1
EXHIBIT 4.2
--------------------------------------------------------------------------------
U.S. RECEIVABLES PURCHASE AGREEMENT
DATED AS OF JULY 2, 2001
AMONG
W1 RECEIVABLES, L.P., AS SELLER,
XXXXXXXXXXX INTERNATIONAL, INC., AS SERVICER,
JUPITER SECURITIZATION CORPORATION
AND
BANK ONE, NA (MAIN OFFICE CHICAGO), AS AGENT
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
PAGE
----
ARTICLE I. PURCHASE ARRANGEMENTS............................................................1
Section 1.1 Purchase Facility.........................................................1
Section 1.2 Increases.................................................................2
Section 1.3 Decreases.................................................................2
Section 1.4 Payment Requirements......................................................2
ARTICLE II. PAYMENTS AND COLLECTIONS........................................................3
Section 2.1 Payments..................................................................3
Section 2.2 Collections Prior to Amortization.........................................3
Section 2.3 Collections Following Amortization........................................4
Section 2.4 Application of Collections................................................4
Section 2.5 Payment Recission.........................................................5
Section 2.6 Maximum Purchaser Interests...............................................5
Section 2.7 Clean Up Call.............................................................5
ARTICLE III. CONDUIT FUNDING................................................................5
Section 3.1 CP Costs..................................................................5
Section 3.2 CP Costs Payments.........................................................6
Section 3.3 Calculation of CP Costs...................................................6
ARTICLE IV. FINANCIAL INSTITUTION FUNDING...................................................6
Section 4.1 Financial Institution Funding.............................................6
Section 4.2 Yield Payments............................................................6
Section 4.3 Selection and Continuation of Tranche Periods.............................6
Section 4.4 Financial Institution Discount Rates......................................7
Section 4.5 Suspension of the LIBO Rate...............................................7
ARTICLE V. REPRESENTATIONS AND WARRANTIES...................................................8
Section 5.1 Representations and Warranties of the Seller Parties......................8
Section 5.2 Financial Institution Representations and Warranties.....................11
ARTICLE VI. CONDITIONS OF PURCHASES........................................................12
Section 6.1 Conditions Precedent to Initial Incremental Purchase.....................12
Section 6.2 Conditions Precedent to All Purchases and Reinvestments..................12
ARTICLE VII. COVENANTS.....................................................................13
Section 7.1 Affirmative Covenants of the Seller Parties..............................13
Section 7.2 Negative Covenants of the Seller Parties.................................20
ARTICLE VIII. ADMINISTRATION AND COLLECTION................................................21
Section 8.1 Designation of Servicer..................................................21
Section 8.2 Duties of Servicer.......................................................22
Section 8.3 Collection Notices.......................................................23
Section 8.4 Responsibilities of Seller...............................................23
Section 8.5 Reports..................................................................23
Section 8.6 Servicing Fees...........................................................23
ARTICLE IX. AMORTIZATION EVENTS............................................................24
Section 9.1 Amortization Events......................................................24
Section 9.2 Remedies.................................................................25
i
3
PAGE
----
ARTICLE X. INDEMNIFICATION..................................................................26
Section 10.1 Indemnities by the Seller Parties.........................................26
Section 10.2 Increased Cost and Reduced Return.........................................29
Section 10.3 Other Costs and Expenses..................................................29
ARTICLE XI. THE AGENT.......................................................................30
Section 11.1 Authorization and Action..................................................30
Section 11.2 Delegation of Duties......................................................30
Section 11.3 Exculpatory Provisions....................................................30
Section 11.4 Reliance by Agent.........................................................31
Section 11.5 Non-Reliance on Agent and Other Purchasers................................31
Section 11.6 Reimbursement and Indemnification.........................................31
Section 11.7 Agent in its Individual Capacity..........................................31
Section 11.8 Successor Agent...........................................................32
ARTICLE XII. ASSIGNMENTS; PARTICIPATIONS....................................................32
Section 12.1 Assignments...............................................................32
Section 12.2 Participations............................................................33
ARTICLE XIII. LIQUIDITY FACILITY............................................................33
Section 13.1 Transfer to Financial Institutions........................................33
Section 13.2 Transfer Price Reduction Yield............................................34
Section 13.3 Payments to Conduit.......................................................34
Section 13.4 Limitation on Commitment to Purchase from Conduit.........................34
Section 13.5 Defaulting Financial Institutions.........................................34
Section 13.6 Terminating Financial Institutions........................................35
ARTICLE XIV. MISCELLANEOUS..................................................................36
Section 14.1 Waivers and Amendments....................................................36
Section 14.2 Notices...................................................................37
Section 14.3 Ratable Payments..........................................................37
Section 14.4 Protection of Ownership Interests of the Purchasers.......................37
Section 14.5 Confidentiality...........................................................38
Section 14.6 Bankruptcy Petition.......................................................39
Section 14.7 Limitation of Liability...................................................39
Section 14.8 CHOICE OF LAW.............................................................39
Section 14.9 CONSENT TO JURISDICTION...................................................39
Section 14.10 WAIVER OF JURY TRIAL......................................................40
Section 14.11 Integration; Binding Effect; Survival of Terms............................40
Section 14.12 Counterparts; Severability; Section References............................40
Section 14.13 Bank One Roles............................................................40
Section 14.14 Characterization..........................................................41
ii
4
EXHIBITS AND SCHEDULES
Exhibit I Definitions
Exhibit II Form of Purchase Notice
Exhibit III Chief Executive Office of the Seller; Locations of Records; Seller's Federal
Employer Identification Number
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI-1 Form of Collection Account Agreement for Lock-Box Accounts
Exhibit VI-2 Form of Collection Account Agreement for Deposit Accounts
Exhibit VII Form of Assignment Agreement
Exhibit VIII Credit and Collection Policy
Exhibit IX Form of Contract(s)
Exhibit X Form of Monthly Report
Exhibit XI Form of Performance Undertaking
Schedule A Commitments
Schedule B Closing Documents
iii
5
U.S. RECEIVABLES PURCHASE AGREEMENT
THIS
U.S. RECEIVABLES PURCHASE AGREEMENT, dated as of July 2,
2001, is among W1 Receivables, L.P., a Texas limited partnership ("SELLER"),
Xxxxxxxxxxx International, Inc., a Delaware corporation ("WEATHERFORD"), as
initial Servicer, the entities listed on Schedule A to this Agreement (together
with any of their respective successors and assigns hereunder, the "FINANCIAL
INSTITUTIONS"), Jupiter Securitization Corporation ("CONDUIT") and Bank One, NA
(Main Office Chicago), as agent for the Purchasers hereunder or any successor
agent hereunder (together with its successors and assigns hereunder, the
"AGENT"). Unless defined elsewhere herein, capitalized terms used in this
Agreement shall have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Purchaser Interests to
the Purchasers from time to time.
Conduit may, in its absolute and sole discretion, purchase
Purchaser Interests from Seller from time to time.
In the event that Conduit declines to make any purchase, the
Financial Institutions shall, at the request of Seller, purchase
Purchaser Interests from time to time. In addition, the Financial
Institutions have agreed to provide a liquidity facility to Conduit in
accordance with the terms hereof.
Bank One, NA (Main Office Chicago) has been requested and is
willing to act as Agent on behalf of Conduit and the Financial
Institutions in accordance with the terms hereof.
ARTICLE I.
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
(a) Upon the terms and subject to the conditions hereof,
Seller may, at its option, sell and assign Purchaser Interests to the Agent for
the benefit of one or more of the Purchasers. In accordance with the terms and
conditions set forth herein, Conduit may, at its option, instruct the Agent to
purchase on behalf of Conduit, or if Conduit shall decline to purchase, the
Agent shall purchase, on behalf of the Financial Institutions, Purchaser
Interests from time to time in an aggregate amount not to exceed at such time
the lesser of (i) the Purchase Limit and (ii) the aggregate amount of the
Commitments during the period from the date hereof to but not including the
Facility Termination Date.
1
6
(b) Seller may, upon at least 10 Business Days' notice to the
Agent, terminate in whole or reduce in part, ratably among the Financial
Institutions, the unused portion of the Purchase Limit; provided that each
partial reduction of the Purchase Limit shall be in an amount equal to
$5,000,000 or an integral multiple thereof.
Section 1.2 Increases. Seller shall provide the Agent with at least two
(2) Business Days' prior notice in a form set forth as Exhibit II hereto of each
Incremental Purchase (a "PURCHASE NOTICE"). Each Purchase Notice shall be
subject to Section 6.2 hereof and, except as set forth below, shall be
irrevocable and shall specify the requested Purchase Price (which shall not be
less than $1,000,000) and date of purchase and, in the case of an Incremental
Purchase to be funded by the Financial Institutions, the requested Discount Rate
and Tranche Period. Following receipt of a Purchase Notice, the Agent will
determine whether Conduit agrees to make the purchase. If Conduit declines to
make a proposed purchase in whole or in part, the Agent will notify Seller of
such fact, whereupon, Seller may cancel the Purchase Notice or, in the absence
of such a cancellation, the Incremental Purchase of the Purchaser Interest will
be made by the Financial Institutions. On the date of each Incremental Purchase,
upon satisfaction of the applicable conditions precedent set forth in Article
VI, Conduit or the Financial Institutions, as applicable, shall deposit to the
account specified by the Agent (and the Agent shall deposit to the account
specified in the Purchase Notice) in immediately available funds no later than
12:00 noon (Chicago time), an amount equal to (i) in the case of Conduit, the
aggregate Purchase Price of the Purchaser Interests Conduit is then purchasing
or (ii) in the case of a Financial Institution, such Financial Institution's Pro
Rata Share of the aggregate Purchase Price of the Purchaser Interests the
Financial Institutions are purchasing.
Section 1.3 Decreases. Seller shall provide the Agent with prior
written notice in conformity with the Required Notice Period (a "REDUCTION
NOTICE") of any proposed reduction of Aggregate Capital from Collections. Such
Reduction Notice shall designate (i) the date (the "PROPOSED REDUCTION DATE")
upon which any such reduction of Aggregate Capital shall occur (which date shall
give effect to the applicable Required Notice Period), and (ii) the amount of
Aggregate Capital to be reduced which shall be applied ratably to the Purchaser
Interests of Conduit and the Financial Institutions in accordance with the
amount of Capital (if any) owing to Conduit, on the one hand, and the amount of
Capital (if any) owing to the Financial Institutions (ratably, based on their
respective Pro Rata Shares), on the other hand (the "AGGREGATE REDUCTION"). Only
one (1) Reduction Notice shall be outstanding at any time.
Section 1.4 Payment Requirements. All amounts to be paid or deposited
by any Seller Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 12:00 noon (Chicago
time) on the day when due in immediately available funds, and if not received
before 12:00 noon (Chicago time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the Agent, for the account of such Purchaser, at 1 Bank Xxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000 until otherwise notified by the Agent. All computations
of Yield, per annum fees calculated as part of any CP Costs, per annum fees
hereunder and per annum fees under the Fee Letter shall be made on the basis of
a year of 360 days for the actual number of days elapsed. If any amount
hereunder shall be payable on a day which is not a Business Day, such amount
shall be payable on the next succeeding Business Day.
2
7
ARTICLE II.
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Notwithstanding any limitation on recourse
contained in this Agreement, Seller shall immediately pay to the Agent when due,
for the account of the relevant Purchaser or Purchasers on a full recourse
basis, (i) such fees as set forth in the Fee Letter (which fees shall be
sufficient to pay all fees owing to the Financial Institutions), (ii) all CP
Costs in connection with purchases by Conduit of Purchaser Interests, (iii) all
amounts payable as Yield, (iv) all amounts payable as Deemed Collections (which
shall be immediately due and payable by Seller and applied to reduce outstanding
Aggregate Capital hereunder in accordance with Sections 2.2 and 2.3 hereof), (v)
all amounts required pursuant to Section 2.6, (vi) all amounts payable pursuant
to Article X, if any, (vii) all Servicer costs and expenses, including the
Servicing Fee, in connection with servicing, administering and collecting the
Receivables, (viii) all Broken Funding Costs and (ix) all Default Fees
(collectively, the "OBLIGATIONS"). If Seller fails to pay any of the Obligations
when due, Seller agrees to pay, on demand, the Default Fee in respect thereof
until paid. Notwithstanding the foregoing, no provision of this Agreement or the
Fee Letter shall require the payment or permit the collection of any amounts
hereunder in excess of the maximum permitted by applicable law. If at any xxxx
Xxxxxx receives any Collections or is deemed to receive any Collections, Seller
shall immediately pay such Collections or Deemed Collections to the Servicer for
application in accordance with the terms and conditions hereof and, at all times
prior to such payment, such Collections or Deemed Collections shall be held in
trust by Seller for the exclusive benefit of the Purchasers and the Agent.
Section 2.2 Collections Prior to Amortization. Prior to the
Amortization Date, any Collections and/or Deemed Collections received by the
Servicer shall be set aside and held in trust by the Servicer for the payment of
any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in
this Section 2.2. If at any time any Collections are received by the Servicer
prior to the Amortization Date, (i) the Servicer shall set aside the Termination
Percentage (hereinafter defined) of Collections evidenced by the Purchaser
Interests of each Terminating Financial Institution and (ii) Seller hereby
requests and the Purchasers (other than any Terminating Financial Institutions)
hereby agree to make, simultaneously with such receipt, a reinvestment (each, a
"REINVESTMENT") with that portion of the balance of each and every Collection
received by the Servicer that is part of any Purchaser Interest (other than any
Purchaser Interests of Terminating Financial Institutions), such that after
giving effect to such Reinvestment, the amount of Capital of such Purchaser
Interest immediately after such receipt and corresponding Reinvestment shall be
equal to the amount of Capital immediately prior to such receipt. On each
Settlement Date prior to the occurrence of the Amortization Date, the Servicer
shall remit to the Agent's account the amounts set aside during the preceding
Settlement Period that have not been subject to a Reinvestment and apply such
amounts (if not previously paid in accordance with Section 2.1) first, to reduce
unpaid CP Costs, Yield and other Obligations and second, to reduce the Capital
of all Purchaser Interests of Terminating Financial Institutions, applied
ratably to each Terminating Financial Institution according to its respective
Termination Percentage. If such Capital, CP Costs, Yield and other Obligations
shall be reduced to zero, any additional Collections received by the Servicer
(i) if applicable, shall be remitted to
3
8
the Agent's account no later than 12:00 noon (Chicago time) to the extent
required to fund any Aggregate Reduction on such Settlement Date and (ii) any
balance remaining thereafter shall be remitted from the Servicer to Seller on
such Settlement Date. Each Terminating Financial Institution shall be allocated
a ratable portion of Collections from the date of any assignment by Conduit
pursuant to Section 13.6 (the "TERMINATION DATE") until such Terminating
Financing Institution's Capital shall be paid in full. This ratable portion
shall be calculated on the Termination Date of each Terminating Financial
Institution as a percentage equal to (i) Capital of such Terminating Financial
Institution outstanding on its Termination Date, divided by (ii) the Aggregate
Capital outstanding on such Termination Date (the "TERMINATION PERCENTAGE").
Each Terminating Financial Institution's Termination Percentage shall remain
constant prior to the Amortization Date. On and after the Amortization Date,
each Termination Percentage shall be disregarded, and each Terminating Financial
Institution's Capital shall be reduced ratably with all Financial Institutions
in accordance with Section 2.3.
Section 2.3 Collections Following Amortization. On the Amortization
Date and on each day thereafter, the Servicer shall set aside and hold in trust,
for the holder of each Purchaser Interest, all Collections received on such day
and an additional amount for the payment of any accrued and unpaid Obligations
owed by Seller and not previously paid by Seller in accordance with Section 2.1.
On and after the Amortization Date, the Servicer shall, at any time upon the
request from time to time by (or pursuant to standing instructions from) the
Agent (i) remit to the Agent's account the amounts set aside pursuant to the
preceding sentence, and (ii) apply such amounts to reduce the Capital associated
with each such Purchaser Interest and any other Aggregate Unpaids.
Section 2.4 Application of Collections. If there shall be insufficient
funds on deposit for the Servicer to distribute funds in payment in full of the
aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable), the
Servicer shall distribute funds:
FIRST, to the payment of the Servicer's reasonable
out-of-pocket costs and expenses in connection with servicing,
administering and collecting the Receivables, including the Servicing
Fee, if Seller or one of its Affiliates is not then acting as the
Servicer,
SECOND, to the reimbursement of the Agent's costs of
collection and enforcement of this Agreement,
THIRD, ratably to the payment of all accrued and unpaid fees
under the Fee Letter, CP Costs and Yield,
FOURTH, (to the extent applicable) to the ratable reduction of
the Aggregate Capital (without regard to any Termination Percentage),
FIFTH, for the ratable payment of all other unpaid
Obligations, provided that to the extent such Obligations relate to the
payment of Servicer costs and expenses, including the Servicing Fee,
when Seller or one of its Affiliates is
4
9
acting as the Servicer, such costs and expenses will not be paid until
after the payment in full of all other Obligations, and
SIXTH, after the Aggregate Unpaids have been indefeasibly
reduced to zero, to Seller.
Collections applied to the payment of Aggregate Unpaids shall be distributed in
accordance with the aforementioned provisions, and, giving effect to each of the
priorities set forth above in this Section 2.4, shall be shared ratably (within
each priority) among the Agent and the Purchasers in accordance with the amount
of such Aggregate Unpaids owing to each of them in respect of each such
priority.
Section 2.5 Payment Recission. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Agent (for application to the Person or Persons who suffered such
recission, return or refund) the full amount thereof, plus the Default Fee from
the date of any such recission, return or refunding.
Section 2.6 Maximum Purchaser Interests. Seller shall ensure that the
Purchaser Interests of the Purchasers shall at no time exceed in the aggregate
100%. If the aggregate of the Purchaser Interests of the Purchasers exceeds
100%, Seller shall pay to the Agent within one (1) Business Day an amount to be
applied to reduce the Aggregate Capital (as allocated by the Agent), such that
after giving effect to such payment the aggregate of the Purchaser Interests
equals or is less than 100%.
Section 2.7 Clean Up Call. In addition to Seller's rights pursuant to
Section 1.3, Servicer shall have the right (after providing written notice to
the Agent in accordance with the Required Notice Period), at any time following
the reduction of the Aggregate Capital to a level that is less than 10.0% of the
aggregate Outstanding Balance of all Receivables as of the Initial Cut-Off Date,
to repurchase from the Purchasers all, but not less than all, of the then
outstanding Purchaser Interests. The purchase price in respect thereof shall be
an amount equal to the Aggregate Unpaids through the date of such repurchase,
payable in immediately available funds. Such repurchase shall be without
representation, warranty or recourse of any kind by, on the part of, or against
any Purchaser or the Agent.
ARTICLE III.
CONDUIT FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with respect to the
Capital associated with each Purchaser Interest of Conduit for each day that any
Capital in respect of such Purchaser Interest is outstanding. Each Purchaser
Interest funded substantially with Pooled Commercial Paper will accrue CP Costs
each day on a pro rata basis, based upon the percentage share the
5
10
Capital in respect of such Purchaser Interest represents in relation to all
assets held by Conduit and funded substantially with related Pooled Commercial
Paper.
Section 3.2 CP Costs Payments. On each Settlement Date, Seller shall
pay to the Agent (for the benefit of Conduit) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the Capital associated with all
Purchaser Interests of Conduit for the immediately preceding Accrual Period in
accordance with Article II.
Section 3.3 Calculation of CP Costs. On the 5th Business Day
immediately preceding each Settlement Date, Conduit shall calculate the
aggregate amount of CP Costs allocated to the Capital of the Purchaser Interests
for the applicable Accrual Period and shall notify Seller of such aggregate
amount.
ARTICLE IV.
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each Purchaser Interest of
the Financial Institutions shall accrue Yield for each day during its Tranche
Period at either the LIBO Rate or the Prime Rate in accordance with the terms
and conditions hereof. No Purchaser Interest of Conduit shall constitute a
Purchaser Interest of the Financial Institutions unless and until it is
transferred to and acquired by the Financial Institutions pursuant to Article
XIII of this Agreement. Until Seller gives notice to the Agent of another
Discount Rate in accordance with Section 4.4, the initial Discount Rate for any
Purchaser Interest transferred to the Financial Institutions by Conduit pursuant
to the terms and conditions hereof shall be the Prime Rate. If the Financial
Institutions acquire by assignment from Conduit any Purchaser Interest pursuant
to Article XIII, each Purchaser Interest so assigned shall each be deemed to
have a new Tranche Period commencing on the date of any such assignment.
Section 4.2 Yield Payments. On the Settlement Date for each Purchaser
Interest of the Financial Institutions, Seller shall pay to the Agent (for the
benefit of the Financial Institutions) an aggregate amount equal to the accrued
and unpaid Yield for the entire Tranche Period of each such Purchaser Interest
in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche Periods.
(a) With consultation from (and approval by) the Agent, Seller
shall from time to time request Tranche Periods for the Purchaser Interests of
the Financial Institutions, provided that, if at any time the Financial
Institutions shall have a Purchaser Interest, Seller shall always request
Tranche Periods such that at least one Tranche Period shall end on the date
specified in clause (A) of the definition of Settlement Date.
(b) Seller or the Agent, upon notice to and consent by the
other received at least three (3) Business Days prior to the end of a Tranche
Period (the "TERMINATING TRANCHE") for any Purchaser Interest, may, effective on
the last day of the Terminating Tranche: (i) divide any such Purchaser
Interest into multiple Purchaser Interests, (ii) combine any such Purchaser
6
11
Interest with one or more other Purchaser Interests that have a Terminating
Tranche ending on the same day as such Terminating Tranche or (iii) combine any
such Purchaser Interest with a new Purchaser Interests to be purchased on the
day such Terminating Tranche ends, provided, that in no event may a Purchaser
Interest of Conduit be combined with a Purchaser Interest of the Financial
Institutions.
Section 4.4 Financial Institution Discount Rates. Seller may select the
LIBO Rate or the Prime Rate for each Purchaser Interest of the Financial
Institutions. Seller shall by 12:00 noon (Chicago time): (i) at least three (3)
Business Days prior to the expiration of any Terminating Tranche with respect to
which the LIBO Rate is being requested as a new Discount Rate and (ii) on the
expiration date of any Terminating Tranche with respect to which the Prime Rate
is being requested as a new Discount Rate, give the Agent irrevocable notice of
the new Discount Rate for the Purchaser Interest associated with such
Terminating Tranche. Until Seller gives notice to the Agent of another Discount
Rate, the initial Discount Rate for any Purchaser Interest transferred to the
Financial Institutions pursuant to the terms and conditions hereof shall be the
Prime Rate.
Section 4.5 Suspension of the LIBO Rate.
