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Exhibit 10.2
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RECEIVABLES PURCHASE AGREEMENT
DATED AS OF MAY 1, 2000
AMONG
OMNOVA RECEIVABLES CORPORATION, AS SELLER,
OMNOVA SOLUTIONS INC., AS SERVICER,
FALCON ASSET SECURITIZATION CORPORATION,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO
AND
BANK ONE, NA (MAIN OFFICE CHICAGO), AS AGENT
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TABLE OF CONTENTS
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ARTICLE I. PURCHASE ARRANGEMENTS..................................................................................1
Section 1.1 PURCHASE FACILITY...............................................................................1
Section 1.2 INCREASES.......................................................................................2
Section 1.3 DECREASES.......................................................................................2
Section 1.4 PAYMENT REQUIREMENTS............................................................................2
ARTICLE II. PAYMENTS AND COLLECTIONS..............................................................................3
Section 2.1 PAYMENTS........................................................................................3
Section 2.3 COLLECTIONS FOLLOWING AMORTIZATION..............................................................4
Section 2.4 APPLICATION OF COLLECTIONS......................................................................4
Section 2.5 PAYMENT RECISSION...............................................................................5
Section 2.6 MAXIMUM PURCHASER INTERESTS.....................................................................5
Section 2.7 CLEAN UP CALL...................................................................................5
ARTICLE III. CONDUIT FUNDING......................................................................................6
Section 3.1 CP COSTS........................................................................................6
Section 3.2 CP COSTS PAYMENTS...............................................................................6
Section 3.3 CALCULATION OF CP COSTS.........................................................................6
ARTICLE IV. FINANCIAL INSTITUTION FUNDING.........................................................................6
Section 4.1 FINANCIAL INSTITUTION FUNDING...................................................................6
Section 4.2 YIELD PAYMENTS..................................................................................6
Section 4.3 SELECTION AND CONTINUATION OF TRANCHE PERIODS...................................................6
Section 4.4 FINANCIAL INSTITUTION DISCOUNT RATES............................................................7
Section 4.5 SUSPENSION OF THE LIBO RATE.....................................................................7
ARTICLE V. REPRESENTATIONS AND WARRANTIES.........................................................................8
Section 5.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES............................................8
Section 5.2 FINANCIAL INSTITUTION REPRESENTATIONS AND WARRANTIES...........................................11
ARTICLE VI. CONDITIONS OF PURCHASES..............................................................................12
Section 6.1 CONDITIONS PRECEDENT TO INITIAL INCREMENTAL PURCHASE...........................................12
Section 6.2 CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS........................................12
ARTICLE VII. COVENANTS...........................................................................................13
Section 7.1 AFFIRMATIVE COVENANTS OF THE SELLER PARTIES....................................................13
Section 7.2 NEGATIVE COVENANTS OF THE SELLER PARTIES.......................................................21
ARTICLE VIII. ADMINISTRATION AND COLLECTION......................................................................22
Section 8.1 DESIGNATION OF SERVICER........................................................................22
Section 8.2 DUTIES OF SERVICER.............................................................................23
Section 8.3 COLLECTION NOTICES.............................................................................24
Section 8.4 RESPONSIBILITIES OF SELLER.....................................................................24
Section 8.5 REPORTS........................................................................................24
Section 8.6 SERVICING FEES.................................................................................24
ARTICLE IX. AMORTIZATION EVENTS..................................................................................25
Section 9.1 AMORTIZATION EVENTS............................................................................25
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Section 9.2 REMEDIES.......................................................................................26
ARTICLE X. INDEMNIFICATION.......................................................................................27
Section 10.1 INDEMNITIES BY THE SELLER PARTIES..............................................................27
Section 10.2 INCREASED COST AND REDUCED RETURN..............................................................30
Section 10.3 OTHER COSTS AND EXPENSES.......................................................................30
Section 10.4 ADDITIONAL INDEMNIFICATION OBLIGATIONS.........................................................31
Section 10.5 DEFENSE OF CLAIMS..............................................................................31
ARTICLE XI. THE AGENT............................................................................................32
Section 11.1 AUTHORIZATION AND ACTION.......................................................................32
Section 11.2 DELEGATION OF DUTIES...........................................................................32
Section 11.3 EXCULPATORY PROVISIONS.........................................................................32
Section 11.4 RELIANCE BY AGENT..............................................................................33
Section 11.5 NON-RELIANCE ON AGENT AND OTHER PURCHASERS.....................................................33
Section 11.6 REIMBURSEMENT AND INDEMNIFICATION..............................................................33
Section 11.7 AGENT IN ITS INDIVIDUAL CAPACITY...............................................................33
Section 11.8 SUCCESSOR AGENT................................................................................34
ARTICLE XII. ASSIGNMENTS; PARTICIPATIONS.........................................................................34
Section 12.1 ASSIGNMENTS....................................................................................34
Section 12.2 PARTICIPATIONS.................................................................................35
ARTICLE XIII. LIQUIDITY FACILITY.................................................................................35
Section 13.1 TRANSFER TO FINANCIAL INSTITUTIONS.............................................................35
Section 13.2 TRANSFER PRICE REDUCTION YIELD.................................................................36
Section 13.3 PAYMENTS TO CONDUIT............................................................................36
Section 13.4 LIMITATION ON COMMITMENT TO PURCHASE FROM CONDUIT..............................................36
Section 13.5 DEFAULTING FINANCIAL INSTITUTIONS..............................................................36
Section 13.6 TERMINATING FINANCIAL INSTITUTIONS.............................................................37
ARTICLE XIV. MISCELLANEOUS.......................................................................................38
Section 14.1 WAIVERS AND AMENDMENTS.........................................................................38
Section 14.2 NOTICES........................................................................................39
Section 14.3 RATABLE PAYMENTS...............................................................................39
Section 14.4 PROTECTION OF OWNERSHIP INTERESTS OF THE PURCHASERS............................................39
Section 14.5 CONFIDENTIALITY................................................................................40
Section 14.6 BANKRUPTCY PETITION............................................................................41
Section 14.7 LIMITATION OF LIABILITY........................................................................41
Section 14.8 CHOICE OF LAW..................................................................................41
Section 14.9 CONSENT TO JURISDICTION........................................................................41
Section 14.10 WAIVER OF JURY TRIAL...........................................................................42
Section 14.11 INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS.................................................42
Section 14.12 COUNTERPARTS; SEVERABILITY; SECTION REFERENCES.................................................42
Section 14.13 BANK ONE ROLES.................................................................................42
Section 14.14 CHARACTERIZATION...............................................................................43
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EXHIBITS AND SCHEDULES
Exhibit I Definitions
Exhibit II Form of Purchase Notice
Exhibit III Places of Business of the Seller Parties; Locations of
Records; Federal Employer Identification Number(s)
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Form of Collection Account Agreement
Exhibit VII Form of Assignment Agreement
Exhibit VIII Credit and Collection Policy
Exhibit IX Form of Contract(s)
Exhibit X Form of Monthly Report
Schedule A Commitments
Schedule B Closing Documents
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RECEIVABLES PURCHASE AGREEMENT
THIS RECEIVABLES PURCHASE AGREEMENT dated as of May 1, 2000 is
among OMNOVA Receivables Corporation, an Ohio corporation ("SELLER"), OMNOVA
Solutions Inc., an Ohio corporation ("OMNOVA"), as initial Servicer (the
Servicer together with Seller, the "SELLER PARTIES" and each a "SELLER PARTY"),
the entities listed on Schedule A to this Agreement (together with any of their
respective successors and assigns hereunder, the "FINANCIAL INSTITUTIONS"),
Falcon Asset Securitization Corporation ("CONDUIT") and Bank One, NA (Main
Office Chicago), as agent for the Purchasers hereunder or any successor agent
hereunder (together with its successors and assigns hereunder, the "AGENT").
Unless defined elsewhere herein, capitalized terms used in this Agreement shall
have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Purchaser Interests to
the Purchasers from time to time.
Conduit may, in its absolute and sole discretion, purchase
Purchaser Interests from Seller from time to time.
In the event that Conduit declines to make any purchase, the
Financial Institutions shall, at the request of Seller, purchase
Purchaser Interests from time to time. In addition, the Financial
Institutions have agreed to provide a liquidity facility to Conduit in
accordance with the terms hereof.
Bank One, NA (Main Office Chicago) has been requested and is
willing to act as Agent on behalf of Conduit and the Financial
Institutions in accordance with the terms hereof.
ARTICLE I.
PURCHASE ARRANGEMENTS
Section 1.1 PURCHASE FACILITY.
(a) Upon the terms and subject to the conditions hereof,
Seller may, at its option, sell and assign Purchaser Interests to the Agent for
the benefit of one or more of the Purchasers. In accordance with the terms and
conditions set forth herein, Conduit may, at its option, instruct the Agent to
purchase, on behalf of Conduit, or if Conduit shall decline to purchase, the
Agent shall purchase, on behalf of the Financial Institutions, Purchaser
Interests from time to time in an aggregate amount not to exceed at such time
the lesser of (i) the Purchase Limit and (ii) the aggregate amount of the
Commitments during the period from the date hereof to but not including the
Facility Termination Date divided by 102% of such aggregate amount.
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(b) Seller may, upon at least 30 days' notice to the Agent,
terminate in whole or reduce in part, ratably among the Financial Institutions,
the unused portion of the Purchase Limit; provided that each partial reduction
of the Purchase Limit shall be in an amount equal to $5,000,000 or an integral
multiple thereof.
Section 1.2 INCREASES. Seller shall provide the Agent with at least two
Business Days' prior notice in a Monthly Report or in a form set forth as
Exhibit II hereto of each Incremental Purchase (in either case, a "PURCHASE
NOTICE"). Each Purchase Notice shall be subject to Section 6.2 hereof and,
except as set forth below, shall be irrevocable and shall specify the requested
Purchase Price (which shall not be less than $1,000,000) and date of purchase
(which, in the case of any Incremental Purchase (after the initial Incremental
Purchase hereunder), shall only be on a Settlement Date) and, in the case of an
Incremental Purchase to be funded by the Financial Institutions, the requested
Discount Rate and Tranche Period. Following receipt of a Purchase Notice, the
Agent will determine whether Conduit agrees to make the purchase. If Conduit
declines to make a proposed purchase, Seller may cancel the Purchase Notice or,
in the absence of such a cancellation, the Incremental Purchase of the Purchaser
Interest will be made by the Financial Institutions. On the date of each
Incremental Purchase, upon satisfaction of the applicable conditions precedent
set forth in Article VI, Conduit or the Financial Institutions, as applicable,
shall deposit to an account specified by the Agent, for transfer by the Agent to
an account designated by Seller (or by Servicer, on Seller's behalf), in
immediately available funds, no later than 12:00 noon (Chicago time), an amount
equal to (i) in the case of Conduit, the aggregate Purchase Price of the
Purchaser Interests Conduit is then purchasing or (ii) in the case of a
Financial Institution, such Financial Institution's Pro Rata Share of the
aggregate Purchase Price of the Purchaser Interests the Financial Institutions
are then purchasing.
Section 1.3 DECREASES. Seller shall provide the Agent with two Business
Days' prior written notice (a "REDUCTION NOTICE") of any proposed reduction of
Aggregate Capital from Collections. Such Reduction Notice shall designate (i)
the date (the "PROPOSED REDUCTION DATE") upon which any such reduction of
Aggregate Capital shall occur (which date shall be not less than two Business
Days subsequent to the date upon which such Reduction Notice is received by the
Agent), and (ii) the amount of Aggregate Capital to be reduced which shall be
applied ratably to the Purchaser Interests of Conduit and the Financial
Institutions in accordance with the amount of Capital (if any) owing to Conduit,
on the one hand, and the amount of Capital (if any) owing to the Financial
Institutions (ratably, based on their respective Pro Rata Shares), on the other
hand (the "AGGREGATE REDUCTION"). Only one (1) Reduction Notice shall be
outstanding at any time.
Section 1.4 PAYMENT REQUIREMENTS. All amounts to be paid or deposited
by any Seller Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (Chicago
time) on the day when due in immediately available funds, and if not received
before 11:00 a.m. (Chicago time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the Agent, for the account of such Purchaser, at 1 Bank Xxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000 until otherwise notified by the Agent. Upon notice to
Seller, the Agent may debit any account of Seller now or hereafter maintained at
Bank One, NA for all amounts due and
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payable hereunder which are not subject to a good faith dispute. All
computations of Yield, per annum fees calculated as part of any CP Costs, per
annum fees hereunder and per annum fees under the Fee Letter shall be made on
the basis of a year of 360 days for the actual number of days elapsed. If any
amount hereunder shall be payable on a day which is not a Business Day, such
amount shall be payable on the next succeeding Business Day.
ARTICLE II.
PAYMENTS AND COLLECTIONS
Section 2.1 PAYMENTS. Notwithstanding any limitation on recourse contained in
this Agreement, Seller shall immediately pay to the Agent when due, for the
account of the relevant Purchaser or Purchasers on a full recourse basis, (i)
such fees as set forth in the Fee Letter (which fees shall be sufficient to pay
all fees owing to the Financial Institutions), (ii) all CP Costs, (iii) all
amounts payable as Yield, (iv) all amounts payable as Deemed Collections (which
shall be immediately due and payable by Seller and applied to reduce outstanding
Aggregate Capital hereunder in accordance with Sections 2.2 and 2.3 hereof), (v)
all amounts payable to reduce the Purchaser Interest, if required, pursuant to
Section 2.6, (vi) all amounts payable pursuant to Article X, if any, (vii) all
Servicer costs and expenses, including the Servicing Fee, in connection with
servicing, administering and collecting the Receivables, (viii) all Broken
Funding Costs and (ix) all Default Fees (collectively, the "OBLIGATIONS"). If
Seller fails to pay any of the Obligations when due, Seller agrees to pay, on
demand, the Default Fee in respect thereof until paid. Notwithstanding the
foregoing, no provision of this Agreement or the Fee Letter shall require the
payment or permit the collection of any amounts hereunder in excess of the
maximum permitted by applicable law. If at any xxxx Xxxxxx receives any
Collections or is deemed to receive any Collections, Seller shall immediately
pay such Collections or Deemed Collections to the Servicer for application in
accordance with the terms and conditions hereof and, at all times prior to such
payment, such Collections or Deemed Collections shall be held in trust by Seller
for the exclusive benefit of the Purchasers and the Agent.
Section 2.2 COLLECTIONS PRIOR TO AMORTIZATION. Prior to the
Amortization Date, any Collections and/or Deemed Collections received by the
Servicer shall be set aside and held in trust by the Servicer for the payment of
any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in
this Section 2.2. If at any time any Collections are received by the Servicer
prior to the Amortization Date, (i) the Servicer shall set aside the Termination
Percentage (hereinafter defined) of Collections evidenced by the Purchaser
Interests of each Terminating Financial Institution and (ii) Seller hereby
requests and the Purchasers (other than any Terminating Financial Institutions)
hereby agree to make, simultaneously with such receipt, a reinvestment (each a
"REINVESTMENT") with that portion of the balance of each and every Collection
received by the Servicer that is part of any Purchaser Interest (other than any
Purchaser Interests of Terminating Financial Institutions), such that after
giving effect to such Reinvestment, the amount of Capital of such Purchaser
Interest immediately after such receipt and corresponding Reinvestment shall be
equal to the amount of Capital immediately prior to such receipt. On each
Settlement Date prior to the occurrence of the Amortization Date, the Servicer
shall remit to the Agent's account the amounts set aside during the preceding
Settlement
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Period that have not been subject to a Reinvestment and apply such amounts (if
not previously paid in accordance with Section 2.1) first, to reduce unpaid CP
Costs, Yield and other Obligations and second, to reduce the Capital of all
Purchaser Interests of Terminating Financial Institutions, applied ratably to
each Terminating Financial Institution according to its respective Termination
Percentage. If such Capital, CP Costs, Yield and other Obligations shall be
reduced to zero, any additional Collections received by the Servicer (i) if
applicable, shall be remitted to the Agent's account no later than 11:00 a.m.
(Chicago time) to the extent required to fund any Aggregate Reduction on such
Settlement Date and (ii) any balance remaining thereafter shall be remitted from
the Servicer to Seller on such Settlement Date. Each Terminating Financial
Institution shall be allocated a ratable portion of Collections from the date of
any assignment by Conduit pursuant to Section 13.6 (the "TERMINATION DATE")
until such Terminating Financing Institution's Capital shall be paid in full.
This ratable portion shall be calculated on the Termination Date of each
Terminating Financial Institution as a percentage equal to (i) Capital of such
Terminating Financial Institution outstanding on its Termination Date, divided
by (ii) the Aggregate Capital outstanding on such Termination Date (the
"TERMINATION PERCENTAGE"). Each Terminating Financial Institution's Termination
Percentage shall remain constant prior to the Amortization Date. On and after
the Amortization Date, each Termination Percentage shall be disregarded, and
each Terminating Financial Institution's Capital shall be reduced ratably with
all Financial Institutions in accordance with Section 2.3.
Section 2.3 COLLECTIONS FOLLOWING AMORTIZATION. On the Amortization
Date and on each day thereafter, the Servicer shall set aside and hold in trust,
for the holder of each Purchaser Interest, all Collections received on such day
and an additional amount for the payment of any accrued and unpaid Obligations
owed by Seller and not previously paid by Seller in accordance with Section 2.1.
On and after the Amortization Date, the Servicer shall, upon the request from
time to time by (or pursuant to standing instructions from) the Agent (i) remit
to the Agent's account the amounts set aside pursuant to the preceding sentence,
and (ii) apply such amounts to reduce the Capital associated with each such
Purchaser Interest and any other Aggregate Unpaids.
Section 2.4 APPLICATION OF COLLECTIONS. If there shall be insufficient
funds on deposit for the Servicer to distribute funds in payment in full of the
aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable), the
Servicer shall distribute funds:
FIRST, to the payment of the Servicer's reasonable
out-of-pocket costs and expenses in connection with servicing,
administering and collecting the Receivables, including the Servicing
Fee, if Seller or one of its Affiliates is not then acting as the
Servicer,
SECOND, to the reimbursement of the Agent's costs of
collection and enforcement of this Agreement,
THIRD, ratably to the payment of all accrued and unpaid fees
under the Fee Letter, CP Costs and Yield,
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FOURTH, (to the extent applicable) to the ratable reduction of
the Aggregate Capital (without regard to any Termination Percentage),
FIFTH, for the ratable payment of all other unpaid
Obligations, provided that to the extent such Obligations relate to the
payment of Servicer costs and expenses, including the Servicing Fee,
when Seller or one of its Affiliates is acting as the Servicer, such
costs and expenses will not be paid until after the payment in full of
all other Obligations, and
SIXTH, after the Aggregate Unpaids have been indefeasibly
reduced to zero, to Seller.
Collections applied to the payment of Aggregate Unpaids shall be distributed in
accordance with the aforementioned provisions, and, giving effect to each of the
priorities set forth above in this Section 2.4, shall be shared ratably (within
each priority) among the Agent and the Purchasers in accordance with the amount
of such Aggregate Unpaids owing to each of them in respect of each such
priority.
Section 2.5 PAYMENT RECISSION. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Agent (for application to the Person or Persons who suffered such
recission, return or refund) the full amount thereof, plus the Default Fee from
the date of any such recission, return or refunding.
Section 2.6 MAXIMUM PURCHASER INTERESTS. Seller shall ensure that the
Purchaser Interests of the Purchasers shall at no time exceed in the aggregate
100%. If the aggregate of the Purchaser Interests of the Purchasers exceeds
100%, Seller shall pay to the Agent within two (2) Business Days an amount to be
applied to reduce the Aggregate Capital (as allocated by the Agent), such that
after giving effect to such payment the aggregate of the Purchaser Interests
equals or is less than 100%.
Section 2.7 CLEAN UP CALL. In addition to Seller's rights pursuant to
Section 1.3, Seller shall have the right (after providing the Agent with two
Business Days' prior written notice), at any time following the reduction of the
Aggregate Capital to a level that is less than 10.0% of the original Purchase
Limit, to repurchase from the Purchasers all, but not less than all, of the then
outstanding Purchaser Interests. The purchase price in respect thereof shall be
an amount equal to the Aggregate Unpaids through the date of such repurchase,
payable in immediately available funds. Such repurchase shall be without
representation, warranty or recourse of any kind by, on the part of, or against
any Purchaser or the Agent.
