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Exhibit 10.9
[EXECUTION COPY]
U.S. $65,000,000
TRADE RECEIVABLES PURCHASE AND SALE AGREEMENT
Dated as of April 1, 1993
as Amended and Restated as of May 10, 1993
Among
THE GEON COMPANY
as Seller
---------
and
XXXXXX X.X.
and
CITICORP NORTH AMERICA, INC.
as Agent
--------
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TABLE OF CONTENTS
PRELIMINARY STATEMENTS........................................ 1
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms....................... 2
Adverse Claim............................... 2
Affiliate................................... 2
Affiliated Obligor.......................... 2
Agent's Account............................. 2
Alternate Base Rate......................... 2
Applicable Margin........................... 3
Assignee.................................... 4
Assignee Rate............................... 4
Assignment.................................. 5
Average Maturity............................ 5
BFG......................................... 5
BFG Agreement............................... 5
BFG Owners.................................. 5
Business Day................................ 5
Capital..................................... 5
Certificate................................. 5
Citibank.................................... 5
Collection Agent............................ 6
Collection Agent Fee........................ 6
Collection Agent Fee Reserve................ 6
Collections................................. 6
Concentration Limit......................... 6
Confidential Information.................... 6
Consolidated................................ 6
Contract.................................... 6
Credit Agreement............................ 7
Credit and Collection Policy................ 7
Debt........................................ 7
Default Ratio............................... 7
Defaulted Receivable........................ 7
Delinquency Ratio........................... 7
Delinquent Receivable....................... 8
Designated Obligor.......................... 8
Determination Date.......................... 8
EBITD....................................... 8
Eligible Asset.............................. 8
Eligible Receivable......................... 9
ERISA....................................... 11
Eurocurrency Liabilities.................... 11
Eurodollar Rate............................. 11
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Eurodollar Rate Reserve Percentage.......... 11
Event of Investment Ineligibility........... 11
Excluded Obligors........................... 11
Excluded Receivables........................ 11
Facility.................................... 12
Facility Termination Date................... 12
Federal Funds Rate.......................... 12
Fixed Period................................ 12
GAAP........................................ 13
Investor.................................... 13
Investor Rate............................... 13
Liquidation Day............................. 14
Liquidation Fee............................. 14
Liquidation Yield........................... 14
Loan Documents.............................. 15
Lock-Box Account............................ 15
Lock-Box Agreement.......................... 15
Lock-Box Bank............................... 15
Loss Percentage............................. 15
Loss Reserve................................ 15
Net Receivables Pool Balance................ 15
Notice of Effectiveness..................... 16
Obligor..................................... 16
Outstanding Balance......................... 16
Owner....................................... 16
Parallel Purchase Commitment................ 16
Person...................................... 16
Pool Receivable............................. 16
Purchase.................................... 16
Purchase Limit.............................. 16
Rate Ratio.................................. 16
Receivable.................................. 16
Receivables Pool............................ 17
Reinvestment Termination Date............... 17
Related Security............................ 17
Responsible Officer......................... 17
Seller Report............................... 18
Settlement Period........................... 18
Subsidiary.................................. 18
Termination Date............................ 18
UCC......................................... 18
Yield....................................... 18
Yield Reserve............................... 19
SECTION 1.02. Other Terms................................. 19
SECTION 1.03. Computation of Time Periods................. 19
SECTION 1.04. Accounting Terms............................ 20
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ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Facility.................................... 20
SECTION 2.02. Making Purchases............................ 20
SECTION 2.03. Termination of Facility or
Reduction of the Purchase Limit............. 21
SECTION 2.04. Eligible Asset.............................. 21
SECTION 2.05. Non-Liquidation
Settlement Procedures....................... 22
SECTION 2.06. Liquidation Settlement Procedures........... 23
SECTION 2.07. General Settlement Procedures............... 24
SECTION 2.08. Payments and Computations, Etc. ............ 25
SECTION 2.09. Dividing or Combining of
Eligible Assets............................. 25
SECTION 2.10. Fees and Payments........................... 26
SECTION 2.11. Increased Costs............................. 26
SECTION 2.12. Additional Yield on Eligible
Assets Bearing a Eurodollar Rate............ 28
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to
Initial Purchase............................ 28
SECTION 3.02. Conditions Precedent to All
Purchases and Reinvestments................. 31
SECTION 3.03. Conditions Precedent to Effectiveness
of the Amendment and Restatement
of the Original Agreement................... 32
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties
of the Seller............................... 34
ARTICLE V
GENERAL COVENANTS OF THE SELLER
SECTION 5.01. Affirmative Covenants of the Seller......... 37
SECTION 5.02. Reporting Requirements of the Seller........ 39
SECTION 5.03. Negative Covenants of the Seller............ 41
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ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent............. 42
SECTION 6.02. Duties of Collection Agent.................. 42
SECTION 6.03. Rights of the Agent......................... 44
SECTION 6.04. Responsibilities of the Seller.............. 45
SECTION 6.05. Further Action Evidencing Purchases......... 45
ARTICLE VII
EVENTS OF INVESTMENT INELIGIBILITY
SECTION 7.01. Events of Investment Ineligibility.......... 46
ARTICLE VIII
THE AGENT
SECTION 8.01. Authorization and Action.................... 49
SECTION 8.02. Agent's Reliance, Etc. ..................... 49
SECTION 8.03. CNAI and Affiliates......................... 50
SECTION 8.04. Investor's Purchase Decision................ 50
ARTICLE IX
ASSIGNMENT
SECTION 9.01. Assignment..................................... 50
SECTION 9.02. Annotation of Certificate...................... 52
ARTICLE X
INDEMNIFICATION
SECTION 10.01. Indemnities by the Seller..................... 52
SECTION 10.02. Additional Indemnities........................ 54
SECTION 10.03. Limited Recourse.............................. 54
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments, Etc. ........................... 56
SECTION 11.02. Notices, Etc. .............................. 56
SECTION 11.03. No Waiver; Remedies......................... 56
SECTION 11.04. Binding Effect.............................. 56
SECTION 11.05. Governing Law............................... 56
SECTION 11.06. Costs, Expenses and Taxes................... 57
SECTION 11.07. No Proceedings.............................. 58
SECTION 11.08. Confidentiality............................. 58
SECTION 11.09. Execution in Counterparts................... 59
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LIST OF EXHIBITS
EXHIBIT A Form of Assignment
EXHIBIT B Form of Certificate
EXHIBIT C Seller Report
EXHIBIT D Form of Letter to Lock-Box Account Banks
EXHIBIT E Form of Opinion of Seller's Counsel
SCHEDULE I List of Lock-Box Banks
SCHEDULE II Description of Credit and Collection Policy
SCHEDULE III Form of Contracts
SCHEDULE IV List of Offices of Seller where Records
Relating to the Receivables are Kept
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TRADE RECEIVABLES
PURCHASE AND SALE AGREEMENT
Dated as of April 1, 1993
As Amended and Restated as of May 10, 1993
THE GEON COMPANY, a Delaware corporation (the "Seller"), XXXXXX X.X., a
New York limited partnership (the "Investor"), and CITICORP NORTH AMERICA, INC.,
a Delaware corporation ("CNAI"), as agent for the Owners (as defined in Section
1.01 hereof) (the "Agent"), agree as follows:
PRELIMINARY STATEMENTS. (1) Certain terms which are capitalized and used
throughout this Agreement (in addition to those defined above) are defined in
Article I of this Agreement.
(2) The Seller has, and expects to have, Pool Receivables in which the
Seller intends to sell interests referred to herein as Eligible Assets.
(3) The Investor desires to purchase Eligible Assets from the Seller.
(4) In consideration of the reinvestment in Pool Receivables of daily
Collections (other than with regard to accrued Yield and the Collection Agent
Fee) attributable to an Eligible Asset, the Seller will sell to the Owner of
such Eligible Asset additional interests in the Pool Receivables as part of such
Eligible Asset until such reinvestment is terminated. It is intended that such
daily reinvestment of Collections be effected by an automatic daily adjustment
to each Owner's Eligible Assets.
(5) CNAI has been requested and is willing to act as Agent.
(6) This Agreement is an amendment and restatement of the Trade
Receivables Purchase and Sale Agreement, dated as of April 1, 1993, as amended
to date (the "Original Agreement"). The Original Agreement is being amended and
restated hereby to extend the term of the Facility and to make certain other
changes.
NOW, THEREFORE, the parties agree that the Original Agreement is amended
and restated as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADVERSE CLAIM" means a lien, security interest, charge or
encumbrance, or other right or claim of any person.
"Affiliate" when used with respect to a Person means any other Person
controlling, controlled by or under common control with such Person.
"AFFILIATED OBLIGOR" means any Obligor which is an Affiliate of
another Obligor
"AGENT'S ACCOUNT" means the special account (account number 4060-5071)
of the Agent maintained at the office of Citibank at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx.
"ALTERNATE BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal
to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1% per
annum, plus (ii) the rate obtained by dividing (A) the latest
three-week moving average of secondary market morning offering rates
in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average
(adjusted to the basis of a year of 365/366 days) being determined
weekly on each Monday (or, if such day is not a Business Day, on the
next succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication
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shall be suspended or terminated, on the basis of quotations for such
rates received by Citibank from three New York certificate of deposit
dealers of recognized standing selected by the Agent, by (B) a
percentage equal to 100% minus the average of the daily percentages
specified during such three-week period by the Board of Governors of
the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for
Citibank with respect to liabilities consisting of or including (among
other liabilities) three-month U.S. dollar non-personal time deposits
in the United States, plus (iii) the average during such three-week
period of the annual assessment rates estimated by Citibank for
determining the then current annual assessment payable by Citibank to
the Federal Deposit Insurance Corporation (or any successor) for
insuring U.S. dollar deposits of Citibank in the United States; and
(c) 1/2 of 1% per annum above the Federal Funds Rate.
"APPLICABLE MARGIN" means, as of any date (a) prior to March 31, 1994,
0% per annum for interest calculated at the Alternate Base Rate and 7/8 of
1% per annum for interest calculated at the Eurodollar Rate and (b) on or
after March 31, 1994, that percentage per annum set forth below for such
interest rate opposite the description of Rate Ratio set forth below in
which is included the Rate Ratio in effect on such date:
Alternate
Base Eurodollar
Rate Ratio Rate Rate
---------- ---- ----------
less than .75:1.0 0% 5/8%
.75:1.0 or greater,
but less than 1.5:1.0 0% 7/8%
1.5:1.0 or greater 1/4% 1-1/8%
PROVIDED, HOWEVER, that no change in the Applicable Margin shall be
effective until three Business Days after the date on which the Agent
receives financial statements
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pursuant to Section 5.02(a) or 5.02(b), demonstrating such Rate Ratio as of
the last day of the period covered by such financial statements.
"ASSIGNEE" means Citibank, CNAI or the Investor or any of their
respective Affiliates or any other Person acceptable to the Agent as the
assignee of an Eligible Asset pursuant to Section 9.01.
"ASSIGNEE RATE" for any Fixed Period for any Eligible Asset means an
interest rate per annum equal to the Eurodollar Rate for such Fixed Period
plus the Applicable Margin then applicable to such Eurodollar Rate,
PROVIDED, HOWEVER, that in the case of
(i) any Fixed Period on or prior to the first day of which the
Owner shall have notified the Agent that, after reasonable efforts by
such Owner (consistent with its internal policy and legal and
regulatory restrictions) to designate a lending office that would
allow such Owner to fund an Eligible Asset at the Assignee Rate set
forth above and which would not, in the judgment of such Owner, be
otherwise disadvantageous to such Owner, the introduction of or any
change occurring on or after the effective date of this Agreement or
in the interpretation of any law or regulation makes it unlawful, or
any central bank or other governmental authority asserts that it is
unlawful, for the Owner to fund such Eligible Asset at the Assignee
Rate set forth above (and the Owner shall not have subsequently
notified the Agent that such circumstances no longer exist),
(ii) any Fixed Period of 1 to (and including) 29 days,
(iii) any Fixed Period as to which the Agent does not receive
notice, by no later than 12:00 noon (New York City time) on the third
Business Day preceding the first day of such Fixed Period, that the
related Eligible Asset will not be funded by issuance of commercial
paper, or
(iv) any Fixed Period for an Eligible Asset the Capital of which
allocated to the Owner is less than $500,000,
the "ASSIGNEE RATE" for such Fixed Period for such Eligible Asset shall be
an interest rate per annum equal to the Alternate Base Rate in effect on
the first day of such Fixed Period plus the "Applicable Margin" then
applicable to "Base Rate Advances" under the Credit
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Agreement; PROVIDED FURTHER, however, that the Agent and the Seller may
agree in writing from time to time upon a different "Assignee Rate."
"ASSIGNMENT" means an assignment, in substantially the form of Exhibit
A hereto, by which an Eligible Asset may be assigned pursuant to Section
9.01 or the Asset Purchase Agreement, dated as of the date of this
amendment and restatement.
"AVERAGE MATURITY" means, on any day, that period (expressed in days)
equal to the average maturity of the Pool Receivables as shall be
calculated by the Collection Agent as set forth in the most recent Seller
Report in accordance with the provisions thereof; provided, however, that,
if the Agent shall disagree with any such calculation, the Agent may
recalculate the Average Maturity for such day.
"BFG" means The X.X. Xxxxxxxx Company, a New York corporation.