(a) If any Financial Institution notifies the Agent that it
has determined in good faith that funding its Pro Rata Share of the Purchaser
Interests of the Financial Institutions at a LIBO Rate would violate any
applicable law, rule, regulation, or directive of any governmental or regulatory
authority, whether or not having the force of law, or that (i) deposits of a
type and maturity appropriate to match fund its Purchaser Interests at such LIBO
Rate are not available or (ii) such LIBO Rate does not accurately reflect the
cost of acquiring or maintaining a Purchaser Interest at such LIBO Rate, then
the Agent shall suspend the availability of such LIBO Rate and require Seller to
select the Prime Rate for any Purchaser Interest accruing Yield at such LIBO
Rate.
(b) If less than all of the Financial Institutions give a
notice to the Agent pursuant to Section 4.5(a), each Financial Institution which
gave such a notice shall be obliged, at the request of Seller, Conduit or the
Agent, to assign all of its rights and obligations hereunder to (i) another
Financial Institution or (ii) another funding entity nominated by Seller or the
Agent that is acceptable to Conduit and willing to participate in this Agreement
through the Liquidity Termination Date in the place of such notifying Financial
Institution; provided that (i) the notifying Financial Institution receives
payment in full, pursuant to an Assignment Agreement, of an amount equal to such
notifying Financial Institution's Pro Rata Share of the Capital and Yield owing
to all of the Financial Institutions and all accrued but unpaid fees and other
costs and expenses payable in respect of its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, and (ii) the replacement Financial
Institution otherwise satisfies the requirements of Section 12.1(b).
7
12
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Seller Parties. Each
Seller Party hereby represents and warrants to the Agent and the Purchasers, as
to itself, as of the date hereof and as of the date of each Incremental Purchase
and the date of each Reinvestment that:
(a) Existence and Power. Such Seller Party is duly organized,
validly existing and in good standing under the laws of its state of
organization. Such Seller Party is duly qualified to do business and is in good
standing as a foreign corporation or limited partnership, as the case may be,
and has and holds all organizational power and all governmental licenses,
authorizations, consents and approvals required to carry on its business in each
jurisdiction in which its business is conducted where the failure to so qualify
or so hold could reasonably be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by such Seller Party of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder, and, in the case of Seller, Seller's
use of the proceeds of purchases made hereunder, are within its corporate or
limited partnership, as applicable, powers and authority and have been duly
authorized by all necessary corporate or limited partnership, as applicable,
action on its part. This Agreement and each other Transaction Document to which
such Seller Party is a party has been duly executed and delivered by such Seller
Party.
(c) No Conflict. The execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party, and the performance of its obligations hereunder and thereunder do not
breach or violate (i) its Organic Documents, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or by which it or any of its property is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on assets of such Originator or its Subsidiaries other than
as created under the Transaction Documents and in any case, where such breach or
violation could reasonably be expected to have a Material Adverse Effect; and no
transaction contemplated hereby requires compliance with any bulk sales act.
(d) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party and the performance of its obligations hereunder and thereunder.
(e) Actions, Suits. Except as disclosed in Xxxxxxxxxxx'x
reports on SEC Form 10-K or 10-Q, there are no actions, suits or proceedings
pending, or to the best of such Seller Party's knowledge, threatened, against or
affecting such Seller Party, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to
8
13
have a Material Adverse Effect. Such Seller Party is not in default with respect
to any order of any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction
Document to which such Seller Party is a party constitute the legal, valid and
binding obligations of such Seller Party enforceable against such Seller Party
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information relating to such
Seller Party's business, assets or financial condition heretofore furnished by
such Seller Party or any of its Affiliates to the Agent or any Purchaser for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by such Seller Party or any of its Affiliates to
the Agent or any Purchaser will be, true and accurate in every material respect
on the date such information is stated or certified and does not and will not
contain any material misstatement of fact or omit to state a fact necessary to
make the statements contained therein not misleading in any material respect.
(h) Use of Proceeds. No proceeds of any purchase hereunder
will be used (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction that constitutes a tender offer under Regulation 140 promulgated
under the Securities Exchange Act of 1934, as amended and in which the board of
directors or similar governing body of the subject company has not approved the
transaction.
(i) Good Title. Immediately prior to each purchase hereunder,
Seller shall be the legal and beneficial owner of the Receivables and Related
Security with respect thereto, free and clear of any Adverse Claim, except as
created by the Transaction Documents. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect Seller's
ownership interest in each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of
the financing statements contemplated hereby, is effective to, and shall, upon
each purchase hereunder, transfer to the Agent for the benefit of the relevant
Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or
Purchasers shall acquire from Seller) a valid and perfected first priority
undivided percentage ownership or security interest in each Receivable existing
or hereafter arising and in the Related Security (to the extent covered by
Article 9 of the UCC) and Collections with respect thereto, free and clear of
any Adverse Claim, except as created by the Transactions Documents. There have
been duly filed all financing statements or other similar instruments or
documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect the Agent's (on behalf of the Purchasers) ownership or
security interest in the Receivables, the Related Security (to the extent
covered by Article 9 of the UCC) and the Collections.
9
14
(k) Places of Business and Locations of Records. The chief
executive office of Seller and the offices where each of the Seller Parties
keeps all of its Records are located at the address(es) listed on Exhibit III or
such other locations of which the Agent has been notified in accordance with
Section 7.2(a) in jurisdictions where all action required by Section 14.4(a) has
been taken and completed. Seller's Federal Employer Identification Number is
correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The names and addresses of all Collection Banks, together with the
account numbers of the Collection Accounts of Seller at each Collection Bank and
the post office box number of each Lock-Box, are listed on Exhibit IV. Seller
has not granted any Person, other than the Agent as contemplated by this
Agreement, dominion and control of any Lock-Box or Collection Account, or the
right to take dominion and control of any such Lock-Box or Collection Account at
a future time or upon the occurrence of a future event.
(m) Material Adverse Effect. (i) The initial Servicer
represents and warrants that since December 31, 2000, no event has occurred that
would have a material adverse effect on the financial condition or operations of
the initial Servicer and its Subsidiaries, taken as a whole, or the ability of
the initial Servicer to perform its obligations under this Agreement, and (ii)
Seller represents and warrants that since the date of this Agreement, no event
has occurred that would have a material adverse effect on (A) the financial
condition or operations of Seller, or (B) the ability of Seller to perform its
obligations under the Transaction Documents.
(n) Names. In the past five (5) years, Seller has not used any
partnership names, trade names or assumed names other than the name in which it
has executed this Agreement.
(o) Ownership of Seller. Xxxxxxxxxxx owns, directly or
indirectly, 100% of the issued and outstanding Equity Interests of Seller, free
and clear of any Adverse Claim. Such capital stock is validly issued, fully paid
and nonassessable, and there are no options, warrants or other rights to acquire
securities of Seller.
(p) Not a Holding Company or an Investment Company. Such
Seller Party is not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor statute. Such Seller Party is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or any successor statute.
(q) Compliance with Law. Such Seller Party has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject where the failure to
so comply could reasonably be expected to have a Material Adverse Effect. Seller
represents and warrants that each Eligible Receivable, together with the
Contract and Invoice related thereto, does not breach 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
10
15
practices and privacy), and no part of such Contract or Invoice is in violation
of any such law, rule or regulation, where such breach or violation could
reasonably be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Seller
Party has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and has not made
any change to such Credit and Collection Policy, except such material change as
to which the Agent has been notified in accordance with Section 7.1(a)(vii).
(s) Payments to Originators. With respect to each Receivable
transferred to Seller under the U.S. Receivables Sale Agreement, Seller has
given reasonably equivalent value to the applicable Originator in consideration
therefor and such transfer was not made for or on account of an antecedent debt.
No transfer by any Originator of any Receivable under the U.S. Receivables Sale
Agreement is or may be voidable under any section of the Bankruptcy Reform Act
of 1978 (11 U.S.C. Sections 101 et seq.), as amended.
(t) Enforceability of Invoices. Each Invoice with respect to
each Receivable is effective to create, and has created, a legal, valid and
binding obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder (subject to adjustment, to the extent provided
therein) and any accrued interest thereon, enforceable against the Obligor in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating
to or limiting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
(u) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable on the date of its purchase under
the U.S. Receivables Sale Agreement was an Eligible Receivable on such purchase
date.
(v) Net Receivables Balance. Seller has determined that,
immediately after giving effect to each purchase hereunder, the Net Receivables
Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the
Aggregate Reserves.
(w) Accounting. Seller accounts for the transactions
contemplated by the U.S. Receivables Sale Agreement for financial accounting
purposes as purchases from the Originators of the U.S. Receivables and Related
Security.
Section 5.2 Financial Institution Representations and Warranties. Each
Financial Institution hereby represents and warrants to the Agent and Conduit
that:
(a) Existence and Power. Such Financial Institution is a
corporation or a banking association duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, and has all corporate power to perform its obligations hereunder.
11
16
(b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any Adverse
Claim on its assets. This Agreement has been duly authorized, executed and
delivered by such Financial Institution.
(c) Governmental Authorization. No authorization or approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution and delivery by such
Financial Institution of this Agreement and the performance of its obligations
hereunder.
(d) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of such Financial Institution enforceable against
such Financial Institution in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether such enforcement is sought
in a proceeding in equity or at law).
ARTICLE VI.
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Incremental Purchase. The
initial Incremental Purchase of a Purchaser Interest under this Agreement is
subject to the conditions precedent that (a) the Agent shall have received on or
before the date of such purchase those documents listed on Schedule B and (b)
the Agent shall have received all fees and expenses required to be paid on such
date pursuant to the terms of this Agreement and the Fee Letter.
Section 6.2 Conditions Precedent to All Purchases and Reinvestments.
Each purchase of a Purchaser Interest (other than pursuant to Section 13.1) and
each Reinvestment shall be subject to the further conditions precedent that (a)
in the case of each such purchase or Reinvestment: (i) the Servicer shall have
delivered to the Agent on or prior to the date of such purchase, in form and
substance satisfactory to the Agent, all Monthly Reports as and when due under
Section 8.5 and (ii) upon the Agent's request, the Servicer shall have delivered
to the Agent at least three (3) days prior to such purchase or Reinvestment an
interim Monthly Report showing the amount of Eligible Receivables; (b) the
Facility Termination Date shall not have occurred; (c) the Agent shall have
received such other approvals, opinions or documents as it may reasonably
request and (d) on the date of each such Incremental Purchase or Reinvestment,
the following statements shall be true (and acceptance of the proceeds of such
Incremental Purchase or Reinvestment shall be deemed a representation and
warranty by Seller that such statements are then true):
12
17
(i) the representations and warranties set forth in
Section 5.1 are true and correct on and as of the date of such Incremental
Purchase or Reinvestment as though made on and as of such date;
(ii) no event has occurred and is continuing, or
would result from such Incremental Purchase or Reinvestment, that will
constitute an Amortization Event, and no event has occurred and is continuing,
or would result from such Incremental Purchase or Reinvestment, that would
constitute a Potential Amortization Event; and
(iii) the Aggregate Capital does not exceed the
Purchase Limit and the aggregate Purchaser Interests do not exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent for the
benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII.
COVENANTS
Section 7.1 Affirmative Covenants of the Seller Parties. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will maintain, for
itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent:
(i) Annual Reporting. Within 120 days after the close
of each of its respective fiscal years, audited, unqualified financial
statements (which shall include balance sheets, statements of income and
retained earnings and a statement of cash flows) for Xxxxxxxxxxx and Seller for
such fiscal year certified in a manner reasonably satisfactory to the Agent by
independent public accountants of recognized national standing.
(ii) Quarterly Reporting. Within 60 days after the
close of the first three (3) quarterly periods of each of its respective fiscal
years, balance sheets of Xxxxxxxxxxx and Seller as at the close of each such
period and statements of income and retained earnings and a statement of cash
flows for Xxxxxxxxxxx and Seller for the period from the beginning of such
fiscal year to the end of such quarter, all certified by its vice
president-finance, its chief financial officer or other vice president with
finance or accounting responsibility.
13
18
(iii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance certificate in
substantially the form of Exhibit V signed by such Seller Party's Authorized
Officer and dated the date of such annual financial statement or such quarterly
financial statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly
upon the furnishing thereof to the shareholders of such Seller Party copies of
all financial statements, reports and proxy statements so furnished.
(v) Copies of Notices. Promptly upon its receipt of
any notice, request for consent, financial statements, certification, report or
other communication under or in connection with any Transaction Document from
any Person other than the Agent or Conduit, copies of the same.
(vi) Change in Credit and Collection Policy. At least
thirty (30) days prior to the effectiveness of any material change in or
material amendment to the Credit and Collection Policy, a copy of the Credit and
Collection Policy then in effect and a notice (A) indicating such change or
amendment, and (B) if such proposed change or amendment would be reasonably
likely to materially and adversely affect the collectibility of the Receivables
or decrease the credit quality of any newly created Receivables, requesting the
Agent's consent thereto.
(vii) Other Information. Promptly, from time to time,
such other information, documents, records or reports relating to the
Receivables or the condition or operations, financial or otherwise, of such
Seller Party as the Agent may from time to time reasonably request in order to
protect the interests of the Agent and the Purchasers under or as contemplated
by this Agreement.
(b) Notices. Such Seller Party will notify the Agent in
writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
(i) Amortization Events or Potential Amortization
Events. The occurrence of each Amortization Event and each Potential
Amortization Event, by a statement of an Authorized Officer of such Seller
Party.
(ii) Judgment and Proceedings. (1) The entry of any
judgment or decree against Xxxxxxxxxxx or any of its Subsidiaries (other than
Seller) if the aggregate amount of all judgments and decrees then outstanding
against Weatherford and its Subsidiaries exceeds $25,000,000 after deducting (A)
the amount with respect to which they are insured and with respect to which the
insurer has assumed responsibility in writing, and (B) the amount for which they
are otherwise indemnified if the terms of such indemnification are reasonably
satisfactory to the Agent, and (2) the institution of any litigation,
arbitration proceeding or governmental proceeding against the Servicer which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect; and (B) the entry of any judgment or decree or the
institution of any litigation, arbitration proceeding or governmental proceeding
against Seller.
14
19
(iii) Material Adverse Effect. The occurrence of any
event or condition that has had, or could reasonably be expected to have, a
Material Adverse Effect.
(iv) Sale Termination Date. The occurrence of the
"SALE TERMINATION DATE" under and as defined in the U.S. Receivables Sale
Agreement with respect to any Material Originator.
(v) Defaults Under Other Agreements. The occurrence
of a default or an event of default under any other financing arrangement
pursuant to which such Seller Party is a debtor or an obligor; PROVIDED,
HOWEVER, that with respect to Xxxxxxxxxxx'x financing arrangements, no such
notice shall be required unless such financing arrangement provides for credit
accommodations or facilities in excess of $25,000,000 in the aggregate.
(c) Compliance with Laws and Preservation of Legal Existence.
Such Seller Party will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, where the failure to so comply could reasonably be expected
to have a Material Adverse Effect. Such Seller Party will preserve and maintain
its corporate or limited partnership (as applicable) existence, rights,
franchises and privileges in the jurisdiction of its incorporation or formation,
as applicable, and qualify and remain qualified in good standing as a foreign
corporation or foreign limited partnership, as applicable, in each jurisdiction
where its business is conducted, where the failure to so preserve and maintain
or qualify could reasonably be expected to have a Material Adverse Effect,
except that Xxxxxxxxxxx may enter into Permitted Restructurings.
(d) Audits. Such Seller Party will furnish to the Agent from
time to time such information with respect to it and the Receivables as the
Agent may reasonably request. Such Seller Party will, from time to time during
regular business hours as requested by the Agent upon reasonable notice and at
the sole cost of such Seller Party, permit the Agent, or its agents or
representatives (and shall cause each Originator to permit the Agent or its
agents or representatives), (i) to examine and make copies of and abstracts from
all Records in the possession or under the control of such Person relating to
the Receivables and the Related Security, including, without limitation, the
related Contracts, and (ii) to visit the offices and properties of such Person
during normal business hours for the purpose of examining such materials
described in clause (i) above, and to discuss matters relating to such Person's
financial condition or the Receivables and the Related Security or any Person's
performance under any of the Transaction Documents or any Person's performance
under the Contracts and, in each case, with any of the officers or employees of
Seller or the Servicer having knowledge of such matters.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will (and will cause each other
Originator to) maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records evidencing
Receivables in the event of the destruction of the originals thereof), and keep
and maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Receivables (including, without
limitation, records adequate to permit the immediate identification of each new
Receivable and
15
20
all Collections of and adjustments to each existing Receivable). The Servicer
will (and will cause each Originator to) give the Agent notice of any material
change in the administrative and operating procedures referred to in the
previous sentence.
(ii) Such Seller Party will (and will cause each
Originator to) (A) on or prior to the date hereof, xxxx its master data
processing records and other books and records relating to the Purchaser
Interests with a legend, acceptable to the Agent, describing the Purchaser
Interests and (B) upon the request of the Agent following the occurrence of an
Amortization Event: (x) xxxx each Contract with a legend describing the
Purchaser Interests and (y) deliver to the Agent all Contracts (including,
without limitation, all multiple originals of any such Contract) relating to the
Receivables.
(f) Compliance with Contracts and Credit and Collection
Policy. Such Seller Party will (and will cause each Originator to) timely and
fully (i) perform and comply with all provisions, covenants and other promises
required to be observed by it under the Contracts related to the Receivables,
and (ii) comply in all respects with the Credit and Collection Policy in regard
to each Receivable and the related Contract.
(g) Performance and Enforcement of U.S. Receivables Sale
Agreement. Seller will, and will require each Originator to, perform each of
their respective obligations and undertakings under and pursuant to the U.S.
Receivables Sale Agreement, will purchase Receivables thereunder in strict
compliance with the terms thereof and will vigorously enforce the rights and
remedies accorded to Seller under the U.S. Receivables Sale Agreement. Seller
will take all actions to perfect and enforce its rights and interests (and the
rights and interests of the Agent and the Purchasers as assignees of Seller)
under the U.S. Receivables Sale Agreement as the Agent may from time to time
reasonably request, including, without limitation, making claims to which it may
be entitled under any indemnity, reimbursement or similar provision contained in
the U.S. Receivables Sale Agreement.
(h) Ownership. Seller will (or will cause the Originators to)
take all necessary action to (i) vest legal and equitable title to the
Receivables, the Related Security and the Collections purchased under the U.S.
Receivables Sale Agreement irrevocably in Seller, free and clear of any Adverse
Claims other than Adverse Claims in favor of the Agent and the Purchasers
(including, without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect Seller's interest in such
Receivables, Related Security (to the extent covered by Article 9 of the UCC)
and Collections and such other action to perfect, protect or more fully evidence
the interest of Seller therein as the Agent may reasonably request), and (ii)
establish and maintain, in favor of the Agent, for the benefit of the
Purchasers, a valid and perfected undivided percentage ownership interest
(and/or a valid and perfected first priority security interest) in all
Receivables, Related Security (to the extent covered by Article 9 of the UCC)
and Collections to the full extent contemplated herein, free and clear of any
Adverse Claims other than Adverse Claims in favor of the Agent for the benefit
of the Purchasers (including, without limitation, the filing of all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect the Agent's (for
the benefit of the Purchasers) interest in such Receivables, Related Security
(to the extent covered by
16
21
Article 9 of the UCC) and Collections and such other action to perfect, protect
or more fully evidence the interest of the Agent for the benefit of the
Purchasers as the Agent may reasonably request).
(i) Purchasers' Reliance. Seller acknowledges that the
Purchasers are entering into the transactions contemplated by this Agreement in
reliance upon Seller's identity as a legal entity that is separate from
Xxxxxxxxxxx and each other Originator. Therefore, from and after the date of
execution and delivery of this Agreement, Seller shall take all reasonable
steps, including, without limitation, all steps that the Agent or any Purchaser
may from time to time reasonably request, to maintain Seller's identity as a
separate legal entity and to make it manifest to third parties that Seller is an
entity with assets and liabilities distinct from those of each Originator and
its Affiliates (other than General Partner) and not just a division of such
Originator or Affiliate. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, Seller will:
(A) conduct its own business in its own name
and require that all full-time employees of Seller, if any, identify themselves
as such and not as employees of an Originator (including, without limitation, by
means of providing appropriate employees with business or identification cards
identifying such employees as Seller's employees);
(B) compensate all employees, consultants
and agents directly, from Seller's own funds, for services provided to Seller by
such employees, consultants and agents and, to the extent any employee,
consultant or agent of Seller is also an employee, consultant or agent of any
Originator or any Affiliate thereof, allocate the compensation of such employee,
consultant or agent between Seller and such Originator or such Affiliate, as
applicable, on a basis that reflects the services rendered to Seller and such
Originator or such Affiliate, as applicable;
(C) clearly identify its offices (by signage
or otherwise) as its offices and, if such office is located in the offices of
any Originator, Seller shall lease such office at a fair market rent;
(D) have a separate telephone number, which
will be answered only in its name and separate stationery, invoices and checks
in its own name;
(E) conduct all transactions with any
Originator strictly on an arm's-length basis, allocate all overhead expenses
(including, without limitation, telephone and other utility charges) for items
shared between Seller and such Originator on the basis of actual use to the
extent practicable and, to the extent such allocation is not practicable, on a
basis reasonably related to actual use;
(F) cause Seller's General Partner at all
times to have a Board of Directors consisting of three members, at least one
member of which is an Independent Director;
17
22
(G) observe all legal formalities as a
distinct entity, and ensure that all partnership actions relating to (A) the
selection, maintenance or replacement of the Independent Director, (B) the
dissolution or liquidation of Seller or (C) the initiation of, participation in,
acquiescence in or consent to any bankruptcy, insolvency, reorganization or
similar proceeding involving Seller, are duly authorized by unanimous vote of
its Board of Directors (including the Independent Director);
(H) maintain Seller's books and records
separate from those of each Originator and any Affiliate thereof and otherwise
readily identifiable as its own assets rather than assets of Such Originator and
any Affiliate thereof;
(I) prepare its financial statements
separately from those of each Originator and insure that any consolidated
financial statements of such Originator or any Affiliate thereof that include
Seller and that are filed with the Securities and Exchange Commission or any
other governmental agency have notes clearly stating that Seller is a separate
legal entity and that its assets will be available first and foremost to satisfy
the claims of the creditors of Seller;
(J) except as herein specifically otherwise
provided, maintain the funds or other assets of Seller separate from, and not
commingled with, those of each Originator or any Affiliate thereof and only
maintain bank accounts or other depository accounts to which Seller alone is the
account party, into which Seller alone makes deposits and from which Seller
alone (or the Agent hereunder) has the power to make withdrawals;
(K) pay all of Seller's operating expenses
from Seller's own assets (except for certain payments by an Originator or other
Persons pursuant to allocation arrangements that comply with the requirements of
this Section 7.1(i));
(L) operate its business and activities such
that: it does not engage in any business or activity of any kind, or enter into
any transaction or indenture, mortgage, instrument, agreement, contract, lease
or other undertaking, other than the transactions contemplated and authorized by
this Agreement and the U.S. Receivables Sale Agreement; and does not create,
incur, guarantee, assume or suffer to exist any indebtedness or other
liabilities, whether direct or contingent, other than (1) as a result of the
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, (2) the incurrence of
obligations under the Transaction Documents, (3) the incurrence of obligations,
as expressly contemplated in the U.S. Receivables Sale Agreement, to make
payment to each Originator thereunder for the purchase of Receivables from such
Originator under the U.S. Receivables Sale Agreement, and (4) the incurrence of
operating expenses in the ordinary course of business of the type otherwise
contemplated by this Agreement;
(M) maintain its Organic Documents in
conformity with this Agreement, such that it does not amend, restate, supplement
or otherwise modify its Organic Documents in any respect that would impair its
ability to comply with the terms or provisions of any of the Transaction
Documents, including, without limitation, Section 7.1(i) of this Agreement;
18
23
(N) maintain the effectiveness of, and
continue to perform under the U.S. Receivables Sale Agreement and the
Performance Undertaking, such that it does not amend, restate, supplement,
cancel, terminate or otherwise modify the U.S. Receivables Sale Agreement or the
Performance Undertaking, or give any consent, waiver, directive or approval
thereunder or waive any default, action, omission or breach under the U.S.