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ARTICLE III.
CONDUIT FUNDING
Section 3.1 CP COSTS. Seller shall pay CP Costs with respect to the
Capital associated with each Purchaser Interest of Conduit for each day that any
Capital in respect of such Purchaser Interest is outstanding. Each Purchaser
Interest funded substantially with Pooled Commercial Paper will accrue CP Costs
each day on a pro rata basis, based upon the percentage share the Capital in
respect of such Purchaser Interest represents in relation to all assets held by
Conduit and funded substantially with related Pooled Commercial Paper.
Section 3.2 CP COSTS PAYMENTS. On each Settlement Date, Seller shall
pay to the Agent (for the benefit of Conduit) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the Capital associated with all
Purchaser Interests of Conduit for the immediately preceding Accrual Period in
accordance with Article II.
Section 3.3 CALCULATION OF CP COSTS. On or prior to the 5th day of each
month hereafter, Conduit shall calculate the aggregate amount of CP Costs
allocated to the Capital of the Purchaser Interests for the applicable Accrual
Period and shall notify Seller of such aggregate amount.
ARTICLE IV.
FINANCIAL INSTITUTION FUNDING
Section 4.1 FINANCIAL INSTITUTION FUNDING. Each Purchaser Interest of
the Financial Institutions shall accrue Yield for each day during its Tranche
Period at either the LIBO Rate or the Prime Rate in accordance with the terms
and conditions hereof. Until Seller gives notice to the Agent of another
Discount Rate in accordance with Section 4.4, the initial Discount Rate for any
Purchaser Interest transferred to the Financial Institutions by Conduit pursuant
to the terms and conditions hereof shall be the Prime Rate. If the Financial
Institutions acquire by assignment from Conduit any Purchaser Interest pursuant
to Article XIII, each Purchaser Interest so assigned shall each be deemed to
have a new Tranche Period commencing on the date of any such assignment.
Section 4.2 YIELD PAYMENTS. On the Settlement Date for each Purchaser
Interest of the Financial Institutions, Seller shall pay to the Agent (for the
benefit of the Financial Institutions) an aggregate amount equal to the accrued
and unpaid Yield for the entire Tranche Period of each such Purchaser Interest
in accordance with Article II.
Section 4.3 SELECTION AND CONTINUATION OF TRANCHE PERIODS.
(a) With consultation from (and approval by) the Agent, Seller
shall from time to time request Tranche Periods for the Purchaser Interests of
the Financial Institutions, provided that, if at any time the Financial
Institutions shall have a Purchaser Interest, Seller shall always request
Tranche Periods such that at least one Tranche Period shall end on the date
specified in clause (A) of the definition of Settlement Date.
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(b) Seller or the Agent, upon notice to and consent by the
other received at least three (3) Business Days prior to the end of a Tranche
Period (the "TERMINATING TRANCHE") for any Purchaser Interest, may, effective on
the last day of the Terminating Tranche: (i) divide any such Purchaser Interest
into multiple Purchaser Interests, (ii) combine any such Purchaser Interest with
one or more other Purchaser Interests that have a Terminating Tranche ending on
the same day as such Terminating Tranche or (iii) combine any such Purchaser
Interest with a new Purchaser Interests to be purchased on the day such
Terminating Tranche ends, provided, that in no event may a Purchaser Interest of
Conduit be combined with a Purchaser Interest of the Financial Institutions.
Section 4.4 FINANCIAL INSTITUTION DISCOUNT RATES. Seller may select the
LIBO Rate or the Prime Rate for each Purchaser Interest of the Financial
Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least three (3)
Business Days prior to the expiration of any Terminating Tranche with respect to
which the LIBO Rate is being requested as a new Discount Rate and (ii) at least
one (1) Business Day prior to the expiration of any Terminating Tranche with
respect to which the Prime Rate is being requested as a new Discount Rate, give
the Agent irrevocable notice of the new Discount Rate for the Purchaser Interest
associated with such Terminating Tranche. Until Seller gives notice to the Agent
of another Discount Rate, the initial Discount Rate for any Purchaser Interest
transferred to the Financial Institutions pursuant to the terms and conditions
hereof shall be the Prime Rate.
Section 4.5 SUSPENSION OF THE LIBO RATE
(a) If any Financial Institution notifies the Agent that it
has determined that funding its Pro Rata Share of the Purchaser Interests of the
Financial Institutions at a LIBO Rate would violate any applicable law, rule,
regulation, or directive of any governmental or regulatory authority, whether or
not having the force of law, or that (i) deposits of a type and maturity
appropriate to match fund its Purchaser Interests at such LIBO Rate are not
available or (ii) such LIBO Rate does not accurately reflect the cost of
acquiring or maintaining a Purchaser Interest at such LIBO Rate, then the Agent
shall suspend the availability of such LIBO Rate and require Seller to select
the Prime Rate for any Purchaser Interest accruing Yield at such LIBO Rate.
(b) If less than all of the Financial Institutions give a
notice to the Agent pursuant to Section 4.5(a), each Financial Institution which
gave such a notice shall be obliged, at the request of Seller, Conduit or the
Agent, to assign all of its rights and obligations hereunder to (i) another
Financial Institution or (ii) another funding entity nominated by Seller or the
Agent that is acceptable to Conduit and willing to participate in this Agreement
through the Liquidity Termination Date in the place of such notifying Financial
Institution; provided that (i) the notifying Financial Institution receives
payment in full, pursuant to an Assignment Agreement, of an amount equal to such
notifying Financial Institution's Pro Rata Share of the Capital and Yield owing
to all of the Financial Institutions and all accrued but unpaid fees and other
costs and expenses payable in respect of its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, and (ii) the replacement Financial
Institution otherwise satisfies the requirements of Section 12.1(b).
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES. Each
Seller Party hereby represents and warrants to the Agent and the Purchasers, as
to itself, as of the date hereof and as of the date of each Incremental Purchase
and the date of each Reinvestment that:
(a) CORPORATE EXISTENCE AND POWER. Such Seller Party is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation. Such Seller Party is duly qualified to do
business and is in good standing as a foreign corporation, and has and holds all
corporate power and all governmental licenses, authorizations, consents and
approvals required to carry on its business in each jurisdiction in which its
business is conducted except where the failure to so qualify or so hold could
not reasonably be expected to have a Material Adverse Effect.
(b) POWER AND AUTHORITY; DUE AUTHORIZATION, EXECUTION AND
DELIVERY. The execution and delivery by such Seller Party of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder and, in the case of Seller, Seller's
use of the proceeds of purchases made hereunder, are within its corporate powers
and authority and have been duly authorized by all necessary corporate action on
its part. This Agreement and each other Transaction Document to which such
Seller Party is a party has been duly executed and delivered by such Seller
Party.
(c) NO CONFLICT. The execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party, and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its certificate or articles of incorporation or
by-laws, (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any agreement, contract or instrument to which it is a party
or by which it or any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on assets of such Seller Party or its Subsidiaries (except as created hereunder)
except, in any case, where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect; and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law.
(d) GOVERNMENTAL AUTHORIZATION. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party and the performance of its obligations hereunder and thereunder.
(e) ACTIONS, SUITS. There are no actions, suits or proceedings
pending, or to the best of such Seller Party's knowledge, threatened, against or
affecting such Seller Party, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. Such Seller Party is not in default with respect to any order of
any court, arbitrator or governmental body.
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(f) BINDING EFFECT. This Agreement and each other Transaction
Document to which such Seller Party is a party constitute the legal, valid and
binding obligations of such Seller Party enforceable against such Seller Party
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) ACCURACY OF INFORMATION. All information heretofore
furnished by such Seller Party or any of its Affiliates to the Agent or the
Purchasers for purposes of or in connection with this Agreement, any of the
other Transaction Documents or any transaction contemplated hereby or thereby
is, and all such information hereafter furnished by such Seller Party or any of
its Affiliates to the Agent or the Purchasers will be, true and accurate in
every material respect on the date such information is stated or certified and
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.
(h) USE OF PROCEEDS. No proceeds of any purchase hereunder
will be used (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction which is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.
(i) GOOD TITLE. Immediately prior to each purchase hereunder,
Seller shall be the legal and beneficial owner of the Receivables and Related
Security with respect thereto, free and clear of any Adverse Claim, except as
created by the Transaction Documents. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect Seller's
ownership interest in each Receivable, its Collections and the Related Security.
(j) PERFECTION. This Agreement, together with the filing of
the financing statements contemplated hereby, is effective to, and shall, upon
each purchase hereunder, transfer to the Agent for the benefit of the relevant
Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or
Purchasers shall acquire from Seller) a valid and perfected first priority
undivided percentage ownership or security interest in each Receivable existing
or hereafter arising and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transactions Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect the Agent's (on
behalf of the Purchasers) ownership or security interest in the Receivables, the
Related Security and the Collections.
(k) PLACES OF BUSINESS AND LOCATIONS OF RECORDS. The principal
places of business and chief executive office of such Seller Party and the
offices where it keeps all of its Records are located at the address(es) listed
on Exhibit III or such other locations of which the Agent has been notified in
accordance with Section 7.2(a) in jurisdictions where all action
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required by Section 14.4(a) has been taken and completed. Seller's Federal
Employer Identification Number is correctly set forth on Exhibit III.
(l) COLLECTIONS. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The names and addresses of all Collection Banks, together with the
account numbers of the Collection Accounts of Seller at each Collection Bank and
the post office box number of each Lock-Box, are listed on Exhibit IV. Seller
has not granted any Person, other than the Agent as contemplated by this
Agreement, dominion and control of any Lock-Box or Collection Account, or the
right to take dominion and control of any such Lock-Box or Collection Account at
a future time or upon the occurrence of a future event.
(m) MATERIAL ADVERSE EFFECT. (i) The initial Servicer
represents and warrants that since November 30, 1999, no event has occurred that
would have a material adverse effect on the financial condition or operations of
the initial Servicer and its Subsidiaries or the ability of the initial Servicer
to perform its obligations under this Agreement, and (ii) Seller represents and
warrants that since the date of this Agreement, no event has occurred that would
have a material adverse effect on (A) the financial condition or operations of
Seller, (B) the ability of Seller to perform its obligations under the
Transaction Documents, or (C) the collectibility of the Receivables generally or
any material portion of the Receivables.
(n) NAMES. In the past five (5) years, Seller has not used any
corporate names, trade names or assumed names other than the name in which it
has executed this Agreement and the names set forth on Exhibit XI hereto.
(o) OWNERSHIP OF SELLER. Originator owns, directly or
indirectly, 100% of the issued and outstanding capital stock of Seller, free and
clear of any Adverse Claim. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Seller.
(p) NOT A HOLDING COMPANY OR AN INVESTMENT CONDUIT. Such
Seller Party is not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor statute. Such Seller Party is not an
"investment company" within the meaning of the Investment Conduit Act of 1940,
as amended, or any successor statute.
(q) COMPLIANCE WITH LAW. Such Seller Party has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation, except where such contravention or
violation could not reasonably be expected to have a Material Adverse Effect.
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(r) COMPLIANCE WITH CREDIT AND COLLECTION POLICY. Such Seller
Party has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and has not made
any material change to such Credit and Collection Policy, except such material
change as to which the Agent has been notified in accordance with Section
7.1(a)(vii).
(s) PAYMENTS TO ORIGINATOR. With respect to each Receivable
transferred to Seller under the Receivables Sale Agreement, Seller has given
reasonably equivalent value to Originator in consideration therefor and such
transfer was not made for or on account of an antecedent debt. No transfer by
Originator of any Receivable under the Receivables Sale Agreement is or may be
voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C.
sections 101 et seq.), as amended.
(t) ENFORCEABILITY OF CONTRACTS. 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).
(u) ELIGIBLE RECEIVABLES. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable on the date of its purchase under
the Receivables Sale Agreement was an Eligible Receivable on such purchase date.
(v) NET RECEIVABLES BALANCE. Seller has determined that,
immediately after giving effect to each purchase hereunder, the Net Receivables
Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the
Aggregate Reserves.
(w) ACCOUNTING. The manner in which such Seller Party accounts
for the transactions contemplated by this Agreement and the Receivables Sale
Agreement does not jeopardize the true sale analysis.
Section 5.2 FINANCIAL INSTITUTION REPRESENTATIONS AND WARRANTIES. Each
Financial Institution hereby represents and warrants to the Agent and Conduit
that:
(a) EXISTENCE AND POWER. Such Financial Institution is a
corporation or a banking association duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, and has all corporate power to perform its obligations hereunder.
(b) NO CONFLICT. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a
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party or any of its property is bound, or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting it or its property, and do not
result in the creation or imposition of any Adverse Claim on its assets. This
Agreement has been duly authorized, executed and delivered by such Financial
Institution.
(c) GOVERNMENTAL AUTHORIZATION. No authorization or approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution and delivery by such
Financial Institution of this Agreement and the performance of its obligations
hereunder.
(d) BINDING EFFECT. This Agreement constitutes the legal,
valid and binding obligation of such Financial Institution enforceable against
such Financial Institution in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether such enforcement is sought
in a proceeding in equity or at law).
ARTICLE VI.
CONDITIONS OF PURCHASES
Section 6.1 CONDITIONS PRECEDENT TO INITIAL INCREMENTAL
PURCHASE. The initial Incremental Purchase of a Purchaser Interest under this
Agreement is subject to the conditions precedent that (a) the Agent shall have
received on or before the date of such purchase those documents listed on
Schedule B and (b) the Agent shall have received all fees and expenses required
to be paid on such date pursuant to the terms of this Agreement and the Fee
Letter.
Section 6.2 CONDITIONS PRECEDENT TO ALL PURCHASES AND
REINVESTMENTS. Each purchase of a Purchaser Interest (other than pursuant to
Section 13.1) and each Reinvestment shall be subject to the further conditions
precedent that (a) the Servicer shall have delivered to the Agent on or prior to
the date of such purchase or Reinvestment, in form and substance satisfactory to
the Agent, all Monthly Reports as and when due under Section 8.5; (b) upon the
Agent's request, the Servicer shall have delivered to the Agent at least three
(3) days prior to such purchase or Reinvestment an interim Monthly Report
showing the amount of Eligible Receivables; (c) the Facility Termination Date
shall not have occurred; (d) the Agent shall have received such other approvals,
opinions or documents as it may reasonably request and (e) on the date of each
such Incremental Purchase or Reinvestment, the following statements shall be
true (and acceptance of the proceeds of such Incremental Purchase or
Reinvestment shall be deemed a representation and warranty by Seller that such
statements are then true):
(i) the representations and warranties set forth in Section
5.1 are true and correct on and as of the date of such Incremental
Purchase or Reinvestment as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result
from such Incremental Purchase or Reinvestment, that will constitute an
Amortization Event,
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and no event has occurred and is continuing, or would result from such
Incremental Purchase or Reinvestment, that would constitute a Potential
Amortization Event; and
(iii) the Aggregate Capital does not exceed the Purchase Limit
and the aggregate Purchaser Interests do not exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent for the
benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII.
COVENANTS
Section 7.1 AFFIRMATIVE COVENANTS OF THE SELLER PARTIES. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:
(a) FINANCIAL REPORTING. Such Seller Party will maintain a
system of accounting established and administered in accordance with GAAP, and
furnish or cause to be furnished to the Agent:
(i) ANNUAL REPORTING. As soon as practical and in any
event within 95 days after the close of each of its respective
fiscal years (A) OMNOVA will furnish to the Agent audited,
unqualified financial statements (which shall include balance
sheets and statements of income and retained earnings) for
such fiscal year certified in a manner acceptable to the Agent
by independent public accountants reasonably acceptable to the
Agent and (B) Seller will furnish to Agent unaudited financial
statements (which shall include balance sheets, statements of
income and retained earnings and a statement of cash flows)
for such fiscal year certified in a manner acceptable to the
Agent by Seller's Chief Executive Officer, Seller's Chief
Financial Officer, any of Seller's Senior Vice Presidents, its
Secretary or its Treasurer.
(ii) QUARTERLY REPORTING. As soon as practical and in
any event within 50 days after the close of the first three
(3) quarterly periods of each of its respective fiscal years,
balance sheets of each of Originator and the Servicer as at
the close of each such period and statements of income and
retained earnings and a statement of cash flows for each such
Person for the period from the beginning of such fiscal year
to the end of such quarter, all certified by its Chief
Executive
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Officer, its Chief Financial Officer, any of its Senior Vice
Presidents, its Secretary or its Treasurer.
(iii) COMPLIANCE CERTIFICATE. Together with the financial
statements required hereunder, a compliance certificate in
substantially the form of Exhibit V signed by such Seller Party's
Authorized Officer and dated the date of such annual financial
statement or such quarterly financial statement, as the case may be.
(iv) SHAREHOLDERS STATEMENTS AND REPORTS. Promptly upon the
furnishing thereof to the shareholders of such Seller Party copies of
all financial statements, reports and proxy statements so furnished.
(v) S.E.C. FILINGS. Promptly upon the filing thereof, copies
of all registration statements and annual, quarterly, monthly or other
regular reports which Originator or any of its Subsidiaries files with
the Securities and Exchange Commission.
(vi) COPIES OF NOTICES. Promptly upon its receipt of any
notice, request for consent, financial statements, certification,
report or other communication under or in connection with any
Transaction Document from any Person other than the Agent or Conduit,
copies of the same.
(vii) CHANGE IN CREDIT AND COLLECTION POLICY. At least thirty
(30) days prior to the effectiveness of any material change in or
material amendment to the Credit and Collection Policy, a copy of the
Credit and Collection Policy then in effect and a notice (A) indicating
such change or amendment, and (B) if such proposed change or amendment
would be reasonably likely to adversely affect the collectibility of
the Receivables or decrease the credit quality of any newly created
Receivables, requesting the Agent's consent thereto.
(viii) OTHER INFORMATION. Promptly, from time to time, such
other information, documents, records or reports relating to the
Receivables or the condition or operations, financial or otherwise, of
such Seller Party as the Agent may from time to time reasonably request
in order to protect the interests of the Agent and the Purchasers under
or as contemplated by this Agreement.
(b) NOTICES. Such Seller Party will notify the Agent in writing of any
of the following promptly upon learning of the occurrence thereof, describing
the same and, if applicable, the steps being taken with respect thereto:
(i) AMORTIZATION EVENTS OR POTENTIAL AMORTIZATION EVENTS. The
occurrence of each Amortization Event and each Potential Amortization
Event, by a statement of an Authorized Officer of such Seller Party.
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(ii) JUDGMENT AND PROCEEDINGS. (A) (1) The entry of any
judgment or decree against the Servicer or any of its respective
Subsidiaries if the aggregate amount of all judgments and decrees then
outstanding against the Servicer and its Subsidiaries exceeds
$10,000,000 after deducting (a) the amount with respect to which the
Servicer or any such Subsidiary is insured and with respect to which
the insurer has assumed responsibility in writing, and (b) the amount
for which the Servicer or any such Subsidiary is otherwise indemnified
if the terms of such indemnification are satisfactory to the Agent, and
(2) the institution of any litigation, arbitration proceeding or
governmental proceeding against the Servicer which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect; and (B) the entry of any judgment or decree or the institution
of any litigation, arbitration proceeding or governmental proceeding
against Seller.
(iii) MATERIAL ADVERSE EFFECT. The occurrence of any event or
condition that has had, or could reasonably be expected to have, a
Material Adverse Effect.
(iv) PURCHASE TERMINATION DATE. The occurrence of the
"PURCHASE TERMINATION DATE" under and as defined in the Receivables
Sale Agreement.
(v) DEFAULTS UNDER OTHER AGREEMENTS. The occurrence of a
default or an event of default under any other financing arrangement
pursuant to which such Seller Party is a debtor or an obligor.
(vi) DOWNGRADE OF ORIGINATOR. Any downgrade in the rating of
any Indebtedness of Originator by Standard & Poor's Ratings Group or by
Xxxxx'x Investors Service, Inc., setting forth the Indebtedness
affected and the nature of such change.
(c) COMPLIANCE WITH LAWS AND PRESERVATION OF CORPORATE EXISTENCE. Such
Seller Party will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Such Seller Party will preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where its business is
conducted, except where the failure to so preserve and maintain or qualify could
not reasonably be expected to have a Material Adverse Effect.
