Outstanding
Balance or otherwise modify the terms of any Pool Receivable, or amend,
modify or waive any term or condition of any related Contract in any
manner that would modify the terms of any Pool Receivable.
(e) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. The
Servicer and, to the extent that it ceases to be the Servicer,
Greetings, shall not make (and shall not permit any Originator to make)
any change in the character of its business or in any Credit and
Collection Policy that would have a Material Adverse Effect. The
Servicer and, to the extent that it ceases to be the Servicer,
Greetings, shall not make (and shall not permit any Originator or AGSC
to make) any other change in any Credit and Collection Policy without
giving prior written notice thereof to the Administrator and each
Purchaser Agent.
(f) AUDITS. The Servicer and, to the extent that it ceases to
be the Servicer, Greetings, shall (and shall cause each Originator and
AGSC to), from time to time during regular business hours, (unless a
Termination Event or Unmatured Termination Event exists) by the
Administrator, Purchaser or any Purchaser Agent, permit (and cause each
Originator and AGSC) the Administrator, any Purchaser, any Purchaser
Agent or any agent or representative of the foregoing: (i) to examine
and make copies of and abstracts from all books, records and documents
(including computer tapes and disks) in its possession or under its
control (or the control of AGSC or an Originator) relating to
Receivables and the Related Security, including the related Contracts;
and (ii) to visit its offices and properties (and the offices and
property of AGSC and the Originators) for the purpose of examining such
materials described in CLAUSE (i) above, and to discuss matters
relating to Receivables and the Related Security or Greetings', AGSC's
or any Originator's performance under the Transaction Documents or
under the Contracts with any of their respective officers, employees,
agents or contractors having knowledge of such matters and (iii)
without limiting CLAUSES (i) and (ii) above, to engage certified public
accountants or other auditors acceptable to the Servicer and the
Administrator to conduct, at the Servicer's expense, a review of the
Servicer's books and records with respect to such Receivables.
(g) CHANGE IN LOCK-BOX BANKS, LOCK-BOX ACCOUNTS AND PAYMENT
INSTRUCTIONS TO OBLIGORS. The Servicer and, to the extent that it
ceases to be the Servicer, Greetings, shall not (and shall not permit
any Originator or AGSC to) add or terminate any bank as a Lock- Box
Bank or any account as a Lock-Box Account from those listed in SCHEDULE
II to the Agreement, or make any change in its instructions to Obligors
regarding payments to be made to the Servicer or any Lock-Box Account
(or related post office box), unless the Administrator and a Simple
Majority shall have consented thereto in writing, which consent shall
not be unreasonably withheld or delayed, and the Administrator shall
have received copies of all agreements and documents (including
Lock-Box Agreements) that it may request in connection therewith.
Notwithstanding anything contained in this PARAGRAPH (g)
IV-7
to the contrary, the Servicer may add an account as a Lock-Box Account
at a Lock-Box Bank, without the consent of the Administrator and the
Purchasers upon delivery to the Administrator of a Lock-Box Agreement
in form and substance reasonably acceptable to the Administrator.
(h) DEPOSITS TO LOCK-BOX ACCOUNTS. The Servicer shall: (i)
mail, wire or otherwise transfer, or cause to be so transferred, any
Collections received by it to Lock-Box Accounts not later than one
Business Day after receipt thereof and (ii) instruct all Obligors
(other than, for a period no longer than 120 days after the Closing
Date, Kinko's) to make payments of all Receivables to one or more
Lock-Box Accounts or to post office boxes to which only Lock-Box Banks
have access (and shall instruct the Lock-Box Banks to cause all items
and amounts relating to such Receivables received in such post office
boxes to be removed and deposited into a Lock-Box Account on a daily
basis). Except as otherwise agreed to in writing by the Administrator
and the Majority Purchasers, each Lock-Box Account shall at all times
be subject to a Lock-Box Agreement. The Servicer will not deposit or
otherwise credit, or cause or permit to be so deposited or credited, to
any Lock- Box Account cash or cash proceeds other than Collections.