Receivables Sale Agreement or the Performance Undertaking or otherwise grant any
indulgence thereunder, without (in each case) the prior written consent of the
Agent;
(O) maintain its separateness such that it
does not merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions,
and except as otherwise contemplated herein) all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets of, any Person, nor at any time create, have,
acquire, maintain or hold any interest in any Subsidiary; and
(P) maintain at all times the Required
Capital Amount (as defined in the U.S. Receivables Sale Agreement) and refrain
from making any dividend, distribution, redemption of capital stock or payment
of any subordinated indebtedness which would cause the Required Capital Amount
to cease to be so maintained.
(j) Collections. Such Seller Party will cause (1) all proceeds
from all Lock-Boxes to be directly deposited by a Collection Bank into a
Collection Account and (2) each Lock-Box and Collection Account to be subject at
all times from and after August 15, 2001 to a Collection Account Agreement that
is in full force and effect. In the event any payments relating to Receivables
are remitted directly to Seller or any Affiliate of Seller, Seller will remit
(or will cause all such payments to be remitted) directly to a Collection Bank
and deposited into a Collection Account within two (2) Business Days following
receipt thereof, and, at all times prior to such remittance, Seller will itself
hold or, if applicable, will cause such payments to be held in trust for the
exclusive benefit of the Agent and the Purchasers. Seller will maintain
exclusive ownership, dominion and control (subject to the terms of this
Agreement) of each Lock-Box and Collection Account and shall not grant the right
to take dominion and control of any Lock-Box or Collection Account at a future
time or upon the occurrence of a future event to any Person, except to the Agent
as contemplated by this Agreement.
(k) Taxes. Such Seller Party will file all tax returns and
reports required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing, except any such taxes which are not yet
delinquent or are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. Seller will pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of Conduit, the Agent or any Financial Institution.
(l) Insurance. Seller will maintain in effect, or cause to be
maintained in effect, at Seller's own expense, such casualty and liability
insurance as Seller shall deem appropriate in its good faith business judgment.
19
24
(m) Payment to Originators. Each purchase by Seller of a
Receivable shall be effected under, and in strict compliance with the terms of,
the U.S. Receivables Sale Agreement, including, without limitation, the terms
relating to the amount and timing of payments to be made to the applicable
Originator in respect of the purchase price for such Receivable.
Section 7.2 Negative Covenants of the Seller Parties. Until the date on
which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
(a) Name Change, Offices and Records. Except for Permitted
Restructurings by Xxxxxxxxxxx, such Seller Party will not change its name,
identity or organizational structure (within the meaning of Article 9 of any
applicable enactment of the UCC) or relocate its chief executive office or any
office where Records are kept unless it shall have: (i) given the Agent at least
thirty (30) days' prior written notice thereof and (ii) delivered to the Agent
all financing statements, instruments and other documents requested by the Agent
in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Except as may
be required by the Agent pursuant to Section 8.2(b), such Seller Party will not
add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
PROVIDED, HOWEVER, that the Servicer may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection
Policy. Such Seller Party will not, and will not permit any Originator to, make
any change to the Credit and Collection Policy that could adversely affect the
collectibility of the Receivables or decrease the credit quality of any newly
created Receivables. Except as provided in Section 8.2(d), the Servicer will
not, and will not permit any Originator to, extend, amend or otherwise modify
the terms of any Receivable or any Contract related thereto other than in
accordance with the Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box or Collection
Account, or assign any right to receive income with respect thereto (other than,
in each case, the creation of the interests therein in favor of the Agent and
the Purchasers provided for herein), and Seller will defend the right, title and
interest of the Agent and the Purchasers in, to and under any of the foregoing
property, against all claims of third parties claiming through or under Seller
or any Originator.
20
25
(e) Net Receivables Balance. At no time prior to the
Amortization Date shall Seller permit the Net Receivables Balance to be less
than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the
Aggregate Reserves.
(f) Sale Termination Date Determination. Seller will not
designate the Sale Termination Date (as defined in the U.S. Receivables Sale
Agreement), or send any written notice to any Originator in respect thereof,
without the prior written consent of the Agent, except with respect to the
occurrence of such Sale Termination Date arising pursuant to Section 5.1(d) of
the U.S. Receivables Sale Agreement.
(g) Restricted Junior Payments. From and after the occurrence
of any Amortization Event, Seller will not make any Restricted Junior Payment
if, after giving effect thereto, Seller would fail to meet its obligations set
forth in Section 7.2(e).
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer.
(a) The servicing, administration and collection of the
Receivables shall be conducted by such Person (the "SERVICER") so designated
from time to time in accordance with this Section 8.1. Xxxxxxxxxxx is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms of this Agreement. The Agent may at any time
following the occurrence of an Amortization Event designate as Servicer any
Person to succeed Xxxxxxxxxxx or any successor Servicer.
(b) Without the prior written consent of the Agent and the
Required Financial Institutions, Weatherford shall not be permitted to delegate
any of its duties or responsibilities as Servicer to any Person other than (i)
the Originators and (ii) with respect to certain Charged-Off Receivables,
outside collection agencies in accordance with its customary practices. None of
the Originators shall be permitted to further delegate to any other Person any
of the duties or responsibilities of the Servicer delegated to it by
Xxxxxxxxxxx. If at any time following the occurrence of an Amortization Event
the Agent shall designate as Servicer any Person other than Xxxxxxxxxxx, all
duties and responsibilities theretofore delegated by Xxxxxxxxxxx to any other
Originator may, at the discretion of the Agent, be terminated forthwith on
notice given by the Agent to Xxxxxxxxxxx and to Seller.
(c) Notwithstanding the foregoing subsection (b), (i)
Xxxxxxxxxxx shall be and remain primarily liable to the Agent and the Purchasers
for the full and prompt performance of all duties and responsibilities of the
Servicer hereunder and (ii) the Agent and the Purchasers shall be entitled to
deal exclusively with Xxxxxxxxxxx in matters relating to the discharge by the
Servicer of its duties and responsibilities hereunder. The Agent and the
Purchasers shall not be required to give notice, demand or other communication
to any Person other than Xxxxxxxxxxx in order for communication to the Servicer
and its sub-servicer or other delegate with respect thereto to be accomplished.
Xxxxxxxxxxx, at all times that it is the Servicer, shall be responsible
21
26
for providing any sub-servicer or other delegate of the Servicer with any notice
given to the Servicer under this Agreement.
Section 8.2 Duties of Servicer.
(a) The Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Receivable from time to
time, all in accordance with applicable laws, rules and regulations, with
reasonable care and diligence, and in accordance with the Credit and Collection
Policy.
(b) The Servicer will instruct all Obligors to pay all
Collections directly to a Lock-Box or Collection Account. From and after August
14, 2001, the Servicer shall effect a Collection Account Agreement substantially
in the form of Exhibit VI with each Collection Bank with respect to each
Lock-Box or Collection Account. In the case of any remittances received in any
Lock-Box or Collection Account that shall have been identified, to the
satisfaction of the Servicer, as not constituting Collections or other proceeds
of the Receivables or the Related Security, the Servicer shall promptly remit
such items to the Person identified to it as being the owner of such
remittances. From and after the date the Agent delivers to any Collection Bank a
Collection Notice pursuant to Section 8.3, the Agent may request that the
Servicer, and the Servicer thereupon promptly shall instruct all Obligors with
respect to the Receivables, to remit all payments thereon to a new depositary
account specified by the Agent and, at all times thereafter, Seller and the
Servicer shall not deposit or otherwise credit, and shall not permit any other
Person to deposit or otherwise credit to such new depositary account any cash or
payment item other than Collections.
(c) The Servicer shall administer the Collections in
accordance with the procedures described herein and in Article II. The Servicer
shall set aside and hold in trust for the account of Seller and the Purchasers
their respective shares of the Collections in accordance with Article II. The
Servicer shall, upon the request of the Agent, segregate, in a manner acceptable
to the Agent, all cash, checks and other instruments received by it from time to
time constituting Collections from the general funds of the Servicer or Seller
prior to the remittance thereof in accordance with Article II. If the Servicer
shall be required to segregate Collections pursuant to the preceding sentence,
the Servicer shall segregate and deposit with a bank designated by the Agent
such allocable share of Collections of Receivables set aside for the Purchasers
on the first Business Day following receipt by the Servicer of such Collections,
duly endorsed or with duly executed instruments of transfer.
(d) The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; provided, however, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable or Charged-Off Receivable or limit the rights of the Agent
or the Purchasers under this Agreement. Notwithstanding anything to the contrary
contained herein, the Agent shall have the absolute and unlimited right to
direct the Servicer to commence or settle any legal action with respect to any
Receivable or to foreclose upon or repossess any Related Security.
22
27
(e) The Servicer shall hold in trust for Seller and the
Purchasers all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Security or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent, deliver or make available to the Agent all such Records, at
a place selected by the Agent. The Servicer shall, as soon as practicable
following receipt thereof turn over to Seller any cash collections or other cash
proceeds received with respect to Indebtedness not constituting Receivables. The
Servicer shall, from time to time at the request of any Purchaser, furnish to
the Purchasers (promptly after any such request) a calculation of the amounts
set aside for the Purchasers pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness
owed by it to any Originator or Seller shall, except as otherwise specified by
such Obligor or otherwise required by contract or law and unless otherwise
instructed by the Agent, be applied as a Collection of any Receivable of such
Obligor (starting with the oldest such Receivable) to the extent of any amounts
then due and payable thereunder before being applied to any other receivable or
other obligation of such Obligor.
Section 8.3 Collection Notices. The Agent is authorized at any time
after the occurrence of an Amortization Event to date and to deliver to the
Collection Banks the Collection Notices. Seller hereby transfers to the Agent
for the benefit of the Purchasers, effective when the Agent delivers such
notice, the exclusive ownership and control of each Lock-Box and the Collection
Accounts. In case any authorized signatory of Seller whose signature appears on
a Collection Account Agreement shall cease to have such authority before the
delivery of such notice, such Collection Notice shall nevertheless be valid as
if such authority had remained in force. Seller hereby authorizes the Agent, and
agrees that the Agent shall be entitled after the occurrence of an Amortization
Event to (i) endorse Seller's name on checks and other instruments representing
Collections, (ii) enforce the Receivables, the related Contracts and the Related
Security and (iii) take such action as shall be necessary or desirable to cause
all cash, checks and other instruments constituting Collections of Receivables
to come into the possession of the Agent rather than Seller.
Section 8.4 Responsibilities of Seller. Anything herein to the contrary
notwithstanding, the exercise by the Agent and the Purchasers of their rights
hereunder shall not release the Servicer, any Originator or Seller from any of
their duties or obligations with respect to any Receivables or under the related
Contracts. The Purchasers shall have no obligation or liability with respect to
any Receivables or related Contracts, nor shall any of them be obligated to
perform the obligations of Seller.
Section 8.5 Reports. The Servicer shall prepare and forward to the
Agent (i) on the Monthly Reporting Date and at such times as the Agent shall
request, a Monthly Report and (ii) at such times as the Agent shall request, a
listing by Obligor of all Receivables together with an aging of such
Receivables.
Section 8.6 Servicing Fees. In consideration of Xxxxxxxxxxx'x agreement
to act as Servicer hereunder, the Purchasers hereby agree that, so long as
Xxxxxxxxxxx shall continue to perform as Servicer hereunder, Seller shall pay
over to Xxxxxxxxxxx a fee (the "SERVICING FEE")
23
28
on the first calendar day of each month, in arrears for the immediately
preceding month, equal to 1.00% per annum of the average aggregate Outstanding
Balance of all Receivables during such period, as compensation for its servicing
activities.
ARTICLE IX.
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more of
the following events shall constitute an "AMORTIZATION EVENT":
(a) Any Seller Party shall fail (i) to make any payment or
deposit required hereunder when due and, for any such payment or deposit which
is not in respect of Capital, such failure continues for one (1) Business Day,
or (ii) to perform or observe any term, covenant or agreement hereunder (other
than as referred to in clause (i) of this paragraph (a) and paragraph 9.1(e))
and such failure shall continue for three (3) consecutive Business Days.
(b) Any representation, warranty, certification or statement
made by any Seller Party in this Agreement, any other Transaction Document or in
any other document delivered pursuant hereto or thereto shall prove to have been
incorrect when made or deemed made.
(c) Failure of Seller to pay any Indebtedness when due or the
failure of any other Seller Party to pay Indebtedness when due in excess of
$25,000,000 or the default by any Seller Party in the performance of any term,
provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness of any Seller
Party shall be declared to be due and payable or required to be prepaid (other
than by a regularly scheduled payment) prior to the date of maturity thereof.
(d) Any Event of Bankruptcy shall occur with respect to any
Seller Party, General Partner or any Material Originator.
(e) Seller shall fail to comply with the terms of Section 2.6
hereof.
(f) As at the end of any calendar month:
(i) the 3-month rolling average of the Delinquency
Ratio shall exceed 7.25%;
(ii) the 3-month rolling average of the Default Ratio
shall exceed 29.0%;
(iii) the 3-month rolling average of the Dilution
Ratio shall exceed 11.25%; or
24
29
(iv) the 3-month rolling average of the
Loss-to-Liquidation Ratio shall exceed 21.75%.
(g) A Change of Control shall occur.
(h) (i) One or more final judgments for the payment of money
shall be entered against Seller or (ii) one or more final judgments for the
payment of money in an amount in excess of $25,000,000, individually or in the
aggregate, shall be entered against the Servicer on claims not covered by
insurance or as to which the insurance carrier has denied its responsibility,
and such judgment shall continue unsatisfied and in effect for fifteen (15)
consecutive days without a stay of execution.
(i) Except as a result of a Permitted Restructuring: (i) any
Material Originator's "SALE TERMINATION DATE" under and as defined in the U.S.
Receivables Sale Agreement shall occur or (ii) any Material Originator shall for
any reason cease to transfer, or cease to have the legal capacity to transfer,
or otherwise be incapable of transferring Receivables to Seller under the U.S.
Receivables Sale Agreement.
(j) This Agreement shall terminate in whole or in part (except
in accordance with its terms), or shall cease to be effective or to be the
legally valid, binding and enforceable obligation of Seller, or any Obligor
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of the Purchasers
shall cease to have a valid and perfected first priority security interest in
the Receivables, the Related Security and the Collections with respect thereto
and the Collection Accounts.
(k) The Servicer or the Performance Guarantor shall fail to
maintain senior unsecured long-term debt ratings from either or both of Standard
& Poor's Ratings Group or Xxxxx'x Investors Services, Inc. of at least "BBB-"
from Standard & Poor's Ratings Group and "Baa3" from Xxxxx'x Investors Services,
Inc.
(l) Performance Guarantor shall fail to perform or observe any
term, covenant or agreement required to be performed by it under the Performance
Undertaking, or the Performance Undertaking shall cease to be effective or to be
the legally valid, binding and enforceable obligation of Performance Guarantor,
or Performance Guarantor shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability.
Section 9.2 Remedies. Upon the occurrence and during the continuation
of an Amortization Event, the Agent may, or upon the direction of the Required
Financial Institutions shall, take any of the following actions: (i) replace the
Person then acting as Servicer, (ii) declare the Amortization Date to have
occurred, whereupon the Amortization Date shall forthwith occur, without demand,
protest or further notice of any kind, all of which are hereby expressly waived
by each Seller Party; PROVIDED, HOWEVER, that upon the occurrence of an
Amortization Event described in Section 9.1(d) with respect to Seller, the
Amortization Date shall automatically occur, without demand, protest or any
notice of any kind, all of which are hereby expressly waived by each Seller
Party, (iii) to the fullest extent permitted by applicable law, declare that the
25
30
Default Fee shall accrue with respect to any of the Aggregate Unpaids
outstanding at such time (it being understood and agreed that in no event shall
any Aggregate Unpaid which is accruing Default Fees also accrue any CP Costs or
Yield), (iv) deliver the Collection Notices to the Collection Banks, and (v)
notify Obligors of the Purchasers' interest in the Receivables. The
aforementioned rights and remedies shall be without limitation, and shall be in
addition to all other rights and remedies of the Agent and the Purchasers
otherwise available under any other provision of this Agreement, by operation of
law, at equity or otherwise, all of which are hereby expressly preserved,
including, without limitation, all rights and remedies provided under the UCC,
all of which rights shall be cumulative.
ARTICLE X.
INDEMNIFICATION
Section 10.1 Indemnities by the Seller Parties. Without limiting any
other rights that the Agent or any Purchaser may have hereunder or under
applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to)
the Agent and each Purchaser and their respective assigns, officers, directors,
agents and employees (each an "INDEMNIFIED PARTY") from and against any and all
damages, losses, claims, taxes, liabilities, costs, expenses and for all other
amounts payable, including reasonable attorneys' fees (which attorneys may be
employees of the Agent or such Purchaser) and disbursements (all of the
foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by a Purchaser of
an interest in the Receivables, and (B) the Servicer hereby agrees to indemnify
(and pay upon demand to) each Indemnified Party for Indemnified Amounts awarded
against or incurred by any of them arising out of the Servicer's activities as
Servicer hereunder excluding, however, in all of the foregoing instances under
the preceding clauses (A) and (B):
(a) Indemnified Amounts to the extent a final judgment of a
court of competent jurisdiction holds that such Indemnified Amounts
resulted from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses
in respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; or
(c) taxes imposed by the jurisdiction in which such
Indemnified Party's principal executive office is located, on or
measured by the overall net income of such Indemnified Party to the
extent that the computation of such taxes is consistent with the
characterization for income tax purposes of the acquisition by the
Purchasers of Purchaser Interests as a loan or loans by the Purchasers
to Seller secured by the Receivables, the Related Security, the
Collection Accounts and the Collections;
26
31
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, Seller shall indemnify the Agent and the
Purchasers for Indemnified Amounts (including, without limitation, losses in
respect of uncollectible receivables, regardless of whether reimbursement
therefor would constitute recourse to Seller or the Servicer) relating to or
resulting from:
(i) any representation or warranty made by any Seller Party or
any Originator (or any officers of any such Person) under
or in connection with this Agreement, any other
Transaction Document or any other information or report
delivered by any such Person pursuant hereto or thereto,
which shall have been false or incorrect when made or
deemed made;
(ii) the failure by Seller, the Servicer or any Originator to
comply with any applicable law, rule or regulation with
respect to any Receivable or Contract related thereto, or
the nonconformity of any Receivable or Contract included
therein with any such applicable law, rule or regulation
or any failure of the applicable Originator to keep or
perform any of its obligations, express or implied, with
respect to any Contract;
(iii) any failure of Seller, the Servicer or any Originator to
perform its duties, covenants or other obligations in
accordance with the provisions of this Agreement or any
other Transaction Document;
(iv) any products liability, personal injury or damage suit,
or other similar claim arising out of or in connection
with merchandise, insurance or services that are the
subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor or an inability of
such Obligor to pay due to lack of funds or lack of
creditworthiness) to the payment of any Receivable
(including, without limitation, a defense based on such
Receivable or the related Contract or Invoice 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 goods related
to such Receivable or the furnishing or failure to furnish
such goods;
(vi) the commingling of Collections of Receivables at any time
with other funds;
27
32
(vii) any investigation, litigation or proceeding related to
or arising from this Agreement or any other Transaction
Document, the transactions contemplated hereby, the use
of the proceeds of an Incremental Purchase or a
Reinvestment, the ownership of the Purchaser Interests
or any other investigation, litigation or proceeding
relating to Seller, the Servicer or any Originator in
which any Indemnified Party becomes involved as a result
of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor
in respect of any such Receivable as a result of such
Obligor being immune (other than by virtue of a
discharge in bankruptcy) from civil and commercial law
and suit on the grounds of sovereignty or otherwise from
any legal action, suit or proceeding;
(ix) any Amortization Event described in Section 9.1(d);
(x) any failure of Seller to acquire and maintain legal and
equitable title to, and ownership of any Receivable and
the Related Security and Collections with respect thereto
from the applicable Originator, free and clear of any
Adverse Claim (other than as created hereunder); or any
failure of Seller to give reasonably equivalent value to
the applicable Originator under the U.S. Receivables Sale
Agreement in consideration of the transfer by the
applicable Originator of any Receivable, or any attempt
by any Person to void such transfer under statutory
provisions or common law or equitable action;
(xi) any failure to vest and maintain vested in the Agent for
the benefit of the Purchasers, or to transfer to the
Agent for the benefit of the Purchasers, legal and
equitable title to, and ownership of, a valid and
perfected undivided percentage ownership interest (to the
extent of the Purchaser Interests contemplated hereunder)
or a valid first priority perfected security interest in
the Receivables, the Related Security and the
Collections, free and clear of any Adverse Claim (except
as created by the Transaction Documents);
(xii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to any Receivable, the
Related Security and Collections with respect thereto,
and the proceeds of any thereof, whether at the time of
any Incremental Purchase or Reinvestment or at any
subsequent time;
(xiii) any action or omission by any Seller Party which
reduces or impairs the rights of the Agent or the
Purchasers with respect to any Receivable or the value of
any such Receivable;
28
33
(xiv) any attempt by any Person to void any Incremental
Purchase or Reinvestment hereunder under statutory
provisions or common law or equitable action; and
(xv) the failure of any Receivable included in the calculation
of the Net Receivables Balance as an Eligible Receivable
to be an Eligible Receivable at the time so included.