"BFG AGREEMENT" means the Trade Receivables Purchase and Sale
Agreement, dated as of May 8, 1987 as amended and restated as of July 10,
1992 among BFG, the Investor and the Agent.
"BFG OWNERS" means collectively each "Owner" under the BFG Agreement.
"BUSINESS DAY" means any day on which (i) banks are not authorized or
required to close in New York City and (ii) if this definition of "Business
Day" is utilized in connection with the Eurodollar Rate, dealings are
carried out in the London interbank market.
"CAPITAL" of any Eligible Asset means the original amount paid to the
Seller for such Eligible Asset at the time of its acquisition by the
Investor pursuant to Sections 2.01 and 2.02, or such amount divided or
combined by any dividing or combining of such Eligible Asset pursuant to
Section 2.09, in each case reduced from time to time by Collections
received and distributed on account of such Capital pursuant to Section
2.06; PROVIDED, HOWEVER, that such Capital of such Eligible Asset shall not
be reduced by any distribution of any portion of Collections if at any time
such distribution is rescinded or must otherwise be returned for any
reason.
"CERTIFICATE" means a certificate of assignment by the Seller to the
Agent in the form of Exhibit B hereto, evidencing each Eligible Asset.
"CITIBANK" means Citibank, NA., a national banking association.
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"COLLECTION AGENT" means at any time the Person (including the Agent)
then authorized pursuant to Article VI to service, administer and collect
Pool Receivables.
"COLLECTION AGENT FEE" has the meaning assigned to that term in
Section 2.10.
"COLLECTION AGENT FEE RESERVE" for any Eligible Asset at any time
means the unpaid Collection Agent Fee relating to such Eligible Asset
accrued to such time.
"COLLECTIONS" means, with respect to any Pool Receivable, all cash
collections and other cash proceeds of such Pool Receivable, including,
without limitation, all cash proceeds of Related Security with respect to
such Pool Receivable, and any Collection of such Pool Receivable deemed to
have been received pursuant to Section 2.07.
"CONCENTRATION LIMIT" for any Obligor means at any time 3 1/3%, or
such other percentage ("SPECIAL CONCENTRATION LIMIT") for any Obligor
designated by the Agent in a writing delivered to the Seller; PROVIDED,
HOWEVER, that in the case of an Obligor with any Affiliated Obligor, the
Concentration Limit shall be calculated as if such Obligor and such
Affiliated Obligor are one Obligor; PROVIDED, HOWEVER, that the Agent may
cancel any Special Concentration Limit upon three Business Days' notice to
the Seller.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in the
Credit Agreement in effect on the date hereof.
"CONSOLIDATED" refers to the consolidation of accounts in accordance
with GAAP.
"CONTRACT" means an agreement between the Seller and an Obligor, in
substantially the form of one of the forms of written contract set forth in
Schedule III hereto or otherwise approved by the Agent, or in the case of
an open account agreement, as evidenced by one of the forms of invoices set
forth in Schedule III hereto or otherwise approved by the Agent, pursuant
to or under which such Obligor shall be obligated to pay for merchandise,
insurance or services from time to time.
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"CREDIT AGREEMENT" means the Credit Agreement, dated as of the date
hereof, among the Seller, the Banks party thereto and Citibank, as Agent,
as the same may be amended from time to time in accordance with its terms.
"CREDIT AND COLLECTION POLICY" means those credit and collection
policies and practices in effect on the date hereof relating to Contracts
and Receivables described in Schedule II hereto, as modified in compliance
with Section 5.03(c).
"DEBT" shall have the meaning set forth in the Credit Agreement in
effect on the date hereof; any capitalized terms used in the definition of
Debt set forth in the Credit Agreement shall have the meanings given to
such terms in the Credit Agreement as of such date and are hereby
incorporated herein by reference.
"DEFAULT RATIO" means the ratio (expressed as a percentage) computed
as of the last day of each calendar month by dividing (i) the aggregate
Outstanding Balance of all Pool Receivables that were Defaulted Receivables
on such date or would have been Defaulted Receivables on such date had they
not been written off the books of the Seller during such month by (ii) the
aggregate Outstanding Balance of all Pool Receivables on such date.
"DEFAULTED RECEIVABLE" means a Receivable:
(i) as to which any payment, or part thereof, remains unpaid for
91 days or more from the original due date for such payment,
(ii) as to which the Obligor thereof has taken any action, or
suffered any event to occur, of the type described in Section 7.01(g),
(iii) which is subject to any dispute, offset, counterclaim or
defense whatsoever (except the discharge in bankruptcy of the Obligor
thereof) or
(iv) which, consistent with the Credit and Collection Policy,
would be written off the Seller's books as uncollectible.
"DELINQUENCY RATIO" means the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the
aggregate Outstanding Balance of all Pool Receivables that were Delinquent
Receivables
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at the end of such month by (ii) the aggregate Outstanding Balance of all
Pool Receivables on such date.
"DELINQUENT RECEIVABLE" means a Receivable that is not a Defaulted
Receivable and:
(i) as to which any payment, or part thereof, remains unpaid for
61 to 90 days from the original due date for such payment; or
(ii) which, consistent with the Credit and Collection Policy,
would be classified as delinquent by the Seller.
"DESIGNATED OBLIGOR" means, at any time, all Obligors; provided,
however, that any Obligor shall cease to be a Designated Obligor upon three
Business Days notice by the Agent to the Seller or pursuant to Section
10.03.
"DETERMINATION DATE" has the meaning assigned to that term in Section
10.03.
"EBITD" means, for any period, net income (or net loss) plus the sum
of (a) interest expense minus (b) the amount of such interest expense which
shall have been capitalized during such period, plus (c) income tax expense
plus (d) depreciation expense, in each case determined in accordance with
GAAP for such period.
"ELIGIBLE ASSET" means, at any time, an undivided percentage ownership
interest at such time in (i) all then outstanding Pool Receivables arising
prior to the time of the most recent computation or recomputation of such
undivided percentage interest pursuant to Section 2.04, (ii) all Related
Security with respect to such Pool Receivables and (iii) all Collections
with respect to, and other proceeds of, such Pool Receivables. Such
undivided percentage interest for such Eligible Asset shall be computed as
C + YR + LR + CAFR
------------------
NRPB
where:
C = the Capital of such Eligible Asset at the
time of such computation.
YR = the Yield Reserve of such Eligible Asset
at the time of such computation.
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LR = the Loss Reserve of such Eligible Asset at
the time of such computation.
CAFR = the Collection Agent Fee Reserve of such
Eligible Asset at the time of such
computation.
NRPB = the Net Receivables Pool Balance at the
time of such computation.
Each Eligible Asset shall be determined from time to time pursuant to the
provisions of Section 2.04.
"ELIGIBLE RECEIVABLE" means, at any time and with respect to any
Eligible Asset, a Receivable:
(i) the Obligor of which is a United States resident, is not an
Affiliate of any of the parties hereto, and is not a government or a
governmental subdivision or agency;
(ii) the Obligor of which at the time of the initial creation of
an interest therein hereunder is a Designated Obligor;
(iii) the Obligor of which at the time of the initial creation of
an interest therein hereunder is not the Obligor of any Defaulted
Receivables in the aggregate amount of 5% or more of the aggregate
Outstanding Balance of all Pool Receivables of such Obligor;
(iv) which at the time of the initial creation of an interest
therein hereunder is not a Defaulted Receivable or a Delinquent
Receivable;
(v) which, according to the Contract related thereto, is required
to be paid in full within 30 days (or, in the case of Receivables
having an Outstanding Balance not exceeding 25% of the Outstanding
Balance of all Pool Receivables, 90 days) of the original billing date
therefor;
(vi) which is an account receivable representing all or part of
the sales price of merchandise, insurance and services within the
meaning of Section 3(c)(5) of the Investment Company Act of 1940, as
amended;
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(vii) a purchase of which with the proceeds of notes would
constitute a "current transaction" within the meaning of Section
3(a)(3) of the Securities Act of 1933, as amended;
(viii) which is an "account" within the meaning of Section 9-106
of the UCC of the State of Ohio;
(ix) which is denominated and payable only in United States
dollars in the United States;
(x) which arises under a Contract which has been duly authorized
and which, together with such Receivable, is in full force and effect
and constitutes the legal, valid and binding obligation of the Obligor
of such Receivable enforceable against such Obligor in accordance with
its terms and is not subject to any dispute, offset, counterclaim or
defense whatsoever (except the discharge in bankruptcy of such
Obligor);
(xi) which, together with the Contract related thereto, does not
contravene in any material respect 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 with respect to which no party to the
Contract related thereto is in violation of any such law, rule or
regulation in any material respect;
(xii) which (A) satisfies all applicable requirements of the
Credit and Collection Policy and (B) complies with such other criteria
and requirements (other than those relating to the collectibility of
such Receivable) as the Agent may from time to time specify to the
Seller upon 30 days notice; and
(xiii) as to which, at or prior to the time of the initial
creation of an interest therein through a Purchase, the Agent has not
notified the Seller that the Agent has determined, in its sole
discretion, that such Receivable (or class of Receivables) is not
acceptable for purchase by the Investor hereunder.
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"ERISA" means the U.S. Employee Retirement Income Security Act of
1974, as amended from time to time and the regulations promulgated and
rulings issued thereunder.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR RATE" means, for any Fixed Period, an interest rate per
annum at which deposits in U.S. dollars are offered by the principal office
of Citibank in London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before the first day
of such Fixed Period in an amount substantially equal to the Capital
associated with such Fixed Period on such first day and for a period equal
to such Fixed Period.
"EURODOLLAR RATE RESERVE PERCENTAGE" of any Owner for any Fixed Period
in respect of which Yield is computed by reference to the Eurodollar Rate
means the reserve percentage applicable during such Fixed Period (or, if
more than one such percentage shall be so applicable, the daily average of
such percentages for those days in such Fixed Period during which any such
percentage shall be so applicable) under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for such Owner with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference to which
the interest rate on Eurocurrency Liabilities is determined) having a term
equal to such Fixed Period.
"EVENT OF INVESTMENT INELIGIBILITY" has the meaning assigned to that
term in Section 7.01.
"EXCLUDED OBLIGORS" has the meaning assigned to that term in Section
10.03.
"EXCLUDED RECEIVABLES" has the meaning assigned to that term in
Section 10.03.
"FACILITY" means the willingness of the Investor to consider, in its
sole discretion pursuant to Article II,
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the purchase from the Seller of undivided percentage interests in Pool
Receivables by making Purchases of Eligible Assets from time to time.
"FACILITY TERMINATION DATE" means the earlier of December 31, 1997 or
the date of termination of the Facility pursuant to Section 2.03 or Section
7.01.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Agent from three federal funds brokers of recognized standing selected
by it.
"FIXED PERIOD" means with respect to any Eligible Asset:
(a) initially the period commencing on the date of the Purchase
of such Eligible Asset and ending such number of days, as the Seller
shall select and the Agent shall approve pursuant to Section 2.02, up
to 270 days from such date; and
(b) thereafter each period commencing on the last day of the
immediately preceding Fixed Period for such Eligible Asset and ending
such number of days (not to exceed 270 days as the Seller shall select
and the Agent shall approve on notice by the Seller received by the
Agent (including notice by telephone, confirmed in writing) not later
than 11:00 A.M. (New York City time) on such last day, except that if
the Agent shall not have received such notice or the Agent and the
Seller shall not have so mutually agreed before 11:00 A.M. (New York
City time) on such last day, such period shall be one day;
PROVIDED, HOWEVER, THAT:
(i) any Fixed Period in respect of which Yield is computed by
reference to the Assignee Rate shall be a period of from one to and
including 29 days, or a period of one, two, three or six months as the
Seller may select as provided for above;
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(ii) any such Fixed Period (other than of one day) which would
otherwise end on a day which is not a Business Day shall be extended
to the next succeeding Business Day (PROVIDED, HOWEVER, if Yield in
respect of such Fixed Period is computed by reference to the
Eurodollar Rate, and such Fixed Period would otherwise end on a day
which is not a Business Day, and there is no subsequent Business Day
in the same calendar month as such day, such Fixed Period shall end on
the next preceding Business Day);
(iii) in the case of Fixed Periods of one day for any Eligible
Asset, (A) if such Fixed Period is such Eligible Asset's initial Fixed
Period, such Fixed Period shall be the day of the related Purchase;
(B) any subsequently occurring Fixed Period which is one day shall, if
the immediately preceding Fixed Period is more than one day, be the
last day of such immediately preceding Fixed Period, and, if the
immediately preceding Fixed Period is one day, be the day next
following such immediately preceding Fixed Period; and (C) which
occurs on a day immediately preceding a day which is not a Business
Day shall be extended to the next succeeding Business Day; and
(iv) in the case of any Fixed Period for any Eligible Asset which
commences before the Termination Date for such Eligible Asset and
would otherwise end on a date occurring after such Termination Date,
such Fixed Period shall end on such Termination Date and the duration
of each Fixed Period which commences on or after the Termination Date
for such Eligible Asset shall be of such duration as shall be selected
by the Agent.
"GAAP" has the meaning specified in Section 1.04.
"INVESTOR" means Xxxxxx X.X. and any successor or assign of Xxxxxx
X.X. that is a receivables investment company which in the ordinary course
of its business issues commercial paper or other securities to fund its
acquisition and maintenance of receivables.