(i) REPORTING REQUIREMENTS. Greetings shall provide to the
Administrator (in multiple copies, if requested by the
Administrator) and each Purchaser Agent the following:
(i) as soon as available and in any event within 60 days
after the end of the first three quarters of each fiscal year
of Greetings, balance sheets of Greetings and its consolidated
Subsidiaries, each Originator, AGSC and Seller as of the end
of such quarter and statements of income, retained earnings
and cash flow of Greetings and its consolidated Subsidiaries,
each Originator, and AGSC for the period commencing at the end
of the previous fiscal year and ending with the end of such
quarter, certified by the chief financial officer of such
Person;
(ii) as soon as available and in any event within 120 days
after the end of each fiscal year of Greetings and of Seller,
a copy of the annual report for such year for Greetings and
its consolidated Subsidiaries, each Originator, and AGSC,
containing financial statements for such year audited by
independent certified public accountants of nationally
recognized standing;
(iii) as to the Servicer only, as soon as available and in
any event not later than two Business Days prior to the
Settlement Date, an Information Package as of the last day of
such month or, within 10 Business Days of a request by the
Administrator or any Purchaser Agent, an Information Package
for such periods as is specified by the Administrator or such
Purchaser Agent (including on a semi-monthly, weekly or daily
basis);
IV-8
(iv) as soon as possible and in any event within five days
after becoming aware of the occurrence of each Termination
Event or Unmatured Termination Event, a statement of the chief
financial officer of Greetings setting forth details of such
Termination Event or Unmatured Termination Event and the
action that such Person has taken and proposes to take with
respect thereto;
(v) promptly after the sending or filing thereof, copies
of all reports that Greetings sends to any of its security
holders, and copies of all reports and registration statements
that Greetings or any Subsidiary files with the Securities and
Exchange Commission or any national securities exchange;
(vi) promptly after the filing or receiving thereof,
copies of all reports and notices that Greetings or any of its
Affiliate files under ERISA with the Internal Revenue Service,
the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or that such Person or any of its
Affiliates receives from any of the foregoing or from any
multiemployer plan (within the meaning of Section 4001(a)(3)
of ERISA) to which such Person or any of its Affiliate is or
was, within the preceding five years, a contributing employer,
in each case in respect of the assessment of withdrawal
liability or an event or condition that could result in the
imposition of a liability on Greetings and/or any such
Affiliate;
(vii) at least thirty days before any change in
Greetings's, any Originator's or AGSC's name or any other
change requiring the amendment of UCC financing statements, a
notice setting forth such changes and the effective date
thereof;
(viii) promptly after Greetings obtains knowledge thereof,
notice of any: (A) litigation, investigation or proceeding
that may exist at any time between Greetings or any of its
Subsidiaries and any Governmental Authority that, if not cured
or if adversely determined, as the case may be, would
reasonably be expected to result in a Material Adverse Effect;
(B) litigation or proceeding adversely affecting such Person
or any of its Subsidiaries in which the amount involved is
more than $2,000,000 and not covered by insurance or in which
injunctive or similar relief is sought; or (C) litigation or
proceeding relating to any Transaction Document;
(ix) promptly after the occurrence thereof, notice of any
Material Adverse Effect;
(x) such other information respecting the Receivables or
the condition or operations, financial or otherwise, of
Greetings, any Originator or AGSC or any of their respective
Affiliates as the Administrator or any Purchaser Agent may
from time to time reasonably request; and
IV-9
(xi) promptly after the occurrence thereof, notice of any
material acquisition or investment by Greetings of or in any
Person, business or operation.
3. SEPARATE EXISTENCE. Each of the Seller and Greetings hereby
acknowledges that the Purchasers, the Purchaser Agents, the Administrator and
the Liquidity Providers are entering into the transactions contemplated by this
Agreement and the other Transaction Documents in reliance upon the Seller's and
AGSC's identity as a legal entity separate from Greetings and its Affiliates.