Section 10.2 Increased Cost and Reduced Return. If after the date
hereof, any Funding Source shall be charged any fee, expense or increased cost
on account of the adoption of any applicable law, rule or regulation (including
any applicable law, rule or regulation regarding capital adequacy) or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency (a "REGULATORY CHANGE"): (i) that subjects any
Funding Source to any charge or withholding on or with respect to any Funding
Agreement or a Funding Source's obligations under a Funding Agreement, or on or
with respect to the Receivables, or changes the basis of taxation of payments to
any Funding Source of any amounts payable under any Funding Agreement (except
for changes in the rate of tax on the overall net income of a Funding Source or
taxes excluded by Section 10.1) or (ii) that imposes, modifies or deems
applicable any reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of a Funding
Source, or credit extended by a Funding Source pursuant to a Funding Agreement
or (iii) that imposes any other condition the result of which is to increase the
cost to a Funding Source of performing its obligations under a Funding
Agreement, or to reduce the rate of return on a Funding Source's capital as a
consequence of its obligations under a Funding Agreement, or to reduce the
amount of any sum received or receivable by a Funding Source under a Funding
Agreement or to require any payment calculated by reference to the amount of
interests or loans held or interest received by it, then, upon demand by the
Agent, Seller shall pay to the Agent, for the benefit of the relevant Funding
Source, such amounts charged to such Funding Source or such amounts to otherwise
compensate such Funding Source for such increased cost or such reduction.
Section 10.3 Other Costs and Expenses. Seller shall pay to the Agent
and Conduit on demand all costs and out-of-pocket expenses in connection with
the preparation, execution, delivery and administration of this Agreement, the
transactions contemplated hereby and the other documents to be delivered
hereunder, including without limitation, the cost of Conduit's auditors auditing
the books, records and procedures of Seller, reasonable fees and out-of-pocket
expenses of legal counsel for Conduit and the Agent (which such counsel may be
employees of Conduit or the Agent) with respect thereto and with respect to
advising Conduit and the Agent as to their respective rights and remedies under
this Agreement. Seller shall pay to the Agent on demand any and all costs and
expenses of the Agent and the Purchasers, if any, including reasonable counsel
fees and expenses in connection with the enforcement of this Agreement and the
other documents delivered hereunder and in connection with any restructuring or
workout of this Agreement or such documents, or the administration of this
Agreement following an Amortization Event.
29
34
ARTICLE XI.
THE AGENT
Section 11.1 Authorization and Action. Each Purchaser hereby designates
and appoints Bank One to act as its agent hereunder and under each other
Transaction Document, and authorizes the Agent to take such actions as agent on
its behalf and to exercise such powers as are delegated to the Agent by the
terms of this Agreement and the other Transaction Documents together with such
powers as are reasonably incidental thereto. The Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in any other
Transaction Document, or any fiduciary relationship with any Purchaser, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.
Each Purchaser hereby authorizes the Agent to execute each of the Uniform
Commercial Code financing statements and Collection Account Agreements on behalf
of such Purchaser (the terms of which shall be binding on such Purchaser).
Section 11.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of any Seller Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith. The Agent shall
not be under any obligation to any Purchaser to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect
30
35
the properties, books or records of the Seller Parties. The Agent shall not be
deemed to have knowledge of any Amortization Event or Potential Amortization
Event unless the Agent has received notice from Seller or a Purchaser.
Section 11.4 Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Seller), independent
accountants and other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence of Conduit or the Required Financial Institutions or all
of the Purchasers, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Purchasers, provided that unless and
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Conduit or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
Section 11.5 Non-Reliance on Agent and Other Purchasers. Each Purchaser
expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Seller
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Purchaser represents and warrants to the Agent that it has and will,
independently and without reliance upon the Agent or any other Purchaser and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of Seller and
made its own decision to enter into this Agreement, the other Transaction
Documents and all other documents related hereto or thereto.
Section 11.6 Reimbursement and Indemnification. The Financial
Institutions agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller Parties (i) for
any amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Seller Parties hereunder and (ii) for any other expenses
incurred by the Agent, in its capacity as Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.
Section 11.7 Agent in its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with Seller or any Affiliate of Seller as though the Agent were
not the Agent hereunder. With respect to the acquisition of Purchaser Interests
pursuant to this Agreement, the Agent shall have the same rights and powers
under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent, and the terms "FINANCIAL
INSTITUTION,"
31
36
"PURCHASER," "FINANCIAL INSTITUTIONS" and "PURCHASERS" shall include the Agent
in its individual capacity.
Section 11.8 Successor Agent. The Agent may, upon five days' notice to
Seller and the Purchasers, and the Agent will, upon the direction of all of the
Purchasers (other than the Agent, in its individual capacity) resign as Agent.
If the Agent shall resign, then the Required Financial Institutions during such
five-day period shall appoint from among the Purchasers a successor agent. If
for any reason no successor Agent is appointed by the Required Financial
Institutions during such five-day period, then effective upon the termination of
such five day period, the Purchasers shall perform all of the duties of the
Agent hereunder and under the other Transaction Documents and Seller and the
Servicer (as applicable) shall make all payments in respect of the Aggregate
Unpaids directly to the applicable Purchasers and for all purposes shall deal
directly with the Purchasers. After the effectiveness of any retiring Agent's
resignation hereunder as Agent, the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Transaction Documents and
the provisions of this Article XI and Article X shall continue in effect for its
benefit with respect to any actions taken or omitted to be taken by it while it
was Agent under this Agreement and under the other Transaction Documents.
ARTICLE XII.
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments.
(a) Seller and each Financial Institution hereby agree and
consent to the complete or partial assignment by Conduit of all or any portion
of its rights under, interest in, title to and obligations under this Agreement
to the Financial Institutions pursuant to Section 13.1 or to any other Person,
and upon such assignment, Conduit shall be released from its obligations so
assigned. Further, Seller and each Financial Institution hereby agree that any
assignee of Conduit of this Agreement or all or any of the Purchaser Interests
of Conduit shall have all of the rights and benefits under this Agreement as if
the term "CONDUIT" explicitly referred to such party, and no such assignment
shall in any way impair the rights and benefits of Conduit hereunder. Neither
Seller nor the Servicer shall have the right to assign its rights or obligations
under this Agreement.
(b) Any Financial Institution may at any time and from time to
time assign to one or more Persons ("PURCHASING FINANCIAL INSTITUTIONS") all or
any part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
(the "ASSIGNMENT AGREEMENT") executed by such Purchasing Financial Institution
and such selling Financial Institution. The consent of Conduit shall be required
prior to the effectiveness of any such assignment. Each assignee of a Financial
Institution must (i) have a short-term debt rating of A-1 or better by Standard
& Poor's Ratings Group and P-1 by Xxxxx'x Investor Service, Inc. and (ii) agree
to deliver to the Agent, promptly following any request therefor by the Agent or
Conduit, an enforceability opinion in form and substance satisfactory to the
Agent and Conduit. Upon delivery of the executed Assignment Agreement to the
Agent, such selling Financial Institution shall be released from its obligations
32
37
hereunder to the extent of such assignment. Thereafter the Purchasing Financial
Institution shall for all purposes be a Financial Institution party to this
Agreement and shall have all the rights and obligations of a Financial
Institution under this Agreement to the same extent as if it were an original
party hereto and no further consent or action by Seller, the Purchasers or the
Agent shall be required.
(c) Each of the Financial Institutions agrees that in the
event that it shall cease to have a short-term debt rating of A-1 or better by
Standard & Poor's Ratings Group and P-1 by Xxxxx'x Investor Service, Inc. (an
"AFFECTED FINANCIAL INSTITUTION"), such Affected Financial Institution shall be
obliged, at the request of Conduit or the Agent, to assign all of its rights and
obligations hereunder to (x) another Financial Institution or (y) another
funding entity nominated by the Agent and acceptable to Conduit, and willing to
participate in this Agreement through the Liquidity Termination Date in the
place of such Affected Financial Institution; provided that the Affected
Financial Institution receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such Financial Institution's Pro Rata Share of
the Aggregate Capital and Yield owing to the Financial Institutions and all
accrued but unpaid fees and other costs and expenses payable in respect of its
Pro Rata Share of the Purchaser Interests of the Financial Institutions.
Section 12.2 Participations. Any Financial Institution may, in the
ordinary course of its business at any time sell to one or more Persons (each, a
"PARTICIPANT") participating interests in its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, its obligation to pay Conduit its
Acquisition Amounts or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution's rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Conduit and the Agent shall continue to deal
solely and directly with such Financial Institution in connection with such
Financial Institution's rights and obligations under this Agreement. Each
Financial Institution agrees that any agreement between such Financial
Institution and any such Participant in respect of such participating interest
shall not restrict such Financial Institution's right to agree to any amendment,
supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in Section 14.1(b)(i).
ARTICLE XIII.
LIQUIDITY FACILITY
Section 13.1 Transfer to Financial Institutions. Each Financial
Institution hereby agrees, subject to Section 13.4, that immediately upon
written notice from Conduit delivered on or prior to the Liquidity Termination
Date, it shall acquire by assignment from Conduit, without recourse or warranty,
its Pro Rata Share of one or more of the Purchaser Interests of Conduit as
specified by Conduit. Each such assignment by Conduit shall be made pro rata
among all of the Financial Institutions, except for pro rata assignments to one
or more Terminating Financial Institutions pursuant to Section 13.6. Each such
Financial Institution shall, no later than
33
38
1:00 p.m. (Chicago time) on the date of such assignment, pay in immediately
available funds (unless another form of payment is otherwise agreed between
Conduit and any Financial Institution) to the Agent at an account designated by
the Agent, for the benefit of Conduit, its Acquisition Amount. Unless a
Financial Institution has notified the Agent that it does not intend to pay its
Acquisition Amount, the Agent may assume that such payment has been made and
may, but shall not be obligated to, make the amount of such payment available to
Conduit in reliance upon such assumption. Conduit hereby sells and assigns to
the Agent for the ratable benefit of the Financial Institutions, and the Agent
hereby purchases and assumes from Conduit, effective upon the receipt by Conduit
of the Conduit Transfer Price, the Purchaser Interests of Conduit which are the
subject of any transfer pursuant to this Article XIII.
Section 13.2 Transfer Price Reduction Yield. If the Adjusted Funded
Amount is included in the calculation of the Conduit Transfer Price for any
Purchaser Interest, each Financial Institution agrees that the Agent shall pay
to Conduit the Reduction Percentage of any Yield received by the Agent with
respect to such Purchaser Interest.
Section 13.3 Payments to Conduit. In consideration for the reduction of
the Conduit Transfer Prices by the Conduit Transfer Price Reductions, effective
only at such time as the aggregate amount of the Capital of the Purchaser
Interests of the Financial Institutions equals the Conduit Residual, each
Financial Institution hereby agrees that the Agent shall not distribute to the
Financial Institutions and shall immediately remit to Conduit any Yield,
Collections or other payments received by it to be applied pursuant to the terms
hereof or otherwise to reduce the Capital of the Purchaser Interests of the
Financial Institutions.
Section 13.4 Limitation on Commitment to Purchase from Conduit.
Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have any obligation to purchase any Purchaser Interest from
Conduit, pursuant to Section 13.1 or otherwise, if:
(i) Conduit shall have voluntarily commenced any proceeding or
filed any petition under any bankruptcy, insolvency or similar law seeking the
dissolution, liquidation or reorganization of Conduit or taken any corporate
action for the purpose of effectuating any of the foregoing; or
(ii) involuntary proceedings or an involuntary petition shall
have been commenced or filed against Conduit by any Person under any bankruptcy,
insolvency or similar law seeking the dissolution, liquidation or reorganization
of Conduit and such proceeding or petition shall have not been dismissed.
Section 13.5 Defaulting Financial Institutions. If one or more
Financial Institutions defaults in its obligation to pay its Acquisition Amount
pursuant to Section 13.1 (each such Financial Institution shall be called a
"DEFAULTING FINANCIAL INSTITUTION" and the aggregate amount of such defaulted
obligations being herein called the "CONDUIT TRANSFER PRICE DEFICIT"), then upon
notice from the Agent, each Financial Institution other than the Defaulting
Financial Institutions (a "NON-DEFAULTING FINANCIAL INSTITUTION") shall promptly
pay to the Agent, in immediately available funds, an amount equal to the lesser
of (x) such Non-Defaulting Financial Institution's proportionate share (based
upon the relative Commitments of the Non-Defaulting
34
39
Financial Institutions) of the Conduit Transfer Price Deficit and (y) the unused
portion of such Non-Defaulting Financial Institution's Commitment. A Defaulting
Financial Institution shall forthwith upon demand pay to the Agent for the
account of the Non-Defaulting Financial Institutions all amounts paid by each
Non-Defaulting Financial Institution on behalf of such Defaulting Financial
Institution, together with interest thereon, for each day from the date a
payment was made by a Non-Defaulting Financial Institution until the date such
Non-Defaulting Financial Institution has been paid such amounts in full, at a
rate per annum equal to the Federal Funds Effective Rate plus two percent (2%).
In addition, without prejudice to any other rights that Conduit may have under
applicable law, each Defaulting Financial Institution shall pay to Conduit
forthwith upon demand, the difference between such Defaulting Financial
Institution's unpaid Acquisition Amount and the amount paid with respect thereto
by the Non-Defaulting Financial Institutions, together with interest thereon,
for each day from the date of the Agent's request for such Defaulting Financial
Institution's Acquisition Amount pursuant to Section 13.1 until the date the
requisite amount is paid to Conduit in full, at a rate per annum equal to the
Federal Funds Effective Rate plus two percent (2%).
Section 13.6 Terminating Financial Institutions.
(a) Each Financial Institution hereby agrees to deliver
written notice to the Agent not more than 30 Business Days and not less than 5
Business Days prior to the Liquidity Termination Date indicating whether such
Financial Institution intends to renew its Commitment hereunder. If any
Financial Institution fails to deliver such notice on or prior to the date that
is 5 Business Days prior to the Liquidity Termination Date, such Financial
Institution will be deemed to have declined to renew its Commitment (each
Financial Institution which has declined or has been deemed to have declined to
renew its Commitment hereunder, a "NON-RENEWING FINANCIAL INSTITUTION"). The
Agent shall promptly notify Conduit of each Non-Renewing Financial Institution
and Conduit, in its sole discretion, may (A) to the extent of Commitment
Availability, declare that such Non-Renewing Financial Institution's Commitment
shall, to such extent, automatically terminate on a date specified by Conduit on
or before the Liquidity Termination Date or (B) upon one (1) Business Days'
notice to such Non-Renewing Financial Institution assign to such Non-Renewing
Financial Institution on a date specified by Conduit its Pro Rata Share of the
aggregate Purchaser Interests then held by Conduit, subject to, and in
accordance with, Section 13.1. In addition, Conduit may, in its sole discretion,
at any time (x) to the extent of Commitment Availability, declare that any
Affected Financial Institution's Commitment shall automatically terminate on a
date specified by Conduit or (y) assign to any Affected Financial Institution on
a date specified by Conduit its Pro Rata Share of the aggregate Purchaser
Interests then held by Conduit, subject to, and in accordance with, Section 13.1
(each Affected Financial Institution or each Non-Renewing Financial Institution
is hereinafter referred to as a "TERMINATING FINANCIAL INSTITUTION"). The
parties hereto expressly acknowledge that any declaration of the termination of
any Commitment, any assignment pursuant to this Section 13.6 and the order of
priority of any such termination or assignment among Terminating Financial
Institutions shall be made by Conduit in its sole and absolute discretion.
(b) Upon any assignment to a Terminating Financial Institution
as provided in this Section 13.6, any remaining Commitment of such Terminating
Financial Institution shall automatically terminate. Upon reduction to zero of
the Capital of all of the Purchaser Interests of
35
40
a Terminating Financial Institution (after application of Collections thereto
pursuant to Sections 2.2 and 2.3) all rights and obligations of such Terminating
Financial Institution hereunder shall be terminated and such Terminating
Financial Institution shall no longer be a "FINANCIAL INSTITUTION" hereunder;
provided, however, that the provisions of Article X shall continue in effect for
its benefit with respect to Purchaser Interests held by such Terminating
Financial Institution prior to its termination as a Financial Institution.
ARTICLE XIV.
MISCELLANEOUS
Section 14.1 Waivers and Amendments.
(a) No failure or delay on the part of the Agent or any
Purchaser in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law. Any waiver of this Agreement shall be effective only in the specific
instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing in accordance with the
provisions of this Section 14.1(b). Conduit, Seller and the Agent, at the
direction of the Required Financial Institutions, may enter into written
modifications or waivers of any provisions of this Agreement, provided, however,
that no such modification or waiver shall:
(i) without the consent of each affected Purchaser,
(A) extend the Liquidity Termination Date or the date of any payment or deposit
of Collections by Seller or the Servicer, (B) reduce the rate or extend the time
of payment of Yield or any CP Costs (or any component of Yield or CP Costs), (C)
reduce any fee payable to the Agent for the benefit of the Purchasers, (D)
except pursuant to Article XII hereof, change the amount of the Capital of any
Purchaser, any Financial Institution's Pro Rata Share (except pursuant to
Sections 13.1 or 13.5) or any Financial Institution's Commitment, (E) amend,
modify or waive any provision of the definition of Required Financial
Institutions or this Section 14.1(b), (F) consent to or permit the assignment or
transfer by Seller of any of its rights and obligations under this Agreement,
(G) change the definition of "ELIGIBLE RECEIVABLE," "LOSS RESERVE," "DILUTION
RESERVE," "YIELD AND SERVICING RESERVE," "DELINQUENCY RATIO," "DILUTION RATIO",
"DEFAULT RATIO" or "LOSS-TO-LIQUIDATION RATIO," or (H) amend or modify any
defined term (or any defined term used directly or indirectly in such defined
term) used in clauses (A) through (G) above in a manner that would circumvent
the intention of the restrictions set forth in such clauses; or
(ii) without the written consent of the then Agent,
amend, modify or waive any provision of this Agreement if the effect thereof is
to affect the rights or duties of such Agent.
36
41
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Seller, the Agent may amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and Conduit may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII,
Section 14.13 or any other provision of this Agreement without the consent of
Seller, provided that such amendment has no negative impact upon Seller. Any
modification or waiver made in accordance with this Section 14.1 shall apply to
each of the Purchasers equally and shall be binding upon Seller, the Purchasers
and the Agent.
Section 14.2 Notices. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other means, when received at the address specified in this
Section 14.2. Seller hereby authorizes the Agent to effect purchases and Tranche
Period and Discount Rate selections based on telephonic notices made by any
Person whom the Agent in good faith believes to be acting on behalf of Seller.
Seller agrees to deliver promptly to the Agent a written confirmation of each
telephonic notice signed by an authorized officer of Seller; provided, however,
the absence of such confirmation shall not affect the validity of such notice.
If the written confirmation differs from the action taken by the Agent, the
records of the Agent shall govern absent manifest error.
Section 14.3 Ratable Payments. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.2 or 10.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 14.4 Protection of Ownership Interests of the Purchasers.
(a) Seller agrees that from time to time, at its expense, it
will promptly execute (if required by applicable law) and deliver all
instruments and documents, and take all actions, that may be necessary or
desirable, or that the Agent may request, to perfect, protect or more fully
evidence the Purchaser Interests, or to enable the Agent or the Purchasers to
exercise and enforce their rights and remedies hereunder. Seller hereby
authorizes the Agent or its designees or assigns to file one or more financing
or continuation statements, and amendments thereto and assignments thereof, with
or without Seller's signature as permitted by applicable
37
42
law, relative to all or any of the now existing or hereafter arising Receivables
and Related Security.
(b) At any time after the occurrence of an Amortization Event,
the Agent may, or the Agent may direct Seller or the Servicer to, notify the
Obligors of Receivables, at Seller's expense, of the ownership or security
interests of the Purchasers under this Agreement and the Agent may, or the Agent
may direct Seller or the Servicer to, direct that payments of all amounts due or
that become due under any or all Receivables be made directly to the Agent or
its designee. Seller or the Servicer (as applicable) shall, at any Purchaser's
request, withhold the identity of such Purchaser in any such notification.
(c) If any Seller Party fails to perform any of its
obligations hereunder, the Agent or any Purchaser may (but shall not be required
to) perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes
the Agent at any time and from time to time in the sole discretion of the Agent,
and appoints the Agent as its attorney-in-fact, to act on behalf of such Seller
Party (i) to execute on behalf of Seller as debtor and to file financing
statements necessary or desirable in the Agent's sole discretion to perfect and
to maintain the perfection and priority of the interest of the Purchasers in the
Receivables and (ii) to file a carbon, photographic or other reproduction of
this Agreement or any financing statement with respect to the Receivables as a
financing statement in such offices as the Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of
the interests of the Purchasers in the Receivables. This appointment is coupled
with an interest and is irrevocable.
Section 14.5 Confidentiality.
(a) Each Seller Party and each Purchaser shall maintain and
shall cause each of its employees, agents and officers to maintain the
confidentiality of this Agreement and the other confidential or proprietary
information with respect to the Agent and Conduit and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
such Seller Party and such Purchaser and its officers, agents and employees may
disclose such information to such Seller Party's and such Purchaser's external
accountants and attorneys and as required by any applicable law or order of any
judicial or administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each
Seller Party hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Financial Institutions or Conduit by each
other, (ii) by the Agent or the Purchasers to any prospective or actual assignee
or participant of any of them and (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to Conduit or any entity organized for the purpose of purchasing, or
making loans secured by, financial assets for which Bank One acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing, provided each such Person is
informed of the confidential nature of such information. In addition, the
Purchasers and the Agent may disclose any such nonpublic information pursuant to
38
43
any law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).
Section 14.6 Bankruptcy Petition. Seller, the Servicer, the Agent and
each Financial Institution hereby covenants and agrees that, prior to the date
that is one year and one day after the payment in full of all outstanding senior
indebtedness of Conduit, it will not institute against, or join any other Person
in instituting against, Conduit any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.
Section 14.7 Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of any party hereto,
no claim may be made by any party or any Person claiming through any party
against any other party or its respective Affiliates, directors, officers,
employees, attorneys or agents for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement, or any act, omission or event occurring in connection
therewith; and each of the parties hereby waives, releases, and agrees not to
xxx upon any claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor; PROVIDED, HOWEVER, that nothing
herein shall limit any such party's liability for actual direct damages arising
from breach of contract.
Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF
NEW YORK.
Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR
NEW YORK STATE COURT SITTING IN
NEW YORK,
NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING
PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER
OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN
NEW YORK,
NEW YORK.
39
44
Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii) the indemnification and payment provisions of
Article X, and Sections 14.5 and 14.6 shall be continuing and shall survive any
termination of this Agreement.