"INVESTOR RATE" for any Fixed Period for any Eligible Asset means, to
the extent the Investor funds such Eligible Asset for such Fixed Period by
issuing
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commercial paper, the rate equivalent to the rate (or if more than one
rate, the weighted average of the rates) at which commercial paper notes of
the Investor having a term equal to such Fixed Period and to be issued to
fund the Purchase or maintenance of such Eligible Asset may be sold by any
placement agent or commercial paper dealer selected by the Agent on behalf
of the Investor, as agreed between each such agent or dealer and the Agent
and notified by the Agent to the Collection Agent; PROVIDED, HOWEVER, if
the rate (or rates) as agreed between any such agent or dealer and the
Agent with regard to any Fixed Period for any Eligible Asset is a discount
rate (or rates), the "INVESTOR RATE" for such Fixed Period shall be the
rate (or if more than one rate, the weighted average of the rates)
resulting from converting such discount rate (or rates) to an
interest-bearing equivalent rate per annum.
"LIQUIDATION DAY" for any Eligible Asset means either (i) each day
during any Settlement Period for such Eligible Asset on which the
conditions set forth in Section 3.02 are not satisfied (or such failure of
conditions is not waived by the Agent), or (ii) each day which occurs on or
after the Termination Date for such Eligible Asset.
"LIQUIDATION FEE" means, for any Fixed Period during which a
Liquidation Day occurs, the amount, if any, by which (i) the additional
Yield (calculated without taking into account any Liquidation Fee or any
shortened duration of such Fixed Period pursuant to clause (iv) of the
definition thereof) which would have accrued during such Fixed Period on
the reductions of Capital of the Eligible Asset relating to such Fixed
Period had such reductions remained as Capital, exceeds (ii) the income, if
any, received by the Owner's investing the proceeds of such reductions of
Capital.
"LIQUIDATION YIELD" means, for any Eligible Asset at any date, an
amount equal to the product of (i) the Capital of such Eligible Asset as at
such date and (ii) the product of (a) the Assignee Rate for such Eligible
Asset for a Fixed Period deemed to commence at such time for a period of 30
days and (b) a fraction having as its numerator the number of days in the
period equal to the Average Maturity (as in effect at such date) and 360 as
its denominator.
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"LOAN DOCUMENTS" shall have the meaning set forth in the Credit
Agreement.
"LOCK-BOX ACCOUNT" means an account maintained at a Lock-Box Bank for
the purpose of receiving Collections.
"LOCK-BOX AGREEMENT" means an agreement, in substantially the form of
Exhibit D hereto, from the Seller to any Lock-Box Bank with such
modifications as may be acceptable to the Agent.
"LOCK-BOX BANK" means any of the banks holding one or more Lock-Box
Accounts.
"LOSS PERCENTAGE" means, for any Eligible Asset at any date, the
greatest of (i) three times the highest Default Ratio as of the last day of
the 12 months ended immediately preceding such date, (ii) three times the
Concentration Limit and (iii) 10%.
"LOSS RESERVE" means, for any Eligible Asset at any date, an amount
equal to
LP x (C + YR)
where :
LP = the Loss Percentage for such Eligible Asset at
the close of business of the Collection Agent
on such date.
C = the Capital of such Eligible Asset at the close
of business of the Collection Agent on such
date.
YR = the Yield Reserve for such Eligible Asset at
the close of business of the Collection Agent
on such date.
"NET RECEIVABLES POOL BALANCE" means, at any time, the Outstanding
Balance of the Eligible Receivables in the Receivables Pool at such time
reduced by the sum of (i) the aggregate Outstanding Balance of the
Defaulted Receivables in the Receivables Pool at such time and (ii) the
aggregate amount by which the Outstanding Balance of Eligible Receivables
(other than Defaulted Receivables) of each Obligor then in the Receivables
Pool exceeds the
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product of (a) the Concentration Limit for such Obligor multiplied by (b)
the Outstanding Balance of the Eligible Receivables then in the Receivables
Pool.
"NOTICE OF EFFECTIVENESS" means a notice of effectiveness in the form
of Annex 1 to Exhibit D hereto.
"OBLIGOR" means a Person obligated to make payments pursuant to a
Contract.
"OUTSTANDING BALANCE" of any Receivable at any time means the then
outstanding principal balance thereof.
"OWNER" means the Investor and all other owners by assignment or
otherwise of an Eligible Asset and, to the extent of the undivided
interests so purchased, shall include any participants.
"PARALLEL PURCHASE COMMITMENT" means the Parallel Purchase Commitment,
dated as of May 10, 1993, among the Seller, Citibank, the other financial
institutions party thereto and CNAI, as Agent, as the same may be amended
from time to time in accordance with its terms.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political subdivision
or agency thereof.
"POOL RECEIVABLE" means a Receivable in the Receivables Pool.
"PURCHASE" means a purchase by the Investor of an Eligible Asset from
the Seller pursuant to Article II.
"PURCHASE LIMIT" means $65,000,000, as such amount may be reduced
pursuant to Section 2.03.
"RATE RATIO" means, as of any date, the ratio of (a) Consolidated
total Debt of the Seller and its Subsidiaries as of such date to (b)
Consolidated EBITD of the Seller and its Subsidiaries for the period of
four consecutive fiscal quarters ended on or immediately before such date.
"RECEIVABLE" means the indebtedness of any Obligor under a Contract
arising from a sale by Seller, and
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includes the right to payment of any interest or finance charges and other
obligations of such Obligor with respect thereto.
"RECEIVABLES POOL" means at any time the aggregation of each then
outstanding Receivable in respect of which the Obligor is a Designated
Obligor or, as to any Receivable in existence on such date, was a
Designated Obligor on the date of any Purchase or reinvestment pursuant to
Section 2.05, and which is not excluded from the Receivables Pool pursuant
to Section 10.03.
"REINVESTMENT TERMINATION DATE" for any Eligible Asset means that
Business Day which the Seller designates, or, if the conditions precedent
in Section 3.02 are not satisfied, such Business Day which the Agent
designates, as the Reinvestment Termination Date for such Eligible Asset by
notice to the Agent (if the Seller so designates) or to the Seller (if the
Agent so designates) at least one Business Day prior to such Business Day.
"RELATED SECURITY" means with respect to any Receivable :
(i) all of the Seller's interest in the merchandise (including
returned merchandise), if any, relating to the sale which gave rise to
such Receivable;
(ii) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such
Receivable or otherwise, together with all financing statements signed
by an Obligor describing any collateral securing such Receivable; and
(iii) all guarantees, 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.
"RESPONSIBLE OFFICER" means the chief financial officer, controller or
chief accounting officer of the Seller.
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"SELLER REPORT" means a report, in substantially the form of Exhibit C
hereto, furnished by the Collection Agent to the Agent for each Owner
pursuant to Section 2.07.
"SETTLEMENT PERIOD" for any Eligible Asset means each period
commencing on the first day of each Fixed Period for such Eligible Asset
and ending on the last day of such Fixed Period, and, on and after the
Termination Date for such Eligible Asset, such period (including, without
limitation, a daily period) as shall be selected from time to time by the
Agent or, in the absence of any such selection, each period of thirty days
from the last day of the immediately preceding Settlement Period.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) more than 50% of (a) the
issued and outstanding capital stock having ordinary voting power to elect
a majority of the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such
partnership or joint venture or (c) the beneficial interest in such trust
or estate is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one
or more of such Person"s other Subsidiaries.
"TERMINATION DATE" for any Eligible Asset means the earlier of (i) the
Reinvestment Termination Date for such Eligible Asset and (ii) the Facility
Termination Date.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"YIELD" means:
(i) for each Eligible Asset for any Fixed Period to the extent
the Investor will be funding such Eligible Asset on the first day of
such Fixed Period through the issuance of commercial paper,
IR x C x ED + LF
--
360
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(ii) for each Eligible Asset for any Fixed Period to the extent
the Owner will not be funding such Eligible Asset on the first day of
such Fixed Period through the issuance of commercial paper,
AR x C x ED + LF
--
360
where:
AR = the Assignee Rate for such Eligible Asset for
such Fixed Period.
C = the Capital of such Eligible Asset during such
Fixed Period.
IR = the Investor Rate for such Eligible Asset for
such Fixed Period.
ED = the actual number of days elapsed during such
Fixed Period.
LF = the Liquidation Fee, if any, for such Eligible
Asset for such Fixed Period.
PROVIDED, HOWEVER, that no provision of this Agreement or the Certificate
shall require the payment or permit the collection of Yield in excess of
the maximum permitted by applicable law; and PROVIDED FURTHER that Yield
for any Eligible Asset shall not be considered paid by any distribution if
at any time such distribution is rescinded or must otherwise be returned
for any reason.
"YIELD RESERVE" for any Eligible Asset at any time means the sum of
(i) the Liquidation Yield at such time for such Eligible Asset, and (ii)
the accrued and unpaid Yield for such Eligible Asset.
SECTION 1.02. OTHER TERMS. All terms used in Article 9 of the UCC in the
State of New York, and not specifically defined herein, are used herein as
defined in such Article 9.
SECTION 1.03. COMPUTATION OF TIME PERIODS. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified
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date, the word "from" means "from and including" and the words "to" and "until"
each mean 'to but excluding."
SECTION 1.04. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(e) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. FACILITY. On the terms and conditions hereinafter set
forth, the Investor may, in its sole discretion, make Purchases from time to
time during the period from the date hereof to the Facility Termination Date.
Under no circumstances shall the Investor make any Purchase if, after giving
effect to such Purchase, the aggregate outstanding Capital of Eligible Assets,
together with the aggregate outstanding "Capital" of "Eligible Assets" under the
Parallel Purchase Commitment would exceed the Purchase Limit. The Owner of each
Eligible Asset shall, with the proceeds of Collections attributable to such
Eligible Asset, reinvest, pursuant to Section 2.05, in additional undivided
percentage interests in the Pool Receivables by making an appropriate
readjustment of such Eligible Asset. Nothing in this Agreement shall be deemed
to be or construed as a commitment by the Investor (or CNAI or Citibank) to
purchase any Eligible Asset at any time.
SECTION 2.02. MAKING PURCHASES. (a) Each Purchase shall be made on at
least three Business Days' notice from the Seller to the Agent. Each such notice
of a proposed Purchase shall specify the desired amount (which shall not be less
than $5,000,000), date and duration of the initial Fixed Period for the Eligible
Asset to be purchased. The Agent shall promptly notify the Seller whether such
terms are acceptable to the Investor.
(b) On the date of each Purchase, the Investor shall, upon satisfaction
of the applicable conditions set forth in Article III, make available to the
Agent the amount of its Purchase by deposit of such amount in same day funds to
the Agent's Account, and, after receipt by the Agent of such funds, the Agent
will cause such funds to be made immediately available to the Seller at
Citibank's office at
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000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx. The Investor shall on the date of each
Purchase, and the Owner of each Eligible Asset shall on the first day of each
Fixed Period (other than the initial Fixed Period) for such Eligible Asset,
notify the Agent of the Investor Rate or Assignee Rate, as the case may be, for
such Fixed Period.
SECTION 2.03. TERMINATION OF FACILITY OR REDUCTION OF THE PURCHASE LIMIT.
(a) OPTIONAL. The Seller may, upon at least five Business Days' notice to the
Agent, terminate the Facility in whole or reduce in part the unused portion of
the Purchase Limit; PROVIDED, HOWEVER, that for purposes of this Section
2.03(a), the unused portion of the Purchase Limit shall be computed as the
excess of (A) the Purchase Limit immediately prior to giving effect to such
termination or reduction over (B) the sum of (i) the aggregate Capital of
Eligible Assets outstanding at the time of such computation and (ii) the
aggregate "Capital" of "Eligible Assets" outstanding under the Parallel Purchase
Commitment at such time; PROVIDED FURTHER that each partial reduction shall be
in an amount equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(b) MANDATORY. On each day on which the Seller shall, pursuant to Section
2.03(a) of the Parallel Purchase Commitment, reduce in part the unused portion
of the Commitment (as defined in the Parallel Purchase Commitment), the Purchase
Limit shall automatically reduce by an equal amount. The Purchase Limit shall
automatically terminate in whole on any day on which the Seller shall terminate
in whole the Commitment pursuant to Section 2.03(a) of the Parallel Purchase
Commitment.
SECTION 2.04. ELIGIBLE ASSET. (a) Each Eligible Asset shall be initially
computed as of the opening of business of the Collection Agent on the date of
Purchase of such Eligible Asset. Thereafter until the Termination Date for such
Eligible Asset, such Eligible Asset shall be automatically recomputed as of the
close of business of the Collection Agent on each day (other than a Liquidation
Day). Such Eligible Asset shall remain constant from the time as of which any
such computation or recomputation is made until the time as of which the next
such recomputation, if any, shall be made. Any Eligible Asset, as computed as of
the day immediately preceding the Termination Date for such Eligible Asset,
shall remain constant at all times on and after such Termination Date. Such
Eligible Asset shall become zero at such time as the Owner of such Eligible
Asset shall have
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received the accrued Yield for such Eligible Asset and shall have recovered the
Capital of such Eligible Asset, and the Collection Agent shall have received the
accrued Collection Agent Fee for such Eligible Asset.