(d) AUDITS. Such Seller Party will furnish to the Agent from time to
time such information with respect to it and the Receivables as the Agent may
reasonably request. Such Seller Party will, from time to time during regular
business hours as requested by the Agent upon reasonable notice and at the sole
cost of such Seller Party, permit the Agent, or its agents or representatives,
(i) to examine and make copies of and abstracts from all Records in the
possession or under the control of such Person relating to the Receivables and
the Related Security, including, without limitation, the related Contracts, and
(ii) to visit the offices and
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properties of such Person for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to such Person's financial
condition or the Receivables and the Related Security or any Person's
performance under any of the Transaction Documents or any Person's performance
under the Contracts and, in each case, with any of the officers or employees of
Seller or the Servicer having knowledge of such matters.
(e) KEEPING AND MARKING OF RECORDS AND BOOKS.
(i) The Servicer will, and will cause each Originator to,
maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records
evidencing Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit
the immediate identification of each new Receivable and all Collections
of and adjustments to each existing Receivable). The Servicer will give
the Agent notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
(ii) Such Seller Party will, and will cause each Originator
to, (A) on or prior to May 31, 2000, xxxx its master data processing
records and other books and records relating to the Purchaser Interests
with a legend, acceptable to the Agent, describing the Purchaser
Interests and (B) upon the request of the Agent during the continuance
of an Amortization Event: (x) xxxx each Contract with a legend
describing the Purchaser Interests and (y) deliver to the Agent all
Contracts (including, without limitation, all multiple originals of any
such Contract) relating to the Receivables.
(f) COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION POLICY. Such
Seller Party will timely and fully (i) perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables, and (ii) comply in all respects with the Credit and
Collection Policy in regard to each Receivable and the related Contract.
(g) PERFORMANCE AND ENFORCEMENT OF RECEIVABLES SALE AGREEMENT. Seller
will, and will require Originator to, perform each of their respective
obligations and undertakings under and pursuant to the Receivables Sale
Agreement, will purchase Receivables thereunder in strict compliance with the
terms thereof and will vigorously enforce the rights and remedies accorded to
Seller under the Receivables Sale Agreement. Seller will take all actions to
perfect and enforce its rights and interests (and the rights and interests of
the Agent and the Purchasers as assignees of Seller) under the Receivables Sale
Agreement as the Agent may from time to time reasonably request, including,
without limitation, making claims to which it may be entitled under any
indemnity, reimbursement or similar provision contained in the Receivables Sale
Agreement.
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(h) OWNERSHIP. Seller will, and will cause each Originator to, take all
necessary action to (i) vest legal and equitable title to the Receivables, the
Related Security and the Collections purchased under the Receivables Sale
Agreement irrevocably in Seller, free and clear of any Adverse Claims other than
Adverse Claims in favor of the Agent and the Purchasers (including, without
limitation, the filing of all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Seller's interest in such Receivables, Related Security
and Collections and such other action to perfect, protect or more fully evidence
the interest of Seller therein as the Agent may reasonably request), and (ii)
establish and maintain, in favor of the Agent, for the benefit of the
Purchasers, a valid and perfected first priority undivided percentage ownership
interest (and/or a valid and perfected first priority security interest) in all
Receivables, Related Security and Collections to the full extent contemplated
herein, free and clear of any Adverse Claims other than Adverse Claims in favor
of the Agent for the benefit of the Purchasers (including, without limitation,
the filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect the Agent's (for the benefit of the Purchasers) interest in such
Receivables, Related Security and Collections and such other action to perfect,
protect or more fully evidence the interest of the Agent for the benefit of the
Purchasers as the Agent may reasonably request).
(i) PURCHASERS' RELIANCE. Seller acknowledges that the Purchasers are
entering into the transactions contemplated by this Agreement in reliance upon
Seller's identity as a legal entity that is separate from Originator. Therefore,
from and after the date of execution and delivery of this Agreement, Seller
shall take all reasonable steps, including, without limitation, all steps that
the Agent or any Purchaser may from time to time reasonably request, to maintain
Seller's identity as a separate legal entity and to make it manifest to third
parties that Seller is an entity with assets and liabilities distinct from those
of Originator and any Affiliates thereof and not just a division of Originator
or any such Affiliate. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, Seller will:
(A) conduct its own business in its own name and require that
all full-time employees of Seller, if any, identify themselves as such
and not as employees of Originator (including, without limitation, by
means of providing appropriate employees with business or
identification cards identifying such employees as Seller's employees);
(B) compensate all employees, consultants and agents directly,
from Seller's own funds, for services provided to Seller by such
employees, consultants and agents and, to the extent any employee,
consultant or agent of Seller is also an employee, consultant or agent
of Originator or any Affiliate thereof, allocate the compensation of
such employee, consultant or agent between Seller and Originator or
such Affiliate, as applicable, on a basis that reflects the services
rendered to Seller and Originator or such Affiliate, as applicable;
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(C) clearly identify its offices (by signage or otherwise) as
its offices and, if such office is located in the offices of
Originator, Seller shall lease such office at a fair market rent;
(D) have a separate telephone number, which will be answered
only in its name and separate stationery, invoices and checks in its
own name;
(E) conduct all transactions with Originator and the Servicer
(including, without limitation, performance of any of its delegated
duties as a sub-Servicer) strictly on an arm's-length basis, allocate
all overhead expenses (including, without limitation, telephone and
other utility charges) for items shared between Seller and Originator
on the basis of actual use to the extent practicable and, to the extent
such allocation is not practicable, on a basis reasonably related to
actual use;
(F) at all times have a Board of Directors consisting of three
members, at least one member of which is an Independent Director;
(G) observe all corporate formalities as a distinct entity,
and ensure that all corporate actions relating to (A) the selection,
maintenance or replacement of the Independent Director, (B) the
dissolution or liquidation of Seller or (C) the initiation of,
participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving Seller, are
duly authorized by unanimous vote of its Board of Directors (including
the Independent Director);
(H) maintain Seller's books and records separate from those of
Originator and any Affiliate thereof and otherwise readily identifiable
as its own assets rather than assets of Originator and any Affiliate
thereof;
(I) prepare its financial statements separately from those of
Originator and insure that any consolidated financial statements of
Originator or any Affiliate thereof that include Seller and that are
filed with the Securities and Exchange Commission or any other
governmental agency have notes clearly stating that Seller is a
separate corporate entity and that its assets will be available first
and foremost to satisfy the claims of the creditors of Seller;
(J) except as herein specifically otherwise provided, maintain
the funds or other assets of Seller separate from, and not commingled
with, those of Originator or any Affiliate thereof and only maintain
bank accounts or other depository accounts to which Seller alone is the
account party, into which Seller alone makes deposits and from which
Seller alone (or the Agent hereunder) has the power to make
withdrawals;
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(K) pay all of Seller's operating expenses from Seller's own
assets (except for certain payments by Originator or other Persons
pursuant to allocation arrangements that comply with the requirements
of this Section 7.1(i));
(L) operate its business and activities such that: it does not
engage in any business or activity of any kind, or enter into any
transaction or indenture, mortgage, instrument, agreement, contract,
lease or other undertaking, other than the transactions contemplated
and authorized by this Agreement and the Receivables Sale Agreement;
and does not create, incur, guarantee, assume or suffer to exist any
indebtedness or other liabilities, whether direct or contingent, other
than (1) as a result of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business, (2) the incurrence of obligations under this Agreement, (3)
the incurrence of obligations, as expressly contemplated in the
Receivables Sale Agreement, to make payment to Originator thereunder
for the purchase of Receivables from Originator under the Receivables
Sale Agreement, and (4) the incurrence of operating expenses in the
ordinary course of business of the type otherwise contemplated by this
Agreement;
(M) maintain its corporate charter in conformity with this
Agreement, such that it does not amend, restate, supplement or
otherwise modify its Certificate of Incorporation or By-Laws in any
respect that would impair its ability to comply with the terms or
provisions of any of the Transaction Documents, including, without
limitation, Section 7.1(i) of this Agreement;
(N) maintain the effectiveness of, and continue to perform
under the Receivables Sale Agreement, such that it does not amend,
restate, supplement, cancel, terminate or otherwise modify the
Receivables Sale Agreement, or give any consent, waiver, directive or
approval thereunder or waive any default, action, omission or breach
under the Receivables Sale Agreement or otherwise grant any indulgence
thereunder, without (in each case) the prior written consent of the
Agent;
(O) maintain its corporate separateness such that it does not
merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions, and except as otherwise contemplated herein) all or
substantially all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially all of the assets of, any
Person, nor at any time create, have, acquire, maintain or hold any
interest in any Subsidiary.
(P) maintain at all times the Required Capital Amount (as
defined in the Receivables Sale Agreement) and refrain from making any
dividend, distribution, redemption of capital stock or payment of any
subordinated
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indebtedness which would cause the Required Capital Amount to cease to
be so maintained; and
(Q) take such other actions as are necessary on its part to
ensure that the facts and assumptions set forth in the opinion issued
by Frost & Xxxxxx LLP, as counsel for Seller, in connection with the
closing or initial Incremental Purchase under this Agreement and
relating to substantive consolidation issues, and in the certificates
accompanying such opinion, remain true and correct in all material
respects at all times.
(j) COLLECTIONS. Such Seller Party will cause (1) all proceeds from all
Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account and (2) each Lock-Box and Collection Account to be subject at all times
to a Collection Account Agreement that is in full force and effect. In the event
any payments relating to Receivables are remitted directly to Seller or any
Affiliate of Seller, Seller will remit (or will cause all such payments to be
remitted) directly to a Collection Bank and deposited into a Collection Account
within two (2) Business Days following receipt thereof, and, at all times prior
to such remittance, Seller will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of the Agent and the
Purchasers. Seller will maintain exclusive ownership, dominion and control
(subject to the terms of this Agreement) of each Lock-Box and Collection Account
and shall not grant the right to take dominion and control of any Lock-Box or
Collection Account at a future time or upon the occurrence of a future event to
any Person, except to the Agent as contemplated by this Agreement.
(k) TAXES. Such Seller Party will file all tax returns and reports
required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing, except any such taxes which are not yet
delinquent or are being diligently contested in good faith by appropriate
proceedings and, in each case, for which adequate reserves in accordance with
GAAP shall have been set aside on its books. Seller will pay when due any taxes
payable in connection with the Receivables, exclusive of taxes on or measured by
income or gross receipts of Conduit, the Agent or any Financial Institution.
(l) INSURANCE. Seller will maintain in effect, or cause to be
maintained in effect, at Seller's own expense, such casualty and liability
insurance as Seller shall deem appropriate in its good faith business judgment.
The Agent, for the benefit of the Purchasers, shall be named as an additional
insured with respect to all such liability insurance maintained by Seller.
Seller will pay or cause to be paid, the premiums therefor and deliver to the
Agent evidence satisfactory to the Agent of such insurance coverage. Copies of
each policy shall be furnished to the Agent and any Purchaser in certificated
form upon the Agent's or such Purchaser's request. The foregoing requirements
shall not be construed to negate, reduce or modify, and are in addition to,
Seller's obligations hereunder.
(m) PAYMENT TO ORIGINATOR. With respect to any Receivable purchased by
Seller from Originator, such sale shall be effected under, and in strict
compliance with the terms of, the Receivables Sale Agreement, including, without
limitation, the terms relating to the
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amount and timing of payments to be made to Originator in respect of the
purchase price for such Receivable.
Section 7.2 NEGATIVE COVENANTS OF THE SELLER PARTIES. Until the date on
which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
(a) NAME CHANGE, OFFICES AND RECORDS. Such Seller Party will
not change its name, identity or corporate structure (within the meaning of
Section 9-402(7) of any applicable enactment of the UCC) or relocate its chief
executive office or any office where Records are kept unless it shall have: (i)
given the Agent at least forty-five (45) days' prior written notice thereof and
(ii) delivered to the Agent all financing statements, instruments and other
documents requested by the Agent in connection with such change or relocation.
(b) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Except as may
be required by the Agent pursuant to Section 8.2(b), such Seller Party will not
add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
provided, however, that the Servicer may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) MODIFICATIONS TO CONTRACTS AND CREDIT AND COLLECTION
POLICY. Such Seller Party will not make any change to the Credit and Collection
Policy that could adversely affect the collectibility of the Receivables or
decrease the credit quality of any newly created Receivables. Except as provided
in Section 8.2(d), the Servicer will not extend, amend or otherwise modify the
terms of any Receivable or any Contract related thereto other than in accordance
with the Credit and Collection Policy.
(d) SALES, LIENS. Seller will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of the Agent and
the Purchasers provided for herein), and Seller will defend the right, title and
interest of the Agent and the Purchasers in, to and under any of the foregoing
property, against all claims of third parties claiming through or under Seller
or Originator. Seller will not create or suffer to exist any mortgage, pledge,
security interest, encumbrance, lien, charge or other similar arrangement on any
of its inventory.
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(e) NET RECEIVABLES BALANCE. At no time prior to the
Amortization Date shall Seller permit the Net Receivables Balance to be less
than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the
Aggregate Reserves.
(f) PURCHASE TERMINATION DATE DETERMINATION. Seller will not
designate the Purchase Termination Date (as defined in the Receivables Sale
Agreement), or send any written notice to Originator in respect thereof, without
the prior written consent of the Agent, except with respect to the occurrence of
such Purchase Termination Date arising pursuant to Section 5.1(d) of the
Receivables Sale Agreement.
(g) RESTRICTED JUNIOR PAYMENTS. From and after the occurrence
of any Amortization Event, Seller will not make any Restricted Junior Payment
if, after giving effect thereto, Seller would fail to meet its obligations set
forth in Section 7.2(e).
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1 DESIGNATION OF SERVICER.
(a) The servicing, administration and collection of the
Receivables shall be conducted by such Person (the "SERVICER") so designated
from time to time in accordance with this Section 8.1. OMNOVA is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms of this Agreement. The Agent may at any time
(upon sixty (60) days' notice to the Servicer if no Amortization Event is then
continuing) designate as Servicer any Person to succeed OMNOVA or any successor
Servicer.
(b) Without the prior written consent of the Agent and the
Required Financial Institutions, OMNOVA shall not be permitted to delegate any
of its duties or responsibilities as Servicer to any Person other than (i)
Seller and (ii) with respect to certain Charged-Off Receivables, outside
collection agencies in accordance with its customary practices. Seller shall not
be permitted to further delegate to any other Person any of the duties or
responsibilities of the Servicer delegated to it by OMNOVA. If at any time the
Agent shall designate as Servicer any Person other than OMNOVA, all duties and
responsibilities theretofore delegated by OMNOVA to Seller may, at the
discretion of the Agent, be terminated forthwith on notice given by the Agent to
OMNOVA and to Seller.
(c) Notwithstanding the foregoing subsection (b), (i) at all
times that OMNOVA or one of its Affiliates is the Servicer, OMNOVA shall be and
remain primarily liable to the Agent and the Purchasers for the full and prompt
performance of all duties and responsibilities of the Servicer hereunder and
(ii) the Agent and the Purchasers shall be entitled to deal exclusively with
OMNOVA at all times that it or one of its Affiliates is the Servicer in matters
relating to the discharge by the Servicer of its duties and responsibilities
hereunder. At all times that OMNOVA or one of its Affiliates is the Servicer,
the Agent and the Purchasers shall not be required to give notice, demand or
other communication to any Person other than OMNOVA in order for communication
to the Servicer and its sub-servicer or other delegate with
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respect thereto to be accomplished. OMNOVA, at all times that it or one of its
Affiliates is the Servicer, shall be responsible for providing any sub-servicer
or other delegate of the Servicer with any notice given to the Servicer under
this Agreement.
Section 8.2 DUTIES OF SERVICER.
(a) The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Receivable from time to
time, all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and Collection
Policy.
(b) The Servicer will instruct all Obligors to pay all
Collections directly to a Lock-Box or Collection Account. The Servicer shall
effect a Collection Account Agreement substantially in the form of Exhibit VI
with each bank party to a Collection Account at any time. In the case of any
remittances received in any Lock-Box or Collection Account that shall have been
identified, to the satisfaction of the Servicer, to not constitute Collections
or other proceeds of the Receivables or the Related Security, the Servicer shall
promptly remit such items to the Person identified to it as being the owner of
such remittances. From and after the date the Agent delivers to any Collection
Bank a Collection Notice pursuant to Section 8.3, the Agent may request that the
Servicer, and the Servicer thereupon promptly shall instruct all Obligors with
respect to the Receivables, to remit all payments thereon to a new depositary
account specified by the Agent and, at all times thereafter, Seller and the
Servicer shall not deposit or otherwise credit, and shall not permit any other
Person to deposit or otherwise credit to such new depositary account any cash or
payment item other than Collections.
(c) The Servicer shall administer the Collections in
accordance with the procedures described herein and in Article II. The Servicer
shall set aside and hold in trust for the account of Seller and the Purchasers
their respective shares of the Collections in accordance with Article II. The
Servicer shall, upon the request of the Agent, segregate, in a manner acceptable
to the Agent, all cash, checks and other instruments received by it from time to
time constituting Collections from the general funds of the Servicer or Seller
prior to the remittance thereof in accordance with Article II. If the Servicer
shall be required to segregate Collections pursuant to the preceding sentence,
the Servicer shall segregate and deposit with a bank designated by the Agent
such allocable share of Collections of Receivables set aside for the Purchasers
on the first Business Day following receipt by the Servicer of such Collections,
duly endorsed or with duly executed instruments of transfer.
(d) The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; provided, however, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable or Charged-Off Receivable or limit the rights of the Agent
or the Purchasers under this Agreement. Notwithstanding anything to the contrary
contained herein, the Agent shall have the absolute and unlimited right to
direct the Servicer to commence or settle any legal action with respect to any
Receivable or to foreclose upon or repossess any Related Security.
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(e) The Servicer shall hold in trust for Seller and the
Purchasers all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Security or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent, deliver or make available to the Agent all such Records, at
a place reasonably selected by the Agent. The Servicer shall, as soon as
practicable following receipt thereof turn over to Seller any cash collections
or other cash proceeds received with respect to Indebtedness not constituting
Receivables. The Servicer shall, from time to time at the request of any
Purchaser, furnish to the Purchasers (promptly after any such request) a
calculation of the amounts set aside for the Purchasers pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness
owed by it to Originator or Seller shall, except as otherwise specified by such
Obligor or otherwise required by contract or law and unless otherwise instructed
by the Agent, be applied as a Collection of any Receivable of such Obligor
(starting with the oldest such Receivable) to the extent of any amounts then due
and payable thereunder before being applied to any other receivable or other
obligation of such Obligor.
Section 8.3 COLLECTION NOTICES. The Agent is authorized at any time to
date and to deliver to the Collection Banks the Collection Notices. Seller
hereby transfers to the Agent for the benefit of the Purchasers, effective when
the Agent delivers such notice, the exclusive ownership and control of each
Lock-Box and the Collection Accounts. In case any authorized signatory of Seller
whose signature appears on a Collection Account Agreement shall cease to have
such authority before the delivery of such notice, such Collection Notice shall
nevertheless be valid as if such authority had remained in force. Seller hereby
authorizes the Agent, and agrees that the Agent shall be entitled to (i) endorse
Seller's name on checks and other instruments representing Collections, (ii)
enforce the Receivables, the related Contracts and the Related Security and
(iii) take such action as shall be necessary or desirable to cause all cash,
checks and other instruments constituting Collections of Receivables to come
into the possession of the Agent rather than Seller.
Section 8.4 RESPONSIBILITIES OF SELLER. Anything herein to the contrary
notwithstanding, the exercise by the Agent and the Purchasers of their rights
hereunder shall not release the Servicer, Originator or Seller from any of their
duties or obligations with respect to any Receivables or under the related
Contracts. The Purchasers shall have no obligation or liability with respect to
any Receivables or related Contracts, nor shall any of them be obligated to
perform the obligations of Seller.
Section 8.5 REPORTS. The Servicer shall prepare and forward to the
Agent (i) on the thirteenth (13th) day of each month (or, if the thirteenth
(13th) day of a month is not a Business Day, on the next succeeding Business
Day) and at such times as the Agent shall request, a Monthly Report and (ii) at
such times as the Agent shall request, a listing by Obligor of all Receivables
together with an aging of such Receivables.