Therefore, from and after the date hereof, each of the Seller and Greetings
shall take all steps specifically required by the Agreement or reasonably
required by the Administrator to continue the Seller's and AGSC's identity as a
separate legal entity and to make it apparent to third Persons that each of the
Seller and AGSC is an entity with assets and liabilities distinct from those of
Greetings and any other Person, and is not a division of Greetings, its
Affiliates or any other Person. Without limiting the generality of the foregoing
and in addition to and consistent with the other covenants set forth herein,
each of the Seller and Greetings shall take such actions as shall be required in
order that:
(a) The Seller will be a limited purpose corporation whose
primary activities are restricted in its certificate of incorporation
to: (i) purchasing or otherwise acquiring from the Originators, owning,
holding, granting security interests or selling interests in Pool
Assets, (ii) entering into agreements for the selling and servicing of
the Receivables Pool, and (iii) conducting such other activities as it
deems necessary or appropriate to carry out its primary activities;
(b) Seller shall not engage in any business or activity, or
incur any indebtedness or liability, other than as expressly permitted
by the Transaction Documents;
(c) Not less than one member of the Seller's Board of
Directors (the "INDEPENDENT DIRECTOR") shall be an individual who is
not a direct, indirect or beneficial stockholder, officer, director,
employee, affiliate, associate or supplier of Greetings or any of its
Affiliates. The certificate of incorporation of the Seller shall
provide that: (i) the Seller's Board of Directors shall not approve, or
take any other action to cause the filing of, a voluntary bankruptcy
petition with respect to the Seller unless the Independent Director
shall approve the taking of such action in writing before the taking of
such action, and (ii) such provision cannot be amended without the
prior written consent of the Independent Director;
(d) The Independent Director shall not at any time serve as a
trustee in bankruptcy for the Seller, Greetings or any Affiliate
thereof;
(e) Any employee, consultant or agent of the Seller or AGSC
will be compensated from the Seller's or AGSC's (as appropriate) funds
for services provided to the Seller or AGSC. Seller will not engage any
agents other than its attorneys, auditors and other professionals and a
servicer and any other agent contemplated by the Transaction Documents
IV-10
for the Receivables Pool, which servicer will be fully compensated for
its services by payment of the Servicing Fee;
(f) The Seller will contract with the Servicer to perform for
the Seller all operations required on a daily basis to service the
Receivables Pool. The Seller will pay the Servicer the Servicing Fee
pursuant to the Agreement. The Seller will not incur any material
indirect or overhead expenses for items shared with Greetings (or any
other Affiliate thereof) that are not reflected in the Servicing Fee.
To the extent, if any, that the Seller, AGSC (or any Affiliate thereof)
shares items of expenses not reflected in the Servicing Fee, such as
legal, auditing and other professional services, such expenses will be
allocated to the extent practical on the basis of actual use or the
value of services rendered, and otherwise on a basis reasonably related
to the actual use or the value of services rendered; it being
understood that Greetings shall pay all expenses relating to the
preparation, negotiation, execution and delivery of the Transaction
Documents, including legal, agency and other fees;
(g) Neither the Seller's nor AGSC's operating expenses will be
paid by Greetings or any other Affiliate thereof;
(h) All of the Seller's and AGSC's business correspondence and
other communications shall be conducted in their respective names and
on their own separate stationery;
(i) The Seller's and AGSC's books and records will be
maintained separately from those of Greetings and any other Affiliate
thereof;
(j) All financial statements of Greetings or any Affiliate
thereof that are consolidated to include Seller or AGSC will contain
detailed notes clearly stating that: (i) each is a special purpose
corporation and a Subsidiary of Greetings, and (ii) the Originators
have sold receivables and other related assets to AGSC (who has in turn
sold receivables and related assets to Seller) or Seller that, in turn,
has sold undivided interests therein to certain financial institutions
and other entities;
(k) The Seller's and AGSC's assets will be maintained in a