(b) If any Eligible Asset would otherwise be reduced on any day on
account of Receivables arising as or becoming Pool Receivables, the Owner of
such Eligible Asset may prevent such reduction by giving notice to the
Collection Agent, before the close of business of the Collection Agent on such
day, that such Eligible Asset's interest in such Receivables is to be limited so
as to prevent such reduction. If such notice is given for any day for any
Eligible Asset, the Receivables Pool for such Eligible Asset, and the Net
Receivables Pool Balance for such Eligible Asset, will include, with respect to
Receivables arising as or becoming Pool Receivables on such day, only such
number of such Receivables or such portion of such Receivables as shall cause
such Eligible Asset to remain constant, such Receivables or portion thereof
being included in the Receivables Pool for such Eligible Asset in the order of
the Seller's account numbers for such Receivables up to an aggregate amount so
as to cause such Eligible Asset to remain constant, and the remainder of such
Receivables or portion thereof shall be treated as Receivables arising on the
next succeeding Business Day.
SECTION 2.05. NON-LIQUIDATION SETTLEMENT PROCEDURES. On each day (other
than a Liquidation Day) during each Settlement Period for each Eligible Asset,
the Collection Agent shall: (i) out of Collections of Pool Receivables
attributable to such Eligible Asset received on such day, set aside and hold in
trust for the Owner of such Eligible Asset an amount equal to the Yield and
Collection Agent Fee accrued through such day for such Eligible Asset and not so
previously set aside and (ii) reinvest the remainder of such Collections, for
the benefit of such Owner, by recomputation of such Eligible Asset pursuant to
Section 2.04 as of the end of such day and the payment of such remainder to the
Seller; PROVIDED, HOWEVER, that, to the extent that the Agent or any Owner shall
be required for any reason to pay over any amount of Collections which shall
have been previously reinvested for the account of such Owner pursuant hereto,
such amount shall be deemed not to have been so applied but rather to have been
retained by the Seller and paid over for the account of such Owner and,
notwithstanding any provision hereof to the contrary, such Owner shall have a
claim for such amount. On the last day of each Settlement
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Period for each Eligible Asset, the Collection Agent shall deposit to the
Agent's Account for the account of the Owner of such Eligible Asset the amounts
set aside as described in clause (i) of the first sentence of this Section 2.05.
Upon receipt of such funds by the Agent, the Agent shall distribute them to the
Owner of such Eligible Asset in payment of the accrued Yield for such Eligible
Asset and to the Collection Agent in payment of the accrued Collection Agent Fee
payable with respect to such Eligible Asset. If there shall be insufficient
funds on deposit for the Agent to distribute funds in payment in full of the
aforementioned amounts, the Agent shall distribute funds, FIRST, in payment of
the accrued Yield for such Eligible Asset, and SECOND, in payment of the accrued
Collection Agent Fee payable with respect to such Eligible Asset.
SECTION 2.06. LIQUIDATION SETTLEMENT PROCEDURES. On each Liquidation Day
during each Settlement Period for each Eligible Asset, the Collection Agent
shall set aside and hold in trust for the Owner of such Eligible Asset the
Collections of Pool Receivables attributable to such Eligible Asset received on
such day. On the last day of each Settlement Period for each Eligible Asset, the
Collection Agent shall deposit to the Agent's Account for the account of the
Owner of such Eligible Asset the amounts set aside pursuant to the preceding
sentence but not to exceed the sum of (i) the accrued Yield for such Eligible
Asset, (ii) the Capital of such Eligible Asset, (iii) the accrued Collection
Agent Fee payable with respect to such Eligible Asset and (iv) the aggregate
amount of other amounts owed hereunder by the Seller to the Owner of such
Eligible Asset. Any amounts set aside pursuant to the first sentence of this
Section 2.06 and not required to be deposited to the Agent's Account pursuant to
the preceding sentence shall be paid to the Seller by the Collection Agent;
PROVIDED, HOWEVER, that, if amounts are set aside during such Settlement Period
pursuant to the first sentence of this Section 2.06 on any Liquidation Day and
thereafter during such Settlement Period the conditions set forth in Section
3.02 are satisfied or are waived by the Agent, such previously set aside amounts
shall, to the extent representing a return of Capital, be applied pursuant to
clause (ii) of the first sentence of Section 2.05 on the day of such subsegment
satisfaction or waiver of conditions. Upon receipt of funds deposited to the
Agent's Account pursuant to the preceding sentence or Section 7.07 of the Credit
Agreement, the Agent shall distribute them (i) to the Owner of such Eligible
Asset (a) in payment of the accrued Yield for such Eligible Asset, (b) in
reduction (to zero) of the Capital of such Eligible Asset and (c) in payment
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of any other amounts owed by the Seller hereunder to such Owner and (ii) to the
Collection Agent in payment of the accrued Collection Agent Fee payable with
respect to such Eligible Asset. If there shall be insufficient funds on deposit
for the Agent to distribute funds in payment in full of the aforementioned
amounts, the Agent shall distribute funds, FIRST, in payment of the accrued
Yield for such Eligible Asset, SECOND, in reduction of Capital of such Eligible
Asset, THIRD, in payment of other amounts payable to such Owner, and FOURTH, in
payment of the accrued Collection Agent Fee payable with respect to such
Eligible Asset.
SECTION 2.07. GENERAL SETTLEMENT PROCEDURES. If on any day the
Outstanding Balance of a Pool Receivable is either (a) reduced as a result of
any defective, rejected or returned merchandise, insurance or services, any cash
discount, or any adjustment by the Seller, or (b) reduced or cancelled as a
result of a setoff in respect of any claim by the Obligor thereof against the
Seller (whether such claim arises out of the same or a related transaction or an
unrelated transaction), the Seller shall be deemed to have received on such day
a Collection of such Receivable in the amount of such reduction or cancellation.
If on any day any of the representations or warranties in Section 4.01(h) is no
longer true with respect to a Pool Receivable, the Seller shall be deemed to
have received on such day a Collection in full of such Pool Receivable. Except
as stated in the preceding sentences of this Section 2.07 or as otherwise
required by law or the underlying Contract, all Collections received from an
Obligor of any Receivable shall be applied to Receivables then outstanding of
such Obligor in the order of the age of such Receivables, starting with the
oldest such Receivable, except if payment is designated by such Obligor for
application to specific Receivables. Prior to the tenth Business Day of each
month, the Collection Agent shall prepare and forward to the Agent for each
Owner of an Eligible Asset (i) a Seller Report, relating to each Eligible Asset,
as of the close of business of the Collection Agent on the last day of the
immediately preceding month, and (ii) at the request of the Agent, a listing by
Obligor of all Pool Receivables, together with an analysis as to the aging of
such Receivables. On or prior to the day the Collection Agent is required to
make a deposit with respect to a Settlement Period pursuant to Section 2.05 or
2.06, the Seller will advise the Agent of each Liquidation Day occurring during
such Settlement Period and of the allocation of the amount of such deposit to
each outstanding Eligible
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Asset; PROVIDED, HOWEVER, that, if the Seller is not the Collection Agent, the
Seller shall also advise the Collection Agent of the occurrence of each such
Liquidation Day occurring during such Settlement Period on or prior to such day.
SECTION 2.08. PAYMENTS AND COMPUTATIONS, ETC. All amounts to be paid or
deposited by the Seller hereunder shall be paid or deposited in accordance with
the terms hereof no later than 11:00 A.M. (New York City time) on the day when
due in lawful money of the United States of America in same day funds to the
Agent's Account. The Seller shall, to the extent permitted by law, pay to the
Agent interest on all amounts not paid or deposited when due hereunder at 2% per
annum above the Alternate Base Rate, payable on demand, PROVIDED, HOWEVER, that
such interest rate shall not at any time exceed the maximum rate permitted by
applicable law. Such interest shall be retained by the Agent except to the
extent that such failure to make a timely payment or deposit has continued
beyond the date for distribution by the Agent of such overdue amount to an Owner
of an Eligible Asset, in which case such interest accruing after such date shall
be for the account of, and distributed by the Agent to the Owners ratably in
accordance with their respective interests in such overdue amount. All
computations of interest and all computations of Yield, Liquidation Yield and
fees hereunder shall be made on the basis of a year of 360 days for the actual
number of days (including the first but excluding the last day) elapsed.
SECTION 2.09. DIVIDING OR COMBINING OF ELIGIBLE ASSETS. The Seller may,
on notice received by the Agent not later than 11:00 A.M. (New York City time)
three Business Days before the last day of any Fixed Period for any then
existing Eligible Asset (an "EXISTING ELIGIBLE ASSET"), divide such Existing
Eligible Asset on such last day into two or more new Eligible Assets, each such
new Eligible Asset having Capital as designated in such notice and all such new
Eligible Assets collectively having aggregate Capital equal to the Capital of
such Existing Eligible Asset. The Seller may, on notice received by the Agent
not later than 11:00 A.M. (New York City time) three Business Days before the
last day of any Fixed Periods ending on the same day for two or more Existing
Eligible Assets owned by the same Owner or the date of any proposed Purchase (if
the last day of such Fixed Period is the date of such proposed Purchase), either
(i) combine such Existing Eligible Assets or (ii) combine such Existing Eligible
Asset or Eligible Assets, if owned by the
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Investor, and such proposed Eligible Asset to be purchased, on such last day
into one new Eligible Asset, such new Eligible Asset having Capital equal to the
aggregate Capital of such Existing Eligible Assets, or such Existing Eligible
Asset or Eligible Assets and such proposed Eligible Asset, as the case may be.
On and after any division or combination of Eligible Assets as described above,
each of the new Eligible Assets resulting from such division, or the new
Eligible Asset resulting from such combination, as the case may be, shall be a
separate Eligible Asset having Capital as set forth above, and shall take the
place of such Existing Eligible Asset or Eligible Assets or proposed Eligible
Asset, as the case may be, in each case under and for all purposes of this
Agreement, and the Agent shall annotate the Certificate accordingly.
SECTION 2.10. FEES AND PAYMENTS. (a) The Seller shall pay certain fees to
the Agent as more fully set forth in a letter agreement of even date herewith.
(b) Each Owner shall pay to the Collection Agent a collection fee (the
"COLLECTION AGENT FEE") of 1/4 of 1% per annum on the average daily amount of
Capital of each Eligible Asset owned by such Owner, from the date thereof until
the later of the Facility Termination Date or the date on which such Capital is
reduced to zero, payable on the last day of each Settlement Period for such
Eligible Asset; PROVIDED, HOWEVER, that, upon three Business Days' notice to the
Agent, the Collection Agent may (if not the Seller) elect to be paid, as such
fee, another percentage per annum on the average daily amount of Capital of each
such Eligible Asset, but in no event in excess of 110% of the costs and expenses
referred to in Section 6.02(b); and PROVIDED FURTHER that such fee shall be
payable only from Collections pursuant to, and subject to the priority of
payment set forth in, Sections 2.05 and 2.06.
SECTION 2.11. INCREASED COSTS. (a) If CNAI, an Owner, any entity which
enters into a commitment to purchase Eligible Assets or interests therein, or
any of their respective Affiliates (each an "AFFECTED PERSON") determines that
compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) issued on or after the effective date of this Agreement affects or will
affect the amount of capital required or expected to be maintained by such
Affected Person and such Affected Person determines that the amount of such
capital is increased by or
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based upon the existence of any commitment to make purchases of or otherwise to
maintain the investment in Pool Receivables or interests therein related to this
Agreement or to the funding thereof and other commitments of the same type
relating to this Agreement, then, within five Business Days after receipt of a
written demand by such Affected Person (with a copy to the Agent), the Seller
shall immediately pay to the Agent, for the account of such Affected Person (as
a third-party beneficiary), from time to time as specified by such Affected
Person, additional amounts sufficient to compensate such Affected Person in the
light of such circumstances, to the extent that such Affected Person reasonably
determines such increase in capital to be allocable to the existence of any of
such commitments. A certificate as to such amounts setting forth in reasonable
detail the calculations used in determining, and the basis of the requirements
for, such amounts, submitted to the Seller and the Agent by such Affected
Person, shall be conclusive and binding for all purposes, absent evidence of
error. Notwithstanding anything to the contrary contained in this subsection
(a), an Owner shall only be entitled to receive reimbursement for such
additional amounts pursuant to this subsection (a) to the extent (i) incurred
within 60 days prior to, and at any time after, the date on which such Owner
gives to the Seller a notice that an event has occurred as a result of which
such additional amounts will arise or a notice that the Seller is obligated to
pay such additional amounts, whichever first occurs and (ii) such Owner shall
not have been reimbursed for such additional amounts under a separate Section of
this Agreement.
(b) If, due to either (i) the introduction of or any change occurring on
or after the effective date of this Agreement (other than any change by way of
imposition or increase of reserve requirements referred to in Section 2.12) in
or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) issued on or after the effective date
of this Agreement, there shall be any increase in the cost to an Owner of
agreeing to purchase or purchasing, or maintaining the ownership of Eligible
Assets in respect of which Yield is computed by reference to the Eurodollar
Rate, then, within five Business Days after receipt of a written demand by such
Owner (with a copy to the Agent), the Seller
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shall pay to the Agent, for the account of such Owner (as a third-party
beneficiary), from time to time as specified, additional amounts sufficient to
compensate such Owner for such increased costs. A certificate as to the amount
of such increased cost setting forth in reasonable detail the calculations used
for determining, and the basis of the requirements for, such increased costs,
submitted to the Seller and the Agent by such Owner shall be conclusive and
binding for all purposes, absent evidence of error. Notwithstanding anything to
the contrary contained in this subsection (b), an Owner shall only be entitled
to receive reimbursement for such increased costs to the extent (i) incurred
within 60 days prior to, and at any time after, the date on which such Owner
gives to the Seller a notice that an event has occurred as a result of which
such increased costs will arise or a notice that the Seller is obligated to pay
increased costs, whichever first occurs and (ii) such Owner shall not have been
reimbursed for such increased cost under a separate Section of this Agreement.