Section 8.6 SERVICING FEES. In consideration of OMNOVA's agreement to
act as Servicer hereunder, the Purchasers hereby agree that, so long as OMNOVA
shall continue to
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perform as Servicer hereunder, Seller shall pay over to OMNOVA a fee (the
"SERVICING FEE") on the first calendar day of each month, in arrears for the
immediately preceding month, equal to 0.75% per annum of the average Aggregate
Capital outstanding during such period, as compensation for its servicing
activities.
ARTICLE IX.
AMORTIZATION EVENTS
Section 9.1 AMORTIZATION EVENTS. The occurrence of any one or more of
the following events shall constitute an Amortization Event:
(a) Any Seller Party shall fail (i) to make any payment or
deposit required hereunder when due, or (ii) to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clause (i) of this
paragraph (a) and paragraph 9.1(e)) and such failure shall continue for five (5)
consecutive Business Days.
(b) Any representation, warranty, certification or statement
made by any Seller Party in this Agreement, any other Transaction Document or in
any other document delivered pursuant hereto or thereto shall prove to have been
incorrect when made or deemed made.
(c) Failure of Seller to pay any Indebtedness when due or the
failure of any other Seller Party to pay Indebtedness when due in excess of (i)
$5,000,000 with respect to any item of Indebtedness or (ii) $10,000,000 in the
aggregate with all other such Indebtedness; or the default by any Seller Party
in the performance of any term, provision or condition contained in any
agreement under which any such Indebtedness was created or is governed, the
effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of any Seller Party shall be declared to be
due and payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the date of maturity thereof.
(d) (i) Any Seller Party or any of its Subsidiaries shall
generally not pay its debts as such debts become due or shall admit in writing
its inability to pay its debts generally or shall make a general assignment for
the benefit of creditors; or (ii) any proceeding shall be instituted by or
against any Seller Party or any of its Subsidiaries seeking to adjudicate it
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any substantial part of
its property or (iii) any Seller Party or any of its Subsidiaries shall take any
corporate action to authorize any of the actions set forth in clauses (i) or
(ii) above in this subsection (d).
(e) Seller shall fail to comply with the terms of Section 2.6
hereof.
(f) As at the end of any month:
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(i) the average of the Loss-to-Liquidation Ratios for the
three (3) months then most recently ended shall exceed 2.30%,
(ii) the average of the Delinquency Ratios for the three (3)
months then most recently ended shall exceed shall exceed 1.15%, or
(iii) the average of the Dilution Ratios for the three (3)
months then most recently ended shall exceed shall exceed 5.70%.
(g) A Change of Control shall occur.
(h) (i) One or more final judgments for the payment of money
shall be entered against Seller or (ii) one or more final judgments for the
payment of money in an amount in excess of $10,000,000, 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 thirty (30)
consecutive days without a stay of execution.
(i) The "PURCHASE TERMINATION DATE" under and as defined in
the Receivables Sale Agreement shall occur under the Receivables Sale Agreement
or Originator shall for any reason cease to transfer, or cease to have the legal
capacity to transfer, or otherwise be incapable of transferring Receivables to
Seller under the Receivables Sale Agreement.
(j) This Agreement shall terminate in whole or in part (except
in accordance with its terms), or shall cease to be effective or to be the
legally valid, binding and enforceable obligation of Seller, or the Agent for
the benefit of the Purchasers shall cease to have a valid and perfected first
priority security interest in the Receivables, the Related Security and the
Collections with respect thereto and the Collection Accounts.
(k) Originator shall cease to own 100% of Seller.
(l) Originator shall breach any of the covenants (incorporated
herein by this reference as if set forth herein in their entirety) of Originator
in Sections 9.1, 9.2 and 9.3 of the Originator Credit Agreement.
(m) The occurrence of any Event of Default under and as
defined in the Originator Credit Agreement as in effect on the date of this
Agreement (regardless of whether the same remains in effect) and as hereafter
amended or otherwise modified from time to time in accordance with the terms
thereof; PROVIDED, HOWEVER, that no amendment, waiver or modification of any
provision of Articles VIII, IX or X of such Originator Credit Agreement (or of
any defined term used in any such provision) shall be effective for purposes of
this clause (m) unless Bank One, NA has expressly consented thereto.
Section 9.2 REMEDIES. Upon the occurrence and during the continuation
of an Amortization Event, the Agent may, or upon the direction of the Required
Financial Institutions shall, take any of the following actions: (i) replace the
Person then acting as Servicer, (ii) declare
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the Amortization Date to have occurred, whereupon the Amortization Date shall
forthwith occur, without demand, protest or further notice of any kind, all of
which are hereby expressly waived by each Seller Party; provided, however, that
upon the occurrence of an Amortization Event described in Section 9.1(d)(ii), or
of an actual or deemed entry of an order for relief with respect to any Seller
Party under the Federal Bankruptcy Code, the Amortization Date shall
automatically occur, without demand, protest or any notice of any kind, all of
which are hereby expressly waived by each Seller Party, (iii) to the fullest
extent permitted by applicable law, declare that the Default Fee shall accrue
with respect to any of the Aggregate Unpaids outstanding at such time, (iv)
deliver the Collection Notices to the Collection Banks, and (v) notify Obligors
of the Purchasers' interest in the Receivables. The aforementioned rights and
remedies shall be without limitation, and shall be in addition to all other
rights and remedies of the Agent and the Purchasers otherwise available under
any other provision of this Agreement, by operation of law, at equity or
otherwise, all of which are hereby expressly preserved, including, without
limitation, all rights and remedies provided under the UCC, all of which rights
shall be cumulative.
ARTICLE X.
INDEMNIFICATION
Section 10.1 INDEMNITIES BY THE SELLER PARTIES. Without limiting any
other rights that the Agent or any Purchaser may have hereunder or under
applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to)
the Agent and each Purchaser and their respective assigns, officers, directors,
agents and employees (each an "INDEMNIFIED PARTY") from and against any and all
damages, losses, claims, taxes, liabilities, reasonable costs, reasonable
expenses and for all other reasonable amounts payable, including reasonable
attorneys' fees (which attorneys may be employees of the Agent or such
Purchaser) and disbursements (all of the foregoing being collectively referred
to as "INDEMNIFIED AMOUNTS") awarded against or incurred by any of them arising
out of or as a result of this Agreement or the acquisition, either directly or
indirectly, by a Purchaser of an interest in the Receivables, and (B) the
Servicer hereby agrees to indemnify (and pay within fifteen days to) each
Indemnified Party for Indemnified Amounts awarded against or incurred by any of
them arising out of the Servicer's activities as Servicer hereunder excluding,
however, in all of the foregoing instances under the preceding clauses (A) and
(B):
(i) Indemnified Amounts to the extent a final judgment of a
court of competent jurisdiction holds that such Indemnified Amounts
resulted from gross negligence, willful misconduct or breach of
contract on the part of the Indemnified Party seeking indemnification;
(ii) Indemnified Amounts to the extent the same includes
losses in respect of Receivables that are uncollectible on account of
the insolvency, bankruptcy or lack of creditworthiness of the related
Obligor;
(iii) taxes imposed by the jurisdiction in which such
Indemnified Party's principal executive office is located, on or
measured by the overall net
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income of such Indemnified Party to the extent that the computation of
such taxes is consistent with the characterization for income tax
purposes of the acquisition by the Purchasers of Purchaser Interests as
a loan or loans by the Purchasers to Seller secured by the Receivables,
the Related Security, the Collection Accounts and the Collections; or
(iv) Indemnified Amounts to the extent incurred in connection
with the institution or continuance of any suit or legal action by one
Indemnified Party against another Indemnified Party.
provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification (and subject to (i), (ii), (iii) and (iv)
above), Seller shall indemnify the Agent and the Purchasers for Indemnified
Amounts (including, without limitation, losses in respect of uncollectible
receivables, regardless of whether reimbursement therefor would constitute
recourse to Seller or the Servicer) relating to or resulting from:
(i) any representation or warranty made by any Seller Party or
Originator (or any officers of any such Person) in this Agreement, any
other Transaction Document or any other information or report delivered
by any such Person pursuant hereto or thereto, which shall have been
false or incorrect when made or deemed made;
(ii) the failure by Seller, the Servicer or Originator to
comply with any applicable law, rule or regulation with respect to any
Receivable or Contract related thereto, or the nonconformity of any
Receivable or Contract included therein with any such applicable law,
rule or regulation or any failure of Originator to keep or perform any
of its obligations, express or implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer or Originator to
perform its duties, covenants or other obligations in accordance with
the provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage suit,
or other similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of any Contract
or any Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable (including, without limitation, a defense based on
such Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance
with its terms), or any other claim resulting
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from the sale of the merchandise or service related to such
Receivable or the furnishing or failure to furnish such
merchandise or services;
(vi) the commingling of Collections of Receivables at
any time with other funds;
(vii) any investigation, litigation or proceeding
arising out of or as a result of this Agreement or any other
Transaction Document, the transactions contemplated hereby,
the use of the proceeds of an Incremental Purchase or a
Reinvestment, the ownership of the Purchaser Interests or any
other investigation, litigation or proceeding relating to
Seller, the Servicer or Originator in which any Indemnified
Party becomes involved as a result of any of the transactions
contemplated hereby;
(viii) any inability to litigate any claim against
the Obligor of any Receivable that had previously been
included in the Net Receivables Balance in respect of such
Receivable as a result of such Obligor being immune from civil
and commercial law and suit on the grounds of sovereignty or
otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event described in Section
9.1(d);
(x) any failure of Seller to acquire and maintain
legal and equitable title to, and ownership of any Receivable
and the Related Security and Collections with respect thereto
from Originator, free and clear of any Adverse Claim (other
than as created hereunder); or any failure of Seller to give
reasonably equivalent value to Originator under the
Receivables Sale Agreement in consideration of the transfer by
Originator of any Receivable, or any attempt by any Person to
void such transfer under statutory provisions or common law or
equitable action;
(xi) any failure to vest and maintain vested in the
Agent for the benefit of the Purchasers, or to transfer to the
Agent for the benefit of the Purchasers, legal and equitable
title to, and ownership of, a first priority perfected
undivided percentage ownership interest (to the extent of the
Purchaser Interests contemplated hereunder) or security
interest in the Receivables, the Related Security and the
Collections, free and clear of any Adverse Claim (except as
created by the Transaction Documents);
(xii) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to any Receivable, the
Related Security and Collections with respect thereto, and the
proceeds of any thereof, whether at the time of any
Incremental Purchase or Reinvestment or at any subsequent
time;
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(xiii) any action or omission by any Seller Party
which reduces or impairs the rights of the Agent or the
Purchasers with respect to any Receivable or the value of any
such Receivable;
(xiv) any attempt by any Person to void any
Incremental Purchase or Reinvestment hereunder under statutory
provisions or common law or equitable action; and
(xv) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible
Receivable to be an Eligible Receivable at the time so
included.
Section 10.2 INCREASED COST AND REDUCED RETURN. If after the date
hereof, any Funding Source shall be charged any fee, expense or increased cost
on account of the adoption of any applicable law, rule or regulation (including
any applicable law, rule or regulation regarding capital adequacy) or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency (a "REGULATORY CHANGE"): (i) that subjects any
Funding Source to any charge or withholding on or with respect to any Funding
Agreement or a Funding Source's obligations under a Funding Agreement, or on or
with respect to the Receivables, or changes the basis of taxation of payments to
any Funding Source of any amounts payable under any Funding Agreement (except
for changes in the rate of tax on the overall net income of a Funding Source or
taxes excluded by Section 10.1) or (ii) that imposes, modifies or deems
applicable any reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of a Funding
Source, or credit extended by a Funding Source pursuant to a Funding Agreement
or (iii) that imposes any other condition the result of which is to increase the
cost to a Funding Source of performing its obligations under a Funding
Agreement, or to reduce the rate of return on a Funding Source's capital as a
consequence of its obligations under a Funding Agreement, or to reduce the
amount of any sum received or receivable by a Funding Source under a Funding
Agreement or to require any payment calculated by reference to the amount of
interests or loans held or interest received by it, then, upon demand by the
Agent, Seller shall pay to the Agent, for the benefit of the relevant Funding
Source, such amounts charged to such Funding Source or such amounts to otherwise
compensate such Funding Source for such increased cost or such reduction.
Section 10.3 OTHER COSTS AND EXPENSES. Seller shall pay to the Agent
and Conduit on demand all reasonable costs and out-of-pocket expenses in
connection with the preparation, execution, delivery, amendment and
administration of this Agreement, the transactions contemplated hereby and the
other documents to be delivered hereunder, including without limitation, the
cost of Conduit's auditors auditing the books, records and procedures of Seller,
reasonable fees and out-of-pocket expenses of legal counsel for Conduit and the
Agent (which such counsel may be employees of Conduit or the Agent) with respect
thereto and with respect to advising Conduit and the Agent as to their
respective rights and remedies under this Agreement;
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PROVIDED, HOWEVER, that Seller shall not be required to pay the Agent's or
Conduit's for fees and out-of-pocket expenses of legal counsel for Conduit and
the Agent in connection with any amendment to this Agreement prior to April 30,
2001 that deals solely with changes to the definitions of "CONCENTRATION LIMIT"
or "APPROVED FOREIGN RECEIVABLES." Seller shall pay to the Agent on demand any
and all reasonable costs and expenses of the Agent and the Purchasers, if any,
including reasonable counsel fees and expenses in connection with the
enforcement of this Agreement and the other documents delivered hereunder and in
connection with any restructuring or workout of this Agreement or such
documents, or the administration of this Agreement following an Amortization
Event.
Section 10.4 ADDITIONAL INDEMNIFICATION OBLIGATIONS. The Agent will use
its best efforts to give prompt written notice of the institution of any third
party claim against the Agent or any Purchaser of which the Agent has actual
knowledge; provided, however, that failure to promptly give any such notice
shall not relieve Seller from its liability hereunder unless such failure or
delay results in irreversible prejudice to Seller.
Section 10.5 DEFENSE OF CLAIMS. If any third party claim is made
against an Indemnified Party, (a) Seller will be entitled to participate in the
defense thereof and, (b) if it so chooses, to assume the defense thereof with
counsel mutually acceptable to Seller and the Indemnified Party, provided that
in connection with such assumption Seller first admits in writing its liability
to indemnify the Indemnified Party with respect to all elements of such claim in
full. Should Seller so elect to assume the defense of a third party claim:
(i) Seller will not be liable to the
Indemnified Party for any legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof,
(ii) the Indemnified Party will (A)
cooperate in all reasonable respects with Seller in connection with such defense
and (B) not admit any liability with respect to, or settle, compromise or
discharge, such third party claim without Seller's prior written consent, as the
case may be,
(iii) upon request, Seller will consult with
the Indemnified Party and its counsel and keep them apprised of material
developments in the case or proceeding, and
(iv) the Indemnified Party shall be entitled
to participate in (but not to control) such defense with its own counsel at its
own expense.
If Seller does not assume the defense of any such third party claim, the
Indemnified Party shall diligently defend the same, or settle the same on
reasonable terms, after giving notice to Seller of such terms and Seller
promptly reimburse the Indemnified Party upon written request. Anything
contained in this Agreement to the contrary notwithstanding, Seller shall not be
entitled to assume the defense of any part of a third party claim that seeks an
order, injunction or other
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equitable relief that the Indemnified Party determines, in good faith, is
reasonably likely to affect its business other than by the payout of money
damages.
ARTICLE XI.
THE AGENT
Section 11.1 AUTHORIZATION AND ACTION. Each Purchaser hereby designates
and appoints Bank One to act as its agent hereunder and under each other
Transaction Document, and authorizes the Agent to take such actions as agent on
its behalf and to exercise such powers as are delegated to the Agent by the
terms of this Agreement and the other Transaction Documents together with such
powers as are reasonably incidental thereto. The Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in any other
Transaction Document, or any fiduciary relationship with any Purchaser, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.
Each Purchaser hereby authorizes the Agent to execute each of the Uniform
Commercial Code financing statements and Collection Account Agreements on behalf
of such Purchaser (the terms of which shall be binding on such Purchaser).
Section 11.2 DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 11.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of any Seller Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in
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connection herewith. The Agent shall not be under any obligation to any
Purchaser to ascertain or to inquire as to the observance or performance of any
of the agreements or covenants contained in, or conditions of, this Agreement or
any other Transaction Document, or to inspect the properties, books or records
of the Seller Parties. The Agent shall not be deemed to have knowledge of any
Amortization Event or Potential Amortization Event unless the Agent has received
notice from Seller or a Purchaser.
Section 11.4 RELIANCE BY AGENT. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Seller), independent
accountants and other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence of Conduit or the Required Financial Institutions or all
of the Purchasers, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Purchasers, provided that unless and
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Conduit or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
Section 11.5 NON-RELIANCE ON AGENT AND OTHER PURCHASERS. Each Purchaser
expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Seller
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Purchaser represents and warrants to the Agent that it has and will,
independently and without reliance upon the Agent or any other Purchaser and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of Seller and
made its own decision to enter into this Agreement, the other Transaction
Documents and all other documents related hereto or thereto.
Section 11.6 REIMBURSEMENT AND INDEMNIFICATION. The Financial
Institutions agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller Parties (i) for
any amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Seller Parties hereunder and (ii) for any other expenses
incurred by the Agent, in its capacity as Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.
Section 11.7 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with Seller or any
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Affiliate of Seller as though the Agent were not the Agent hereunder. With
respect to the acquisition of Purchaser Interests pursuant to this Agreement,
the Agent shall have the same rights and powers under this Agreement in its
individual capacity as any Purchaser and may exercise the same as though it were
not the Agent, and the terms "FINANCIAL INSTITUTION," "PURCHASER," "FINANCIAL
INSTITUTIONS" and "PURCHASERS" shall include the Agent in its individual
capacity.
Section 11.8 SUCCESSOR AGENT. The Agent may, upon five days' notice to
Seller and the Purchasers, and the Agent will, upon the direction of all of the
Purchasers (other than the Agent, in its individual capacity) resign as Agent.
If the Agent shall resign, then the Required Financial Institutions during such
five-day period shall appoint from among the Purchasers a successor agent. If
for any reason no successor Agent is appointed by the Required Financial
Institutions during such five-day period, then effective upon the termination of
such five day period, the Purchasers shall perform all of the duties of the
Agent hereunder and under the other Transaction Documents and Seller and the
Servicer (as applicable) shall make all payments in respect of the Aggregate
Unpaids directly to the applicable Purchasers and for all purposes shall deal
directly with the Purchasers. After the effectiveness of any retiring Agent's
resignation hereunder as Agent, the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Transaction Documents and
the provisions of this Article XI and Article X shall continue in effect for its
benefit with respect to any actions taken or omitted to be taken by it while it
was Agent under this Agreement and under the other Transaction Documents.
ARTICLE XII.
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 ASSIGNMENTS.
(a) Seller and each Financial Institution hereby agree and
consent to the complete or partial assignment by Conduit of all or any portion
of its rights under, interest in, title to and obligations under this Agreement
to the Financial Institutions pursuant to Section 13.1 or to any other Person,
and upon such assignment, Conduit shall be released from its obligations so
assigned. Further, Seller and each Financial Institution hereby agree that any
assignee of Conduit of this Agreement or all or any of the Purchaser Interests
of Conduit shall have all of the rights and benefits under this Agreement as if
the term "CONDUIT" explicitly referred to such party, and no such assignment
shall in any way impair the rights and benefits of Conduit hereunder. Neither
Seller nor the Servicer shall have the right to assign its rights or obligations
under this Agreement.
(b) Any Financial Institution may at any time and from time to
time assign to one or more Persons ("PURCHASING FINANCIAL INSTITUTIONS") all or
any part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
(the "ASSIGNMENT AGREEMENT") executed by such Purchasing Financial Institution
and such selling Financial Institution. The consent of Conduit shall be required
prior to the effectiveness of any such assignment. Each assignee of a Financial
Institution must (i) have a short-term debt rating of A-1 or better by Standard
& Poor's Ratings
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Group and P-1 by Xxxxx'x Investor Service, Inc. and (ii) agree to deliver to the
Agent, promptly following any request therefor by the Agent or Conduit, an
enforceability opinion in form and substance satisfactory to the Agent and
Conduit. Upon delivery of the executed Assignment Agreement to the Agent, such
selling Financial Institution shall be released from its obligations hereunder
to the extent of such assignment. Thereafter the Purchasing Financial
Institution shall for all purposes be a Financial Institution party to this
Agreement and shall have all the rights and obligations of a Financial
Institution under this Agreement to the same extent as if it were an original
party hereto and no further consent or action by Seller, the Purchasers or the
Agent shall be required.