Section 14.12 Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "ARTICLE," "SECTION," "SCHEDULE" or "EXHIBIT" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
Section 14.13 Bank One Roles. Each of the Financial Institutions
acknowledges that Bank One acts, or may in the future act, (i) as administrative
agent for Conduit or any Financial Institution, (ii) as issuing and paying agent
for the Commercial Paper, (iii) to provide credit or liquidity enhancement for
the timely payment for the Commercial Paper and (iv) to provide other services
from time to time for Conduit or any Financial Institution (collectively, the
"BANK ONE ROLES"). Without limiting the generality of this Section 14.13, each
Financial Institution hereby acknowledges and consents to any and all Bank One
Roles and agrees that in connection with any Bank One Role, Bank One may take,
or refrain from taking, any action that it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Conduit, and the giving of notice to the Agent of a mandatory purchase
pursuant to Section 13.1.
40
45
Section 14.14 Characterization.
(a) It is the intention of the parties hereto that each
purchase hereunder shall constitute and be treated as an absolute and
irrevocable sale, which purchase shall provide the applicable Purchaser with the
full benefits of ownership of the applicable Purchaser Interest. Except as
specifically provided in this Agreement, each sale of a Purchaser Interest
hereunder is made without recourse to Seller; provided, however, that (i) Seller
shall be liable to each Purchaser and the Agent for all representations,
warranties, covenants and indemnities made by Seller pursuant to the terms of
this Agreement, and (ii) such sale does not constitute and is not intended to
result in an assumption by any Purchaser or the Agent or any assignee thereof of
any obligation of Seller or any Originator or any other person arising in
connection with the Receivables, the Related Security, or the related Contracts,
or any other obligations of Seller or any Originator.
(b) In addition to any ownership interest which the Agent may
from time to time acquire pursuant hereto, Seller hereby grants to the Agent for
the ratable benefit of the Purchasers a valid and perfected security interest in
all of Seller's right, title and interest in, to and under all Receivables now
existing or hereafter arising, the Collections, each Lock-Box, each Collection
Account, all Related Security, all other rights and payments relating to such
Receivables, and all proceeds of any thereof prior to all other liens on and
security interests therein to secure the prompt and complete payment of the
Aggregate Unpaids. The Agent and the Purchasers shall have, in addition to the
rights and remedies that they may have under this Agreement, all other rights
and remedies provided to a secured creditor under the UCC and other applicable
law, which rights and remedies shall be cumulative.
[signature pages follow]
41
46
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date hereof.
W1 RECEIVABLES, L.P.
BY: W1 GENERAL PARTNER, INC., ITS GENERAL PARTNER
By: /s/ C. Xxxxx XxXxxxxx
---------------------
Name: C. Xxxxx XxXxxxxx
Title: Vice President
Address: 000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, XX 00000
Attention: C. Xxxxx XxXxxxxx, Treasurer
Phone: (000) 000-0000
Fax: (000) 000-0000
XXXXXXXXXXX INTERNATIONAL, INC.
By: /s/ C. Xxxxx XxXxxxxx
---------------------
Name: C. Xxxxx XxXxxxxx
Title: Treasurer
Address: 000 Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000
Attention: C. Xxxxx XxXxxxxx, Treasurer
Phone: (000) 000-0000
Fax: (000) 000-0000
42
47
JUPITER SECURITIZATION CORPORATION
By: /s/ Xxx X. Xxxxxxxx
-----------------------------------------
Xxx X. Xxxxxxxx, Authorized Signatory
Address: c/o Bank One, NA (Main Office Chicago), as Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
BANK ONE, NA (MAIN OFFICE CHICAGO),
AS A FINANCIAL INSTITUTION AND AS AGENT
By: /s/ Xxx X. Xxxxxxxx
-----------------------------------------
Xxx X. Xxxxxxxx, Authorized Signatory
Address: Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0596, 1-21
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
43
48
EXHIBIT I
DEFINITIONS
(a) CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN
SHALL HAVE THE MEANINGS ATTRIBUTED THERETO IN THE U.S. RECEIVABLES SALE
AGREEMENT (HEREINAFTER DEFINED); AND
(b) AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE
THE FOLLOWING MEANINGS (SUCH MEANINGS TO BE EQUALLY APPLICABLE TO BOTH THE
SINGULAR AND PLURAL FORMS OF THE TERMS DEFINED):
"ACCRUAL PERIOD" means each calendar month, provided that the
initial Accrual Period hereunder means the period from (and including) the date
of the initial purchase hereunder to (and including) the last day of the
calendar month thereafter.
"ACQUISITION AMOUNT" means, on the date of any purchase from
Conduit of one or more Purchaser Interests pursuant to Section 13.1, with
respect to each Financial Institution, the lesser of (i) such Financial
Institution's Pro Rata Share of the sum of (A) the lesser of (1) the Adjusted
Liquidity Price of each such Purchaser Interest and (2) the Capital of each such
Purchaser Interest and (B) all accrued and unpaid CP Costs for each such
Purchaser Interest and (ii) such Financial Institution's unused Commitment.
"ADJUSTED FUNDED AMOUNT" means, in determining the Conduit
Transfer Price for any Purchaser Interest, an amount equal to the sum of the
Adjusted Liquidity Price of each such Purchaser Interest.
"ADJUSTED LIQUIDITY PRICE" means an amount equal to:
NDR
----------------
RI [ DC + [ 1+ (0.50 x 0.10) ]]
WHERE:
RI = the undivided percentage interest evidenced by
such Purchaser Interest.
DC = the Deemed Collections.
NDR = the Outstanding Balance of all Receivables as to
which any payment, or part thereof, has not
remained unpaid for 91 days or more from the
original due date for such payment.
44
49
Each of the foregoing shall be determined from the most recent Monthly Report
received from the Servicer.
"ADVERSE CLAIM" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets or
properties in favor of any other Person.
"AFFECTED FINANCIAL INSTITUTION" has the meaning specified in
Section 12.1(c).
"AFFILIATE" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person or any Subsidiary of such Person. A
Person shall be deemed to control another Person if the controlling Person owns
10% or more of any class of voting securities of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of stock, by contract or otherwise.
"AGENT" has the meaning set forth in the preamble to this
Agreement.
"AGGREGATE CAPITAL" means, on any date of determination, the
aggregate amount of Capital of all Purchaser Interests outstanding on such date.
"AGGREGATE REDUCTION" has the meaning specified in
Section 1.3.
"AGGREGATE RESERVES" means, on any date of determination, the
sum of the Loss Reserve, the Yield and Servicing Reserve and the Dilution
Reserve.
"AGGREGATE UNPAIDS" means, at any time, an amount equal to the
sum of all accrued and unpaid fees under the Fee Letter, CP Costs, Yield,
Aggregate Capital and all other unpaid Obligations (whether due or accrued) at
such time.
"AGREEMENT" means this
U.S. Receivables Purchase Agreement, as
it may be amended or modified and in effect from time to time.
"AMORTIZATION DATE" means the earliest to occur of (i) the day
on which any of the conditions precedent set forth in Section 6.2 are not
satisfied, (ii) the Business Day immediately prior to the occurrence of an
Amortization Event set forth in Section 9.1(d)(ii), (iii) the Business Day
specified in a written notice from the Agent following the occurrence of any
other Amortization Event, and (iv) the date which is 10 Business Days after the
Agent's receipt of written notice from Seller that it wishes to terminate the
facility evidenced by this Agreement.
"AMORTIZATION EVENT" has the meaning specified in Article IX.
"ASSIGNMENT AGREEMENT" has the meaning set forth in
Section 12.1(b).
"AUTHORIZED OFFICER" means, with respect to any Person, its
president, corporate controller, treasurer or chief financial officer.
45
50
"BANK ONE" means Bank One, NA (Main Office Chicago) in its
individual capacity and its successors.
"BROKEN FUNDING COSTS" means for any Purchaser Interest which:
(i) has its Capital reduced without compliance by Seller with the notice
requirements hereunder or (ii) does not become subject to an Aggregate Reduction
following the delivery of any Reduction Notice or (iii) is assigned under
Article XIII or terminated prior to the date on which it was originally
scheduled to end; an amount equal to the excess, if any, of (A) the CP Costs or
Yield (as applicable) that would have accrued during the remainder of the
Tranche Periods or the tranche periods for Commercial Paper determined by the
Agent to relate to such Purchaser Interest (as applicable) subsequent to the
date of such reduction, assignment or termination (or in respect of clause (ii)
above, the date such Aggregate Reduction was designated to occur pursuant to the
Reduction Notice) of the Capital of such Purchaser Interest if such reduction,
assignment or termination had not occurred or such Reduction Notice had not been
delivered, over (B) the sum of (x) to the extent all or a portion of such
Capital is allocated to another Purchaser Interest, the amount of CP Costs or
Yield actually accrued during the remainder of such period on such Capital for
the new Purchaser Interest, and (y) to the extent such Capital is not allocated
to another Purchaser Interest, the income, if any, actually received during the
remainder of such period by the holder of such Purchaser Interest from investing
the portion of such Capital not so allocated. In the event that the amount
referred to in clause (B) exceeds the amount referred to in clause (A), the
relevant Purchaser or Purchasers agree to pay to Seller the amount of such
excess. All Broken Funding Costs shall be due and payable hereunder upon demand.
"BUSINESS DAY" means any day on which banks are not authorized
or required to close in
New York,
New York or Chicago, Illinois and The
Depository Trust Company of
New York is open for business, and, if the
applicable Business Day relates to any computation or payment to be made with
respect to the LIBO Rate, any day on which dealings in dollar deposits are
carried on in the London interbank market.
"CALCULATION PERIOD" means each fiscal month or portion
thereof which elapses during the term of this Agreement.
"CAPITAL" of any Purchaser Interest means, at any time, (A)
the Purchase Price of such Purchaser Interest, minus (B) the sum of the
aggregate amount of Collections and other payments received by the Agent which
in each case are applied to reduce such Capital in accordance with the terms and
conditions of this Agreement; provided that such Capital shall be restored (in
accordance with Section 2.5) in the amount of any Collections or other payments
so received and applied if at any time the distribution of such Collections or
payments are rescinded, returned or refunded for any reason.
"CHANGE OF CONTROL" means (a) a "Change of Control" under and
as defined in the U.S. Receivables Sale Agreement shall occur with respect to
Xxxxxxxxxxx, (b) Xxxxxxxxxxx ceases to own, directly or indirectly, at least a
majority of the Equity Interests of any Material Originator, or (c) Xxxxxxxxxxx
ceases to own, directly or indirectly, 100% of the outstanding Equity Interests
of Seller; PROVIDED, HOWEVER, that a Permitted Restructuring shall not
constitute a Change of Control under this Agreement.
46
51
"CHARGED-OFF RECEIVABLE" means a Receivable: (i) as to which
the Obligor thereof has taken any action, or suffered any event to occur, of the
type described in Section 9.1(d) (as if references to Seller Party therein refer
to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off Seller's books as uncollectible, (iv) which has been identified
by Seller as uncollectible or (v) as to which any payment, or part thereof,
remains unpaid for 121 days or more from the original due date for such payment.
"COLLECTION ACCOUNT" means each concentration account,
depositary account, lock-box account or similar account in which any Collections
are collected or deposited and which is listed on Exhibit IV.
"COLLECTION ACCOUNT AGREEMENT" means an agreement
substantially in the form of Exhibit VI-1 or VI-2 among the applicable
Originator, Seller, the Agent and a Collection Bank.
"COLLECTION BANK" means, at any time, any of the banks holding
one or more Collection Accounts.
"COLLECTION NOTICE" means a notice, in substantially the form
of Annex A to Exhibit VI-1 or VI-2, from the Agent to a Collection Bank.
"COLLECTIONS" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all yield, Finance Charges or other related amounts accruing
in respect thereof and all cash proceeds of Related Security with respect to
such Receivable.
"COMMERCIAL PAPER" means promissory notes of Conduit issued by
Conduit in the commercial paper market.
"COMMITMENT" means, for each Financial Institution, the
commitment of such Financial Institution to purchase Purchaser Interests from
(i) Seller and (ii) Conduit, in an amount not to exceed (i) in the aggregate,
the amount set forth opposite such Financial Institution's name on Schedule A to
this Agreement, as such amount may be modified in accordance with the terms
hereof (including, without limitation, any termination of Commitments pursuant
to Section 13.6 hereof) and (ii) with respect to any individual purchase
hereunder, its Pro Rata Share of the Purchase Price therefor.
"COMMITMENT AVAILABILITY" means at any time the positive
difference (if any) between (a) an amount equal to the aggregate amount of the
Commitments MINUS an amount equal to 2% of such aggregate Commitments at such
time minus (b) the Aggregate Capital at such time.
47
52
"CONCENTRATION LIMIT" means, at any time, for all Receivables
owing from any Obligor and its Affiliates (considered as if they were one and
the same Obligor): (i) 3-1/3% of the aggregate Outstanding Balance of all
Eligible Receivables, or (ii) such other amount (a "SPECIAL CONCENTRATION
LIMIT") for such Obligor designated in writing by the Agent to Seller; PROVIDED
that Conduit or the Required Financial Institutions may, upon not less than
three (3) Business Days' notice to Seller, cancel any Special Concentration
Limit.
"CONDUIT" has the meaning set forth in the preamble to this
Agreement.
"CONDUIT RESIDUAL" means the sum of the Conduit Transfer Price
Reductions.
"CONDUIT TRANSFER PRICE" means, with respect to the assignment
by Conduit of one or more Purchaser Interests to the Agent for the benefit of
one or more of the Financial Institutions pursuant to Section 13.1, the sum of
(i) the lesser of (a) the Capital of each such Purchaser Interest and (b) the
Adjusted Funded Amount of each such Purchaser Interest and (ii) all accrued and
unpaid CP Costs for each such Purchaser Interest.
"CONDUIT TRANSFER PRICE DEFICIT" has the meaning set forth in
Section 13.5.
"CONDUIT TRANSFER PRICE REDUCTION" means in connection with
the assignment of a Purchaser Interest by Conduit to the Agent for the benefit
of the Financial Institutions, the positive difference (if any) between (i) the
Capital of such Purchaser Interest and (ii) the Adjusted Funded Amount for such
Purchaser Interest.
"CONTINGENT OBLIGATION" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees, endorses,
contingently agrees to purchase or provide funds for the payment of, or
otherwise becomes or is contingently liable upon, the obligation or liability of
any other Person, or agrees to maintain the net worth or working capital or
other financial condition of any other Person, or otherwise assures any creditor
of such other Person against loss, including, without limitation, any comfort
letter, operating agreement, take-or-pay contract or application for a letter of
credit.
"CP COSTS" means, for each day, the sum of (i) discount or
yield accrued on Pooled Commercial Paper on such day, plus (ii) any and all
accrued commissions in respect of placement agents and Commercial Paper dealers,
and issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day, plus (iii) other costs associated with funding small or
odd-lot amounts with respect to all receivable purchase facilities which are
funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income
net of expenses received on such day from investment of collections received
under all receivable purchase facilities funded substantially with Pooled
Commercial Paper, minus (v) any payment received on such day net of expenses in
respect of Broken Funding Costs related to the prepayment of any Purchaser
Interest of Conduit pursuant to the terms of any receivable purchase facilities
funded substantially with Pooled Commercial Paper. In addition to the foregoing
costs, if Seller shall request any Incremental Purchase during any period of
time determined by the Agent in good faith to result in incrementally higher CP
Costs applicable to such Incremental Purchase, the Capital associated with any
such Incremental Purchase shall, during such period, be
48
53
deemed to be funded by Conduit in a special pool (which may include capital
associated with other receivable purchase facilities) for purposes of
determining such additional CP Costs applicable only to such special pool and
charged each day during such period against such Capital.
"CREDIT AND COLLECTION POLICY" means each Originator's credit
and collection policies and practices relating to Contracts and Receivables
existing on the date hereof and summarized in Exhibit VIII hereto, as modified
from time to time in accordance with this Agreement.
"DEEMED COLLECTIONS" means the aggregate of all amounts Seller
shall have been deemed to have received as a Collection of a Receivable. Seller
shall be deemed to have received a Collection in full of a Receivable if at any
time (i) the Outstanding Balance of any such Receivable is either (x) reduced as
a result of any defective or rejected goods or services, any discount or any
adjustment or otherwise by Seller (other than cash Collections on account of the
Receivables) or (y) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction) or (ii) any of the representations or
warranties in Article V are no longer true with respect to any Receivable.
"DEFAULT FEE" means with respect to any amount due and payable
by Seller in respect of any Aggregate Unpaids, an amount equal to interest on
any such unpaid Aggregate Unpaids at a rate per annum equal to 2% above the
Prime Rate.
"DEFAULT RATIO" means, at any time, a percentage equal to (i)
the sum of (a) the aggregate Outstanding Balance of all Receivables that were
Defaulted Receivables at such time plus (b) the aggregate Charged-Off
Receivables during the full Calculation Period ended prior to such Calculation
Date, divided by (ii) the aggregate Outstanding Balance of all Receivables at
such time.
"DEFAULTED RECEIVABLE" means a Receivable as to which any
payment, or part thereof, remains unpaid for 91 days or more from the original
due date thereof.
"DEFAULTING FINANCIAL INSTITUTION" has the meaning set forth
in Section 13.5.
"DELINQUENCY RATIO" means, at any time, a percentage equal to
(i) the aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables at such time divided by (ii) the aggregate Outstanding Balance of
all Receivables at such time.
"DELINQUENT RECEIVABLE" means a Receivable as to which any
payment, or part thereof, remains unpaid for 61-90 days from the original due
date for such payment.
"DILUTION HORIZON RATIO" means, as of any date as set forth in
the most recent Monthly Report, a ratio computed by dividing (i) the aggregate
Original Balance of all Receivables generated during the most recently ended
Calculation Period by (ii) the aggregate Outstanding Balance of total
Receivables which are not Defaulted Receivables as at the last day of the most
recently ended Calculation Period.
49
54
"DILUTION RATIO" means, on any date, a percentage equal to a
fraction (i) the numerator of which is the aggregate amount of Dilutions which
occurred during the Calculation Period most recently ended prior to such date,
and (ii) the denominator of which is the aggregate Original Balance of the
Receivables generated during the full Calculation Period which ended one
Calculation Period prior to such Calculation Period.
"DILUTION RESERVE" means, on any date, an amount equal to the
product of (x) the greater of (i) 0.00% and (ii) the Dilution Reserve Percentage
then in effect less 5% and (y) the Net Receivables Balance as of the close of
business of the Servicer on such date.
"DILUTION RESERVE PERCENTAGE" means, on any date, the
percentage equal to the following (where DRP = the Dilution Reserve Percentage):
DRP = { (2.0 x ADR) + [ (HDR-ADR) x (HDR/ADR) ] } x DHR
WHERE:
ADR = the average of the Dilution Ratios for the most
recent twelve Calculation Periods;
HDR = the highest Dilution Ratio during the most recent
twelve months; and
DHR = the Dilution Horizon Ratio.
The Dilution Reserve Percentage shall be calculated monthly in each Monthly
Report and such Dilution Reserve Percentage shall, absent manifest error, be
effective from the corresponding Settlement Date until the next succeeding
Settlement Date.
"DILUTIONS" means, at any time, the aggregate amount of
reductions or cancellations described in clause (i) of the definition of "Deemed
Collections".
"DISCOUNT RATE" means, the LIBO Rate or the Prime Rate, as
applicable, with respect to each Purchaser Interest of the Financial
Institutions.
"ELIGIBLE RECEIVABLE" means, at any time, a Receivable (other
than a Government Receivable):
(i) the Obligor of which (a) if a natural person, is
a resident of the United States or, if a corporation or other business
organization, is organized under the laws of the United States or any political
subdivision thereof and has its chief executive office in the United States; and
(b) is not an Affiliate of any of the parties hereto,
(ii) the Obligor of which is not the Obligor of (a)
any Charged-Off Receivable or (b) Defaulted Receivables which represent in the
aggregate more than 50% of all Receivables owing from such Obligor,
50
55
(iii) which is not, without duplication, a
Charged-Off Receivable or a Defaulted Receivable,
(iv) which by its terms is due and payable within 30
days of the original billing date therefor and has not had its payment terms
extended,
(v) which is an "account" within the meaning of
Article 9 of the UCC of all applicable jurisdictions,
(vi) which is denominated and payable only in United
States dollars in the United States,
(vii) which arises under a Contract in substantially
the form of one of the form contracts set forth on Exhibit IX hereto or
otherwise approved by the Agent in writing, which, together with such
Receivable, is in full force and effect and constitutes the legal, valid and
binding obligation of the related Obligor enforceable against such Obligor in
accordance with its terms subject to no offset, counterclaim or other defense,
(viii) which arises under a Contract which (A) does
not require the Obligor under such Contract to consent to the transfer, sale or
assignment of the rights and duties of the applicable Originator or any of its
assignees under such Contract and (B) does not contain a confidentiality
provision that purports to restrict the ability of any Purchaser to exercise its
rights under this Agreement, including, without limitation, its right to review
the Contract,
(ix) which arises under a Contract that contains an
obligation to pay a specified sum of money, contingent only upon the sale of
goods or the provision of services by the applicable Originator,
(x) which, together with the Contract related
thereto, does not contravene any law, rule or regulation applicable thereto
(including, without limitation, any law, rule and regulation relating to truth
in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to
which no part of the Contract related thereto is in violation of any such law,
rule or regulation,
(xi) which satisfies all applicable requirements of
the Credit and Collection Policy,
(xii) which was generated in the ordinary course of
the applicable Originator's business,
(xiii) which arises solely from the sale of goods or
the provision of services to the related Obligor by the applicable Originator,
and not by any other Person (in whole or in part),
(xiv) as to which the Agent has not notified Seller
that the Agent has determined that such Receivable or class of Receivables is
not acceptable as an Eligible
51
56
Receivable, including, without limitation, because such Receivable arises under
a Contract that is not acceptable to the Agent,
(xv) which is not subject to any right of rescission,
set-off, counterclaim, any other defense (including defenses arising out of
violations of usury laws) of the applicable Obligor against the applicable
Originator or any other Adverse Claim, and the Obligor thereon holds no right as
against such Originator to cause such Originator to repurchase the goods or
merchandise the sale of which shall have given rise to such Receivable (except
with respect to sale discounts effected pursuant to the Contract, or defective
goods returned in accordance with the terms of the Contract),
(xvi) as to which the applicable Originator has
satisfied and fully performed all obligations on its part with respect to such
Receivable required to be fulfilled by it, and no further action is required to
be performed by any Person with respect thereto other than payment thereon by
the applicable Obligor, and
(xvii) all right, title and interest to and in which
has been validly transferred by the applicable Originator directly to Seller
under and in accordance with the U.S. Receivables Sale Agreement, and Seller has
good and marketable title thereto free and clear of any Adverse Claim.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"FACILITY TERMINATION DATE" means the earliest of (i) the
Liquidity Termination Date and (ii) the Amortization Date.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate per annum for each day during such period equal to (a)
the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of
New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.
"FEE LETTER" means that certain letter agreement dated as of
the date hereof among Seller, Xxxxxxxxxxx and the Agent, as it may be amended or
modified and in effect from time to time.