SECTION 2.12. ADDITIONAL YIELD ON ELIGIBLE ASSETS BEARING A EURODOLLAR
RATE. The Seller shall pay to an Owner, so long as such Owner shall be required
under regulations of the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional Yield on the unpaid Capital of
each Eligible Asset of such Owner during each Fixed Period in respect of which
Yield is computed by reference to the Eurodollar Rate, for such Fixed Period, at
a rate per annum equal at all times during such fixed Period to the remainder
obtained by subtracting (i) the Eurodollar Rate for such Fixed Period from (ii)
the rate obtained by dividing such Eurodollar Rate referred to in clause (i)
above by that percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage of such Owner for such Fixed Period, payable on each date on which
Yield is payable on such Eligible Asset. A certificate as to such additional
Yield submitted to the Seller and the Agent by such Owner shall be conclusive
and binding for all purposes, absent evidence of error.
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL PURCHASE. The initial
Purchase hereunder was subject to the condition precedent that the Agent
received on or before the
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date of such Purchase the following, each of which (unless otherwise indicated)
was to be dated the date of such Purchase, and was in form and substance
satisfactory to the Agent:
(a) The Certificate;
(b) A copy of the resolutions adopted by the Board of Directors of the
Seller approving this Agreement, the Certificate and the other documents to
be delivered by it thereunder and the transactions contemplated thereby,
certified by its Secretary or Assistant Secretary;
(c) A certificate of the Secretary or Assistant Secretary of the
Seller certifying the names and true signatures of the officers authorized
on its behalf to sign this Agreement, the Certificate and the other
documents to be delivered by it hereunder (on which certificate the Agent
and each Owner shall be entitled to conclusively rely until such time as
the Agent received from the Seller a revised certificate meeting the
requirements of this subsection (c));
(d) Acknowledgment copies of proper Financing Statements (Form UCC-1),
dated a date reasonably near to the date of the initial Purchase, naming
the Seller as the assignor of Receivables and CNAI, as Agent, as assignee,
or other similar instruments or documents, as shall be necessary or, in the
opinion of the Agent, desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the ownership interests in
all Receivables in which an interest could have been assigned thereunder;
(e) Copies of proper Financing Statements (Form UCC-3) executed by
CNAI, as agent under the BFG Agreement, releasing all security interests
and other rights of CNAI as agent under the BFG Agreement, in the
Receivables previously granted by BFG to CNAI, as agent under the BFG
Agreement;
(f) Certified copies of Requests for Information or Copies (Form
UCC-11) (or a similar search report certified by a party acceptable to the
Agent), dated a date reasonably near to the date of the initial Purchase,
listing all effective financing statements (including those referred to
above in subsection (d)) which name the Seller (under its then present name
and any previous
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name) as debtor and which were filed in the jurisdictions in which filings
were made pursuant to subsection (d) above, together with copies of any
such financing statements (none of which, after giving effect to the
financing statements filed pursuant to clause (e) above, shall cover any
Receivables, Contracts or Related Security);
(g) Executed copies of Lock-Box Agreements duly executed by the Seller
and each Lock-Box Bank;
(h) An Acknowledgment and Authorization in the form of Annex 2 to
Exhibit D executed by each Lock-Box Bank;
(i) Undated copies of Notices of Effectiveness to each Lock-Box Bank
duly executed by the Seller;
(j) A favorable opinion of counsel for the Seller, substantially in
the form of Exhibit E hereto and as to such other matters as the Agent may
reasonably request;
(k) A favorable opinion of counsel for the Agent, as the Agent may
reasonably request;
(l) BFG shall have purchased from the BFG Owners all "Eligible Assets"
as defined in the BFG Agreement and paid to the BFG Owners all accrued and
unpaid "Yield" as defined in the BFG Agreement and all accrued and unpaid
amounts owed (including, without limitation, fees and expenses) under the
BFG Agreement to the BFG Owners;
(m) (i) A certificate of an officer of BFG that BFG has transferred to
the Seller all right, title and interest in and to all "Receivables", all
"Contracts" and all "Related Security" (as each such term is defined in the
BFG Agreement) free of any Adverse Claim and (ii) a certificate of an
officer of the Seller that the Seller has assumed all obligations of BFG in
respect thereto;
(n) Letters and certificates, in form and substance satisfactory to
the Agent, attesting to the solvency of each of the Seller and BFG after
giving effect to the transactions contemplated hereby, from their
respective treasurers or chief accounting officers; and
(o) Executed copies of the Waiver, dated April 1, 1993, among the
Seller and the Agent.
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SECTION 3.02. CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS.
Each Purchase (including the initial Purchase) hereunder and the right of the
Collection Agent to reinvest in Pool Receivables those Collections attributable
to an Eligible Asset pursuant to Sections 2.05 or 2.06 shall be subject to the
further conditions precedent that:
(a) With respect to any such Purchase, on or prior to the date of such
Purchase, the Collection Agent shall have delivered to the Agent, in form
and substance satisfactory to the Agent, a completed Seller Report, dated
within 35 days prior to the date of such Purchase, together with a listing
by Obligor of all Pool Receivables and such additional information as may
be reasonably requested by the Agent,
(b) On the date of such Purchase or reinvestment the following
statements shall be true (and the Seller by accepting proceeds of such
Purchase or by receiving the proceeds of such reinvestment shall be deemed
to have certified on the date of such purchase or reinvestment that):
(i) The representations and warranties contained in Section 4.01
hereof and contained in each other Loan Document are correct on and as
of such date as though made on and as of such date before and after
giving effect to such Purchase or reinvestment and to the application
of proceeds therefrom other than representations or warranties that,
by their terms, refer to a date other than the date of such Purchase,
(ii) No event has occurred and is continuing, or would result
from such Purchase or reinvestment or from the application of proceeds
therefrom, which constitutes an Event of Investment Ineligibility or
would constitute an Event of Investment Ineligibility but for the
requirement that notice be given or time elapse or both,
(iii) The Agent shall not have delivered to the Seller a notice
that the Investor shall not make any further Purchases hereunder
and/or that the Collection Agent shall not reinvest in any Pool
Receivables on behalf of the Owner of an Eligible Asset,
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(iv) On such date, all of the Seller's long-term public senior
debt securities, if rated, are rated at least BBB- by Standard &
Poor's Corporation and Baa3 by Xxxxx'x Investors Service, Inc., or, if
not rated, such securities are deemed to merit a BBB rating in the
sole discretion of the Agent, and
(v) On such date, the fee agreement noted in Section 2.10 of this
Agreement shall be effective, and
(c) the Agent shall have received such other approvals, opinions or
documents as the Agent may reasonably request.
SECTION 3.03. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THE AMENDMENT AND
RESTATEMENT OF THE ORIGINAL AGREEMENT. The effectiveness of the amendment and
restatement of the Original Agreement is subject to the condition precedent that
the Agent shall have received on or before the date hereof the following, each
(unless otherwise indicated) dated the date hereof, in form and substance
satisfactory to the Agent:
(a) A copy of the resolutions adopted by the Board of Directors of the
Seller approving this Agreement and the other documents to be delivered by
it hereunder and the transactions contemplated hereby, certified by its
Secretary or Assistant Secretary;
(b) A certificate of the Secretary or Assistant Secretary of the
Seller certifying the names and true signatures of the officers authorized
on its behalf to sign this Agreement, the Certificate and the other
documents to be delivered by it hereunder (on which certificate the Agent
and each Owner shall be entitled to conclusively rely until such time as
the Agent received from the Seller a revised certificate meeting the
requirements of this subsection (c));
(c) Acknowledgment copies of proper Financing Statement Amendments
(Form UCC-3), amending the Financing Statements referred to in Section
3.01(d);
(d) Acknowledgment copies of proper Financing Statements (Form UCC-3),
if any, necessary to release all security interests and other rights of any
Persons other than of CNAI in the Receivables, Contracts or Related
Security previously granted by the Seller or BFG.
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(e) Certified copies of Requests for Information or Copies (From
UCC-11) (or a similar search report certified by a party acceptable to the
Agent), dated a date reasonably near to the date of the amendment and
restatement of the Original Agreement, listing all effective financing
statements (including those referred to in Section 3.01(d)) which name the
Seller (under its present name and any previous name) as debtor and which
are filed in Cuyahoga County, Ohio and with the Secretary of State of the
State of Ohio, together with copies of any such financing statements (none
of which, after giving effect to the financing statements filed pursuant to
clause (d) above, shall cover any Receivables, Contracts or Related
Security);
(f) Executed copies of Lock-Box Agreements (or amendments thereto, if
necessary, providing for such matters as the Agent may reasonably request)
duly executed by the Seller and each Lock-Box Bank;
(g) An Acknowledgment and Authorization (or amendments thereto, if
necessary, providing for such matters as the Agent may reasonably request)
in the form of Annex 2 to Exhibit D executed by each Lock-Box Bank;
(h) Undated copies of Notices of Effectiveness (or amendments thereto,
if necessary, providing for such matters as the Agent may reasonably
request) to each Lock-Box Bank duly executed by the Seller;
(i) A favorable opinion of (i) in-house counsel for the Seller in
substantially the form of Exhibit E-1 hereto and (ii) White & Case, special
counsel to the Seller, in substantially the form of Exhibit E-2 hereto and
as to such other matters as the Agent may reasonably request;
(j) A favorable opinion of counsel for the Agent, as the Agent may
reasonably request; and
(k) A certificate of the Seller to the effect that (i) the Seller has
delivered each document which it believes is required to be delivered by it
pursuant to Sections 3.01 and 3.02 of the Credit Agreement and (ii) the
"Lenders" (as such term is defined in the Credit Agreement) have made the
initial "Advances" (as such term is defined in the Credit Agreement) under
the Credit Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants as follows:
(a) The Seller is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and is duly
qualified to do business, and is in good standing, in every jurisdiction
where the nature of its business requires it to be so qualified, except
where the failure to so qualify would not have a material adverse effect on
the Seller.
(b) The execution, delivery and performance by the Seller of this
Agreement and all other instruments and documents to be delivered
hereunder, the transactions contemplated hereby and thereby, and the
Seller's use of the proceeds of Purchases, are within the Seller's
corporate powers, have been duly authorized by all necessary corporate
action, do not contravene (i) the Seller's charter or by-laws or (ii) law
or any contractual restriction binding on or affecting the Seller and do
not result in or require the creation of any lien, security interest or
other charge or encumbrance upon or with respect to any of its material
properties, other than as a result of the transactions contemplated by this
Agreement; and no transaction contemplated hereby requires compliance with
any bulk sales act or similar law.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required
for the due execution, delivery and performance by the Seller of this
Agreement or any other document or instrument to be delivered hereunder
EXCEPT for the filing of the UCC Financing Statements referred to in
Article III, all of which, at the time required in Article III, shall have
been duly made and shall be in full force and effect.
(d) This Agreement is, and the Certificate when delivered hereunder
will be, the legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with its terms except to the extent that
the enforceability thereof is limited by applicable bankruptcy, insolvency,
reorganization, moratorium or
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other similar laws affecting creditors' rights generally and by equitable
principles (regardless of whether enforcement is sought in equity or at
law).
(e) (i) The Consolidated balance sheet of the Seller and its
Subsidiaries as at December 31, 1992, and the related Consolidated
statement of income and cash flows of the Seller and its Subsidiaries for
the fiscal year then ended, accompanied by an opinion of Ernst & Young,
independent public accountants, copies of which have been furnished to the
Agent, fairly present, the Consolidated financial condition of the Seller
and its Subsidiaries as at such dates and the Consolidated results of the
operations of the Seller and its Subsidiaries for the periods ended on such
dates, all in accordance with generally accepted accounting principles
applied on a consistent basis, and (ii) since December 31, 1992, there has
been no material adverse change in any such condition or operations.
(f) There are no actions, suits or proceedings pending, or to the
knowledge of the Seller threatened, against or affecting the Seller or any
Subsidiary, or the property of the Seller or of any subsidiary, in any
court, or before any arbitrator of any kind, or before or by any
governmental body, which, taking into account its probability of success,
may materially adversely affect the financial condition of the Seller or
the Seller and its Consolidated Subsidiaries taken as a whole or materially
adversely affect the ability of the Seller to perform its obligations under
this Agreement; neither the Seller nor any Subsidiary is in default with
respect to any order of any court, arbitrator or governmental body except
for defaults with respect to orders of governmental agencies which defaults
are not material to the business or operations of the Seller or any
Subsidiary.
(g) No proceeds of any Purchase or reinvestment will be used by the
Seller to acquire any equity security (other than the Common Stock of the
Seller to the extent permitted under Section 5.02(g) of the Credit
Agreement) of a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
(h) Each Pool Receivable is (i) together with the Contract related
thereto owned by the Seller free and clear of any Adverse Claim except as
provided for herein and (ii) an Eligible Receivable; upon each Purchase or
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reinvestment, the Owner making such Purchase or reinvestment will acquire a
valid and perfected first priority undivided percentage ownership interest
to the extent of the pertinent Eligible Asset in each Pool Receivable then
existing or thereafter arising and in the Related Security and Collections
with respect thereto free and clear of any Adverse Claim except as provided
hereunder; and no effective financing statement or other instrument similar
in effect covering any Contract or any Pool Receivable or the Related
Security or Collections with respect thereto is on file in any recording
office except such as may be filed in favor of CNAI, as Agent, in
accordance with this Agreement.