(c) Each of the Financial Institutions agrees that in the
event that it shall cease to have a short-term debt rating of A-1 or better by
Standard & Poor's Ratings Group and P-1 by Xxxxx'x Investor Service, Inc. (an
"AFFECTED FINANCIAL INSTITUTION"), such Affected Financial Institution shall be
obliged, at the request of Conduit or the Agent, to assign all of its rights and
obligations hereunder to (x) another Financial Institution or (y) another
funding entity nominated by the Agent and acceptable to Conduit, and willing to
participate in this Agreement through the Liquidity Termination Date in the
place of such Affected Financial Institution; provided that the Affected
Financial Institution receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such Financial Institution's Pro Rata Share of
the Aggregate Capital and Yield owing to the Financial Institutions and all
accrued but unpaid fees and other costs and expenses payable in respect of its
Pro Rata Share of the Purchaser Interests of the Financial Institutions.
Section 12.2 PARTICIPATIONS. Any Financial Institution may, in the
ordinary course of its business at any time sell to one or more Persons (each, a
"PARTICIPANT") participating interests in its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, its obligation to pay Conduit its
Acquisition Amounts or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution's rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Conduit and the Agent shall continue to deal
solely and directly with such Financial Institution in connection with such
Financial Institution's rights and obligations under this Agreement. Each
Financial Institution agrees that any agreement between such Financial
Institution and any such Participant in respect of such participating interest
shall not restrict such Financial Institution's right to agree to any amendment,
supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in Section 14.1(b)(i).
ARTICLE XIII.
LIQUIDITY FACILITY
Section 13.1 TRANSFER TO FINANCIAL INSTITUTIONS. Each Financial
Institution hereby agrees, subject to Section 13.4, that immediately upon
written notice from Conduit delivered on or prior to the Liquidity Termination
Date, it shall acquire by assignment from Conduit, without recourse or warranty,
its Pro Rata Share of one or more of the Purchaser Interests of Conduit as
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specified by Conduit. Each such assignment by Conduit shall be made pro rata
among all of the Financial Institutions, except for pro rata assignments to one
or more Terminating Financial Institutions pursuant to Section 13.6. Each such
Financial Institution shall, no later than 1:00 p.m. (Chicago time) on the date
of such assignment, pay in immediately available funds (unless another form of
payment is otherwise agreed between Conduit and any Financial Institution) to
the Agent at an account designated by the Agent, for the benefit of Conduit, its
Acquisition Amount. Unless a Financial Institution has notified the Agent that
it does not intend to pay its Acquisition Amount, the Agent may assume that such
payment has been made and may, but shall not be obligated to, make the amount of
such payment available to Conduit in reliance upon such assumption. Conduit
hereby sells and assigns to the Agent for the ratable benefit of the Financial
Institutions, and the Agent hereby purchases and assumes from Conduit, effective
upon the receipt by Conduit of the Conduit Transfer Price, the Purchaser
Interests of Conduit which are the subject of any transfer pursuant to this
Article XIII.
Section 13.2 TRANSFER PRICE REDUCTION YIELD. If the Adjusted Funded
Amount is included in the calculation of the Conduit Transfer Price for any
Purchaser Interest, each Financial Institution agrees that the Agent shall pay
to Conduit the Reduction Percentage of any Yield received by the Agent with
respect to such Purchaser Interest.
Section 13.3 PAYMENTS TO CONDUIT. In consideration for the reduction of
the Conduit Transfer Prices by the Conduit Transfer Price Reductions, effective
only at such time as the aggregate amount of the Capital of the Purchaser
Interests of the Financial Institutions equals the Conduit Residual, each
Financial Institution hereby agrees that the Agent shall not distribute to the
Financial Institutions and shall immediately remit to Conduit any Yield,
Collections or other payments received by it to be applied pursuant to the terms
hereof or otherwise to reduce the Capital of the Purchaser Interests of the
Financial Institutions.
Section 13.4 LIMITATION ON COMMITMENT TO PURCHASE FROM CONDUIT.
Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have any obligation to purchase any Purchaser Interest from
Conduit, pursuant to Section 13.1 or otherwise, if:
(i) Conduit shall have voluntarily commenced any
proceeding or filed any petition under any bankruptcy,
insolvency or similar law seeking the dissolution, liquidation
or reorganization of Conduit or taken any corporate action for
the purpose of effectuating any of the foregoing; or
(ii) involuntary proceedings or an involuntary
petition shall have been commenced or filed against Conduit by
any Person under any bankruptcy, insolvency or similar law
seeking the dissolution, liquidation or reorganization of
Conduit and such proceeding or petition shall have not been
dismissed.
Section 13.5 DEFAULTING FINANCIAL INSTITUTIONS. If one or more
Financial Institutions defaults in its obligation to pay its Acquisition Amount
pursuant to Section 13.1 (each such Financial Institution shall be called a
"DEFAULTING FINANCIAL INSTITUTION" and the aggregate amount of such defaulted
obligations being herein called the "CONDUIT TRANSFER PRICE DEFICIT"), then upon
notice from the Agent, each Financial Institution other than the Defaulting
Financial
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Institutions (a "NON-DEFAULTING FINANCIAL INSTITUTION") shall promptly
pay to the Agent, in immediately available funds, an amount equal to the lesser
of (x) such Non-Defaulting Financial Institution's proportionate share (based
upon the relative Commitments of the Non-Defaulting Financial Institutions) of
the Conduit Transfer Price Deficit and (y) the unused portion of such
Non-Defaulting Financial Institution's Commitment. A Defaulting Financial
Institution shall forthwith upon demand pay to the Agent for the account of the
Non-Defaulting Financial Institutions all amounts paid by each Non-Defaulting
Financial Institution on behalf of such Defaulting Financial Institution,
together with interest thereon, for each day from the date a payment was made by
a Non-Defaulting Financial Institution until the date such Non-Defaulting
Financial Institution has been paid such amounts in full, at a rate per annum
equal to the Federal Funds Effective Rate plus two percent (2%). In addition,
without prejudice to any other rights that Conduit may have under applicable
law, each Defaulting Financial Institution shall pay to Conduit forthwith upon
demand, the difference between such Defaulting Financial Institution's unpaid
Acquisition Amount and the amount paid with respect thereto by the
Non-Defaulting Financial Institutions, together with interest thereon, for each
day from the date of the Agent's request for such Defaulting Financial
Institution's Acquisition Amount pursuant to Section 13.1 until the date the
requisite amount is paid to Conduit in full, at a rate per annum equal to the
Federal Funds Effective Rate plus two percent (2%).
Section 13.6 TERMINATING FINANCIAL INSTITUTIONS.
(a) Each Financial Institution hereby agrees to deliver
written notice to the Agent not more than 30 Business Days and not less than 5
Business Days prior to the Liquidity Termination Date indicating whether such
Financial Institution intends to renew its Commitment hereunder. If any
Financial Institution fails to deliver such notice on or prior to the date that
is 5 Business Days prior to the Liquidity Termination Date, such Financial
Institution will be deemed to have declined to renew its Commitment (each
Financial Institution which has declined or has been deemed to have declined to
renew its Commitment hereunder, a "NON-RENEWING FINANCIAL INSTITUTION"). The
Agent shall promptly notify Conduit of each Non-Renewing Financial Institution
and Conduit, in its sole discretion, may (A) to the extent of Commitment
Availability, declare that such Non-Renewing Financial Institution's Commitment
shall, to such extent, automatically terminate on a date specified by Conduit on
or before the Liquidity Termination Date or (B) upon one (1) Business Days'
notice to such Non-Renewing Financial Institution assign to such Non-Renewing
Financial Institution on a date specified by Conduit its Pro Rata Share of the
aggregate Purchaser Interests then held by Conduit, subject to, and in
accordance with, Section 13.1. In addition, Conduit may, in its sole discretion,
at any time (x) to the extent of Commitment Availability, declare that any
Affected Financial Institution's Commitment shall automatically terminate on a
date specified by Conduit or (y) assign to any Affected Financial Institution on
a date specified by Conduit its Pro Rata Share of the aggregate Purchaser
Interests then held by Conduit, subject to, and in accordance with, Section 13.1
(each Affected Financial Institution or each Non-Renewing Financial Institution
is hereinafter referred to as a "TERMINATING FINANCIAL INSTITUTION"). The
parties hereto expressly acknowledge that any declaration of the termination of
any Commitment, any assignment pursuant to this Section 13.6 and the order of
priority of any such termination or assignment among Terminating Financial
Institutions shall be made by Conduit in its sole and absolute discretion.
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(b) Upon any assignment to a Terminating Financial Institution
as provided in this Section 13.6, any remaining Commitment of such Terminating
Financial Institution shall automatically terminate. Upon reduction to zero of
the Capital of all of the Purchaser Interests of a Terminating Financial
Institution (after application of Collections thereto pursuant to Sections 2.2
and 2.3) all rights and obligations of such Terminating Financial Institution
hereunder shall be terminated and such Terminating Financial Institution shall
no longer be a "FINANCIAL INSTITUTION" hereunder; provided, however, that the
provisions of Article X shall continue in effect for its benefit with respect to
Purchaser Interests held by such Terminating Financial Institution prior to its
termination as a Financial Institution.
ARTICLE XIV.
MISCELLANEOUS
Section 14.1 WAIVERS AND AMENDMENTS.
(a) No failure or delay on the part of the Agent or any
Purchaser in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law. Any waiver of this Agreement shall be effective only in the specific
instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing in accordance with the
provisions of this Section 14.1(b). Conduit, Seller and the Agent, at the
direction of the Required Financial Institutions, may enter into written
modifications or waivers of any provisions of this Agreement, provided, however,
that no such modification or waiver shall:
(i) without the consent of each affected Purchaser,
(A) extend the Liquidity Termination Date or the date of any
payment or deposit of Collections by Seller or the Servicer,
(B) reduce the rate or extend the time of payment of Yield or
any CP Costs (or any component of Yield or CP Costs), (C)
reduce any fee payable to the Agent for the benefit of the
Purchasers, (D) except pursuant to Article XII hereof, change
the amount of the Capital of any Purchaser, any Financial
Institution's Pro Rata Share (except pursuant to Sections 13.1
or 13.5) or any Financial Institution's Commitment, (E) amend,
modify or waive any provision of the definition of Required
Financial Institutions or this Section 14.1(b), (F) consent to
or permit the assignment or transfer by Seller of any of its
rights and obligations under this Agreement, (G) change the
definition of "ELIGIBLE RECEIVABLE" or "AGGREGATE RESERVES" or
(H) amend or modify any defined term (or any defined term used
directly or indirectly in such defined term) used in clauses
(A) through (G) above in a manner that would circumvent the
intention of the restrictions set forth in such clauses; or
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(ii) without the written consent of the then Agent,
amend, modify or waive any provision of this Agreement if the
effect thereof is to affect the rights or duties of such
Agent.
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Seller, the Agent may amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and Conduit may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII,
Section 14.13 or any other provision of this Agreement without the consent of
Seller, provided that such amendment has no negative impact upon Seller. Any
modification or waiver made in accordance with this Section 14.1 shall apply to
each of the Purchasers equally and shall be binding upon Seller, the Purchasers
and the Agent.
Section 14.2 NOTICES. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other means, when received at the address specified in this
Section 14.2. Seller hereby authorizes the Agent to effect purchases and Tranche
Period and Discount Rate selections based on telephonic notices made by any
Person whom the Agent in good faith believes to be acting on behalf of Seller.
Seller agrees to deliver promptly to the Agent a written confirmation of each
telephonic notice signed by an authorized officer of Seller; provided, however,
the absence of such confirmation shall not affect the validity of such notice.
If the written confirmation differs from the action taken by the Agent, the
records of the Agent shall govern absent manifest error.
Section 14.3 RATABLE PAYMENTS. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.2 or 10.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 14.4 PROTECTION OF OWNERSHIP INTERESTS OF THE PURCHASERS.
(a) Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may request, to
perfect, protect or more fully evidence the Purchaser
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Interests, or to enable the Agent or the Purchasers to exercise and enforce
their rights and remedies hereunder. At any time during the continuance of an
Amortization Event, the Agent may, or the Agent may direct Seller or the
Servicer to, notify the Obligors of Receivables, at Seller's expense, of the
ownership or security interests of the Purchasers under this Agreement and may
also direct that payments of all amounts due or that become due under any or all
Receivables be made directly to the Agent or its designee. Seller or the
Servicer (as applicable) shall, at any Purchaser's request, withhold the
identity of such Purchaser in any such notification.
(b) If any Seller Party fails to perform any of its
obligations hereunder, the Agent or any Purchaser may (but shall not be required
to) perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes
the Agent at any time and from time to time in the sole discretion of the Agent,
and appoints the Agent as its attorney-in-fact, to act on behalf of such Seller
Party (i) to execute on behalf of Seller as debtor and to file financing
statements necessary or desirable in the Agent's sole discretion to perfect and
to maintain the perfection and priority of the interest of the Purchasers in the
Receivables and (ii) to file a carbon, photographic or other reproduction of
this Agreement or any financing statement with respect to the Receivables as a
financing statement in such offices as the Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of
the interests of the Purchasers in the Receivables. This appointment is coupled
with an interest and is irrevocable.
Section 14.5 CONFIDENTIALITY.
(a) Each Seller Party and each Purchaser shall maintain and
shall cause each of its employees and officers to maintain the confidentiality
of this Agreement and the other confidential or proprietary information with
respect to the Agent and Conduit and their respective businesses obtained by it
or them in connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that such Seller Party and such
Purchaser and its officers and employees may disclose such information to such
Seller Party's and such Purchaser's external accountants and attorneys and as
required by any applicable law or order of any judicial or administrative
proceeding.
(b) Anything herein to the contrary notwithstanding, each
Seller Party hereby consents to the disclosure of any nonpublic information with
respect to it on a confidential basis only (i) to the Agent, the Financial
Institutions or Conduit by each other, (ii) by the Agent or the Purchasers to
any prospective or actual assignee or participant of any of them and (iii) by
the Agent to any rating agency, Commercial Paper dealer or provider of a surety,
guaranty or credit or liquidity enhancement to Conduit or any entity organized
for the purpose of purchasing, or making loans secured by, financial assets for
which Bank One acts as the administrative agent and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing. In
addition, the Purchasers and the Agent may disclose any such nonpublic
information pursuant to any law, rule, regulation, direction, request or order
of any judicial, administrative or regulatory authority or proceedings (whether
or not having the force or effect of law).
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Section 14.6 BANKRUPTCY PETITION. Seller, the Servicer, the Agent and
each Financial Institution hereby covenants and agrees that, prior to the date
that is one year and one day after the payment in full of all outstanding senior
indebtedness of Conduit, it will not institute against, or join any other Person
in instituting against, Conduit or any such entity any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
Section 14.7 LIMITATION OF LIABILITY. Except with respect to any claim
arising out of the willful misconduct or gross negligence of (a) Conduit, the
Agent or any Financial Institution, on the one hand, or (b) any Seller Party, on
the other hand, no claim may be made by (i) any Seller Party or any other Person
against Conduit, the Agent or any Financial Institution or (ii) Conduit, the
Agent or any Financial Institution or other Person against any Seller Party, or
any of their respective Affiliates, directors, officers, employees, attorneys or
agents, as applicable, for any special, indirect, consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement, or any act, omission or event occurring in connection therewith; and
each party hereto, for itself and each of its respective Affiliates, directors,
officers, employees, attorneys and agents, 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 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF OHIO.
Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING
PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER
OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
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Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
Section 14.11 INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS.
(a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii) the indemnification and payment provisions of
Article X, and Sections 14.5 and 14.6 shall be continuing and shall survive any
termination of this Agreement.
Section 14.12 COUNTERPARTS; SEVERABILITY; SECTION REFERENCES. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "ARTICLE," "SECTION," "SCHEDULE" or "EXHIBIT" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
Section 14.13 BANK ONE ROLES. Each of the Financial Institutions
acknowledges that Bank One acts, or may in the future act, (i) as administrative
agent for Conduit or any Financial Institution, (ii) as issuing and paying agent
for the Commercial Paper, (iii) to provide credit or liquidity enhancement for
the timely payment for the Commercial Paper and (iv) to provide other services
from time to time for Conduit or any Financial Institution (collectively, the
"BANK ONE ROLES"). Without limiting the generality of this Section 14.13, each
Financial Institution hereby acknowledges and consents to any and all Bank One
Roles and agrees that in connection with any Bank One Role, Bank One may take,
or refrain from taking, any action that it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Conduit, and the giving of notice to the Agent of a mandatory purchase
pursuant to Section 13.1.
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Section 14.14 CHARACTERIZATION.
(a) It is the intention of the parties hereto that each
purchase hereunder shall constitute and be treated as an absolute and
irrevocable sale, which purchase shall provide the applicable Purchaser with the
full benefits of ownership of the applicable Purchaser Interest. Except as
specifically provided in this Agreement, each sale of a Purchaser Interest
hereunder is made without recourse to Seller; provided, however, that (i) Seller
shall be liable to each Purchaser and the Agent for all representations,
warranties, covenants and indemnities made by Seller pursuant to the terms of
this Agreement, and (ii) such sale does not constitute and is not intended to
result in an assumption by any Purchaser or the Agent or any assignee thereof of
any obligation of Seller or Originator or any other person arising in connection
with the Receivables, the Related Security, or the related Contracts, or any
other obligations of Seller or Originator.
(b) In addition to any ownership interest which the Agent may
from time to time acquire pursuant hereto, Seller hereby grants to the Agent for
the ratable benefit of the Purchasers a valid and perfected security interest in
all of Seller's right, title and interest in, to and under all Receivables now
existing or hereafter arising, the Collections, each Lock-Box, each Collection
Account, all Related Security, all other rights and payments relating to such
Receivables, and all proceeds of any thereof prior to all other liens on and
security interests therein to secure the prompt and complete payment of the
Aggregate Unpaids. The Agent and the Purchasers shall have, in addition to the
rights and remedies that they may have under this Agreement, all other rights
and remedies provided to a secured creditor under the UCC and other applicable
law, which rights and remedies shall be cumulative.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
OMNOVA RECEIVABLES CORPORATION, an Ohio corporation,
as Seller
By: ______________________________________________
Name:
Title:
Address: OMNOVA Receivables Corporation
000 Xxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. XxXxx
Fax: (000) 000-0000
Phone: (000) 000-0000
OMNOVA SOLUTIONS INC., an Ohio corporation,
as Servicer
By: ______________________________________________
Name:
Title:
Address: OMNOVA Solutions Inc.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. XxXxx
Fax: (000) 000-0000
Phone: (000) 000-0000
X-0
00
Xxxxxx Xxxxx Securitization Corporation, as Conduit
By: ______________________________________________
Authorized Signatory
Address: Falcon Asset Securitization Corporation
c/o Bank One, NA (Main Office Chicago), as Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
BANK ONE, NA (MAIN OFFICE CHICAGO), as a Financial Institution and as Agent
By: ______________________________________________
Name:
Title:
Address: Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0596, 1-21
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
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EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"ACCRUAL PERIOD" means each calendar month, provided that the
initial Accrual Period hereunder means the period from (and including) the date
of the initial purchase hereunder to (and including) the last day of the
calendar month thereafter.
"ACQUISITION AMOUNT" means, on the date of any purchase from
Conduit of one or more Purchaser Interests pursuant to Section 13.1, with
respect to each Financial Institution, the lesser of (i) such Financial
Institution's Pro Rata Share of the sum of (A) the lesser of (1) the Adjusted
Liquidity Price of each such Purchaser Interest and (2) the Capital of each such
Purchaser Interest and (B) all accrued and unpaid CP Costs for each such
Purchaser Interest and (ii) such Financial Institution's unused Commitment.
"ADJUSTED FUNDED AMOUNT" means, in determining the Conduit
Transfer Price for any Purchaser Interest, an amount equal to the Adjusted
Liquidity Price of each such Purchaser Interest.