"FINANCIAL INSTITUTIONS" has the meaning set forth in the
preamble in this Agreement.
"FUNDING AGREEMENT" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of Conduit.
52
57
"FUNDING SOURCE" means (i) any Financial Institution or (ii)
any insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to Conduit.
"GENERAL PARTNER" means W1 General Partner, Inc., a Delaware
corporation, and its successors.
"GOVERNMENT RECEIVABLE" means a Receivable owing from and
Obligor that is a government or a governmental subdivision or agency.
"INCREMENTAL PURCHASE" means a purchase of one or more
Purchaser Interests which increases the total outstanding Aggregate Capital
hereunder.
"INDEBTEDNESS" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
"INDEPENDENT DIRECTOR" shall mean a member of the Board of
Directors of Seller who is not at such time, and has not been at any time during
the preceding five (5) years, (A) a director, officer, employee or affiliate of
Seller, any Originator, or any of their respective Subsidiaries or Affiliates,
or (B) the beneficial owner (at the time of such individual's appointment as an
Independent Director or at any time thereafter while serving as an Independent
Director) of any of the outstanding common shares of Seller, any Originator, or
any of their respective Subsidiaries or Affiliates, having general voting
rights.
"LIBO RATE" means the rate per annum equal to the sum of (i)
(a) the applicable British Bankers' Association Interest Settlement Rate for
deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m.
(London time) two Business Days prior to the first day of the relevant Tranche
Period, and having a maturity equal to such Tranche Period, provided that, (I)
if Reuters Screen FRBD is not available to the Agent for any reason, the
applicable LIBO Rate for the relevant Tranche Period shall instead be the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars as reported by any other generally recognized financial information
service as of 11:00 a.m. (London time) two Business Days prior to the first day
of such Tranche Period, and having a maturity equal to such Tranche Period, and
(II) if no such British Bankers' Association Interest Settlement Rate is
available to the Agent, the applicable LIBO Rate for the relevant Tranche Period
shall instead be the rate determined by the Agent to be the rate at which Bank
One offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Tranche Period, in the approximate amount to
be funded at the LIBO Rate and having a maturity equal to such Tranche Period,
divided by (b) one minus the
53
58
maximum aggregate reserve requirement (including all basic, supplemental,
marginal or other reserves) which is imposed against the Agent in respect of
Eurocurrency liabilities, as defined in Regulation D of the Board of Governors
of the Federal Reserve System as in effect from time to time (expressed as a
decimal), applicable to such Tranche Period plus (ii) 1.00% per annum. The LIBO
Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.
"LIQUIDITY TERMINATION DATE" means July 1, 2002.
"LOCK-BOX" means each locked postal box with respect to which
a bank has been granted exclusive access for the purpose of retrieving and
processing payments made on the Receivables and which is listed on Exhibit IV.
"LOSS RESERVE" means, on any date, an amount equal to 10.0%
multiplied by the Net Receivables Balance as of the close of business of the
Servicer on such date.
"LOSS-TO-LIQUIDATION RATIO" means a percentage equal to (x)
the sum of (i) aggregate Delinquent Receivables at the end of the most recently
ended Calculation Period, plus (ii) aggregate Charged-Off Receivables during the
full Calculation Period ended prior to such Calculation Date, without giving
effect to clause (v) in the Charged-Off Receivable definition, divided by (y)
the aggregate Collections during the most recent Calculation Period, prior to
such calculation date.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the ability of Performance Guarantor and the Originators, taken as a whole,
to perform their obligations under the Transaction Documents, (ii) the legality,
validity or enforceability of this Agreement or any other Transaction Document,
(iii) any Purchaser's interest in the Receivables generally or in any material
portion of the Receivables, the Related Security or the Collections with respect
thereto, or (iv) the collectibility of the Receivables generally or of any
material portion of the Receivables.
"MATERIAL ORIGINATOR" means any Originator who, in any period
of 12 consecutive months, has generated more than 10% of the total U.S.
Receivables of Weatherford and its consolidated Subsidiaries.
"MONTHLY REPORT" means a report, in substantially the form of
Exhibit X hereto (appropriately completed), furnished by the Servicer to the
Agent pursuant to Section 8.5.
"MONTHLY REPORTING DATE" means the 25th day of each month
hereafter (commencing with July 25, 2001), or, if any such day is not a Business
Day, the next succeeding Business Day thereafter.
"NET RECEIVABLES BALANCE" means, at any time, the aggregate
Outstanding Balance of all Eligible Receivables at such time reduced by the
aggregate amount by which the Outstanding Balance of all Eligible Receivables of
each Obligor and its Affiliates exceeds the Concentration Limit for such
Obligor.
54
59
"NON-DEFAULTING FINANCIAL INSTITUTION" has the meaning set
forth in Section 13.5.
"NON-RENEWING FINANCIAL INSTITUTION" has the meaning set forth
in Section 13.6(a).
"OBLIGATIONS" shall have the meaning set forth in Section 2.1.
"OUTSTANDING BALANCE" of any Receivable at any time means the
then outstanding principal balance thereof.
"PARTICIPANT" has the meaning set forth in Section 12.2.
"PERMITTED RESTRUCTURING" means (a) with respect to any
Originator, any merger, consolidation or similar combination of an Originator
(i) with another Originator, (ii) with and into a newly formed entity that is
(A) domiciled in the United States of America, and (B) wholly-owned, directly or
indirectly, by Weatherford, with no assets (other than its initial paid-in
capital) and no liabilities (other than minimal organization costs) for the
purpose of changing its legal form from a corporation, partnership or limited
liability company domiciled in one state of the United States to a corporation,
partnership or limited liability company domiciled in another state, from a
corporation to a partnership or limited liability company, from a partnership to
a corporation or limited liability company, or from a limited liability company
to a partnership or corporation, as the case may be, (iii) any Person engaged in
a similar line of business as such Originator which would not, after giving
effect to such merger, consolidation or similar combination, cause such
Originator to be the Originator of Receivables with an aggregate Outstanding
Balance of more than 10% of the aggregate Outstanding Balance thereof
immediately prior to such merger, consolidation or similar combination, and/or
(iv) with any other Person to whom the Agent gives its prior written consent, SO
LONG AS: (1) the successor or surviving entity unconditionally assumes such
Originator's (or Originators') respective obligations under the Transaction
Documents to which it is (or they are) a party immediately prior to giving
effect to such combination, (2) prior to the effectiveness of such combination,
all UCC financing statements necessary to maintain the validity, perfection and
priority of Seller's ownership interest in the Receivables and Related Security
acquired or to be acquired from such Originator or Originators under the U.S.
Receivables Sale Agreement, and the Agent's ownership or security interest
therein, have been duly executed and filed in all necessary jurisdictions, and
(3) if the surviving entity in such combination(s) is not an existing party to
the U.S. Receivables Sale Agreement, all other documents required to be
delivered in connection with a Joinder Agreement under the U.S. Receivables Sale
Agreement have been duly executed and delivered substantially contemporaneously
with such combination(s), and (b) with respect to Xxxxxxxxxxx, any merger,
consolidation or similar combination of Xxxxxxxxxxx with another Person so long
as after giving effect thereto: (i) the survivor unconditionally and expressly
assumes, in writing, all of Xxxxxxxxxxx'x obligations under the Transaction
Documents to which Xxxxxxxxxxx was a party immediately prior to such merger,
consolidation or combination, and (ii) the survivor has senior unsecured
long-term debt ratings of at least "BBB-" from Standard & Poor's Ratings Group
and "Baa3" from Xxxxx'x Investors Services, Inc.
55
60
"POOLED COMMERCIAL PAPER" means Commercial Paper notes of
Conduit subject to any particular pooling arrangement by Conduit, but excluding
Commercial Paper issued by Conduit for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by Conduit.
"POTENTIAL AMORTIZATION EVENT" means an event which, with the
passage of time or the giving of notice, or both, would constitute an
Amortization Event.
"PRIME RATE" means a rate per annum equal to the prime rate of
interest announced from time to time by Bank One or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes
"PRO RATA SHARE" means, for each Financial Institution, a
percentage equal to (i) the Commitment of such Financial Institution, divided by
(ii) the aggregate amount of all Commitments of all Financial Institutions
hereunder, adjusted as necessary to give effect to the application of the terms
of Section 13.5 or 13.6.
"PROPOSED REDUCTION DATE" has the meaning set forth in
Section 1.3.
"PURCHASE LIMIT" means $150,000,000.
"PURCHASE NOTICE" has the meaning set forth in Section 1.2.
"PURCHASE PRICE" means, with respect to any Incremental
Purchase of a Purchaser Interest, the amount paid to Seller for such Purchaser
Interest which shall not exceed the least of (i) the amount requested by Seller
in the applicable Purchase Notice, (ii) the unused portion of the Purchase Limit
on the applicable purchase date and (iii) the excess, if any, of the Net
Receivables Balance (less the Aggregate Reserves) on the applicable purchase
date over the aggregate outstanding amount of Aggregate Capital determined as of
the date of the most recent Monthly Report, taking into account such proposed
Incremental Purchase.
"PURCHASERS" means Conduit and each Financial Institution.
"PURCHASER INTEREST" means, at any time, an undivided
percentage ownership interest (computed as set forth below) associated with a
designated amount of Capital, selected pursuant to the terms and conditions
hereof in (i) each Receivable arising prior to the time of the most recent
computation or recomputation of such undivided interest, (ii) all Related
Security with respect to each such Receivable, and (iii) all Collections with
respect to, and other proceeds of, each such Receivable. Each such undivided
percentage interest shall equal:
C
-----------
NRB - AR
WHERE:
C = the Capital of such Purchaser Interest.
56
61
AR = the Aggregate Reserves.
NRB = the Net Receivables Balance.
Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
business day immediately preceding the Amortization Date shall remain constant
at all times thereafter.
"PURCHASING FINANCIAL INSTITUTION" has the meaning set forth
in Section 12.1(b).
"RECEIVABLE" means any "U.S. Receivable" under and as defined
in the U.S. Receivables Sale Agreement in which Seller now has or hereafter
acquires any right, title or interest. Indebtedness and other rights and
obligations arising from any one transaction, including, without limitation,
indebtedness and other rights and obligations represented by an individual
invoice, shall constitute a Receivable separate from a Receivable consisting of
the indebtedness and other rights and obligations arising from any other
transaction; provided however, that any indebtedness, rights or obligations
referred to in the immediately preceding sentence shall be a Receivable
regardless of whether the Obligor or Seller treats such indebtedness, rights or
obligations as a separate payment obligation.
"RECORDS" means, with respect to any Receivable, all Contracts
and other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"REDUCTION NOTICE" has the meaning set forth in Section 1.3.
"REDUCTION PERCENTAGE" means, for any Purchaser Interest
acquired by the Financial Institutions from Conduit for less than the Capital of
such Purchaser Interest, a percentage equal to a fraction the numerator of which
is the Conduit Transfer Price Reduction for such Purchaser Interest and the
denominator of which is the Capital of such Purchaser Interest.
"REGULATORY CHANGE" has the meaning set forth in
Section 10.2(a).
"REINVESTMENT" has the meaning set forth in Section 2.2.
"RELATED SECURITY" means, with respect to any Receivable, all
of Seller's now owned and existing and hereafter arising or acquired right,
title and interest in and to (i) all "Related Security" under and as defined in
the U.S. Receivable Sale Agreement, (ii) the U.S. Receivables Sale Agreement,
(iii) the Performance Undertaking, and (iv) all proceeds of any of the
foregoing.
"REQUIRED FINANCIAL INSTITUTIONS" means, at any time,
Financial Institutions with Commitments in excess of 66-2/3% of the Purchase
Limit.
57
62
"REQUIRED NOTICE PERIOD" means the number of days required
notice set forth below applicable to the Aggregate Reduction indicated below:
AGGREGATE REDUCTION REQUIRED NOTICE PERIOD
------------------- ----------------------
< or = $50,000,000 two (2) Business Days
> $50,000,000 but < or = $100,000,000 three (3) Business Days
> $100,000,000 but < or = $150,000,000 four (4) Business Days
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of Seller now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock or in any junior class of stock of
Seller, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of Seller now or hereafter outstanding, (iii) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to the Subordinated Loans (as defined in the U.S. Receivables Sale
Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of capital stock of Seller now or hereafter
outstanding, and (v) any payment of management fees by Seller (except for
reasonable management fees to Weatherford or its Affiliates in reimbursement of
actual management services performed).
"SELLER" has the meaning set forth in the preamble to this
Agreement.
"SELLER PARTIES" means (a) Seller, and (b) at any time while
it is Servicer and/or Performance Guarantor, Weatherford.
"SERVICER" means at any time the Person (which may be the
Agent) then authorized pursuant to Article VIII to service, administer and
collect Receivables.
"SERVICING FEE" has the meaning set forth in Section 8.6.
"SETTLEMENT DATE" means (A) the second Business Day after each
Monthly Reporting Date, and (B) the last day of the relevant Tranche Period in
respect of each Purchaser Interest of the Financial Institutions.
"SETTLEMENT PERIOD" means (A) in respect of each Purchaser
Interest of Conduit, the immediately preceding Accrual Period, and (B) in
respect of each Purchaser Interest of the Financial Institutions, the entire
Tranche Period of such Purchaser Interest.
58
63
"SUBSIDIARY" of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of which shall at
the time be owned or controlled, directly or indirectly, by such Person or by
one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, association, limited liability company,
joint venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references herein to a
"Subsidiary" shall mean a Subsidiary of Seller.
"TERMINATION DATE" has the meaning set forth in Section 2.2.
"TERMINATION PERCENTAGE" has the meaning set forth in
Section 2.2.
"TERMINATING FINANCIAL INSTITUTION" has the meaning set forth
in Section 13.6(a).
"TERMINATING TRANCHE" has the meaning set forth in
Section 4.3(b).
"TRANCHE PERIOD" means, with respect to any Purchaser Interest
held by a Financial Institution:
(a) if Yield for such Purchaser Interest is calculated on the
basis of the LIBO Rate, a period of one, two, three or six months, or
such other period as may be mutually agreeable to the Agent and Seller,
commencing on a Business Day selected by Seller or the Agent pursuant
to this Agreement. Such Tranche Period shall end on the day in the
applicable succeeding calendar month which corresponds numerically to
the beginning day of such Tranche Period; PROVIDED, HOWEVER, that if
there is no such numerically corresponding day in such succeeding
month, such Tranche Period shall end on the last Business Day of such
succeeding month; or
(b) if Yield for such Purchaser Interest is calculated on the
basis of the Prime Rate, a period commencing on a Business Day selected
by Seller, PROVIDED THAT no such period shall exceed one month.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Purchaser Interest which commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortization Date. The duration of each Tranche Period
which commences after the Amortization Date shall be of such duration as
selected by the Agent.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement,
each Purchase Notice, the U.S. Receivables Sale Agreement, each Collection
Account Agreement, the Performance Undertaking, the Fee Letter, the Subordinated
Note (as defined in the U.S.
59
64
Receivables Sale Agreement) and all other instruments, documents and agreements
executed and delivered in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
"U.S. RECEIVABLES SALE AGREEMENT" means that certain U.S.
Receivables Sale Agreement, dated as of July 2, 2001, between Originators and
Seller, as the same may be amended, restated or otherwise modified from time to
time.
"YIELD" means for each respective Tranche Period relating to
Purchaser Interests of the Financial Institutions, an amount equal to the
product of the applicable Discount Rate for each Purchaser Interest multiplied
by the Capital of such Purchaser Interest for each day elapsed during such
Tranche Period, annualized on a 360 day basis.
"YIELD AND SERVICING RESERVE" means, on any date, an amount
equal to 2.0% multiplied by the Net Receivables Balance as of the close of
business of the Servicer on such date.
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE
CONSTRUED IN ACCORDANCE WITH GAAP. ALL TERMS USED IN ARTICLE 9 OF THE UCC IN THE
STATE OF NEW YORK, AND NOT SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS
DEFINED IN SUCH ARTICLE 9.
60
65
EXHIBIT II
FORM OF PURCHASE NOTICE
[DATE]
Bank One, NA (Main Office Chicago), as Agent
1 Bank One Plaza, 21st Floor
Asset-Backed Finance
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Jupiter Portfolio Manager
RE: PURCHASE NOTICE
Ladies and Gentlemen:
Reference is hereby made to the
U.S. Receivables Purchase
Agreement, dated as of July 2, 2001, by and among W1 Receivables, L.P., a Texas
limited partnership (the "SELLER"), Xxxxxxxxxxx International, Inc., as
Servicer, the Financial Institutions, Jupiter Securitization Corporation
("CONDUIT"), and Bank One, NA (Main Office Chicago), as Agent (the "
U.S.
RECEIVABLES PURCHASE AGREEMENT"). Capitalized terms used herein shall have the
meanings assigned to such terms in the
U.S. Receivables Purchase Agreement.
The Agent is hereby notified of the following Incremental
Purchase:
Purchase Price: $
-----------------------------------
Date of Purchase:
-----------------------------------
Requested Discount Rate: [LIBO Rate] [Prime Rate] [Pooled Commercial
Paper rate]
Please wire-transfer the Purchase Price in immediately
available funds on the above-specified date of purchase to:
[Account Name]
[Account No.]
[Bank Name & Address]
[ABA #]
Reference:
Telephone advice to: [Name] @ tel. no. ( )
Please advise [Name] at telephone no. ( ) ________________
if Conduit will not be making this purchase.
61
66
In connection with the Incremental Purchase to be made on the
above listed "Date of Purchase" (the "PURCHASE DATE"), the Seller hereby
certifies that the following statements are true on the date hereof, and will be
true on the Purchase Date (before and after giving effect to the proposed
Incremental Purchase):
(i) the representations and warranties of the Seller set forth
in Section 5.1 of the
U.S. Receivables Purchase Agreement are true and correct
on and as of the Purchase Date as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result
from the proposed Incremental Purchase, that will constitute an Amortization
Event or a Potential Amortization Event;
(iii) the Facility Termination Date has not occurred, the
Aggregate Capital does not exceed the Purchase Limit and the aggregate Purchaser
Interests do not exceed 100%; and
(iv) the amount of Aggregate Capital is $_________ after
giving effect to the Incremental Purchase to be made on the Purchase Date.
Very truly yours,
W1 RECEIVABLES, L.P.
BY: W1 GENERAL PARTNER, INC., ITS GENERAL
PARTNER
By:
---------------------------------------
Name:
Title:
62
67
EXHIBIT III
CHIEF EXECUTIVE OFFICE OF THE SELLER; LOCATIONS OF RECORDS;
SELLER'S FEDERAL EMPLOYER IDENTIFICATION NUMBER
CHIEF EXECUTIVE OFFICE AND LOCATION OF RECORDS:
000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, XX 00000
(some records may also be located at Suite 600 at the above address)
SELLER'S FEDERAL EMPLOYER IDENTIFICATION NUMBER: 00-0000000
63
68
EXHIBIT IV
NAMES OF COLLECTION BANKS; COLLECTION ACCOUNTS
LOCK BOX P.O. ADDRESS COLLECTION ACCOUNTS
------------------------------------------ -----------------------------------------------------
Weatherford U.S., L.P. Account No. 00103188448 originally in the name of
P.O. Box 200019 Weatherford U.S., L.P. at [X.X. Xxxxxx Xxxxx &
Xxxxxxx, XX 00000-0000 Company/The Chase Manhattan Bank] in Xxxxxxx, XX
00000-0000
------------------------------------------ -----------------------------------------------------
Weatherford Artificial Lift Systems, Inc. Account No. 00100367946 originally in the name of
P.O. Box 200937 Weatherford Artificial Lift Systems, Inc. at [J.P.
Xxxxxxx, XX 00000-0000 Xxxxxx Xxxxx & Company/The Chase Manhattan Bank] in
Xxxxxxx, XX 00000-0000
------------------------------------------ -----------------------------------------------------
[Weatherford Artificial Lift Systems, Account No. 00101764802 originally in the name of
Inc. d/b/a] Trico Industries, Inc. [Xxxxxxxxxxx Artificial Lift Systems, Inc. d/b/a]
X.X. Xxx 000000 Xxxxx Industries, Inc. at [X.X. Xxxxxx Xxxxx &
Xxxxxx, XX 00000-0000 Company/The Chase Manhattan Bank] in Xxxxxx, XX
00000-0000
------------------------------------------ -----------------------------------------------------
Weatherford U.S., L.P. (d/b/a Gemoco) Account No. 00103188455 originally in the name of
P.O. Box 200098 Weatherford U.S., L.P. (d/b/a Gemoco) at [J.P.
Xxxxxxx, XX 00000-0000 Xxxxxx Xxxxx & Company/The Chase Manhattan Bank] in
Xxxxxxx, XX 00000-0000
------------------------------------------ -----------------------------------------------------
[Weatherford U.S., L.P. d/b/a] Xxxxxxxx Account No. 00103340338 originally in the name of
Tool Company, Ltd. [Weatherford U.S., L.P. d/b/a] Xxxxxxxx Tool
X.X. Xxx 000000 Company, Ltd. at [X.X. Xxxxxx Xxxxx & Company/The
Xxxxxxx, XX 00000-0000 Chase Manhattan Bank] in Xxxxxxx, XX 00000-0000
------------------------------------------ -----------------------------------------------------
Account No. 9102717973 originally in the name of
Weatherford Artificial Lift Systems, Inc. at [X.X.
Xxxxxx Chase & Company/The Chase Manhattan Bank] in
Xxx Xxxx, XX 00000
------------------------------------------ -----------------------------------------------------
Account No. 323005020 originally in the name of
Weatherford U.S., L.P. at [X.X. Xxxxxx Chase &
Company/The Chase Manhattan Bank] in Xxx Xxxx,
XX 00000
64
69
EXHIBIT V
FORM OF COMPLIANCE CERTIFICATE
To: Bank One, NA (Main Office Chicago), as Agent
This Compliance Certificate is furnished pursuant to that
certain
U.S. Receivables Purchase Agreement dated as of July 2, 2001 among W1
Receivables, L.P. (the "SELLER"), Xxxxxxxxxxx International, Inc. (the
"SERVICER"), the Purchasers party thereto and Bank One, NA (Main Office
Chicago), as agent for such Purchasers (the "AGREEMENT").
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________ of
[Seller/Servicer].
2. I have reviewed the terms of the Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of [Seller/Servicer] during the accounting period
covered by the attached financial statements.
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event which
constitutes an Amortization Event or Potential Amortization Event, as each such
term is defined under the Agreement, during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate, except as set forth in paragraph 4 below.
4. Described below are the exceptions, if any, to paragraph 3
by listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Seller has taken, is taking, or
proposes to take with respect to each such condition or event: ____________
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this ____ day of _______, 20__ .