manner that facilitates their identification and segregation from those
of Greetings or any Affiliate thereof;
(l) Each of the Seller and AGSC will strictly observe
corporate formalities in its dealings with Greetings or any Affiliate
thereof, and funds or other assets of the Seller and AGSC will not be
commingled with those of Greetings or any Affiliate thereof except as
permitted by the Agreement in connection with servicing the Pool
Receivables. The Seller shall not maintain joint bank accounts or other
depository accounts to which Greetings and/or any Affiliate thereof
(other than Greetings in its capacity as the Servicer and any permitted
Sub-Servicer) has independent access. Neither the Seller nor AGSC is
named, and has entered into any agreement to be named, directly or
indirectly, as a direct or contingent
IV-11
beneficiary or loss payee on any insurance policy with respect to any
loss relating to the property of Greetings or any Subsidiary or other
Affiliate of Greetings. Each of the Seller and AGSC will pay to the
appropriate Affiliate their respective share of the marginal increase
or, in the absence of such increase, the market amount of their
respective share of the portion of the premium payable with respect to
any insurance policy that covers the Seller and/or AGSC and such
Affiliate;
(m) The Seller and AGSC will maintain arm's-length
relationships with Greetings (and any Affiliate thereof). Any Person
that renders or otherwise furnishes services to the Seller and/or AGSC
will be compensated by the Seller or AGSC (as appropriate) at market
rates for such services it renders or otherwise furnishes to the Seller
or AGSC (as appropriate). Neither the Seller, AGSC nor Greetings will
be or will hold itself out to be responsible for the debts of the other
or the decisions or actions respecting the daily business and affairs
of the other. The Seller, AGSC and Greetings will immediately correct
any known misrepresentation with respect to the foregoing, and they
will not operate or purport to operate as an integrated single economic
unit with respect to each other or in their dealing with any other
entity; and
(n) Greetings shall not pay the salaries of Seller's or AGSC's
employees, if any.
IV-12
EXHIBIT V
TERMINATION EVENTS
Each of the following shall be a "TERMINATION EVENT ":
(a) (i) the Seller, Greetings, any Originator, AGSC or the Servicer
shall fail to perform or observe any term, covenant or agreement under the
Agreement or any other Transaction Document, (ii) the Seller or the Servicer
shall fail to make when due any payment or deposit to be made by it under the
Agreement and such failure shall continue unremedied for one Business Day or
(iii) Greetings shall resign as Servicer, and no successor Servicer reasonably
satisfactory to the Administrator and the Majority Purchasers shall have been
appointed; PROVIDED that at all times when Administrator is not permitted to
demand that the Servicer segregate Collections pursuant to SECTION 1.4(b), no
Termination Event or Unmatured Termination Event shall arise solely from the
Seller's or Servicer's (whether as Greetings or as Servicer) failure to comply
with the first sentence of SECTIONS 1(j) or 2(h) of Exhibit IV to this Agreement
(respectively) with respect to Collections received as wire transfers, unless
and until (A) during the period from the Closing Date until earlier of 120 days
following the Closing Date or Kinko's makes payments on Receivables owing from
it directly to a Lock-Box Account (the "INTERIM PERIOD '), the aggregate amount
of such Collections held by the Servicer shall exceed $300,000, (B) during the
Interim Period, the Servicer shall fail to transfer Collections received by it
during any calendar week no later than the second Business Day of the next
following calendar week, or (C) at all times after the Interim Period, the
Servicer shall fail to transfer Collections received by it at any time the
aggregate amount of such Collections during any calendar month and not
previously transferred shall exceed $100,000 for such calendar month; PROVIDED,
FURTHER, that with respect to the failure described in clause (a)(i)
hereinabove, if such failure may be cured without any potential or actual
detriment to any Purchaser, then the Seller, Greetings, any Originator, AGSC or
the Servicer, as applicable, shall have ten days from the earlier of (A) such
Person's knowledge of such failure and (B) notice to such Person of such failure
to so cure any such failure before a Termination Event shall occur, so long as
such Person is diligently attempting to effect such cure.