(i) Each Seller Report (if prepared by the Seller, or to the extent
that information contained therein is supplied by the Seller), information,
exhibit, financial statement, document, book, record or report furnished at
any time by the Seller to the Agent or any Owner in connection with this
Agreement is accurate in all material respects as of its date or (except as
otherwise disclosed to the Agent or such Owner, as the case may be, at such
time) as of the date so furnished, and no such document contains any
material misstatement of fact or omits to state a material fact or any fact
necessary to make the statements contained therein not materially
misleading.
(j) The chief executive office of the Seller is located at the address
of the Seller referred to in Section 11.02 hereof and the chief place of
business and the offices where the Seller keeps all its books, records and
documents evidencing Pool Receivables or the related Contracts are located
at the address specified in Schedule IV hereto (or at such other locations,
notified to the Agent in accordance with Section 5.01(f), in jurisdictions
where all action required by Section 6.05 has been taken and completed).
(k) The names and addresses of all the Lock-Box Banks, together with
the account numbers of the Lock-Box Accounts of the Seller at such Lock-Box
Banks, are specified in Schedule I hereto (or at such other Lock-Box Banks
and/or with such other Lock-Box Accounts as have been notified to the Agent
in accordance with Section 5.03(d)).
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(l) Neither the Seller nor any Affiliate of the Seller has any direct
or indirect ownership or other financial interest in the Investor, the
Agent or any "Original Bank" (as such term is defined in the Parallel
Purchase Commitment).
(m) Each purchase of an Eligible Asset hereunder, and each
reinvestment of Collections in Pool Receivables made hereunder, will
constitute (i) a "current transaction" within the meaning of Section
3(a)(3) of the Securities Act of 1933, as amended, and (ii) a purchase or
other acquisition of notes, drafts, acceptances, open accounts receivable
or other obligations representing part or all of the sales price of
merchandise, insurance or services within the meaning of Section 3(c)(5) of
the Investment Company Act of 1940, as amended.
ARTICLE V
GENERAL COVENANTS OF THE SELLER
SECTION 5.01. AFFIRMATIVE COVENANTS OF THE SELLER. Until the later of the
Facility Termination Date and the date upon which no Capital for any Eligible
Asset shall be existing, the Seller will, unless the Agent shall otherwise
consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material respects with
all applicable laws, rules, regulations and orders with respect to it, its
business and properties and all Pool Receivables and related Contracts,
Related Security and Collections with respect thereto.
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction
of its incorporation, and qualify and remain qualified in good standing as
a foreign corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges and
qualification would materially adversely affect the interests of the Owners
or the Agent hereunder or in the Pool Receivables and the Related Security,
or the ability of the Seller or the Collection Agent to perform their
respective obligations hereunder or the ability of the Seller to perform
its obligations under the Contracts.
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(c) AUDITS. At any time and from time to time during regular business
hours and upon reasonable prior notice, permit the Agent, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer tapes
and disks) in the possession or under the control of the Seller relating to
Pool Receivables and the Related Security, including, without limitation,
the related Contracts, and (ii) to visit the offices and properties of the
Seller for the purpose of examining such materials described in clause (i)
above, and to discuss matters relating to Pool Receivables and the Related
Security or the Seller's performance hereunder or under the Contracts with
any of the officers or employees of the Seller having knowledge of such
matters.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Pool 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 Pool Receivables (including, without limitation,
records adequate to permit the daily identification of each new Pool
Receivable and all Collections of and adjustments to each existing Pool
Receivable).
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS. At its
expense, timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the
Contracts related to the Pool Receivables.
(f) LOCATION OF RECORDS. Keep its chief place of business and chief
executive office, and the offices where it keeps its records concerning the
Pool Receivables and all Contracts related thereto (and all original
documents relating thereto), at the address(es) of the Seller referred to
in Section 4.01(j) or, upon 30 days' prior written notice to the Agent, at
such other locations in a jurisdiction where all action required by Section
6.05 shall have been taken and completed.
(g) CREDIT AND COLLECTION POLICIES. Comply in all material respects
with its Credit and Collection Policy in regard to each Pool Receivable and
the related Contract.
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(h) COLLECTIONS. Instruct all Obligors to cause all Collections to be
deposited directly to a Lock-Box Account.
(i) UCC SEARCHES. Provide the Agent prior to or on June 30, 1993 with
search reports of the type specified in Section 3.03(e) hereof confirming
the filing of the Financing Statement Amendments referred to in Section
3.03(c) with Cuyahoga County, Ohio and the Secretary of State of the State
of Ohio.
SECTION 5.02. REPORTING REQUIREMENTS OF THE SELLER. Until the later of
the Facility Termination Date and the date upon which no Capital for any
Eligible Asset shall be existing, the Seller will, unless the Agent shall
otherwise consent in writing, furnish to the Agent:
(a) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of the Seller
commencing with the Fiscal Quarter ended June 30, 1993, a Consolidated
balance sheet of the Seller and its Subsidiaries as of the end of such
quarter and Consolidated statements of income and cash flows of the Seller
and its Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, setting forth in each
case in comparative form the corresponding figures for the corresponding
period of the preceding fiscal year, all in reasonable detail, duly
certified (subject to year-end audit adjustments) by a Responsible Officer
of the Seller as having been prepared in accordance with GAAP, it being
agreed that delivery of the Seller's Quarterly Report on Form 10-Q will
satisfy this requirement, together with (i) a certificate of said officer
stating that, to his knowledge after reasonable investigation, no Event of
Investment Ineligibility has occurred and is continuing or, if a Event of
Investment Ineligibility has occurred and is continuing, a statement as to
the nature thereof and the action that the Seller has taken and proposes to
take with respect thereto and (ii) a schedule in form satisfactory to the
Agent of the computations used by the Seller in determining the Rate Ratio;
(b) as soon as available and in any event within 120 days after the
end of each fiscal year of the Seller, commencing with the fiscal year
ended December 31, 1993, a copy of the annual audit report for such year
for the Seller and its Subsidiaries, including therein a Consolidated
balance sheet of the Seller and its Subsidiaries as of the end of such
fiscal year and Consolidated statements of income and cash flows of the
Seller and its Subsidiaries for such fiscal year, in each case accompanied
by an opinion without qualification of independent public accountants of
recognized standing acceptable to the Agent, it being agreed that delivery
of
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the Seller's Annual Report on Form 10-K will satisfy this requirement,
together with (i) a certificate of such accounting firm to the Agent
stating that in the course of the regular audit of the business of the
Seller and its Subsidiaries, which audit was conducted by such accounting
firm in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge that an Event of Investment
Ineligibility has occurred insofar as such Event of Investment
Ineligibility relates to accounting matters and is continuing, or if an
Event of Investment Ineligibility has occurred and is continuing, a
statement as to the nature thereof, (ii) a schedule in form satisfactory to
the Agent of the computations used by the Seller in determining, as of the
end of such fiscal year, the Rate Ratio, and (iii) a certificate of a
Responsible Officer of the Seller stating that, to his knowledge after
reasonable investigation, no Event of Investment Ineligibility has occurred
and is continuing or, if a Event of Investment Ineligibility has occurred
and is continuing, a statement as to the nature thereof and the action that
the Seller has taken and proposes to take with respect thereto;
(c) promptly after the sending or filing thereof, copies of all
reports which the Seller sends to any of its security holders in their
capacity as such and copies of all reports and registration statements
which the Seller files with the Securities and Exchange Commission or any
national securities exchange other than (i) registration statements
relating to employee benefit plans and (ii) any exhibits to, or documents
incorporated by reference in, any such filings;
(d) promptly after the filing or receiving thereof, copies of all
reports and notices relating to the Seller and its significant domestic
subsidiaries with respect to any Reportable Event defined in Article IV of
ERISA which the Seller or any such subsidiary files under ERISA with the
Internal Revenue Service or the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor or which the Seller or any subsidiary receives
from such corporation;
(e) as soon as possible and in any event within five days after the
occurrence of each Event of Investment Ineligibility or each event which,
with the giving of notice or lapse of time or both, would constitute an
Event of Investment Ineligibility, the statement of the chief accounting
officer, treasurer or
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assistant treasurer of the Seller setting forth details of such Event of
Investment Ineligibility or event and the action which the Seller proposes
to take with respect thereto; and
(f) promptly, from time to time, such other information, documents,
records or reports respecting the Receivables or the conditions or
operations, financial or otherwise, of the Seller, or any subsidiary, as
the Agent may from time to time request in order to protect any Owner's or
the Agent's interests under or contemplated by this Agreement.
SECTION 5.03. NEGATIVE COVENANTS OF THE SELLER. Until the later of the
Facility Termination Date and the date upon which no Capital for any Eligible
Asset shall be existing, the Seller will not, without the written consent of the
Agent:
(a) SALES, LIENS, ETC. Except as otherwise provided herein, or
pursuant to the Parallel Purchase Commitment, 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 or with respect to,
the Seller's undivided interest in any Pool Receivable or Related Security
or Collections in respect thereof, or upon or with respect to any related
Contract, or upon or with respect to any lock-box account to which any
Collections of any Pool Receivable are sent, or assign any right to receive
income in respect thereof.
(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
permitted in Section 6.02(a), extend, amend or otherwise modify the terms
of any Pool Receivable, or amend, modify or waive any term or condition of
any Contract related thereto.
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make any
change in the character of its business or in the Credit and Collection
Policy, which change would, in either case, impair the collectibility of
any Pool Receivable.
(d) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Add or terminate any
bank as a Lock-Box Bank from those listed in Schedule I hereto or make any
change in its instructions to Obligors regarding payments to be made to
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the Seller or payments to be made to any Lock-Box Bank, unless the Agent
shall have received notice of such addition, termination or change and
executed copies of Lock-Box Agreements (together with an executed
acknowledgment of the Lock-Box Bank in the Form of Annex 2 to Exhibit D
hereto and an undated executed Notice of Effectiveness) with each new
Lock-Box Bank.
(e) DEPOSITS TO LOCK-BOX ACCOUNTS. Deposit or otherwise credit, or
cause or permit to be so deposited or credited, to any Lock-Box Account
cash or cash proceeds other than Collections of Pool Receivables.
ARTICLE VI
ADMINISTRATION AND COLLECTION
SECTION 6.01. DESIGNATION OF COLLECTION AGENT. The servicing,
administering and collection of the Pool Receivables shall be conducted by such
Person (the "Collection Agent") so designated from time to time in accordance
with this Section 6.01. Until the Agent gives three Business Days' notice to the
Seller of a designation of a new Collection Agent, the Seller is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Collection Agent pursuant to the terms hereof. The Agent may at any time
designate as Collection Agent any Person (including itself) to succeed the
Seller or any successor Collection Agent, on the condition in each case that any
such Person so designated shall agree to perform the duties and obligations of
the Collection Agent pursuant to the terms hereof. The Collection Agent may,
with the prior consent of the Agent, subcontract with any other Person for
servicing, administering or collecting the Pool Receivables, PROVIDED that the
Collection Agent shall remain liable for the performance of the duties and
obligations of the Collection Agent pursuant to the terms hereof.
SECTION 6.02. DUTIES OF COLLECTION AGENT. (a) The Collection Agent shall
take or cause to be taken all such actions as may be necessary or advisable to
collect each Pool Receivable from time to time, all in accordance with
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy. Each of the Seller, each
Owner and the Agent hereby appoints as its agent the Collection Agent, from time
to time designated pursuant to Section 6.01, to enforce
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its respective rights and interests in and under the Pool Receivables, the
Related Security and the Contracts. The Collection Agent shall set aside and
hold in trust for the account of the Seller and each Owner their respective
allocable shares of the Collections of Pool Receivables in accordance with
Sections 2.05 and 2.06 but shall not be required (unless otherwise requested by
the Agent) to segregate the funds constituting such portion of such Collections
prior to the remittance thereof in accordance with said Sections. If instructed
by the Agent, the Collection Agent shall segregate and deposit with a bank
(which may be Citibank) designated by the Agent such allocable share of
Collections of Pool Receivables, set aside for each Owner, on the first Business
Day following receipt by the Collection Agent of such Collections. Provided no
Event of Investment Ineligibility shall have occurred and be continuing, the
Seller, while it is Collection Agent, may, in accordance with the Credit and
Collection Policy, extend the maturity or adjust the Outstanding Balance of any
Defaulted Receivable as the Seller may determine to be appropriate to maximize
Collections thereof. The Seller shall deliver to the Collection Agent, and the
Collection Agent shall hold in trust for the Seller and each Owner in accordance
with their respective interests, all documents, instruments and records
(including, without limitation, computer tapes or disks) which evidence or
relate to Pool Receivables.
(b) The Collection Agent shall as soon as practicable following receipt
turn over to the Seller (i) that portion of Collections of Pool Receivables
representing its undivided interest therein, less, in the event the Seller is
not the Collection Agent, all reasonable and appropriate out-of-pocket costs and
expenses of such Collection Agent of servicing, collecting and administering the
Pool Receivables to the extent not covered by the Collection Agent Fee received
by it and (ii) the Collections of any Receivable which is not a Pool Receivable.