-------------------------------
65
70
EXHIBIT VI-1
FORM OF COLLECTION ACCOUNT AGREEMENT FOR LOCK-BOX ACCOUNTS
--------
COLLECTION ACCOUNT AGREEMENT
July 2, 2001
X.X. Xxxxxx Chase & Company
000 Xxxx Xxxxxx, 0-XXX Xxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: __________________
RE: WEATHERFORD ARTIFICIAL LIFT SYSTEMS, INC., WEATHERFORD U.S., L.P.
AND W1 RECEIVABLES L.P.
Ladies and Gentlemen:
Reference is hereby made to each of the post office boxes listed on the
Appendix hereto (each, a "LOCK-BOX" and collectively, the "LOCK-BOXES") of which
you have exclusive control for the purpose of receiving mail and processing
payments therefrom pursuant to that certain Treasury Management Service
Agreement between you and Xxxxxxxxxxx International, Inc. (the "PARENT") dated
March 10, 1995 (the "AGREEMENT"). You hereby confirm your agreement to perform
the services described therein. Among the services you have agreed to perform
therein, is to endorse all checks and other evidences of payment, and credit
such payments to the checking accounts specified on the Appendix opposite each
of the Lock-Boxes maintained with you (each, a "LOCK-BOX ACCOUNT" and
collectively, the "LOCK-BOX ACCOUNTS").
Each of Weatherford Artificial Lift Systems, Inc. and Weatherford U.S.,
L.P. (each, a "COMPANY" AND COLLECTIVELY, THE "COMPANIES") and the Parent hereby
informs you that pursuant to that certain U.S. Receivables Sale Agreement, dated
as of July 2, 2001 between the Companies and W1 Receivables L.P. (the "SELLER"),
the Companies have transferred all of their right, title and interest in and to,
and exclusive ownership and control of, the Lock-Boxes and the Lock-Box Accounts
to Seller. The Parent, the Companies and Seller hereby request that the name of
each of the Lock-Box Accounts be changed to "W1 Receivables L.P."
The Parent, the Companies and Seller hereby irrevocably instruct you,
and you hereby agree, that upon receiving notice from Bank One, NA (Main Office
Chicago) (("Bank One") in the form attached hereto as Annex A: (i) the name of
each of the Lock-Box Accounts will be changed to Bank One for itself and as
agent (or any designee of Bank One) and Bank One will have exclusive ownership
of and access to the Lock-Boxes and the Lock-Box Accounts, and none of the
Parent, the Companies, Seller, nor any of their respective affiliates will have
any
66
71
control of the Lock-Boxes or the Lock-Box Accounts or any access thereto, (ii)
you will either continue to send the funds from the Lock-Boxes to the applicable
Lock-Box Account specified on the Appendix hereto, or will redirect the funds as
Bank One may otherwise request, (iii) you will transfer monies on deposit in the
Lock-Box Accounts at any time, as directed by Bank One, (iv) all services to be
performed by you under the Agreement will be performed on behalf of Bank One,
and (v) all correspondence or other mail which you have agreed to send to the
Parent, either of the Companies or Seller will be sent to Bank One at the
following address:
Bank One, NA (Main Office Chicago)
Suite 0079, 21st Floor
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Credit Manager, Asset Backed Securities Division
Moreover, upon such notice, Bank One for itself and as agent will have
all rights and remedies given to the Parent or the Companies (and Seller, as the
Companies' assignee) under the Agreement. Seller agrees, however, to continue to
pay all fees and other assessments due thereunder at any time.
You hereby acknowledge that monies deposited in the Lock-Box Accounts
or any other account established with you by Bank One for the purpose of
receiving funds from the Lock-Boxes or Lock-Box Accounts are subject to the
liens of Bank One for itself and as agent, and will not be subject to deduction,
set-off, banker's lien or any other right you or any other party may have
against the Parent, the Companies or Seller except that you may debit the
Lock-Box Accounts for any items deposited therein that are returned or otherwise
not collected and for all charges, fees, commissions and expenses incurred by
you in providing services hereunder, all in accordance with your customary
practices for the charge back of returned items and expenses.
THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF [NEW YORK]. This letter agreement may be executed in
any number of counterparts and all of such counterparts taken together will be
deemed to constitute one and the same instrument.
This letter agreement contains the entire agreement between the
parties, and may not be altered, modified, terminated or amended in any respect,
nor may any right, power or privilege of any party hereunder be waived or
released or discharged, except upon execution by all parties hereto of a written
instrument so providing. In the event that any provision in this letter
agreement is in conflict with, or inconsistent with, any provision of the
Agreement, this letter agreement will exclusively govern and control. Each party
agrees to take all actions reasonably requested by any other party to carry out
the purposes of this letter agreement or to preserve and protect the rights of
each party hereunder.
67
72
Please indicate your agreement to the terms of this letter agreement by signing
in the space provided below. This letter agreement will become effective
immediately upon execution of a counterpart of this letter agreement by all
parties hereto.
Very truly yours,
XXXXXXXXXXX INTERNATIONAL, INC.
By:
-----------------------------
Name:
Title:
ADDRESS FOR NOTICES:
-------------------------
XXXXXXXXXXX ARTIFICIAL LIFT SYSTEMS, INC.
By:
-----------------------------
Name:
Title:
ADDRESS FOR NOTICES:
-------------------------
WEATHERFORD U.S., L.P.
BY: WUS HOLDING, LLC, ITS GENERAL PARTNER
By:
-----------------------------
Name:
Title:
ADDRESS FOR NOTICES:
-------------------------
68
73
W1 RECEIVABLES L.P.
BY: W1 GENERAL PARTNER, INC., , ITS GENERAL PARTNER
By:
-----------------------------
Name:
Title:
ADDRESS FOR NOTICES:
-------------------------
ACKNOWLEDGED AND AGREED TO THIS DAY OF 2001:
---- --------------
X.X. XXXXXX XXXXX & COMPANY
By:
-----------------------------
Name:
Title:
BANK ONE, NA (MAIN OFFICE CHICAGO), as Agent
By:
-----------------------------
Name:
Title:
69
74
APPENDIX
FOR COLLECTION ACCOUNT AGREEMENT
LOCK-BOXES LOCK-BOX ACCOUNTS
------------------------------------------ -----------------------------------------------------
Weatherford U.S., L.P. Account No. 00103188448 originally in the name of
P.O. Box 200019 Weatherford U.S., L.P. at [X.X. Xxxxxx Xxxxx &
Xxxxxxx, XX 00000-0000 Company/The Chase Manhattan Bank](1) in Xxxxxxx, XX
00000-0000
------------------------------------------ -----------------------------------------------------
Weatherford Artificial Lift Systems, Inc. Account No. 00100367946 originally in the name of
P.O. Box 200937 Xxxxxxxxxxx Artificial Lift Systems, Inc. at [J.P.
Xxxxxxx, XX 00000-0000 Xxxxxx Xxxxx & Company/The Chase Manhattan Bank] in
Xxxxxxx, XX 00000-0000
------------------------------------------ -----------------------------------------------------
[Xxxxxxxxxxx Artificial Lift Systems, Account No. 00101764802 originally in the name of
Inc. d/b/a] Trico Industries, Inc. [Xxxxxxxxxxx Artificial Lift Systems, Inc. d/b/a]
X.X. Xxx 000000 Xxxxx Industries, Inc. at [X.X. Xxxxxx Xxxxx &
Xxxxxx, XX 00000-0000 Company/The Chase Manhattan Bank] in Xxxxxx, XX
00000-0000
------------------------------------------ -----------------------------------------------------
Weatherford U.S., L.P. (d/b/a Gemoco) Account No. 00103188455 originally in the name of
P.O. Box 200098 Weatherford U.S., L.P. (d/b/a Gemoco) at [J.P.
Xxxxxxx, XX 00000-0000 Xxxxxx Xxxxx & Company/The Chase Manhattan Bank] in
Xxxxxxx, XX 00000-0000
------------------------------------------ -----------------------------------------------------
[Weatherford U.S., L.P. d/b/a] Xxxxxxxx Account No. 00103340338 originally in the name of
Tool Company, Ltd. [Weatherford U.S., L.P. d/b/a] Xxxxxxxx Tool
X.X. Xxx 000000 Company, Ltd. at [X.X. Xxxxxx Xxxxx & Company/The
Xxxxxxx, XX 00000-0000 Chase Manhattan Bank] in Xxxxxxx, XX 00000-0000
--------
(1) Verify bank name for each account.
70
75
ANNEX A
FORM OF NOTICE
[ON LETTERHEAD OF BANK ONE]
[DATE]
X.X. Xxxxxx Xxxxx & Company
000 Xxxx Xxxxxx, 0-XXX Xxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention:
-------------------
RE: W1 RECEIVABLES L.P.
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights
pursuant to that certain letter agreement dated July 2, 2001 among Xxxxxxxxxxx
International, Inc. and certain of its subsidiaries including W1 Receivables
L.P., you and us, to have the name of, and to have exclusive ownership and
control of, account numbers __________________ (the "LOCK-BOX ACCOUNTS")
maintained with you, transferred to us. [Each of the Lock-Box Accounts will
henceforth be a zero-balance account, and funds deposited in the Lock-Box
Accounts should be sent at the end of each day to ___________.] You have further
agreed to perform all other services you are performing under that certain
Treasury Management Service Agreement dated March 10, 1995 between you and
Xxxxxxxxxxx International, Inc. on our behalf.
We appreciate your cooperation in this matter.
Very truly yours,
BANK ONE, NA (MAIN OFFICE CHICAGO) (for
itself and as agent)
By:
-----------------------------------
Title:
71
76
EXHIBIT VI-2
FORM OF COLLECTION ACCOUNT AGREEMENT FOR DIRECT DEPOSIT ACCOUNTS
---------
COLLECTION ACCOUNT AGREEMENT
July 2, 2001
X.X. Xxxxxx Chase & Company(2)
0 Xxxxx Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention:
-------------------
RE: W1 RECEIVABLES L.P.
Ladies and Gentlemen:
Reference is hereby made to Weatherford U.S., L.P.'s Direct
Deposit Account No. 323005020 and Weatherford Artificial Lift Systems, Inc.'s
Direct Deposit Account No. 9102717973 (collectively, the "DDA ACCOUNTS") of
which you have exclusive control for the purpose of receiving mail and
processing payments therefrom pursuant to that certain Terms And Conditions For
Business Accounts and Services between you and each of Weatherford U.S., L.P.
and Weatherford Artificial Lift Systems, Inc. (each, a "COMPANY" and
collectively, the "COMPANIES") dated August 5, 1998 (the "AGREEMENT"). You
hereby confirm your agreement to perform the services described therein.
The Companies hereby inform you that pursuant to that certain U.S.
Receivables Sale Agreement, dated as of July 2, 2001 between the Companies and
W1 Receivables L.P. (the "SELLER"), the Companies have transferred all of their
right, title and interest in and to, and exclusive ownership and control of, the
DDA Accounts to Seller. [The Companies and Seller hereby request that the name
of each of the DDA Accounts be changed to "W1 Receivables L.P."].
The Companies and Seller hereby irrevocably instruct you, and you
hereby agree, that upon receiving notice from Bank One, NA (Main Office Chicago)
(("Bank One") in the form attached hereto as Annex A: (i) the name of the DDA
Accounts will be changed to Bank One for itself and as agent (or any designee of
Bank One) and Bank One will have exclusive
---------
(2) Verify that this is the correct legal name of the bank holding these
accounts.
72
77
ownership of and access to the DDA Accounts, and neither the Company, Seller,
nor any of their respective affiliates will have any control of the DDA Accounts
or any access thereto, (ii) you will transfer monies on deposit in the DDA
Accounts at any time, as directed by Bank One, (iii) all services to be
performed by you under the Agreement will be performed on behalf of Bank One,
and (iv) all correspondence or other mail which you have agreed to send to the
Companies or Seller will be sent to Bank One at the following address:
Bank One, NA (Main Office Chicago)
Suite 0079, 21st Floor
1 Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Credit Manager, Asset Backed Securities Division
Moreover, upon such notice, Bank One for itself and as agent
will have all rights and remedies given to the Companies (and Seller, as the
Companies' assignee) under the Agreement. Seller agrees, however, to continue to
pay all fees and other assessments due thereunder at any time.
You hereby acknowledge that monies deposited in the DDA Accounts or any
other account established with you by Bank One for the purpose of receiving
funds from the DDA Accounts are subject to the liens of Bank One for itself and
as agent, and will not be subject to deduction, set-off, banker's lien or any
other right you or any other party may have against either of the Companies or
Seller except that you may debit the DDA Accounts for any items deposited
therein that are returned or otherwise not collected and for all charges, fees,
commissions and expenses incurred by you in providing services hereunder, all in
accordance with your customary practices for the charge back of returned items
and expenses.
THIS LETTER AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF [NEW YORK]. This letter agreement may be executed in
any number of counterparts and all of such counterparts taken together will be
deemed to constitute one and the same instrument.
This letter agreement contains the entire agreement between the
parties, and may not be altered, modified, terminated or amended in any respect,
nor may any right, power or privilege of any party hereunder be waived or
released or discharged, except upon execution by all parties hereto of a written
instrument so providing. In the event that any provision in this letter
agreement is in conflict with, or inconsistent with, any provision of the
Agreement, this letter agreement will exclusively govern and control. Each party
agrees to take all actions reasonably requested by any other party to carry out
the purposes of this letter agreement or to preserve and protect the rights of
each party hereunder.
73
78
Please indicate your agreement to the terms of this letter agreement by signing
in the space provided below. This letter agreement will become effective
immediately upon execution of a counterpart of this letter agreement by all
parties hereto.
Very truly yours,
WEATHERFORD U.S., L.P.
BY: WUS HOLDING, LLC, ITS GENERAL PARTNER
By:
----------------------------------------
Name:
Title:
ADDRESS FOR NOTICES: _____________________
WEATHERFORD ARTIFICIAL LIFT SYSTEMS, INC.
By:
----------------------------------------
Name:
Title:
ADDRESS FOR NOTICES:
----------------------
W1 RECEIVABLES L.P.
By: W1 GENERAL PARTNER, INC., ITS GENERAL PARTNER
By:
----------------------------------------
Name:
Title:
ADDRESS FOR NOTICES:
----------------------
74
79
ACKNOWLEDGED AND AGREED TO THIS DAY OF , 2001:
------ ----------------
X.X. XXXXXX XXXXX & COMPANY(3)
By: _______________________________
Name:
Title:
BANK ONE, NA (MAIN OFFICE CHICAGO), as Agent
By:
----------------------------------------
Name:
Title:
---------
(3) Verify that this is the correct legal name of the bank holding these
accounts.
75
80
ANNEX A
FORM OF NOTICE
[ON LETTERHEAD OF BANK ONE]
[DATE]
X.X. Xxxxxx Chase & Company(4)
0 Xxxxx Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention:
-------------------
RE: W1 RECEIVABLES L.P.
Ladies and Gentlemen:
We hereby notify you that we are exercising our rights
pursuant to that certain letter agreement dated July 2, 2001 among Weatherford
U.S., L.P., Weatherford Artificial Lift Systems, Inc. (collectively, the
"COMPANIES"), W1 Receivables L.P., you and us, to have the name of, and to have
exclusive ownership and control of, account numbers 323005020 and 9102717973
(the "DDA ACCOUNTS") maintained with you, transferred to us. [Each of the DDA
Accounts will henceforth be a zero-balance account, and funds deposited in the
DDA Accounts should be sent at the end of each day to ___________.] You have
further agreed to perform all other services you are performing under that
certain Terms And Conditions For Business Accounts and Services dated August 5,
1998 between you and the Companies on our behalf.
We appreciate your cooperation in this matter.
Very truly yours,
BANK ONE, NA (MAIN OFFICE CHICAGO) (for
itself and as agent)
By:
-----------------------------------
Title:
---------
(4) Verify that this is the correct legal name of the bank holding these
accounts.
76
81
EXHIBIT VII
FORM OF ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this "ASSIGNMENT AGREEMENT") is
entered into as of the ___ day of ____________, ____, by and between
_____________________ ("ASSIGNOR") and __________________ ("ASSIGNEE").
PRELIMINARY STATEMENTS
A. This Assignment Agreement is being executed and delivered
in accordance with Section 12.1(b) of that certain
U.S. Receivables Purchase
Agreement dated as of July 2, 2001 by and among W1 Receivables, L.P.,
Xxxxxxxxxxx International, Inc., as Servicer, Jupiter Securitization
Corporation, Bank One, NA (Main Office Chicago), as Agent, and the Financial
Institutions party thereto (as amended, modified or restated from time to time,
the "PURCHASE AGREEMENT"). Capitalized terms used and not otherwise defined
herein are used with the meanings set forth or incorporated by reference in the
Purchase Agreement.
B. Assignor is a Financial Institution party to the Purchase
Agreement, and Assignee wishes to become a Financial Institution thereunder; and
C. Assignor is selling and assigning to Assignee an undivided
____% (the "TRANSFERRED PERCENTAGE") interest in all of Assignor's rights and
obligations under the Purchase Agreement and the Transaction Documents,
including, without limitation, Assignor's Commitment and (if applicable) the
Capital of Assignor's Purchaser Interests as set forth herein.
AGREEMENT
The parties hereto hereby agree as follows:
1. The sale, transfer and assignment effected by this
Assignment Agreement shall become effective (the "EFFECTIVE DATE") two (2)
Business Days (or such other date selected by the Agent in its sole discretion)
following the date on which a notice substantially in the form of Schedule II to
this Assignment Agreement ("EFFECTIVE NOTICE") is delivered by the Agent to
Conduit, Assignor and Assignee. From and after the Effective Date, Assignee
shall be a Financial Institution party to the Purchase Agreement for all
purposes thereof as if Assignee were an original party thereto and Assignee
agrees to be bound by all of the terms and provisions contained therein.
2. If Assignor has no outstanding Capital under the Purchase
Agreement, on the Effective Date, Assignor shall be deemed to have hereby
transferred and assigned to Assignee, without recourse, representation or
warranty (except as provided in paragraph 6 below), and the Assignee shall be
deemed to have hereby irrevocably taken, received and assumed from Assignor, the
Transferred Percentage of Assignor's Commitment and all rights and obligations
associated therewith under the terms of the Purchase Agreement, including,
77
82
without limitation, the Transferred Percentage of Assignor's future funding
obligations under Section 4.1 of the Purchase Agreement.
3. If Assignor has any outstanding Capital under the Purchase
Agreement, at or before 12:00 noon, local time of Assignor, on the Effective
Date Assignee shall pay to Assignor, in immediately available funds, an amount
equal to the sum of (i) the Transferred Percentage of the outstanding Capital of
Assignor's Purchaser Interests (such amount, being hereinafter referred to as
the "ASSIGNEE'S CAPITAL"); (ii) all accrued but unpaid (whether or not then due)
Yield attributable to Assignee's Capital; and (iii) accruing but unpaid fees and
other costs and expenses payable in respect of Assignee's Capital for the period
commencing upon each date such unpaid amounts commence accruing, to and
including the Effective Date (the "ASSIGNEE'S ACQUISITION COST"); whereupon,
Assignor shall be deemed to have sold, transferred and assigned to Assignee,
without recourse, representation or warranty (except as provided in paragraph 6
below), and Assignee shall be deemed to have hereby irrevocably taken, received
and assumed from Assignor, the Transferred Percentage of Assignor's Commitment
and the Capital of Assignor's Purchaser Interests (if applicable) and all
related rights and obligations under the Purchase Agreement and the Transaction
Documents, including, without limitation, the Transferred Percentage of
Assignor's future funding obligations under Section 4.1 of the Purchase
Agreement.
4. Concurrently with the execution and delivery hereof,
Assignor will provide to Assignee copies of all documents requested by Assignee
which were delivered to Assignor pursuant to the Purchase Agreement.
5. Each of the parties to this Assignment Agreement agrees
that at any time and from time to time upon the written request of any other
party, it will execute and deliver such further documents and do such further
acts and things as such other party may reasonably request in order to effect
the purposes of this Assignment Agreement.
6. By executing and delivering this Assignment Agreement,
Assignor and Assignee confirm to and agree with each other, the Agent and the
Financial Institutions as follows: (a) other than the representation and
warranty that it has not created any Adverse Claim upon any interest being
transferred hereunder, Assignor makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made by any other Person in or in connection with the Purchase Agreement or the
Transaction Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of Assignee, the Purchase Agreement or any
other instrument or document furnished pursuant thereto or the perfection,
priority, condition, value or sufficiency of any collateral; (b) Assignor makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Seller, any Obligor, any Affiliate of the Seller or
the performance or observance by the Seller, any Obligor, any Affiliate of the
Seller of any of their respective obligations under the Transaction Documents or
any other instrument or document furnished pursuant thereto or in connection
therewith; (c) Assignee confirms that it has received a copy of the Purchase
Agreement and copies of such other Transaction Documents, and other documents
and information as it has requested and deemed appropriate to make its own
credit analysis and decision to enter into this Assignment Agreement; (d)
Assignee will, independently and without
78
83
reliance upon the Agent, Conduit, the Seller or any other Financial Institution
or Purchaser and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Purchase Agreement and the Transaction Documents;
(e) Assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under the Transaction Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; and (f) Assignee agrees that it will perform in
accordance with their terms all of the obligations which, by the terms of the
Purchase Agreement and the other Transaction Documents, are required to be
performed by it as a Financial Institution or, when applicable, as a Purchaser.
7. Each party hereto represents and warrants to and agrees
with the Agent that it is aware of and will comply with the provisions of the
Purchase Agreement, including, without limitation, Sections 4.1, 13.1 and 14.6
thereof.
8. Schedule I hereto sets forth the revised Commitment of
Assignor and the Commitment of Assignee, as well as administrative information
with respect to Assignee.
9. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10. Assignee hereby covenants and agrees that, prior to the
date which is one year and one day after the payment in full of all senior
indebtedness for borrowed money of Conduit, it will not institute against, or
join any other Person in instituting against, Conduit any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment Agreement to be executed by their respective duly authorized officers
of the date hereof.