(b) Greetings (or any Affiliate thereof) shall fail to transfer to any
successor Servicer when required any rights pursuant to the Agreement that
Greetings (or such Affiliate) then has as Servicer;
(c) any representation or warranty made or deemed made by the Seller,
Greetings, AGSC or any Originator (or any of their respective officers) under or
in connection with the Agreement or any other Transaction Document, or any
information or report delivered by the Seller, Greetings, AGSC or any Originator
or the Servicer pursuant to the Agreement or any other Transaction Document,
shall prove to have been incorrect or untrue in any material respect when made
or deemed made or delivered; PROVIDED, HOWEVER, that if the representation and
warranty contained in SECTIONS 1(g), 1(n) or 1(v) of EXHIBIT III to this
Agreement shall prove to have been incorrect or
V-1
untrue in any material respect when made or deemed made or delivered, such
breach shall not constitute a Termination Event if the Seller shall have
complied with its obligations with respect to such Receivable set forth in
SECTION 1.4(e); PROVIDED, FURTHER, that if such breach may be cured without any
potential or actual detriment to any Purchaser, then the Seller, Greetings, AGSC
or any Originator, as applicable, shall have ten days from the earlier of (A)
such Person's knowledge of such breach and (B) notice to such Person of such
breach to so cure any such breach before a Termination Event shall occur, so
long as such Person is diligently attempting to effect such cure.
(d) the Seller or the Servicer shall fail to deliver the Information
Package pursuant to the Agreement, and such failure shall remain unremedied for
two Business Days;
(e) the Agreement or any purchase or reinvestment pursuant to the
Agreement shall for any reason: (i) cease to create, or the Purchased Interest
shall for any reason cease to be, a valid and enforceable perfected undivided
percentage ownership or security interest to the extent of the Purchased
Interest in each Pool Receivable, the Related Security and Collections with
respect thereto, free and clear of any Adverse Claim, or (ii) cease to create
with respect to the Pool Assets, or the interest of the Administrator (for the
benefit of the Purchasers) with respect to such Pool Assets shall cease to be, a
valid and enforceable first priority perfected security interest, free and clear
of any Adverse Claim;
(f) the Seller, Greetings, AGSC or any Originator shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors; or any proceeding shall be instituted by or against the Seller,
Greetings, AGSC or any Originator seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain undismissed or
unstayed for a period of 60 days, or any of the actions sought in such
proceeding (including the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or for any substantial part of its property) shall occur; or the Seller,
Greetings, AGSC or any Originator shall take any organizational action to
authorize any of the actions set forth above in this paragraph;
(g) (i) (A) the Everyday Default Ratio shall exceed 5.0%, (B) the
Disputed Default Ratio shall exceed 3.0%, (C) the Seasonal Default Ratio shall
exceed 3.0%, (D) the Delinquency Ratio shall exceed 48% or (ii) the average for
three consecutive calendar months of (A) the Everyday Default Ratio shall exceed
4.0%, (B) the Disputed Default Ratio shall exceed 2.5%, (C) the Seasonal Default
Ratio shall exceed 2.5%, (D) the Delinquency Ratio shall exceed 44%, or (E) the
Dilution Ratio shall exceed 7%; or (iii) Days Sales Outstanding shall exceed
100.
V-2
(h) a Change in Control shall occur with respect to Seller, any
Originator, AGSC or Greetings;
(i) at any time (i) the sum of (A) the Aggregate Investment plus (B)
the Total Reserves, exceeds (ii) the sum of (A) the Net Receivables Pool Balance
at such time plus (B) the Purchasers' Share of the amount of Collections then on
deposit in the Lock-Box Accounts (other than amounts set aside therein
representing Discount and Fees), and such circumstance shall not have been cured
within two Business Days;
(j) (i) Greetings or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any of its Debt that is outstanding in a
principal amount of at least $10,000,000 in the aggregate when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement, mortgage, indenture
or instrument relating to such Debt (and shall have not been waived); or (ii)
any other event shall occur or condition shall exist under any agreement,
mortgage, indenture or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement,
mortgage, indenture or instrument (and shall have not been waived), if, in
either case: (a) the effect of such non-payment, event or condition is to give
the applicable debtholders the right (whether acted upon or not) to accelerate