"ADJUSTED LIQUIDITY PRICE" means an amount equal to:
|--- |-- ---| ---|
| | | |
RI | (i) DC + (ii) | NDR | |
| | ------------------------------ | |
| | 1.03 | |
| | | |
|--- |-- ---| ---|
where:
RI = the undivided percentage interest evidenced by such
Purchaser Interest.
DC = the Deemed Collections.
NDR = the Outstanding Balance of all Receivables as to which
any payment, or part thereof, has not remained unpaid for 91 days or more from
the original due date for such payment.
Each of the foregoing shall be determined from the most recent Monthly Report
received from the Servicer.
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51
"ADVERSE CLAIM" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"AFFECTED FINANCIAL INSTITUTION" has the meaning specified in
Section 12.1(c).
"AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person or any Subsidiary of such Person. A
Person shall be deemed to control another Person if the controlling Person owns
10% or more of any class of voting securities of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of stock, by contract or otherwise.
"AGENT" has the meaning set forth in the preamble to this
Agreement.
"AGGREGATE CAPITAL" means, on any date of determination, the
aggregate amount of Capital of all Purchaser Interests outstanding on such date.
"AGGREGATE REDUCTION" has the meaning specified in Section
1.3.
"AGGREGATE RESERVES" means, on any date of determination, the
sum of the Loss Reserve, the Yield and Servicer Reserve, the Dilution Reserve
and the FX Reserve.
"AGGREGATE UNPAIDS" means, at any time, an amount equal to the
sum of all accrued and unpaid fees under the Fee Letter, CP Costs, Yield,
Aggregate Capital and all other unpaid Obligations (whether due or accrued) at
such time.
"AGREEMENT" means this Receivables Purchase Agreement, as it
may be amended or modified and in effect from time to time.
"AMORTIZATION DATE" means the earliest to occur of (i) the day
on which any of the conditions precedent set forth in Section 6.2 are not
satisfied, (ii) the Business Day immediately prior to the occurrence of an
Amortization Event set forth in Section 9.1(d)(ii) or (iii) the Business Day
specified in a written notice from the Agent following the occurrence of any
other Amortization Event, and (iv) the date which is 30 days after the Agent's
receipt of written notice from Seller that it wishes to terminate the facility
evidenced by this Agreement.
"AMORTIZATION EVENT" has the meaning specified in Article IX.
"APPROVED FOREIGN RECEIVABLES" means:
(a) Receivables denominated in U.S. dollars but owing from
Obligors which are residents of or organized under the laws of Canada
or any province thereof in an aggregate amount of up to $5,000,000 at
any one time outstanding; and
(b) Receivables denominated in U.S. dollars owing from
Obligors which are residents of or organized under the laws of a
country other than the United States of
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America or Canada (or any state or province of either of the foregoing)
that is a member of the Organization of Economic Coordinated
Development (OECD) in an aggregate amount of up to $1,000,000 at any
one time outstanding.
"ASSIGNMENT AGREEMENT" has the meaning set forth in Section
12.1(b).
"AUTHORIZED OFFICER" means, with respect to any Person, its
president, corporate controller, treasurer or chief financial officer.
"BANK ONE" means Bank One, NA (Main Office Chicago) in its
individual capacity and its successors.
"BROKEN FUNDING COSTS" means for any Purchaser Interest which:
(i) has its Capital reduced without compliance by Seller with the notice
requirements hereunder or (ii) does not become subject to an Aggregate Reduction
following the delivery of any Reduction Notice or (iii) is assigned under
Article XIII or terminated prior to the date on which it was originally
scheduled to end; an amount equal to the excess, if any, of (A) the CP Costs or
Yield (as applicable) that would have accrued during the remainder of the
Tranche Periods or the tranche periods for Commercial Paper determined by the
Agent to relate to such Purchaser Interest (as applicable) subsequent to the
date of such reduction, assignment or termination (or in respect of clause (ii)
above, the date such Aggregate Reduction was designated to occur pursuant to the
Reduction Notice) of the Capital of such Purchaser Interest if such reduction,
assignment or termination had not occurred or such Reduction Notice had not been
delivered, over (B) the sum of (x) to the extent all or a portion of such
Capital is allocated to another Purchaser Interest, the amount of CP Costs or
Yield actually accrued during the remainder of such period on such Capital for
the new Purchaser Interest, and (y) to the extent such Capital is not allocated
to another Purchaser Interest, the income, if any, actually received during the
remainder of such period by the holder of such Purchaser Interest from investing
the portion of such Capital not so allocated. In the event that the amount
referred to in clause (B) exceeds the amount referred to in clause (A), the
relevant Purchaser or Purchasers agree to pay to Seller the amount of such
excess. All Broken Funding Costs shall be due and payable hereunder upon demand.
"BUSINESS DAY" means any day on which banks are not authorized
or required to close in New York, New York or Chicago, Illinois and The
Depository Trust Company of New York is open for business, and, if the
applicable Business Day relates to any computation or payment to be made with
respect to the LIBO Rate, any day on which dealings in dollar deposits are
carried on in the London interbank market.
"CAPITAL" of any Purchaser Interest means, at any time, (A)
the Purchase Price of such Purchaser Interest, minus (B) the sum of the
aggregate amount of Collections and other payments received by the Agent which
in each case are applied to reduce such Capital in accordance with the terms and
conditions of this Agreement; provided that such Capital shall be restored (in
accordance with Section 2.5) in the amount of any Collections or other payments
so received and applied if at any time the distribution of such Collections or
payments are rescinded, returned or refunded for any reason.
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"CHANGE OF CONTROL" means the acquisition by any Person, or
two or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 30% or more of the outstanding shares of
voting stock of OMNOVA.
"CHARGED-OFF RECEIVABLE" means a Receivable: (i) as to which
the Obligor thereof has taken any action, or suffered any event to occur, of the
type described in Section 9.1(d) (as if references to Seller Party therein refer
to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off Seller's books as uncollectible, or (iv) which has been
identified by Seller as uncollectible.
"COLLECTION ACCOUNT" means each concentration account,
depositary account, lock-box account or similar account in which any Collections
are collected or deposited and which is listed on Exhibit IV.
"COLLECTION ACCOUNT AGREEMENT" means an agreement
substantially in the form of Exhibit VI among Originator, Seller, the Agent and
a Collection Bank.
"COLLECTION BANK" means, at any time, any of the banks holding
one or more Collection Accounts.
"COLLECTION NOTICE" means a notice, in substantially the form
of Annex A to Exhibit VI, from the Agent to a Collection Bank.
"COLLECTIONS" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all yield, Finance Charges or other related amounts accruing
in respect thereof and all cash proceeds of Related Security with respect to
such Receivable.
"COMMERCIAL PAPER" means promissory notes of Conduit issued by
Conduit in the commercial paper market.
"COMMITMENT" means, for each Financial Institution, the
commitment of such Financial Institution to purchase Purchaser Interests from
(i) Seller and (ii) Conduit, in an amount not to exceed (i) in the aggregate,
the amount set forth opposite such Financial Institution's name on Schedule A to
this Agreement, as such amount may be modified in accordance with the terms
hereof (including, without limitation, any termination of Commitments pursuant
to Section 13.6 hereof) and (ii) with respect to any individual purchase
hereunder, its Pro Rata Share of the Purchase Price therefor.
"COMMITMENT AVAILABILITY" means at any time the positive
difference (if any) between (a) an amount equal to (i) the aggregate amount of
the Commitments divided by (ii) 1.02, minus (b) the Aggregate Capital at such
time.
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"CONCENTRATION LIMIT" means, as of the close of business of
Servicer on any date, with respect to any Obligor, 2.00% of the Outstanding
Balance of all Eligible Receivables, or such other amount (a "SPECIAL
CONCENTRATION LIMIT") for such Obligor designated by the Agent; provided that in
the case of an Obligor and any Affiliate of such Obligor, the Concentration
Limit shall be calculated as if such Obligor and such Affiliate are one Obligor;
and provided, further, that Conduit or the Required Financial Institutions may,
upon not less than three Business Days' notice to Seller, cancel any Special
Concentration Limit. As of the date hereof, each of Xxxx Industries, Inc.,
Consolidated Papers, Inc., Potlatch Corporation and International Paper Company
and its respective Affiliates shall have a Special Concentration Limit equal to
the lesser of (a) $4,500,000, and (b) 4.50% of all Eligible Receivables, and
Champion International Corp. and its respective Affiliates shall have a Special
Concentration Limit equal to the lesser of (x) $4,900,000, and (y) 4.50% of all
Eligible Receivables.
"CONDUIT" has the meaning set forth in the preamble to this
Agreement.
"CONDUIT RESIDUAL" means the sum of the Conduit Transfer Price
Reductions.
"CONDUIT TRANSFER PRICE" means, with respect to the assignment
by Conduit of one or more Purchaser Interests to the Agent for the benefit of
one or more of the Financial Institutions pursuant to Section 13.1, the sum of
(i) the lesser of (a) the Capital of each such Purchaser Interest and (b) the
Adjusted Funded Amount of each such Purchaser Interest and (ii) all accrued and
unpaid CP Costs for each such Purchaser Interest.
"CONDUIT TRANSFER PRICE DEFICIT" has the meaning set forth in
Section 13.5.
"CONDUIT TRANSFER PRICE REDUCTION" means in connection with
the assignment of a Purchaser Interest by Conduit to the Agent for the benefit
of the Financial Institutions, the positive difference (if any) between (i) the
Capital of such Purchaser Interest and (ii) the Adjusted Funded Amount for such
Purchaser Interest.
"CONTINGENT OBLIGATION" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees, endorses,
contingently agrees to purchase or provide funds for the payment of, or
otherwise becomes or is contingently liable upon, the obligation or liability of
any other Person, or agrees to maintain the net worth or working capital or
other financial condition of any other Person, or otherwise assures any creditor
of such other Person against loss, including, without limitation, any comfort
letter, operating agreement, take-or-pay contract or application for a letter of
credit.
"CONTRACT" means, with respect to any Receivable, any and all
instruments, agreements, invoices or other writings pursuant to which such
Receivable arises or which evidence such Receivable.
"CP COSTS" means, for each day, the sum of (i) discount or
yield accrued on Pooled Commercial Paper on such day, plus (ii) any and all
accrued commissions in respect of placement agents and Commercial Paper dealers,
and issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (iii) other costs associated with
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funding small or odd-lot amounts with respect to all receivable purchase
facilities which are funded by Pooled Commercial Paper for such day, minus (iv)
any accrual of income net of expenses received on such day from investment of
collections received under all receivable purchase facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on
such day net of expenses in respect of Broken Funding Costs related to the
prepayment of any Purchaser Interest of Conduit pursuant to the terms of any
receivable purchase facilities funded substantially with Pooled Commercial
Paper. In addition to the foregoing costs, if Seller shall request any
Incremental Purchase during any period of time determined by the Agent in its
sole discretion to result in incrementally higher CP Costs applicable to such
Incremental Purchase, the Capital associated with any such Incremental Purchase
shall, during such period, be deemed to be funded by Conduit in a special pool
(which may include capital associated with other receivable purchase facilities)
for purposes of determining such additional CP Costs applicable only to such
special pool and charged each day during such period against such Capital.
"CREDIT AND COLLECTION POLICY" means Seller's credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in Exhibit VIII hereto, as modified from time
to time in accordance with this Agreement.
"DEEMED COLLECTIONS" means the aggregate of all amounts Seller
shall have been deemed to have received as a Collection of a Receivable. Seller
shall be deemed to have received a Collection in full of a Receivable if at any
time (i) the Outstanding Balance of any such Receivable is either (x) reduced as
a result of any defective or rejected goods or services, any discount or any
adjustment or otherwise by Seller (other than cash Collections on account of the
Receivables) or (y) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction) or (ii) any of the representations or
warranties in Article V are no longer true with respect to any Receivable.
"DEFAULT FEE" means with respect to any amount due and payable
by Seller in respect of any Aggregate Unpaids, an amount equal to the greater of
(i) $1000 and (ii) interest on any such unpaid Aggregate Unpaids at a rate per
annum equal to 2% above the Prime Rate.
"DEFAULT RATIO" means, on any date of determination, the
highest three-month rolling average during the twelve-month period then most
recently ended of the percentage equal to (i) the sum of (a) 75% of the
Outstanding Balance of Receivables which were Defaulted Receivables on the last
day of the month then most recently ended, plus (b) the aggregate Outstanding
Balance of all Receivables that became Suspense Receivables in such month but
which are not yet Defaulted Receivables, divided by (ii) the aggregate sales of
the Originator during the third month prior to such date of determination.
"DEFAULTED RECEIVABLE" means a Receivable (i) which is not a
Delinquent Receivable and (ii) as to which any payment, or part thereof, remains
unpaid for more than sixty (60) days from the original due date for such
payment.
"DEFAULTING FINANCIAL INSTITUTION" has the meaning set forth
in Section 13.5.
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"DELINQUENCY RATIO" means, on any date of determination, the
percentage equal to (i) the sum of (a) the aggregate Outstanding Balance of all
Receivables that were Delinquent Receivables as of the last day of the calendar
month then most recently ended, plus (b) the aggregate Outstanding Balance of
Receivables that were Suspense Receivables as of the last day of the calendar
month then most recently ended, divided by (ii) the aggregate Outstanding
Balance of all Receivables as of the last day of the calendar month then most
recently ended.
"DELINQUENT RECEIVABLE" means a Receivable as to which any
payment, or part thereof, remains unpaid for more than ninety (90) days from the
original due date for such payment.
"DESIGNATED OBLIGOR" means an Obligor indicated by the Agent
to Seller in writing.
"DILUTION HORIZON RATIO" means cumulative sales of the
Originator during the two (2) months most recently ended divided by the Net
Receivables Balance as of the last day of the month most recently ended.
"DILUTION RATIO" means, at any time, a percentage equal to (i)
the aggregate amount of Dilutions which occurred during the month then most
recently ended, divided by (ii) the aggregate sales of the Originator during the
month immediately preceding the month then most recently ended.
"DILUTION RESERVE" means an amount equal to:
{ (2 x ED) + [ (DS - ED) x (DS/ED) ] } x DHR
where:
ED = Expected Dilution;
DS = Dilution Spike; and
DHR = Dilution Horizon Ratio.
Each of the foregoing shall be determined from the most recent Monthly Report(s)
received from the Servicer.
"DILUTION SPIKE" means, at any time, the highest two-month
rolling average Dilution Ratio during the twelve months then most recently
ended.
"DILUTIONS" means, at any time, the aggregate amount of
reductions or cancellations described in clause (i) of the definition of "Deemed
Collections."
"DISCOUNT RATE" means, the LIBO Rate or the Prime Rate, as
applicable, with respect to each Purchaser Interest of the Financial
Institutions.
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"ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a
resident of the United States or, if a corporation or other business
organization, is organized under the laws of the United States or any political
subdivision thereof and has its chief executive office in the United States,
PROVIDED, HOWEVER, that the limitation set forth in this clause (i)(a) shall not
apply to Approved Foreign Receivables; (b) is not an Affiliate of any of the
parties hereto; (c) is not a Designated Obligor; and (d) is not a government or
a governmental subdivision or agency,
(ii) the Obligor of which is not the Obligor of (A) any
Charged-Off Receivable or (B) Receivables more than 30% of the aggregate
Outstanding balance of which are Defaulted Receivables,
(iii) which is not a Charged-Off Receivable, a Suspense
Receivable, a Defaulted Receivable or a Delinquent Receivable,
(iv) which constitutes the legal, valid and binding obligation
of the related Obligor enforceable against such Obligor in accordance with its
terms subject to no offset, counterclaim or other defense and by its terms is
due and payable (A) within 60 days of the original billing date therefor and has
not had its payment terms extended or (B) within 120 days of the original
billing date therefor and has not had its payment terms extended so long as the
aggregate Outstanding Balance of Eligible Receivables described in clause (B)
does not exceed 3% of the aggregate Outstanding Balance of all Receivables as of
any date of determination,
(v) which is an "account" or "chattel paper" within the
meaning of Section 9-106 and Section 9-105, respectively, of the UCC of all
applicable jurisdictions,
(vi) which is denominated and payable only in United States
dollars in the United States, PROVIDED, HOWEVER, that the currency specified in
this clause (vi) shall not apply to an aggregate amount of Eligible Receivables
denominated in German Marks, Pounds Sterling, Euros or Canadian Dollars of up to
the foreign currency equivalent of $2,500,000 at any one time outstanding,
(vii) which, if it arises under a formal Contract, arises
under a Contract that is substantially in the form of one of the form contracts
set forth on Exhibit IX hereto or otherwise approved by the Agent in writing
that is in full force and effect and constitutes the legal, valid and binding
obligation of the related Obligor enforceable against such Obligor in accordance
with its terms subject to no offset, counterclaim or other defense,
(viii) which arises under a Contract that (A) either by its
terms or by virtue of Section 9-318 of the UCC, does not require the Obligor
under such Contract to consent to the transfer, sale or assignment of the rights
to payment of Originator or any of its assignees under such Contract and (B)
does not contain a confidentiality provision that purports to restrict the
ability of any Purchaser to exercise its rights under this Agreement, including,
without limitation, its right to review the Contract,
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(ix) which represents an obligation to pay a specified sum of
money, contingent only upon the sale of goods or the provision of services by
Originator,
(x) which, together with the Contract related thereto, does
not contravene any law, rule or regulation applicable thereto (including,
without limitation, any law, rule and regulation relating to truth in lending,
fair credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no part of the
Contract related thereto is in violation of any such law, rule or regulation,
(xi) which satisfies all applicable requirements of the Credit
and Collection Policy,
(xii) which was generated in the ordinary course of
Originator's business,
(xiii) which arises from the sale of goods and/or the
provision of services to the related Obligor by Originator, and not by any other
Person (in whole or in part); PROVIDED, HOWEVER, that any portion of such
Receivable that relates to product warranties shall not be deemed to be an
"Eligible Receivable,"
(xiv) as to which the Agent has not notified Seller that the
Agent has determined that such Receivable or class of Receivables is not
acceptable as an Eligible Receivable, including, without limitation, because
such Receivable arises under a Contract that is not acceptable to the Agent,
(xv) which is not subject to any right of rescission, set-off,
counterclaim, any other defense (including defenses arising out of violations of
usury laws) of the applicable Obligor against Originator or any other Adverse
Claim, and the Obligor thereon holds no right as against Originator to cause
Originator to repurchase the goods or merchandise the sale of which shall have
given rise to such Receivable (except with respect to sale discounts effected
pursuant to the Contract, or defective goods returned in accordance with the
terms of the Contract) (it being understood that only the portion of a
Receivable equal to the amount of such right of recission, set-off, counterclaim
or other defense shall be deemed not to be an Eligible Receivable),
(xvi) as to which Originator has satisfied and fully performed
all obligations on its part with respect to such Receivable required to be
fulfilled by it, and no further action is required to be performed by any Person
with respect thereto other than payment thereon by the applicable Obligor, and
(xvii) all right, title and interest to and in which has been
validly transferred by Originator directly to Seller under and in accordance
with the Receivables Sale Agreement, and Seller has good and marketable title
thereto free and clear of any Adverse Claim except as created hereunder.
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"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EXPECTED DILUTION" means the rolling twelve-month average of
the Dilution Ratio.
"FACILITY TERMINATION DATE" means the earliest of (i) May 1,
2003, (ii) the Liquidity Termination Date and (iii) the Amortization Date.
"FEDERAL BANKRUPTCY CODE" means Title 11 of the United States
Code entitled "Bankruptcy," as amended and any successor statute thereto.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate per annum for each day during such period equal to (a)
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.
"FEE LETTER" means that certain letter agreement dated as of
the date hereof among Seller, Originator and the Agent, as it may be amended or
modified and in effect from time to time.
"FINANCE CHARGES" means, with respect to a Contract, any
finance, interest, late payment charges or similar charges owing by an Obligor
pursuant to such Contract.
"FINANCIAL INSTITUTIONS" has the meaning set forth in the
preamble in this Agreement.
"FUNDING AGREEMENT" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of Conduit.
"FUNDING SOURCE" means (i) any Financial Institution or (ii)
any insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to Conduit.
"FX RESERVE" means, on any date of determination, an amount
equal to (i) 25% of the Outstanding Balance of all Receivables denominated in
currencies other than United States dollars divided by (ii) the Net Receivables
Balance.