The Collection Agent, if other than the Seller, shall as soon as practicable
upon demand deliver to the Seller all documents, instruments and records in its
possession which evidence or relate to Receivables of the Seller other than Pool
Receivables, and copies of documents, instruments and records in its possession
which evidence or relate to Pool Receivables. The Collection Agent's
authorization under this Agreement shall terminate, after the Facility
Termination Date, upon receipt by each Owner of an Eligible Asset of an amount
equal to the Capital plus accrued Yield for such Eligible Asset plus all other
amounts owed to the Agent, each Owner and the Seller
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and (unless otherwise agreed by the Agent and the Collection Agent) the
Collection Agent under this Agreement.
SECTION 6.03. RIGHTS OF THE AGENT. (a) The Agent is hereby authorized at
any time upon three Business Days notice to the Seller if the Agent shall
determine in its sole discretion that such action is necessary to protect its
interest in the Receivables, to date, and to deliver to the Lock-Box Banks, the
Notices of Effectiveness delivered hereunder. The Seller hereby, when the Agent
shall deliver the Notices of Effectiveness to the Lock-Box Banks, transfers to
the Agent the exclusive ownership and control of the Lock-Box Accounts to which
the Obligors of Pool Receivables shall make payments, and shall take any further
action that the Agent may reasonably request to effect such transfer. In case
any authorized signatory of the Seller whose signature shall appear on any
Notice of Effectiveness shall cease to have such authority before the delivery
of such Notice of Effectiveness, such signature shall nevertheless be valid and
sufficient for all purposes as if such authority had remained in force at the
time of such delivery. Further, the Agent may notify, at any time upon three
Business Days' notice to the Seller if the Agent shall determine in its sole
discretion that such action is necessary to protect its interest in the
Receivables, or at any time after the designation of a Collection Agent other
than the Seller and at the Seller's expense, the Obligors of Pool Receivables,
or any of them, of the ownership of Eligible Assets by the Owners.
(b) At any time following the designation of a Collection Agent other
than the Seller pursuant to Section 6.01:
(i) The Agent may direct the Obligors of Pool Receivables, or any of
them, that payment of all amounts payable under any Pool Receivable be made
directly to the Agent or its designee.
(ii) The Seller shall, at the Agent's request and at the Seller's
expense, give notice of such ownership to each said Obligor and direct that
payments be made directly to the Agent or its designee.
(iii) Seller shall, at the Agent's request, (A) assemble all of the
documents, instruments and other records (including, without limitation,
computer tapes and disks) which evidence the Pool Receivables, and the
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related Contracts and Related Security, or which are otherwise necessary or
desirable to collect such Pool Receivables, and shall make the same
available to the Agent at a place selected by the Agent or its designee and
(B) segregate all cash, checks and other instruments received by it from
time to time constituting Collections of Pool Receivables in a manner
acceptable to the Agent and shall, promptly upon receipt, remit all such
cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Agent or its designee.
(iv) Each of the Seller and the Investor hereby authorizes the Agent
to take any and all steps in the Seller's name and on behalf of the Seller
and the Owners necessary or desirable, in the determination of the Agent,
to collect all amounts due under any and all Pool Receivables, including,
without limitation, endorsing the Seller's name on checks and other
instruments representing Collections and enforcing such Pool Receivables
and the related Contracts.
SECTION 6.04. RESPONSIBILITIES OF THE SELLER. Anything herein to the
contrary notwithstanding:
(a) The Seller shall perform all of its obligations under the
Contracts related to the Pool Receivables to the same extent as if Eligible
Assets had not been sold hereunder and the exercise by the Agent of its
rights hereunder shall not relieve the Seller from such obligations or its
obligations with respect to Pool Receivables; and
(b) Neither the Agent nor the Owners shall have any obligation or
liability with respect to any Pool Receivables or related Contracts, nor
shall any of them be obligated to perform any of the obligations of the
Seller thereunder.
SECTION 6.05. FURTHER ACTION EVIDENCING PURCHASES. The Seller agrees that
from time to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that the Agent
may reasonably request in order to perfect, protect or more fully evidence the
Eligible Assets purchased by the Owners hereunder, or to enable any of them or
the Agent to exercise or enforce any of their respective rights hereunder.
Without limiting the generality of the foregoing, the Seller will,
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upon the request of the Agent: (i) execute and file such financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate; (ii) if the
Agent shall determine in its sole discretion that such action is necessary to
protect its interest in the Receivables, xxxx conspicuously each invoice
evidencing each Pool Receivable and the related Contract with a legend,
acceptable to the Agent, evidencing that such Eligible Assets have been sold in
accordance with this Agreement; and (iii) xxxx its master data processing
records evidencing such Pool Receivables and related Contracts with such legend.
The Seller hereby authorizes the Agent to file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Pool Receivables and the Related Security now
existing or hereafter arising without the signature of the Seller where
permitted by law. If the Seller fails to perform any of its agreements or
obligations under this Agreement, the Agent may (but shall not be required to)
itself perform, or cause performance of, such agreement or obligation, and the
expenses of the Agent incurred in connection therewith shall be payable by the
Seller as provided in Section 10.01.
ARTICLE VII
EVENTS OF INVESTMENT INELIGIBILITY
SECTION 7.01. EVENTS OF INVESTMENT INELIGIBILITY. If any of the following
events ("EVENTS OF INVESTMENT INELIGIBILITY") shall occur and be continuing:
(a) The Collection Agent (if other than the Agent) (i) shall fail to
perform or observe any term, covenant or agreement hereunder (other than as
referred to in clause (ii) of this Section 7.01(a)) and such failure shall
remain unremedied for three Business Days or (ii) shall fail to make any
payment or deposit to be made by it hereunder when due; or
(b) The Seller shall fail to perform or observe any term, covenant or
agreement contained in Section 5.03(e) or Section 6.03(a); or
(c) Any representation or warranty made or deemed to be made by the
Seller (or any of its officers) under or in connection with this Agreement,
the other Loan
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Documents or any Seller Report or other information or report delivered
pursuant hereto shall prove to have been false or incorrect in any material
respect when made; or
(d) The Seller shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement on its part to be
performed or observed and any such failure shall remain unremedied for
seven Business Days after written notice thereof shall have been given by
the Agent to the Seller; or
(e) The Seller shall fail to pay any Debt in excess of $10,000,000 or
any interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure
shall continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other default under
any agreement or instrument relating to any such Debt, or any other event,
shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or
(f) Any Purchase or any reinvestment pursuant to Section 2.05 shall
for any reason, except to the extent permitted by the terms hereof, cease
to create, or any Eligible Asset shall for any reason cease to be, a valid
and perfected first priority undivided percentage ownership interest to the
extent of the pertinent Eligible Asset in each applicable Pool Receivable
and the Related Security and Collections with respect thereto; or
(g) (i) The Seller shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors;
or any proceeding shall be instituted by or against the Seller seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
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composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property and, if
instituted against the Seller, either such proceeding shall not be stayed
or dismissed for 60 days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against it
or the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property) shall occur;
or (ii) the Seller shall take any corporate action to authorize any of the
actions set forth in clause (i) above in this subsection (g); or
(h) The Default Ratio as at the last day of any calendar month shall
exceed 6% or the Delinquency Ratio as at the last day of any calendar month
shall exceed 4% and a repurchase, if required pursuant to Section 10.03, is
not made when due; or
(i) The Net Receivables Pool Balance shall for a period of five
consecutive Business Days be less than 120% of the sum of the aggregate
outstanding Capital of all Eligible Assets and of the aggregate outstanding
"Capital" of all "Eligible Assets" under the Parallel Purchase Commitment;
or
(j) There shall have been any material adverse change in the financial
condition or operations of the Seller since December 31, 1992, or there
shall have occurred any event which materially adversely affects the
collectibility of the Pool Receivables, or there shall have occurred any
other event which materially adversely affects the ability of the Seller to
collect Pool Receivables or the ability of the Seller to perform hereunder;
or
(k) Any "Event of Default" shall have occurred and be continuing under
the Credit Agreement;
then, and in any such event, the Agent may, by notice to the Seller, declare the
Facility Termination Date to have occurred, EXCEPT that, in the case of any
event described above in clause (i) of subsection (g) or described above in
subsection (f), the Facility Termination Date shall be deemed to have occurred
automatically upon the occurrence of such
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event. Upon any Such termination of the Facility, the Agent and the Owners shall
have, in addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies provided under the UCC of the
applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing or the general applicability of
Article IX hereof, any Owner may elect to assign pursuant to Article IX hereof
any Eligible Asset owned by such Owner to an Assignee following the occurrence
of any Event of Investment Ineligibility.
ARTICLE VIII
THE AGENT
SECTION 8.01. AUTHORIZATION AND ACTION. Each Owner hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto.
SECTION 8.02. AGENT'S RELIANCE, ETC. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them as Agent under or in connection with this
Agreement (including, without limitation, the Agent's servicing, administering
or collecting Pool Receivables as Collection Agent pursuant to Section 6.01),
except for its or their own gross negligence or willful misconduct. Without
limiting the foregoing, the Agent:
(i) may consult with legal counsel (including counsel for the Seller),
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts;
(ii) makes no warranty or representation to any Owner and shall not be
responsible to any Owner for any statements, warranties or representations
made in or in connection with this Agreement;
(iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of
this Agreement on the
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part of the Seller or to inspect the property (including the books and
records) of the Seller;
(iv) shall not be responsible to any Owner for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of
this Agreement, the Certificate or any other instrument or document
furnished pursuant hereto; and
(v) shall incur no liability under or in respect of this Agreement by
acting upon any notice (including notice by telephone), consent,
certificate or other instrument or writing (which may be by facsimile)
believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 8.03. CNAI AND AFFILIATES. With respect to any Eligible Asset
owned by CNAI, CNAI shall have the same rights and powers under this Agreement
as would any Owner and may exercise the same as though it were not the Agent.
CNAI and its Affiliates may generally engage in any kind of business with the
Seller or any Obligor, any of their respective Affiliates and any Person who may
do business with or own securities of the Seller or any Obligor or any of their
respective Affiliates, all as if CNAI were not the Agent and without any duty to
account therefor to the Owners.
SECTION 8.04. INVESTOR'S PURCHASE DECISION. The Investor acknowledges
that it has, independently and without reliance upon the Agent, any of its
Affiliates or any other Owner and based on such documents and information as it
has deemed appropriate, made its own evaluation and decision to enter into this
Agreement and, if it so determines, to purchase an undivided ownership interest
in Pool Receivables hereunder.
ARTICLE IX
ASSIGNMENT
SECTION 9.01. ASSIGNMENT. (a) The Investor may assign to any other
Assignee, and any such Assignee may assign to any other Assignee, any Eligible
Asset. Upon any such assignment, (i) the Assignee shall become the Owner of such
Eligible Asset for all purposes of this Agreement and (ii) the Owner assignor
thereof shall relinquish its rights with respect to such Eligible Asset for all
purposes of this
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Agreement. Such assignments shall be upon such terms and conditions as the
assignor and the Assignee of such Eligible Asset may mutually agree, the parties
thereto shall deliver to the Agent an Assignment, duly executed by such parties,
and such assignor shall promptly execute and deliver all further instruments and
documents, and take all further action, that the Assignee may reasonably request
in order to perfect, protect or more fully evidence the Assignee's right, title
and interest in and to such Eligible Asset, and to enable the Assignee to
exercise or enforce any rights hereunder or under the Certificate. The Agent
shall provide notice to the Seller of any assignment of an Eligible Asset
hereunder.
(b) By executing and delivering an Assignment, the Owner assignor
thereunder and the Assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than as provided in such
Assignment, such assigning Owner makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
the Certificate or any other instrument or document furnished pursuant hereto;
(ii) such assigning Owner makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Seller or the
performance or observance by the Seller of any of its obligations under this
Agreement, the Certificate or any other instrument or document furnished
pursuant hereto; (iii) such Assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and to purchase such Eligible Asset; (iv) such Assignee will,
independently and without reliance upon the Agent, any of its Affiliates, such
assigning Owner or any other Owner 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 this Agreement; (v) such Assignee
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto; (vi) such Assignee appoints as its agent the Collection Agent from time
to time designated pursuant to Section 6.01 to enforce its respective
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rights and interests in and under the Pool Receivables, the Related Security and
the related Contracts; and (vii) such Assignee agrees that it will not institute
against the Investor any proceeding of the type referred to in Section 7.01(g)
so long as any commercial paper issued by the Investor shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any such commercial paper shall have been outstanding.
(c) The Seller may not assign its rights or obligations hereunder or any
interest herein without the prior written consent of the Agent.