the maturity of such Debt, or (b) any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to repay, redeem,
purchase or defease such Debt shall be required to be made, in each case before
the stated maturity thereof;
(k) either: (i) a contribution failure shall occur with respect to any
Benefit Plan sufficient to give rise to a lien under Section 302(f) of ERISA,
(ii) the Internal Revenue Service shall file a notice of lien asserting a claim
or claims pursuant to the Internal Revenue Code with regard to any of the assets
of Seller, any Originator, AGSC, Greetings or any ERISA Affiliate and such lien
shall have been filed and not released within 10 days, or (iii) the Pension
Benefit Guaranty Corporation shall, or shall indicate its intention in writing
to the Seller, any Originator, AGSC, Greetings or any ERISA Affiliate to, either
file a notice of lien asserting a claim pursuant to ERISA with regard to any
assets of the Seller, any Originator, AGSC, Greetings or any ERISA Affiliate or
terminate any Benefit Plan that has unfunded benefit liabilities, or any steps
shall have been taken to terminate any Benefit Plan subject to Title IV of ERISA
so as to result in any liability in excess of $1,000,000 and such lien shall
have been filed and not released within 10 days;
(l) one or more final judgments for the payment of money shall be
entered against the Seller or (ii) one or more final judgments for the payment
of money in an amount in excess of $20,000,000, individually or in the
aggregate, shall be entered against the Servicer on claims not covered by
insurance or as to which the insurance carrier has denied its responsibility,
and such judgment shall continue unsatisfied and in effect for sixty (60)
consecutive days without a stay of execution;
V-3
(m) the "Receivables Sale Termination Date" under and as defined in the
Receivables Sale Agreement shall occur under the Receivables Sale Agreement or
any Originator shall for any reason (other than as a result of or in connection
with its merger into, or its transfer of all or substantially all of its assets
or business to, another Originator) cease to transfer, or cease to have the
legal capacity to transfer, or otherwise be incapable of transferring
Receivables to AGSC under the Receivables Sale Agreement;
(n) the "Purchase and Sale Termination Date" under and as defined in
the Purchase and Sale Agreement shall occur under the Purchase and Sale
Agreement or any Originator shall for any reason (other than as a result of or
in connection with its merger into, or its transfer of all or substantially all
of its assets or business to, another Originator) cease to transfer, or cease to
have the legal capacity to transfer, or otherwise be incapable of transferring
Receivables to AGSC under the Purchase and Sale Agreement;
(o) the "Sale and Contribution Termination Date" under and as defined
in the Sale and Contribution Agreement shall occur under the Sale and
Contribution Agreement or AGSC or any Originator shall for any reason (other
than as a result of or in connection with its merger into, or its transfer of
all or substantially all of its assets or business to, another Originator) cease
to transfer, or cease to have the legal capacity to transfer, or otherwise be
incapable of transferring Receivables to the Seller under the Sale and
Contribution Agreement;
(p) Xxxxx'x or Standard & Poor's shall request any amendment,
supplement or other modification of the Agreement or any other Transaction
Document which is not made within 10 Business Days after the applicable
Purchaser Agent has provided notice thereof to the parties hereto; or
(q) the amount of dilutions recorded on any Information Package (i)
with respect to Receivables originated by any Originator other than Plus Xxxx,
Inc., for any of (a) seasonal returns, (b) advertising allowances or (c) volume
rebates or (ii) with respect to Receivables originated by Plus Xxxx, Inc., for
any of the Plus Xxxx, Inc. specific factors, exceeds the reserves or liabilities
reported on the immediately prior Information Package related to such dilution
category.
V-4
SCHEDULE I
CREDIT AND COLLECTION POLICY
Schedule I-1
SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
Lock-Box Bank Lock-Box Account
------------- -------- -------
Schedule II-1
SCHEDULE III
TRADE NAMES
Organizational Name Trade Names / Fictitious Names
------------------- ------------------------------
Schedule III-1
ANNEX A
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF INFORMATION PACKAGE
Annex A-1
ANNEX B
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF PURCHASE NOTICE
Annex B-1
ANNEX C
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF ASSUMPTION AGREEMENT
Annex C-1
ANNEX D
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF TRANSFER SUPPLEMENT
Annex D-1
ANNEX E
TO RECEIVABLES PURCHASE AGREEMENT
FORM OF PAYDOWN NOTICE
Annex D-1