"GAAP" means generally accepted accounting principles in
effect in the United States of America as of the date of this Agreement.
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"INCREMENTAL PURCHASE" means a purchase of one or more
Purchaser Interests which increases the total outstanding Aggregate Capital
hereunder.
"INDEBTEDNESS" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
"INDEPENDENT DIRECTOR" shall mean a member of the Board of
Directors of Seller who is not at such time, and has not been at any time during
the preceding five (5) years, (A) a director, officer, employee or affiliate of
Seller, Originator, or any of their respective Subsidiaries or Affiliates, or
(B) the beneficial owner (at the time of such individual's appointment as an
Independent Director or at any time thereafter while serving as an Independent
Director) of any of the outstanding common shares of Seller, Originator, or any
of their respective Subsidiaries or Affiliates, having general voting rights;
"LIBO RATE" means the rate per annum equal to the sum of (i)
(a) the applicable British Bankers' Association Interest Settlement Rate for
deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m.
(London time) two Business Days prior to the first day of the relevant Tranche
Period, and having a maturity equal to such Tranche Period, provided that, (i)
if Reuters Screen FRBD is not available to the Agent for any reason, the
applicable LIBO Rate for the relevant Tranche Period shall instead be the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars as reported by any other generally recognized financial information
service as of 11:00 a.m. (London time) two Business Days prior to the first day
of such Tranche Period, and having a maturity equal to such Tranche Period, and
(ii) if no such British Bankers' Association Interest Settlement Rate is
available to the Agent, the applicable LIBO Rate for the relevant Tranche Period
shall instead be the rate determined by the Agent to be the rate at which Bank
One offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Tranche Period, in the approximate amount to
be funded at the LIBO Rate and having a maturity equal to such Tranche Period,
divided by (b) one minus the maximum aggregate reserve requirement (including
all basic, supplemental, marginal or other reserves) which is imposed against
the Agent in respect of Eurocurrency liabilities, as defined in Regulation D of
the Board of Governors of the Federal Reserve System as in effect from time to
time (expressed as a decimal), applicable to such Tranche Period plus (ii) 0.75%
per annum. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16
of 1%.
"LIQUIDITY TERMINATION DATE" means April 27, 2001.
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"LOCK-BOX" means each locked postal box with respect to which
a bank who has executed a Collection Account Agreement has been granted
exclusive access for the purpose of retrieving and processing payments made on
the Receivables and which is listed on Exhibit IV.
"LOSS HORIZON RATIO" means, on any date of determination, a
percentage equal to the quotient of (i) the aggregate of (A) cumulative sales of
the Originator during the three months then most recently ended plus (B)
one-third (1/3) of cumulative sales of the Originator during the month
immediately preceding the three months then most recently ended, divided by (ii)
the Net Receivables Balance as of the last day of the month then most recently
ended.
"LOSS RESERVE" means, on any date, an amount equal to the
greater of (A) 6.0% and (B) an amount equal to:
2 x Default Ratio x Loss Horizon Ratio
Each of the foregoing shall be determined from the most recent Monthly Report(s)
received from the Servicer.
"LOSS-TO-LIQUIDATION RATIO" means, on any date of
determination, a percentage equal to (i) the sum of (a) the aggregate
Outstanding Balance of all Receivables that were Defaulted Receivables as of the
last day of the calendar month then most recently ended, plus (b) the aggregate
Outstanding Balance of Receivables that became Suspense Receivables in such
month but which are not yet Delinquent Receivables, divided by (ii) the
aggregate amount of Collections received in the month then most recently ended.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the financial condition or operations of any Seller Party and its
Subsidiaries, (ii) the ability of any Seller Party to perform its obligations
under this Agreement, (iii) the legality, validity or enforceability of this
Agreement or any other Transaction Document, (iv) any Purchaser's interest in
the Receivables generally or in any significant portion of the Receivables, the
Related Security or the Collections with respect thereto, or (v) the
collectibility of the Receivables generally or of any material portion of the
Receivables.
"MONTHLY REPORT" means a report, in substantially the form of
Exhibit X hereto (appropriately completed), furnished by the Servicer to the
Agent pursuant to Section 8.5.
"NET RECEIVABLES BALANCE" means, at any time, the aggregate
Outstanding Balance of all Eligible Receivables at such time reduced by the
aggregate amount by which the Outstanding Balance of all Eligible Receivables of
each Obligor and its Affiliates exceeds the Concentration Limit for such
Obligor.
"NON-DEFAULTING FINANCIAL INSTITUTION" has the meaning set
forth in Section 13.5.
"NON-RENEWING FINANCIAL INSTITUTION" has the meaning set forth
in Section 13.6(a).
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"OBLIGATIONS" shall have the meaning set forth in Section 2.1.
"OBLIGOR" means a Person obligated to make payments pursuant
to a Contract.
"ORIGINATOR" means OMNOVA Solutions Inc., in its capacity as
seller under the Receivables Sale Agreement.
"ORIGINATOR CREDIT AGREEMENT" means that certain Credit
Agreement, dated as of September 30, 1999, by and among Originator, Bank of
America, as agent and certain other parties.
"OUTSTANDING BALANCE" of any Receivable at any time means the
then outstanding principal balance thereof.
"PARTICIPANT" has the meaning set forth in Section 12.2.
"PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"POOLED COMMERCIAL PAPER" means Commercial Paper notes of
Conduit subject to any particular pooling arrangement by Conduit, but excluding
Commercial Paper issued by Conduit for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by Conduit.
"POTENTIAL AMORTIZATION EVENT" means an event which, with the
passage of time or the giving of notice, or both, would constitute an
Amortization Event.
"PRIME RATE" means a rate per annum equal to the prime rate of
interest announced from time to time by Bank One or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes
"PRO RATA SHARE" means, for each Financial Institution, a
percentage equal to (i) the Commitment of such Financial Institution, divided by
(ii) the aggregate amount of all Commitments of all Financial Institutions
hereunder, adjusted as necessary to give effect to the application of the terms
of Sections 13.5 or 13.6.
"PROPOSED REDUCTION DATE" has the meaning set forth in Section
1.3.
"PURCHASE LIMIT" means $75,000,000.
"PURCHASE NOTICE" has the meaning set forth in Section 1.2.
"PURCHASE PRICE" means, with respect to any Incremental
Purchase of a Purchaser Interest, the amount paid to Seller for such Purchaser
Interest which shall not exceed the least of (i) the amount requested by Seller
in the applicable Purchase Notice, (ii) the unused portion of the Purchase Limit
on the applicable purchase date and (iii) the excess, if any, of the Net
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Receivables Balance (less the Aggregate Reserves) on the applicable purchase
date over the aggregate outstanding amount of Aggregate Capital determined as of
the date of the most recent Monthly Report, taking into account such proposed
Incremental Purchase.
"PURCHASERS" means Conduit and each Financial Institution.
"PURCHASER INTEREST" means, at any time, an undivided
percentage ownership interest (computed as set forth below) associated with a
designated amount of Capital, selected pursuant to the terms and conditions
hereof in (i) each Receivable arising prior to the time of the most recent
computation or recomputation of such undivided interest, (ii) all Related
Security with respect to each such Receivable, and (iii) all Collections with
respect to, and other proceeds of, each such Receivable. Each such undivided
percentage interest shall equal:
C
----------------------
NRB - AR
where:
C = the Capital of such Purchaser Interest.
AR = the Aggregate Reserves.
NRB = the Net Receivables Balance.
Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
business day immediately preceding the Amortization Date shall remain constant
at all times thereafter.
"PURCHASING FINANCIAL INSTITUTION" has the meaning set forth
in Section 12.1(b).
"RECEIVABLE" means all indebtedness and other obligations owed
to Seller or Originator (at the time it arises, and before giving effect to any
transfer or conveyance under the Receivables Sale Agreement or hereunder) or in
which Seller or Originator has a security interest or other interest, including,
without limitation, any indebtedness, obligation or interest constituting an
account, chattel paper, instrument or general intangible, arising in connection
with the sale of goods or the rendering of services by Originator, and further
includes, without limitation, the obligation to pay any Finance Charges with
respect thereto. Indebtedness and other rights and obligations arising from any
one transaction, including, without limitation, indebtedness and other rights
and obligations represented by an individual invoice, shall constitute a
Receivable separate from a Receivable consisting of the indebtedness and other
rights and obligations arising from any other transaction; provided further,
that any indebtedness, rights or obligations referred to in the immediately
preceding sentence shall be a Receivable
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regardless of whether the account debtor or Seller treats such indebtedness,
rights or obligations as a separate payment obligation.
"RECEIVABLES SALE AGREEMENT" means that certain Receivables
Sale Agreement, dated as of May 1, 2000, between Originator and Seller, as the
same may be amended, restated or otherwise modified from time to time.
"RECORDS" means, with respect to any Receivable, all Contracts
and other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"REDUCTION NOTICE" has the meaning set forth in Section 1.3.
"REDUCTION PERCENTAGE" means, for any Purchaser Interest
acquired by the Financial Institutions from Conduit for less than the Capital of
such Purchaser Interest, a percentage equal to a fraction the numerator of which
is the Conduit Transfer Price Reduction for such Purchaser Interest and the
denominator of which is the Capital of such Purchaser Interest.
"REGULATORY CHANGE" has the meaning set forth in Section
10.2(a).
"REINVESTMENT" has the meaning set forth in Section 2.2.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of Seller's interest in the inventory and goods
(including returned or repossessed inventory or goods), if any, the sale,
financing or lease of which by Seller gave rise to such Receivable, and all
insurance contracts with respect thereto,
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements and security agreements
describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Receivable whether pursuant to the Contract related to
such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of Seller's right, title and interest in, to and
under the Receivables Sale Agreement in respect of such Receivable, and
(vii) all proceeds of any of the foregoing.
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"REQUIRED FINANCIAL INSTITUTIONS" means, at any time,
Financial Institutions with Commitments in excess of 66-2/3% of the Purchase
Limit.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of Seller now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock or in any junior class of stock of
Seller, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of Seller now or hereafter outstanding, (iii) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to the Subordinated Loans (as defined in the Receivables Sale
Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of capital stock of Seller now or hereafter
outstanding, and (v) any payment of management fees by Seller (except for
reasonable management fees to the Originator or its Affiliates in reimbursement
of actual management services performed).
"SELLER" has the meaning set forth in the preamble to this
Agreement.
"SELLER PARTIES" has the meaning set forth in the preamble to
this Agreement.
"SERVICER" means at any time the Person (which may be the
Agent) then authorized pursuant to Article VIII to service, administer and
collect Receivables.
"SERVICING FEE" has the meaning set forth in Section 8.6.
"SETTLEMENT DATE" means (A) the third (3rd) Business Day
following each date upon which the servicer is required to deliver a Monthly
Report pursuant to Section 8.5, and (B) the last day of the relevant Tranche
Period in respect of each Purchaser Interest of the Financial Institutions.
"SETTLEMENT PERIOD" means (A) in respect of each Purchaser
Interest of Conduit, the immediately preceding Accrual Period, and (B) in
respect of each Purchaser Interest of the Financial Institutions, the entire
Tranche Period of such Purchaser Interest.
"SUBSIDIARY" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of which shall at
the time be owned or controlled, directly or indirectly, by such Person or by
one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, association, limited liability company,
joint venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of Seller.
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"SUSPENSE RECEIVABLE" means any Receivable that is not yet a
Charged-Off Receivable which has been (or should be) in accordance with the
Credit and Collection Policy designated with code number 598 in the Seller's and
Servicer's records because problems with collection are anticipated, whether due
to a bankruptcy of the Obligor, underpayment or otherwise.
"TERMINATION DATE" has the meaning set forth in Section 2.2.
"TERMINATION PERCENTAGE" has the meaning set forth in Section
2.2.
"TERMINATING FINANCIAL INSTITUTION" has the meaning set forth
in Section 13.6(a).
"TERMINATING TRANCHE" has the meaning set forth in Section
4.3(b).
"TRANCHE PERIOD" means, with respect to any Purchaser Interest
held by a Financial Institution:
(a) if Yield for such Purchaser Interest is calculated on the
basis of the LIBO Rate, a period of one, two, three or six months, or such other
period as may be mutually agreeable to the Agent and Seller, commencing on a
Business Day selected by Seller or the Agent pursuant to this Agreement. Such
Tranche Period shall end on the day in the applicable succeeding calendar month
which corresponds numerically to the beginning day of such Tranche Period,
provided, however, that if there is no such numerically corresponding day in
such succeeding month, such Tranche Period shall end on the last Business Day of
such succeeding month; or
(b) if Yield for such Purchaser Interest is calculated on the
basis of the Prime Rate, a period commencing on a Business Day selected by
Seller and agreed to by the Agent, provided no such period shall exceed one
month.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Purchaser Interest which commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortization Date. The duration of each Tranche Period
which commences after the Amortization Date shall be of such duration as
selected by the Agent.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement,
each Purchase Notice, the Receivables Sale Agreement, each Collection Account
Agreement, the Fee Letter, the Subordinated Note (as defined in the Receivables
Sale Agreement) and all other instruments, documents and agreements executed and
delivered in connection herewith.
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"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
"YIELD" means for each respective Tranche Period relating to
Purchaser Interests of the Financial Institutions, an amount equal to the
product of the applicable Discount Rate for each Purchaser Interest multiplied
by the Capital of such Purchaser Interest for each day elapsed during such
Tranche Period, annualized on a 360 day basis.
"YIELD AND SERVICER RESERVE" means, on any date, an amount
equal to 1.5% multiplied by the Outstanding Balance of all Eligible Receivables
as of the close of business of the Servicer on such date.
All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC in the
State of Illinois, and not specifically defined herein, are used herein as
defined in such Article 9.
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EXHIBIT II
FORM OF PURCHASE NOTICE
[DATE]
Bank One, NA (Main Office Chicago), as Agent
1 Bank One Plaza, 21st Floor
Asset-Backed Finance
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Falcon Portfolio Manager
RE: PURCHASE NOTICE
Ladies and Gentlemen:
Reference is hereby made to the Receivables Purchase
Agreement, dated as of May 1, 2000, by and among OMNOVA Receivables Corporation,
as Seller (the "SELLER"), OMNOVA Solutions Inc., as Servicer, the Financial
Institutions, Falcon Asset Securitization Corporation ("CONDUIT"), and Bank One,
NA (Main Office Chicago), as Agent (the "RECEIVABLES PURCHASE AGREEMENT").
Capitalized terms used herein shall have the meanings assigned to such terms in
the Receivables Purchase Agreement.
The Agent is hereby notified of the following Incremental
Purchase:
Purchase Price: $________________________________
Date of Purchase: _________________________________
Requested Discount Rate: [LIBO Rate] [Prime Rate] [Pooled Commercial
Paper rate]
Please credit the Purchase Price in immediately available
funds to:
[Account Name]
[Account No.]
[Bank Name & Address]
[ABA #]
Reference:
Telephone advice to: [Name] @ tel. No. ( )
Please advise [Name] at telephone no ( ) _________________ if
Conduit will not be making this purchase.
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In connection with the Incremental Purchase to be made on the
above listed "Date of Purchase" (the "PURCHASE DATE"), the Seller hereby
certifies that the following statements are true on the date hereof, and will be
true on the Purchase Date (before and after giving effect to the proposed
Incremental Purchase):
(i) the representations and warranties of the Seller set forth
in Section 5.1 of the Receivables Purchase Agreement are true and correct on and
as of the Purchase Date as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result
from the proposed Incremental Purchase, that will constitute an Amortization
Event or a Potential Amortization Event;
(iii) the Facility Termination Date has not occurred, the
Aggregate Capital does not exceed the Purchase Limit and the aggregate Purchaser
Interests do not exceed 100%; and
(iv) the amount of Aggregate Capital is $_________ after
giving effect to the Incremental Purchase to be made on the Purchase Date.
Very truly yours,
OMNOVA Receivables Corporation
By:_______________________________________
Name:
Title:
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EXHIBIT III
PLACES OF BUSINESS OF THE SELLER PARTIES;
LOCATIONS OF RECORDS;
FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)
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EXHIBIT IV
NAMES OF COLLECTION BANKS; COLLECTION ACCOUNTS
LOCK BOX RELATED COLLECTION ACCOUNT
-------- --------------------------
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EXHIBIT V
FORM OF COMPLIANCE CERTIFICATE
To: Bank One, NA (Main Office Chicago), as Agent
This Compliance Certificate (this "Certificate") is furnished
pursuant to that certain Receivables Purchase Agreement dated as of ________
___, 2000 among OMNOVA Receivables Corporation (the "SELLER"), OMNOVA Solutions
Inc. (the "SERVICER"), the Purchasers party thereto and Bank One, NA (Main
Office Chicago), as agent for such Purchasers (the "AGREEMENT").
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _______________ of Seller.
2. I have reviewed the terms of the Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of Seller and its Subsidiaries during the accounting
period covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event which
constitutes an Amortization Event or Potential Amortization Event, as each such
term is defined under the Agreement, during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate, except as set forth in paragraph 5 below.
4. Schedule I attached hereto sets forth financial data and
computations evidencing the compliance with certain covenants of the Agreement,
all of which data and computations are true, complete and correct.
5. Described below are the exceptions, if any, to paragraph 3
by listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Seller has taken, is taking, or
proposes to take with respect to each such condition or event:
___________________________________
6. Attached as EXHIBIT A hereto is a true and correct copy of
the most recent compliance certificate required to be delivered by OMNOVA
Solutions Inc. under the terms of that certain Credit Agreement, dated as of
September 30, 1999, by and among OMNOVA Solutions Inc., Bank One, NA, as agent,
and certain other parties, as amended, restated and/or otherwise modified from
time to time in accordance with the terms thereof.
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THE FOREGOING CERTIFICATIONS, TOGETHER WITH THE COMPUTATIONS SET FORTH IN
SCHEDULE I HERETO AND THE FINANCIAL STATEMENTS DELIVERED WITH THIS
CERTIFICATE IN SUPPORT HEREOF, ARE MADE AND DELIVERED THIS DAY OF , __ .
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SCHEDULE I TO COMPLIANCE CERTIFICATE
A. Schedule of Compliance as of __________, ____ with Section
___ of the Agreement. Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.
This schedule relates to the month ended: __________________
V-3
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EXHIBIT A TO COMPLIANCE CERTIFICATE
[attach copy of most recent compliance certificate delivered under the
Originator Credit Agreement]
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EXHIBIT VI
FORM OF COLLECTION ACCOUNT AGREEMENT
[ON LETTERHEAD OF ORIGINATOR]
[DATE]
[Lock-Box Bank/Concentration Bank/Depositary Bank]
Re: OMNOVA Solutions Inc.
Ladies and Gentlemen:
Reference is hereby made to P.O. Box # in [city, state, zip
code] (the "LOCK-BOX") of which you have exclusive control for the purpose of
receiving mail and processing payments therefrom pursuant to that certain [name
of lock-box agreement] between you and the undersigned (the "COMPANY") dated
(the "AGREEMENT"). You hereby confirm your agreement to perform the services
described therein. Among the services you have agreed to perform therein, is to
endorse all checks and other evidences of payment, and credit such payments to
the Company's checking account no. maintained with you in the name of the
Company (the "LOCK-BOX ACCOUNT").
The Company hereby informs you that pursuant to that certain
Receivables Sale Agreement, dated as of May 1, 2000 between the Company and
OMNOVA Receivables Corporation (the "SELLER"), the Company has transferred all
of its right, title and interest in and to, and exclusive ownership and control
of, the Lock-Box and the Lock-Box Account to Seller. The Company and Seller
hereby request that the name of the Lock-Box Account be changed to "OMNOVA
SOLUTIONS INC., AS SERVICER."