SECTION 9.02. Annotation of Certificate. The Agent shall annotate the
Certificate to reflect any assignments made pursuant to Section 9.01 or
otherwise.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. INDEMNITIES BY THE SELLER. Without limiting any other
rights which the Agent, any Owner or any of their respective Affiliates (each an
"Indemnified Party") may have hereunder or under applicable law, the Seller
hereby agrees to indemnify each Indemnified Party from and against any and all
damages, losses, claims, liabilities and related costs and expenses, including
reasonable attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or incurred
by any of them arising out of or as a result of this Agreement or the use of
proceeds of Purchases or the ownership of Eligible Assets or in respect of any
Receivable or any Contract, excluding, however, (i) Indemnified Amounts to the
extent resulting from gross negligence or willful misconduct on the part of such
Indemnified Party or (ii) recourse (except as otherwise specifically provided in
this Agreement) for uncollectible Receivables. Without limiting or being limited
by the foregoing, the Seller shall pay on demand to each Indemnified Party any
and all amounts necessary to indemnify such Indemnified Party for Indemnified
Amounts relating to or resulting from:
(i) the creation of an undivided percentage ownership interest in any
Receivable which is not at the date of the creation of such interest an
Eligible Receivable or which thereafter ceases to be an Eligible
Receivable;
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(ii) reliance on any representation or warranty made by the Seller (or
any of its officers) under or in connection with this Agreement, any Seller
Report or any other information or report delivered by the Seller pursuant
hereto, which shall have been false or incorrect in any material respect
when made or deemed made;
(iii) the failure by the Seller to comply with any applicable law,
rule or regulation with respect to any Pool Receivable or the related
Contract, or the nonconformity of any Pool Receivable or the related
Contract with any such applicable law, rule or regulation;
(iv) the failure to vest in the Owner of an Eligible Asset an
undivided percentage ownership interest, to the extent of such Eligible
Asset, in the Receivables in, or purporting to be in, the Receivables Pool
and the Related Security and Collections in respect thereof, free and clear
of any Adverse Claim;
(v) the failure to file, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivables in,
or purporting to be in, the Receivables Pool and the Related Security and
Collections in respect thereof, whether at the time of any Purchase or
reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
in, or purporting to be in, the Receivables Pool (including, without
limitation, a defense based on such Receivable or the related Contract not
being a legal, valid and binding obligation of such Obligor enforceable
against it in accordance with its terms), or any other claim resulting from
the sale of the merchandise or services related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(vii) any failure of the Seller, as Collection Agent or otherwise, to
perform its duties or obligations in accordance with the provisions of
Article VI or to perform its duties or obligations under the Contracts;
(viii) any products liability claim arising out of or in connection
with merchandise, insurance or services which are the subject of any
Contract; or
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(ix) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of Purchases or the ownership of Eligible
Assets or in respect of any Receivable or any Contract; or
(x) the commingling of Collections of Pool Receivables at any time
with other funds; provided, that without in any way limiting the scope of
the foregoing indemnity, such indemnity is not intended to restrict the
Seller from servicing Receivables as the Collection Agent pursuant to
Article 6 of this Agreement.
SECTION 10.02. ADDITIONAL INDEMNITIES. Section 8.04(b) of the Credit
Agreement is incorporated in this Agreement by reference, with the same force
and effect as if the same was set out in this Agreement in full; PROVIDED, that
references to the "Borrower" and any "Lender" therein shall mean the Seller and
any Owner, respectively, and, without limitation, all references in such
incorporated provision to "Indemnified Party" and "Loan Documents" shall mean
and refer to Indemnified Party and Loan Documents under this Agreement,
respectively; likewise, to the extent any word or phrase is defined in this
Agreement, any such word or phrase appearing in the provision so incorporated by
reference from the Credit Agreement shall have the meaning given to it in this
Agreement; and PROVIDED FURTHER, words or phrases used in such incorporated
provision and not otherwise defined in this Agreement shall be also incorporated
herein by reference; and provided further, that notwithstanding the foregoing,
such incorporated provision shall exclude recourse (except as otherwise
specifically provided in this Agreement) for uncollectible Receivables. The
incorporation by reference into this Agreement from the Credit Agreement is for
convenience only and this Agreement and the Credit Agreement shall at all times
be, and be deemed to be and treated as, separate and distinct facilities.
Incorporations by reference in this Agreement from the Credit Agreement shall
not be affected or impaired by any subsequent expiration or termination of the
Credit Agreement, nor by any amendment thereof or waiver thereunder unless the
Agent, as Agent for the Owners, shall have consented to such amendment or waiver
in writing.
SECTION 10.03 LIMITED RECOURSE. On the first day (the "DETERMINATION
DATE") on which (a) the Default Ratio or the Delinquency Ratio exceeds the
percentage therefor set forth in Section 7.01(h) and (b) such percentage would
not be exceeded if such ratio were calculated by excluding from the numerator
and denominator thereof all the Pool Receivables of
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either (i) the Obligor with the largest, (ii) the Obligors with the two largest
or (iii) the Obligors with the three largest Outstanding Balances of Pool
Receivables that on the Determination Date are either Defaulted Receivables or
Delinquent Receivables, as the case may be (the amount of such Outstanding
Balances of the minimum number of such Obligors required so that such percentage
would not be exceeded being called the "EXCLUDED RECEIVABLES", and the one, two
or three Obligors owing such Excluded Receivables being the "EXCLUDED
OBLIGORS"), then the Seller shall repurchase a portion of Eligible Assets
ratably from each Owner by paying to the Agent for the benefit of the Owners on
the first Business Day after the Determination Date:
(i) an amount of Capital equal to the product obtained by multiplying
all Capital outstanding as of the Determination Date by a fraction the
numerator of which shall be the Outstanding Balances of the Excluded
Receivables and the denominator of which shall be the Outstanding Balances
of all Pool Receivables, in each case as of the Determination Date, PLUS
(ii) all Yield accrued thereon through the date of such repurchase
PLUS
(iii) the amount, if any, by which (A) the additional Yield which
would have accrued on the portion of the Eligible Assets so repurchased
during the Fixed Period (computed without regard to clause (iv) of the
definition of "Fixed Period") during which such repurchase occurs if such
portion of such Eligible Assets had remained outstanding in its entirety
exceeds (B) the income, if any, received by the Owner by investing the
proceeds of such repurchase attributable to the portion of the Eligible
Assets so repurchased.
On and after the date on which such payment is made in full, each Excluded
Obligor shall automatically and immediately cease to be a Designated Obligor,
and the Receivables of such Obligor shall automatically and immediately be
excluded from the Receivables Pool. Upon receipt of funds paid to the Agent
pursuant to this Section 10.03, the Agent shall distribute such funds to the
Owners ratably (i) in payment of the accrued Yield for such portion of each
Eligible Asset repurchased, (ii) in reduction of the Capital of such portion of
each Eligible Asset repurchased and (iii) in payment of any other amounts owed
by the Seller hereunder to such Owner.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement nor consent to any departure by the Seller therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Agent, as Agent for the Owners, and then such amendment, waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
SECTION 11.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing and
mailed, faxed or delivered, as to each party hereto, to its address set forth
under its name on the signature pages hereof or at such other address as shall
be designated by such party in a written notice to the other parties hereto.
Notices and communications by facsimile shall be effective when sent, and
notices and communications sent by other means shall be effective when received,
in each case addressed as aforesaid.
SECTION 11.03. NO WAIVER; REMEDIES. No failure on the part of the Agent,
Citibank or an Owner to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION 11.04. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Seller, the Agent, the Owners and their respective
successors and assigns. This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms, and
shall remain in full force and effect until such time, after the Facility
Termination Date, as no Capital of any Eligible Asset shall be outstanding;
provided, however, that rights and remedies with respect to any breach of any
representation and warranty made by the Seller pursuant to Article IV, the
indemnification provisions of Article X and the provisions of Sections 11.06,
11.07 and 11.08 shall be continuing and shall survive any termination of this
Agreement for a period of three years.
SECTION 11.05. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of
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the State of New York, except to the extent that the validity or perfection of
the interests of the Owners in the Receivables, or remedies hereunder, in
respect thereof are governed by the laws of a jurisdiction other than the State
of New York.
SECTION 11.06. COSTS, EXPENSES AND TAXES. (a) In addition to the rights
of indemnification granted to the Indemnified Parties under Article X hereof,
the Seller agrees to pay on demand all costs and expenses in connection with the
preparation, execution, delivery and administration (including periodic
auditing) of this Agreement, the Certificate and the other documents to be
delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent, the Investor, Citibank, CNAI
and their respective Affiliates with respect thereto and with respect to
advising the Agent, the Investor, Citibank, CNAI and their respective Affiliates
as to their respective rights and remedies under this Agreement. The Seller
further agrees to pay on demand all costs and expenses, if any (including
reasonable counsel fees and expenses), of the Agent, CNAI, the Owners and their
respective Affiliates, in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Certificate
and the other documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 11.06(a).
(b) In addition, the Seller shall pay any and all commissions of
placement agents and commercial paper dealers in respect of commercial paper
notes of the Investor issued to fund the Purchase or maintenance of any Eligible
Asset and any and all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other documents to be delivered hereunder, and agrees to
indemnify the Agent, the Investor, Citibank, CNAI and their respective
Affiliates against any liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes and fees.
(c) In addition, the Seller shall pay on demand all other costs, expenses
and taxes (excluding income taxes) incurred by the Investor or any general or
limited partner of the Investor ("OTHER COSTS"), including, without limitation,
the cost of auditing the Investor's books by certified public accountants, the
cost of rating the Investor"s commercial
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paper by independent financial rating agencies, the taxes (excluding income
taxes) resulting from the Investor's operations, and the reasonable fees and
out-of-pocket expenses of counsel for the Investor or any counsel for any
general or limited partner of the Investor with respect to (i) advising the
Investor or such general or limited partner as to its rights and remedies under
this Agreement, (ii) the enforcement of this Agreement and the other documents
to be delivered hereunder, or (iii) advising the Investor or such general or
limited partner as to matters relating to the Investor's operations; PROVIDED,
HOWEVER, that if the Investor enters into agreements for the purchase of
interests in receivables from one or more other Persons ("OTHER SELLERS"), the
Seller and such Other Sellers shall each be liable for such Other Costs ratably
in accordance with the usage under the respective facilities of the Investor to
purchase receivables or interests therein from the Seller and each Other Seller;
and PROVIDED, FURTHER, that if such Other Costs are attributable to the Seller
and not attributable to any Other Seller, the Seller shall be solely liable for
such Other Costs.
SECTION 11.07. NO PROCEEDINGS. Each of the Seller, the Agent, each Owner,
each assignee of an Eligible Asset or any interest therein and each entity which
enters into a commitment to purchase Eligible Assets or interests therein hereby
agrees that it will not institute against the Investor any proceeding of the
type referred to in clause (i) of Section 7.01(g) so long as any commercial
paper issued by the Investor shall be outstanding or there shall not have
elapsed one year plus one day since the last day on which any such commercial
paper shall have been outstanding.
SECTION 11.08. CONFIDENTIALITY. (a) Except to the extent otherwise
required by applicable law, the Seller agrees to maintain the confidentiality of
this Agreement (and all drafts thereof) in communications with third parties and
otherwise; PROVIDED, HOWEVER, that the Agreement may be disclosed to third
parties to the extent such disclosure is (i) required in connection with a sale
of securities of the Seller, (ii) made solely to persons who are legal counsel
for the purchaser or underwriter of such securities, (iii) limited in scope to
the provisions of Articles V, VII, X and, to the extent defined terms are used
in Articles V, VII and X, such terms defined in Article I of this Agreement and
(iv) made pursuant to a written agreement of confidentiality in form and
substance reasonably satisfactory to the Agent; PROVIDED, FURTHER, HOWEVER, that
the Agreement may be disclosed to the Seller's legal counsel pursuant to an
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agreement of the type referred to in clause (iv), above; and PROVIDED, FURTHER,
HOWEVER, that the Seller shall have no obligation of confidentiality in respect
of any information which may be generally available to the public or becomes
available to the public through no fault of the Seller.
(b) Each Owner understands that this Agreement is a confidential document
and no Owner will disclose it to any other Person without the Agent's prior
written consent other than (i) to such Owner's Affiliates and their and their
Affiliates' officers, directors, employees, agents, rating agencies, counsel,
auditors and advisors and then only on a confidential basis, (ii) to actual or
prospective Assignees and participants, and then only if such Assignee has
agreed in writing to maintain such information on a confidential basis, (iii) as
required by any law, rule or regulation or judicial process or (iv) as requested
or required by any state, federal or foreign authority or examiner regulating
banks or banking.
(c) Neither the Agent nor any Owner shall disclose any Confidential
Information to any Person without the consent of the Seller, other than (i) to
the Agent's or such Owner's Affiliates and their and their Affiliates' officers,
directors, employees, agents, rating agencies, counsel, auditors and advisors
and then only on a confidential basis, (ii) to actual or prospective Assignees
and participants, and then only if such Assignee has agreed in writing to
maintain such Confidential Information on a confidential basis, (iii) as
required by any law, rule or regulation or judicial process and (iv) as
requested or required by any state, federal or foreign authority or examiner
regulating banks or banking.
SECTION 11.09. EXECUTION IN COUNTERPARTS. 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.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
THE GEON COMPANY
By:
-------------------------------------
Title: Sr. Vice President & Treasurer
0000 Xxx Xxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxx 00000
(Cuyahoga County)
Attention: Xxxxxx X. Xxxxxxxxxx
Facsimile No. (000) 000-0000
XXXXXX X.X.
By: Citicorp North America, Inc.
as Attorney-in-Fact
By:
-------------------------------------
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: President
Facsimile No. (000) 000-0000
CITICORP NORTH AMERICA, INC.,
as Agent
By:
-------------------------------------
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Corporate Asset
Funding Department
Facsimile No. (000) 000-0000
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
THE GEON COMPANY
By:
-------------------------------------
Title: Sr. Vice President & Treasurer
0000 Xxx Xxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxx 00000
(Cuyahoga County)
Attention: Xxxxxx X. Xxxxxxxxxx
Facsimile No. (000) 000-0000
XXXXXX X.X.
By: Citicorp North America, Inc.
as Attorney-in-Fact
By:
-------------------------------------
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: President
Facsimile No. (000) 000-0000
CITICORP NORTH AMERICA, INC.,
as Agent
By:
-------------------------------------
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Corporate Asset
Funding Department
Facsimile No. (000) 000-0000