The Company and Seller hereby irrevocably instruct you, and
you hereby agree, that upon receiving notice from Bank One, NA (Main Office
Chicago) ("BANK ONE") in the form attached hereto as Annex A: (i) the name of
the Lock-Box Account will be changed to Bank One for itself and as agent (or any
designee of Bank One) and Bank One will have exclusive ownership of and access
to the Lock-Box and the Lock-Box Account, and neither the Company, Seller, nor
any of their respective affiliates will have any control of the Lock-Box or the
Lock-Box Account or any access thereto, (ii) you will either continue to send
the funds from the Lock-Box to the Lock-Box Account, or will redirect the funds
as Bank One may otherwise request, (iii) you will transfer monies on deposit in
the Lock-Box Account, at any time, as directed by Bank One, (iv) all services to
be performed by you under the Agreement will be performed on behalf of Bank One,
and (v) all correspondence or other mail which you have agreed to send to the
Company or Seller will be sent to Bank One at the following address:
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Bank One, NA (Main Office Chicago)
Suite __, 21st Floor
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-
Attention: Credit Manager, Asset Backed Securities
Division
Moreover, upon such notice, Bank One for itself and as agent
will have all rights and remedies given to the Company (and Seller, as the
Company's assignee) under the Agreement. Seller agrees, however, to continue to
pay all fees and other assessments due thereunder at any time.
You hereby acknowledge that monies deposited in the Lock-Box
Account or any other account established with you by Bank One for the purpose of
receiving funds from the Lock-Box are subject to the liens of Bank One for
itself and as agent, and will not be subject to deduction, set-off, banker's
lien or any other right you or any other party may have against the Company or
Seller.
THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS. This letter agreement may be
executed in any number of counterparts and all of such counterparts taken
together will be deemed to constitute one and the same instrument.
This letter agreement contains the entire agreement between
the parties, and may not be altered, modified, terminated or amended in any
respect, nor may any right, power or privilege of any party hereunder be waived
or released or discharged, except upon execution by all parties hereto of a
written instrument so providing. In the event that any provision in this letter
agreement is in conflict with, or inconsistent with, any provision of the
Agreement, this letter agreement will exclusively govern and control. Each party
agrees to take all actions reasonably requested by any other party to carry out
the purposes of this letter agreement or to preserve and protect the rights of
each party hereunder.
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Please indicate your agreement to the terms of this letter
agreement by signing in the space provided below. This letter agreement will
become effective immediately upon execution of a counterpart of this letter
agreement by all parties hereto.
Very truly yours,
OMNOVA Solutions Inc.
By: ____________________________
Name:
Title:
OMNOVA Receivables Corporation
By: ____________________________
Name:
Title:
Acknowledged and agreed to this __ day of
[COLLECTION BANK]
By: _____________________________
Name:
Title:
BANK ONE, NA (MAIN OFFICE CHICAGO), as Agent
By: _____________________________
Name:
Title:
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ANNEX A
FORM OF NOTICE
[ON LETTERHEAD OF BANK ONE]
[DATE]
[Collection Bank/Depositary Bank/Concentration Bank]
Re: OMNOVA Solutions Inc.
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights
pursuant to that certain letter agreement among OMNOVA Solutions Inc., OMNOVA
Receivables Corporation, you and us, to have the name of, and to have exclusive
ownership and control of, account number __________________ (the "LOCK-BOX
ACCOUNT") maintained with you, transferred to us. [Lock-Box Account will
henceforth be a zero-balance account, and funds deposited in the Lock-Box
Account should be sent at the end of each day to ___________.] You have further
agreed to perform all other services you are performing under that certain
agreement dated between you and OMNOVA Solutions Inc. on our behalf.
We appreciate your cooperation in this matter.
Very truly yours,
BANK ONE, NA (MAIN OFFICE CHICAGO)
(for itself and as agent)
By: ____________________________________
Title:
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EXHIBIT VII
FORM OF ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this "ASSIGNMENT AGREEMENT") is
entered into as of the ___ day of ____________, ____, by and between
_____________________ ("ASSIGNOR") and __________________ ("ASSIGNEE").
PRELIMINARY STATEMENTS
A. This Assignment Agreement is being executed and delivered
in accordance with Section 12.1(b) of that certain Receivables Purchase
Agreement dated as of May 1, 2000 by and among OMNOVA Receivables Corporation,
OMNOVA Solutions Inc., as Servicer, Falcon Asset Securitization Corporation,
Bank One, NA (Main Office Chicago), as Agent, and the Financial Institutions
party thereto (as amended, modified or restated from time to time, the "PURCHASE
AGREEMENT"). Capitalized terms used and not otherwise defined herein are used
with the meanings set forth or incorporated by reference in the Purchase
Agreement.
B. Assignor is a Financial Institution party to the Purchase
Agreement, and Assignee wishes to become a Financial Institution thereunder;
and
C. Assignor is selling and assigning to Assignee an undivided
____________% (the "TRANSFERRED PERCENTAGE") interest in all of Assignor's
rights and obligations under the Purchase Agreement and the other Transaction
Documents, including, without limitation, Assignor's Commitment and (if
applicable) the Capital of Assignor's Purchaser Interests as set forth herein.
AGREEMENT
The parties hereto hereby agree as follows:
1. The sale, transfer and assignment effected by this
Assignment Agreement shall become effective (the "EFFECTIVE DATE") two (2)
Business Days (or such other date selected by the Agent in its sole discretion)
following the date on which a notice substantially in the form of Schedule II to
this Assignment Agreement ("EFFECTIVE NOTICE") is delivered by the Agent to
Company, Assignor and Assignee. From and after the Effective Date, Assignee
shall be a Financial Institution party to the Purchase Agreement for all
purposes thereof as if Assignee were an original party thereto and Assignee
agrees to be bound by all of the terms and provisions contained therein.
2. If Assignor has no outstanding Capital under the Purchase
Agreement, on the Effective Date, Assignor shall be deemed to have hereby
transferred and assigned to Assignee, without recourse, representation or
warranty (except as provided in paragraph 6 below), and the Assignee shall be
deemed to have hereby irrevocably taken, received and assumed from Assignor, the
Transferred Percentage of Assignor's Commitment and all rights and obligations
associated therewith under the terms of the Purchase Agreement, including,
VIII-1
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without limitation, the Transferred Percentage of Assignor's future funding
obligations under Section 4.1 of the Purchase Agreement.
3. If Assignor has any outstanding Capital under the Purchase
Agreement, at or before 12:00 noon, local time of Assignor, on the Effective
Date Assignee shall pay to Assignor, in immediately available funds, an amount
equal to the sum of (i) the Transferred Percentage of the outstanding Capital of
Assignor's Purchaser Interests (such amount, being hereinafter referred to as
the "ASSIGNEE'S CAPITAL"); (ii) all accrued but unpaid (whether or not then due)
Yield attributable to Assignee's Capital; and (iii) accrued but unpaid fees and
other costs and expenses payable in respect of Assignee's Capital for the period
commencing upon each date such unpaid amounts commence accruing, to and
including the Effective Date (the "ASSIGNEE'S ACQUISITION COST"); whereupon,
Assignor shall be deemed to have sold, transferred and assigned to Assignee,
without recourse, representation or warranty (except as provided in paragraph 6
below), and Assignee shall be deemed to have hereby irrevocably taken, received
and assumed from Assignor, the Transferred Percentage of Assignor's Commitment
and the Capital of Assignor's Purchaser Interests (if applicable) and all
related rights and obligations under the Purchase Agreement and the Transaction
Documents, including, without limitation, the Transferred Percentage of
Assignor's future funding obligations under Section 4.1 of the Purchase
Agreement.
4. Concurrently with the execution and delivery hereof,
Assignor will provide to Assignee copies of all documents requested by Assignee
which were delivered to Assignor pursuant to the Purchase Agreement.
5. Each of the parties to this Assignment Agreement agrees
that at any time and from time to time upon the written request of any other
party, it will execute and deliver such further documents and do such further
acts and things as such other party may reasonably request in order to effect
the purposes of this Assignment Agreement.
6. By executing and delivering this Assignment Agreement,
Assignor and Assignee confirm to and agree with each other, the Agent and the
Financial Institutions as follows: (a) other than the representation and
warranty that it has not created any Adverse Claim upon any interest being
transferred hereunder, Assignor makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made by any other Person in or in connection with the Purchase Agreement or the
Transaction Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of Assignee, the Purchase Agreement or any
other instrument or document furnished pursuant thereto or the perfection,
priority, condition, value or sufficiency of any collateral; (b) Assignor makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Seller, any Obligor, any Affiliate of the Seller or
the performance or observance by the Seller, any Obligor, any Affiliate of the
Seller of any of their respective obligations under the Transaction Documents or
any other instrument or document furnished pursuant thereto or in connection
therewith; (c) Assignee confirms that it has received a copy of the Purchase
Agreement and copies of such other Transaction Documents, and other documents
and information as it has requested and deemed appropriate to make its own
credit analysis and
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decision to enter into this Assignment Agreement; (d) Assignee will,
independently and without reliance upon the Agent, Company, the Seller or any
other Financial Institution or Purchaser and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Purchase Agreement and
the Transaction Documents; (e) Assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under the
Transaction Documents as are delegated to the Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; and (f) Assignee
agrees that it will perform in accordance with their terms all of the
obligations which, by the terms of the Purchase Agreement and the other
Transaction Documents, are required to be performed by it as a Financial
Institution or, when applicable, as a Purchaser.
7. Each party hereto represents and warrants to and agrees
with the Agent that it is aware of and will comply with the provisions of the
Purchase Agreement, including, without limitation, Sections 4.1, 13.1 and 14.6
thereof.
8. Schedule I hereto sets forth the revised Commitment of
Assignor and the Commitment of Assignee, as well as administrative information
with respect to Assignee.
9. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.
10. Assignee hereby covenants and agrees that, prior to the
date which is one year and one day after the payment in full of all senior
indebtedness for borrowed money of Company, it will not institute against, or
join any other Person in instituting against, Company any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment Agreement to be executed by their respective duly authorized officers
of the date hereof.
[ASSIGNOR]
By: _________________________
Title:
[ASSIGNEE]
By: __________________________
Title:
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SCHEDULE I TO ASSIGNMENT AGREEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
DATE: _____________, ______
TRANSFERRED PERCENTAGE: ____________%
----------------------------------------------------------------------------------------------------------------------
X-0 X-0 X-0 X-0
----------------------------------------------------------------------------------------------------------------------
ASSIGNOR COMMITMENT (PRIOR TO COMMITMENT (AFTER OUTSTANDING CAPITAL RATABLE SHARE OF
GIVING EFFECT TO THE GIVING EFFECT TO THE (IF ANY) OUTSTANDING CAPITAL
ASSIGNMENT AGREEMENT) ASSIGNMENT AGREEMENT)
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
X-0 X-0 X-0
----------------------------------------------------------------------------------------------------------------------
ASSIGNEE COMMITMENT (AFTER OUTSTANDING CAPITAL RATABLE SHARE OF
GIVING EFFECT TO THE (IF ANY) OUTSTANDING CAPITAL
ASSIGNMENT AGREEMENT)
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
ADDRESS FOR NOTICES
--------------------
--------------------
--------------------
Attention:
Phone:
Fax:
VIII-4
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SCHEDULE II TO ASSIGNMENT AGREEMENT
EFFECTIVE NOTICE
TO: ________________________, Assignor
------------------------
------------------------
------------------------
TO: ________________________, Assignee
------------------------
------------------------
------------------------
The undersigned, as Agent under the Receivables Purchase
Agreement dated as of May 1, 2000 by and among OMNOVA Receivables Corporation,
OMNOVA Solutions Inc., as Servicer, Falcon Asset Securitization Corporation,
Bank One, NA (Main Office Chicago), as Agent, and the Financial Institutions
party thereto, hereby acknowledges receipt of executed counterparts of a
completed Assignment Agreement dated as of ____________, ____ between
__________________, as Assignor, and __________________, as Assignee. Terms
defined in such Assignment Agreement are used herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that
the Effective Date will be ______________, ____.
2. Company hereby consents to the Assignment Agreement as
required by Section 12.1(b) of the Receivables Purchase Agreement.
[3. Pursuant to such Assignment Agreement, the Assignee is
required to pay $____________ to Assignor at or before 12:00 noon (local time of
Assignor) on the Effective Date in immediately available funds.]
Very truly yours,
BANK ONE, NA (MAIN OFFICE CHICAGO),
individually and as Agent
By: __________________________
Title:_______________________
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Xxxxxx Xxxxx Securitization CORPORATION
By: ____________________________
Authorized Signatory
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EXHIBIT VIII
CREDIT AND COLLECTION POLICY
SEE EXHIBIT V TO RECEIVABLES SALE AGREEMENT
VIII-1
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EXHIBIT IX
FORM OF CONTRACT(S)
SEE ATTACHED
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EXHIBIT X
FORM OF MONTHLY REPORT
[In addition to such other information as may be included on
this exhibit, each Monthly Report should set forth the following with respect to
the related Calculation Period (as defined in the Receivables Sale Agreement):
(i) the aggregate Outstanding Balance of Receivables created and conveyed by
Originator to Seller in purchases pursuant to the Receivables Sale Agreement
during such Calculation Period, as well as the Net Receivables Balance included
therein, (ii) the aggregate purchase price payable to Originator in respect of
such purchases, specifying the Discount Factor (as defined in the Receivables
Sale Agreement) in effect for such Calculation Period and the aggregate Purchase
Price Credits (as defined in the Receivables Sale Agreement) deducted in
calculating such aggregate purchase price, (iii) the aggregate amount of funds
received by the Servicer during such Calculation Period which are to be applied
as Reinvestments, (iv) the increase or decrease in the amount outstanding under
the Subordinated Note (as defined in the Receivables Sale Agreement) as of the
end of such Calculation Period after giving effect to the application of funds
toward the aggregate purchase price and the restrictions on Subordinated Loans
(as defined in the Receivables Sale Agreement) set forth in Section 1.2(a)(ii)
of the Receivables Sale Agreement, and (v) the amount of any capital
contribution made by Originator to Seller as of the end of such Calculation
Period pursuant to Section 1.2(b) of the Receivables Sale Agreement.]
The above is a true and accurate accounting pursuant to the
terms of the Receivables Purchase Agreement dated May 1, 2000 (the "AGREEMENT"),
by and among OMNOVA Solutions Inc., OMNOVA Receivables Corporation, the
Financial Institutions (as therein defined), Falcon Asset Securitization
Corporation and Bank One, NA (Main Office Chicago), as Agent, and I have no
knowledge of the existence of any conditions or events which constitute an
Amortization Event or Potential Amortization Event, as each such term is defined
under the Agreement, during or at the end of the accounting period covered by
this monthly report or as of the date of this certificate, except as set forth
below.
By: ______________________
Name:_____________________
Title:____________________
Company Name:_____________
Date:_____________________
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EXHIBIT XI
NAMES
None.
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SCHEDULE A
COMMITMENTS OF FINANCIAL INSTITUTIONS
FINANCIAL INSTITUTION COMMITMENT
--------------------- ----------
Bank One, NA (Main Office Chicago) $76,500,000
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SCHEDULE B
DOCUMENTS TO BE DELIVERED TO THE AGENT
ON OR PRIOR TO THE INITIAL PURCHASE (EXCEPT AS OTHERWISE NOTED)
1. Receivables Sale Agreement dated as of May 1, 2000 (the "SALE
AGREEMENT") by and between OMNOVA Solutions Inc., an Ohio corporation
("OMNOVA"), as seller, and OMNOVA Receivables Corporation, an Ohio
corporation ("ORC"), as buyer, together with the following schedules
and exhibits attached thereto:
EXHIBIT I Definitions
EXHIBIT II Chief Executive Office; Places of Business; Locations of
Records; Federal Employer Identification Number(s);
Other Names
EXHIBIT III Lock-Boxes; Collection Accounts; Collection Banks
EXHIBIT IV Form of Compliance Certificate
EXHIBIT V Credit and Collection Policy
EXHIBIT VI Form of Subscription Agreement
Annex A Articles of Incorporation
Annex B Regulations (i.e., By-Laws)
EXHIBIT VII Form of Subordinated Note
SCHEDULE A Documents to be Delivered to the Buyer on or prior to the
Initial Purchase
2. Subordinated Note dated May 1, 2000 executed by ORC in favor of OMNOVA.
3. Investor's Representations and Subscription Agreement dated as of May
1, 2000 between OMNOVA and ORC.
4. Investor's Representations and Subscription Agreement dated as of May
1, 2000 between Xxxxxxx X. Xxxxxxx and ORC.
5. Receivables Purchase Agreement, dated as of May 1, 2000 (the "PURCHASE
AGREEMENT"), among ORC, as seller, OMNOVA, as initial servicer, Falcon
Asset Securitization Corporation, the Financial Institutions party
thereto and Bank One, NA, as Agent (the "AGENT"), together with the
following schedules and exhibits attached thereto:
EXHIBIT I Definitions
EXHIBIT II Form of Purchase Notice
EXHIBIT III Places of Business of the Seller Parties; Locations of Records;
Federal Employer Identification Number
EXHIBIT IV Names of Collection Banks; Collection Accounts
EXHIBIT V Form of Compliance Certificate
EXHIBIT VI Form of Collection Account Agreement
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92
EXHIBIT VII Form of Assignment Agreement
EXHIBIT VIII Credit and Collection Policy
EXHIBIT IX Form of Contract(s)
EXHIBIT X Form of Monthly Report
EXHIBIT XI Names
SCHEDULE A Commitments
SCHEDULE B Closing Documents
6. Fee Letter dated May 1, 2000 between the Agent and ORC.
7. Shareholders Agreement dated as of May 1, 2000 by and among OMNOVA,
Xxxxxxx X. Xxxxxxx and ORC.
8. Certificate of a Secretary or Assistant Secretary of ORC certifying as
to (i) an attached copy of resolutions adopted by the Sole Director of
ORC approving the delivery and performance of the Sale Agreement,
Purchase Agreement and related documents, (ii) an attached copy of
ORC's Articles of Incorporation, (iii) an attached copy of ORC's
Regulations, (iv) an attached copy of a Certificate of Good Standing
from the Secretary of State of Ohio regarding ORC, and (v) the names,
title and specimen signatures of ORC's officers authorized to execute
and deliver the Sale Agreement, Purchase Agreement and related
documents.
9. Certificate of a Secretary or Assistant Secretary of OMNOVA certifying
as to (i) an attached copy of resolutions adopted by the Board of
Directors of OMNOVA approving the delivery and performance of the
Purchase Agreement, Sale Agreement and related documents, (ii) an
attached copy of OMNOVA's Articles of Incorporation, (iii) an attached
copy of OMNOVA's Regulations, (iv) an attached copy of a Certificate of
Good Standing from the Secretary of State of Ohio regarding OMNOVA and
(v) the names, title and specimen signatures of OMNOVA's officers
authorized to execute and deliver the Purchase Agreement, Sale
Agreement and related documents.
10. Original Certificate of Good Standing of ORC from the Secretary of
State of Ohio dated within 15 days prior to May 1, 2000.
11. UCC-1 Financing Statement naming OMNOVA as debtor, ORC as secured party
and Bank One, NA, as Agent, as assignee, filed with the Secretary of
State of Ohio on or prior to May 1, 2000.
12. UCC-1 Financing Statement naming OMNOVA as debtor, ORC as secured party
and Bank One, NA, as Agent, as assignee, filed with the Recorder of
Summit County, Ohio on or prior to May 1, 2000.
13. UCC-1 Financing Statement naming ORC as debtor and Bank One, NA, as
Agent, as secured party, filed with the Secretary of State of Ohio on
or prior to May 1, 2000.
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14. UCC-1 Financing Statement naming ORC as debtor and Bank One, NA, as
Agent, as secured party, filed with the Recorder of Summit County, Ohio
on or prior to May 1, 2000.
15. Post-filing UCC lien searches against OMNOVA and ORC from the Secretary
of State of Ohio and Recorder of Summit County, Ohio. [to be delivered
post-closing]
16. Lock-Box Account Agreement with Bank One, as Collection Bank, with
respect to lockbox no. 3549 and Collection Account no. 362776654.
17. Lock-Box Account Agreement with National City Bank, as Collection Bank,
with respect to lockbox no. 931306 and Collection Account no. 0000000.
18. Lock-Box Account Agreement with Mellon Bank, as Collection Bank, with
respect to lockbox nos. 7777-W5025, LA 21008, AT 40028 and 360553M and
Collection Account No. 006-5218.
19. Opinion of Frost & Xxxxxx LLP with respect to true sale and
non-consolidation matters.
20. Opinion of Frost & Xxxxxx LLP with respect to UCC and corporate
matters.
21. Monthly Report as of March 31, 2000.
22. Original Certificate of Good Standing of OMNOVA from the Secretary of
the Commonwealth of Massachusetts dated on or within 15 days after May
1, 2000. [to be delivered post-closing].
4