[ASSIGNOR]
By:
----------------------------
Title:
[ASSIGNEE]
By:
----------------------------
Title:
79
84
SCHEDULE I TO ASSIGNMENT AGREEMENT
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
DATE: ,
------------- ------
TRANSFERRED PERCENTAGE: %
---------------
X-0 X-0 X-0 X-0
---------------- ------------- ---------------- --------------
ASSIGNOR COMMITMENT COMMITMENT OUTSTANDING RATABLE SHARE
(PRIOR TO GIVING (AFTER GIVING CAPITAL (IF ANY) OF OUTSTANDING
EFFECT TO THE EFFECT TO THE CAPITAL
ASSIGNMENT ASSIGNMENT
AGREEMENT) AGREEMENT)
X-0 X-0 X-0 X-0
---------------- ------------- ---------------- --------------
ASSIGNEE COMMITMENT OUTSTANDING RATABLE SHARE
(AFTER GIVING CAPITAL (IF ANY) OF OUTSTANDING
EFFECT TO THE CAPITAL
ASSIGNMENT
AGREEMENT)
ADDRESS FOR NOTICES
----------------------
----------------------
Attention:
Phone:
Fax:
80
85
SCHEDULE II TO ASSIGNMENT AGREEMENT
EFFECTIVE NOTICE
TO: , Assignor
----------------------
----------------------
----------------------
----------------------
TO: , Assignee
----------------------
----------------------
----------------------
----------------------
The undersigned, as Agent under the U.S. Receivables Purchase
Agreement dated as of July 2, 2001 by and among W1 Receivables, L.P., a Texas
limited partnership, Xxxxxxxxxxx International, Inc., as Servicer, Jupiter
Securitization Corporation, Bank One, NA (Main Office Chicago), as Agent, and
the Financial Institutions party thereto, hereby acknowledges receipt of
executed counterparts of a completed Assignment Agreement dated as of
____________, ____ between __________________, as Assignor, and
__________________, as Assignee. Terms defined in such Assignment Agreement are
used herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that
the Effective Date will be ______________,_____.
2. Conduit hereby consents to the Assignment Agreement as
required by Section 12.1(b) of the U.S. Receivables Purchase Agreement.
[3. Pursuant to such Assignment Agreement, the Assignee is
required to pay $____________ to Assignor at or before 12:00 noon (local time of
Assignor) on the Effective Date in immediately available funds.]
Very truly yours,
BANK ONE, NA (MAIN OFFICE CHICAGO),
individually and as Agent
By:
--------------------------
Title:
------------------------
81
86
JUPITER SECURITIZATION CORPORATION
By:
--------------------------
Authorized Signatory
82
87
EXHIBIT VIII
CREDIT AND COLLECTION POLICY
[attached]
83
88
EXHIBIT IX
FORM OF CONTRACT(S)
[attached]
84
89
EXHIBIT X
[FORM OF] MONTHLY REPORT
W1 RECEIVABLES, L.P.
MONTHLY REPORT AS OF:
FOR THE MONTH OF:
ORIGINATOR-SPECIFIC DATA:
I. RECEIVABLES ROLLFORWARD
Weatherford Weatherford US, Weatherford Artificial
US, L.P. (WCS) L.P. (WDIS) Lift Systems, Inc. (WALS) GEMOCO
-------------- --------------- ------------------------- ----------
Beginning Receivables
Add: New Receivables (1)
Less: Cash Collections
Dilutions
Charge-Offs
Adjustments
-------------- --------------- ------------------------- ----------
TOTAL RECEIVABLES - - - -
-------------- --------------- ------------------------- ----------
II. SUMMARY AGING SCHEDULE
Weatherford Weatherford US, Weatherford Artificial
US, L.P. (WCS) L.P. (WDIS) Lift Systems, Inc. (WALS) GEMOCO
-------------- --------------- ------------------------- ----------
Current
1 - 30 days past due
31 - 60 days past due
61 - 90 days past due
91 - 120 days past due
> 120 days past due
-------------- --------------- ------------------------- ----------
TOTAL RECEIVABLES 0 0 0 0
-------------- --------------- ------------------------- ----------
85
90
III. ELIGIBLE RECEIVABLES
Weatherford Weatherford US, Weatherford Artificial
US, L.P. (WCS) L.P. (WDIS) Lift Systems, Inc. (WALS) GEMOCO
-------------- --------------- ------------------------- ----------
Total Receivables - - - -
Less: Cross-Age Test (50%)
Receivables of Affiliates
Non - US Receivables
Defaulted Receivables (> 90 dpd)
Charged-Off Receivables
Extended Terms ( > 30 days)(2)
Subject to set-off
Federal Government Receivables(3)
Plus: Double Counted Ineligibles
-------------- --------------- ------------------------- ----------
ELIGIBLE RECEIVABLES BALANCE
-------------- --------------- ------------------------- ----------
IV. DYNAMIC RESERVE CALCULATIONS
New Effective
Floor: Dynamic Reserve: Aggregate Reserve:
------- ---------------- ------------------
Loss Reserve Percentage(4) 10.00% 10.00% 10.00%
Dilution Reserve Percentage(5) 0.00% 0.00%
Discount/Servicing Reserve Percentage 2.00% 2.00% 2.00%
===== ===== =====
AGGREGATE RESERVE: 12.00% 12.00% 12.00%
86
91
V. CAPITAL AVAILABILITY
-----------------------------
Facility Limit $150,000,000
-----------------------------
ELIGIBLE RECEIVABLES BALANCE 0
Less: Excess Concentrations (see Page 3) 0
------------
NET RECEIVABLE BALANCE 0
CURRENT
Less Reserves - from Section IV
Aggregate Reserves 12.00% 0
============
Total Available Funding Amount -
------------
Capital Currently Outstanding $ -
------------
----------------------------------------
Purchaser #DIV/0!
Interest
----------------------------------------
REQUIRED PAYDOWN $ -
PRO-FORMA
Less Reserves - from Section IV
Aggregate Reserves 12.00% 0
------------
Total Available Funding Amount -
------------
Potential Capital Outstanding
------------
----------------------------------------
Pro-forma #DIV/0!
Purchaser
Interest
----------------------------------------
INCREMENTAL INCREASE REQUESTED $ -
------------
PORTFOLIO-WIDE DATA:
87
92
VI. COMPLIANCE
3-Month Average Loss-to-Liquidation Ratio(7)
Two month prior Loss-to-Liquidation ratio
One month prior Loss-to-Liquidation ratio
Current month Loss-to-Liquidation ratio
Three-month rolling Loss-to-Liquidation Ratio: #DIV/0!
Loss-to-Liquidation Trigger Ratio: 21.75%
Status: #DIV/0!
3-Month Average Dilution Ratio(8)
Two month prior Dilution ratio
One month prior Dilution ratio
Current month Dilution ratio
Three-month rolling Dilution Ratio: #DIV/0!
Dilution Trigger Ratio: 11.25%
Status: #DIV/0!
3-Month Average Delinquency Ratio(9)
Two month prior Delinquency ratio
One month prior Delinquency ratio
Current month Delinquency ratio
Three-month rolling Delinquency Ratio: #DIV/0!
Delinquency Trigger Ratio: 7.25%
Status: #DIV/0!
3-Month Average Default Ratio(10)
Two month prior Default ratio
One month prior Default ratio
Current month Default ratio
Three-month rolling Default Ratio: #DIV/0!
Default Ratio:
29.00
Status: #DIV/0!
Notes:
1. "New Receivables" is equivalent to Originator Sales.
2. Receivables with contract terms greater than 30 days from invoice.
3. Federal Government receivables are ineligible.
4. Loss Reserve is defined as 10%.
5. Dilution Reserve is defined as the greater of (a) 0% and (b) the
formula: [(2.0 X Average Dilution Ratio) + ((Highest Dilution Ratio -
Average Dilution Ratio) x (Highest Dilution Ratio / Average Dilution
Ratio))] X Dilution Horizon Ratio.
6. Purchaser Interest is defined as follows: (Capital) / (NRB - Aggregate
Reserves).
7. The Loss-to-Liquidation Trigger is defined as: (receivables 61-90 days
from invoice + Total Gross Charge-offs) / Collections
8. Dilution Trigger Ratio is defined as Dilution occurred during the
current month divided by Originator Sales during the month ending one
month prior to such date.
88
93
9. Delinquency Trigger Ratio is defined as Receivables > 60 days, but <
91 days from due date divided by Current Month's Outstanding Balance
of all Receivables.
10. Default Trigger Ratio is defined as: (Defaulted Receivables / Total
Receivables).
11. Dilution Ratio is defined as Dilution occurred during the prior month
divided by Originator Sales during the month ending one month prior to
such date.
12. Average Dilution Ratio is defined as the average monthly Dilution
Ratio experienced during the prior 12-month period.
13. Highest Dilution Ratio is defined as the highest monthly Dilution
Ratio experienced during the prior 12-month period.
14. Dilution Horizon Ratio is defined as the percentage equal to
Originator Sales during the prior month period divided by the current
aggregate Outstanding Balance of all Receivables which are not
Delinquent Receivables.
Eligibility Criteria
Referenced in the Receivables Purchase
Agreement, Eligible Receivable definition:
Cross-Age Test (50%) Clause ( ii )
Receivables of Affiliates Clause ( i )
Non - US Receivables Clause ( i )
Defaulted Receivables (> 90 dpd) Clause ( iii )
Charged-Off Receivables Clause ( iii )
Extended Terms ( > 30 days) (2) Clause ( iv )
Subject to set-off Clause ( xv )
Federal Government Receivables (3) Within "Concentration Limit" definition
The Servicer hereby represents and warrants that the
foregoing is a true and accurate accounting in accordance
with the Transaction Documents.
Signed by:
-----------------------------------------
Title:
-----------------------------------------
89
94
EXHIBIT XI
[FORM OF] PERFORMANCE UNDERTAKING
THIS PERFORMANCE UNDERTAKING (this "UNDERTAKING"), dated as of
July 2, 2001, is executed by Xxxxxxxxxxx International, Inc., a Delaware
corporation (the "PERFORMANCE GUARANTOR") in favor of W1 Receivables, L.P., a
Texas limited partnership (together with its successors and assigns,
"RECIPIENT").
RECITALS
1. Weatherford Artificial Lift Systems, Inc., a Delaware corporation, and
Weatherford U.S., L.P., a Louisiana limited partnership (collectively,
the "ORIGINATORS") and Recipient have entered into a U.S. Receivables
Sale Agreement, dated as of July 2, 2001 (as amended, restated or
otherwise modified from time to time, the "SALE AGREEMENT"), pursuant
to which Performance Guarantor and Originators, subject to the terms
and conditions contained therein, are selling and/or contributing their
respective right, title and interest in their accounts receivable to
Recipient.
2. Performance Guarantor owns one hundred percent (100%) of the Equity
Interests of each of the Originators and Recipient, and each of the
Originators, and accordingly, Performance Guarantor, is expected to
receive substantial direct and indirect benefits from its sale of
receivables to Recipient pursuant to the Sale Agreement (which benefits
are hereby acknowledged).
3. As an inducement for Recipient to acquire Originators' accounts
receivable pursuant to the Sale Agreement, Performance Guarantor has
agreed to guaranty the due and punctual performance by Originators of
their obligations under the Sale Agreement.
AGREEMENT
NOW, THEREFORE, Performance Guarantor hereby agrees as
follows:
Section 1. Definitions. Capitalized terms used herein and not
defined herein shall the respective meanings assigned thereto in the Sale
Agreement or the Receivables Purchase Agreement referenced therein. In addition:
"GUARANTEED OBLIGATIONS" means, collectively, all covenants,
agreements, terms, conditions and indemnities to be performed and observed by
any Originator under and pursuant to the Sale Agreement and each other document
executed and delivered by any Originator pursuant to the Sale Agreement,
including, without limitation, the due and punctual payment of all sums which
are or may become due and owing by any Originator under the Sale Agreement,
whether for fees, expenses (including counsel fees), indemnified amounts or
otherwise, whether upon any termination or for any other reason.
90
95
Section 2. Guaranty of Performance of Guaranteed Obligations.
Performance Guarantor hereby guarantees to Recipient, the full and punctual
payment and performance by each Originator of its respective Guaranteed
Obligations. This Undertaking is an absolute, unconditional and continuing
guaranty of the full and punctual performance of all Guaranteed Obligations of
each Originator under the Sale Agreement and each other document executed and
delivered by any Originator pursuant to the Sale Agreement and is in no way
conditioned upon any requirement that Recipient first attempt to collect any
amounts owing by any Originator to Recipient, the Agent or Blue Ridge from any
other Person or resort to any collateral security, any balance of any deposit
account or credit on the books of Recipient, the Agent or Blue Ridge in favor of
any Originator or any other Person or other means of obtaining payment. Should
any Originator default in the payment or performance of any of its Guaranteed
Obligations, Recipient (or its assigns) may cause the immediate performance by
Performance Guarantor of the Guaranteed Obligations and cause any payment
Guaranteed Obligations to become forthwith due and payable to Recipient (or its
assigns), without demand or notice of any nature (other than as expressly
provided herein), all of which are hereby expressly waived by Performance
Guarantor. Notwithstanding the foregoing, this Undertaking is not a guarantee of
the collection of any of the Receivables and Performance Guarantor shall not be
responsible for any Guaranteed Obligations to the extent the failure to perform
such Guaranteed Obligations by any Originator results from Receivables being
uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor; PROVIDED THAT nothing herein shall
relieve any Originator from performing in full its Guaranteed Obligations under
the Sale Agreement or Performance Guarantor of its undertaking hereunder with
respect to the full performance of such duties.
Section 3. Performance Guarantor's Further Agreement to Pay.
Performance Guarantor further agrees, as the principal obligor and not as a
guarantor only, to pay to Recipient (and its assigns), forthwith upon demand in
funds immediately available to Recipient, all reasonable costs and expenses
(including court costs and reasonable legal expenses) incurred or expended by
Recipient in connection with the Guaranteed Obligations, this Undertaking and
the enforcement thereof, together with interest on amounts recoverable under
this Undertaking from the time when such amounts become due until payment, at a
rate of interest (computed for the actual number of days elapsed based on a 360
day year) equal to the Prime Rate plus 2% per annum, such rate of interest
changing when and as the Prime Rate changes.
Section 4. Waivers by Performance Guarantor. Performance
Guarantor waives notice of acceptance of this Undertaking, notice of any action
taken or omitted by Recipient (or its assigns) in reliance on this Undertaking,
and any requirement that Recipient (or its assigns) be diligent or prompt in
making demands under this Undertaking, giving notice of any Termination Event,
Amortization Event, other default or omission by any Originator or asserting any
other rights of Recipient under this Undertaking. Performance Guarantor warrants
that it has adequate means to obtain from each Originator, on a continuing
basis, information concerning the financial condition of such Originator, and
that it is not relying on Recipient to provide such information, now or in the
future. Performance Guarantor also irrevocably waives all defenses (i) that at
any time may be available in respect of the Guaranteed Obligations by virtue of
any statute of limitations, valuation, stay, moratorium law or other similar law
now or hereafter in effect or (ii) that arise under the law of suretyship,
including impairment of collateral. Recipient (and its assigns) shall be at
liberty, without giving notice to or obtaining the assent of
91
96
Performance Guarantor and without relieving Performance Guarantor of any
liability under this Undertaking, to deal with each Originator and with each
other party who now is or after the date hereof becomes liable in any manner for
any of the Guaranteed Obligations, in such manner as Recipient in its sole
discretion deems fit, and to this end Performance Guarantor agrees that the
validity and enforceability of this Undertaking, including without limitation,
the provisions of Section 7 hereof, shall not be impaired or affected by any of
the following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitutions for, the Guaranteed Obligations or any part thereof
or any agreement relating thereto at any time; (b) any failure or omission to
enforce any right, power or remedy with respect to the Guaranteed Obligations or
any part thereof or any agreement relating thereto, or any collateral securing
the Guaranteed Obligations or any part thereof; (c) any waiver of any right,
power or remedy or of any Termination Event, Amortization Event, or default with
respect to the Guaranteed Obligations or any part thereof or any agreement
relating thereto; (d) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any other
obligation of any person or entity with respect to the Guaranteed Obligations or
any part thereof; (e) the enforceability or validity of the Guaranteed
Obligations or any part thereof or the genuineness, enforceability or validity
of any agreement relating thereto or with respect to the Guaranteed Obligations
or any part thereof; (f) the application of payments received from any source to
the payment of any payment obligations of any Originator or any part thereof or
amounts which are not covered by this Undertaking even though Recipient (or its
assigns) might lawfully have elected to apply such payments to any part or all
of the payment obligations of such Originator or to amounts which are not
covered by this Undertaking; (g) the existence of any claim, setoff or other
rights which Performance Guarantor may have at any time against any Originator
in connection herewith or any unrelated transaction; (h) any assignment or
transfer of the Guaranteed Obligations or any part thereof; or (i) any failure
on the part of any Originator to perform or comply with any term of the Sale
Agreement or any other document executed in connection therewith or delivered
thereunder, all whether or not Performance Guarantor shall have had notice or
knowledge of any act or omission referred to in the foregoing clauses (a)
through (i) of this Section 4.
Section 5. Unenforceability of Guaranteed Obligations Against
Originators. Notwithstanding (a) any change of ownership of any Originator or
the insolvency, bankruptcy or any other change in the legal status of any
Originator; (b) the change in or the imposition of any law, decree, regulation
or other governmental act which does or might impair, delay or in any way affect
the validity, enforceability or the payment when due of the Guaranteed
Obligations; (c) the failure of any Originator or Performance Guarantor to
maintain in full force, validity or effect or to obtain or renew when required
all governmental and other approvals, licenses or consents required in
connection with the Guaranteed Obligations or this Undertaking, or to take any
other action required in connection with the performance of all obligations
pursuant to the Guaranteed Obligations or this Undertaking; or (d) if any of the
moneys included in the Guaranteed Obligations have become irrecoverable from any
Originator for any other reason other than final payment in full of the payment
obligations in accordance with their terms, this Undertaking shall nevertheless
be binding on Performance Guarantor. This Undertaking shall be in addition to
any other guaranty or other security for the Guaranteed Obligations, and it
shall not be rendered unenforceable by the invalidity of any such other guaranty
or security. In the event
92
97
that acceleration of the time for payment of any of the Guaranteed Obligations
is stayed upon the insolvency, bankruptcy or reorganization of any Originator or
for any other reason with respect to any Originator, all such amounts then due
and owing with respect to the Guaranteed Obligations under the terms of the Sale
Agreement, or any other agreement evidencing, securing or otherwise executed in
connection with the Guaranteed Obligations, shall be immediately due and payable
by Performance Guarantor.
Section 6. Representations and Warranties. Performance
Guarantor hereby represents and warrants to Recipient that:
(a) Organization; Powers. Performance Guarantor (i) is duly
organized, validly existing and in good standing or active status under the laws
of the jurisdiction of its organization, (ii) has all requisite power and
authority to own its Property and to carry on its business as now conducted and
as proposed to be conducted, (iii) is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except where the failure so to qualify could not reasonably be expected to
result in a Material Adverse Effect, and (iv) has the power and authority to
execute, deliver and perform its obligations under this Undertaking.
(b) Authorization. The execution, delivery and performance by
Performance Guarantor of this Undertaking (i) have been duly authorized by all
requisite corporate and, if required, stockholder action and (ii) will not (A)
violate (1) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or
by-laws of Performance Guarantor, (2) any order of any Governmental Authority or
(3) any provision of any indenture, agreement or other instrument to which
Performance Guarantor is a party or by which any of them or any of their
Property is or may be bound, (B) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under, or
give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture, agreement or other
instrument or (C) result in the creation or imposition of any Adverse Claim upon
or with respect to any Property now owned or hereafter acquired by Performance
Guarantor.
(c) No Conflict. The execution and delivery by Performance
Guarantor of this Undertaking, and the performance of its obligations hereunder
and thereunder do not contravene or violate (i) its Organizational Documents,
(ii) any law, rule or regulation applicable to it, (iii) any restrictions under
any agreement, contract or instrument to which it is a party or by which it or
any of its property is bound, or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting it or its property, and do not
result in the creation or imposition of any Adverse Claim on assets of
Performance Guarantor or its Subsidiaries (except as created hereunder) except,
in any case, where such contravention or violation could not reasonably be
expected to have a Material Adverse Effect; and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law.
(d) Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with this Undertaking.
93
98
(e) Enforceability. This Undertaking has been duly executed
and delivered by Performance Guarantor and constitutes a legal, valid and
binding obligation of Performance Guarantor enforceable against Performance
Guarantor in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
Section 7. Subrogation; Subordination. Notwithstanding
anything to the contrary contained herein, until the Guaranteed Obligations are
paid in full Performance Guarantor: (a) will not enforce or otherwise exercise
any right of subrogation to any of the rights of Recipient, the Agent or Blue
Ridge against any Originator, (b) hereby waives all rights of subrogation
(whether contractual, under Section 509 of the United States Bankruptcy Code, at
law or in equity or otherwise) to the claims of Recipient, the Agent and Blue
Ridge against any Originator and all contractual, statutory or legal or
equitable rights of contribution, reimbursement, indemnification and similar
rights and "claims" (as that term is defined in the United States Bankruptcy
Code) which Performance Guarantor might now have or hereafter acquire against
any Originator that arise from the existence or performance of Performance
Guarantor's obligations hereunder, (c) will not claim any setoff, recoupment or
counterclaim against any Originator in respect of any liability of Performance
Guarantor to such Originator and (d) waives any benefit of and any right to
participate in any collateral security which may be held by Beneficiaries, the
Agent or Blue Ridge. The payment of any amounts due with respect to any
indebtedness of any Originator now or hereafter owed to Performance Guarantor is
hereby subordinated to the prior payment in full of all of the Guaranteed
Obligations. Performance Guarantor agrees that, after the occurrence of any
default in the payment or performance of any of the Guaranteed Obligations,
Performance Guarantor will not demand, xxx for or otherwise attempt to collect
any such indebtedness of any Originator to Performance Guarantor until all of
the Guaranteed Obligations shall have been paid and performed in full. If,
notwithstanding the foregoing sentence, Performance Guarantor shall collect,
enforce or receive any amounts in respect of such indebtedness while any
obligations are still unperformed or outstanding, such amounts shall be
collected, enforced and received by Performance Guarantor as trustee for
Recipient (and its assigns) and be paid over to Recipient (or its assigns) on
account of the Guaranteed Obligations without affecting in any manner the
liability of Performance Guarantor under the other provisions of this
Undertaking. The provisions of this Section 7 shall be supplemental to and not
in derogation of any rights and remedies of Recipient under any separate
subordination agreement which Recipient may at any time and from time to time
enter into with Performance Guarantor.
Section 8. Termination of Performance Undertaking. Performance
Guarantor's obligations hereunder shall continue in full force and effect until
all Aggregate Unpaids are finally paid and satisfied in full and the Receivables
Purchase Agreement is terminated, PROVIDED THAT this Undertaking shall continue
to be effective or shall be reinstated, as the case may be, if at any time
payment or other satisfaction of any of the Guaranteed Obligations is rescinded
or must otherwise be restored or returned upon the bankruptcy, insolvency, or
reorganization of any Originator or otherwise, as though such payment had not
been made or other satisfaction occurred, whether or not Recipient (or its
assigns) is in possession of this Undertaking. No invalidity, irregularity or
unenforceability by reason of the federal bankruptcy code or any
94
99
insolvency or other similar law, or any law or order of any government or agency
thereof purporting to reduce, amend or otherwise affect the Guaranteed
Obligations shall impair, affect, be a defense to or claim against the
obligations of Performance Guarantor under this Undertaking.
Section 9. Effect of Bankruptcy. This Performance Undertaking
shall survive the insolvency of any Originator and the commencement of any case
or proceeding by or against any Originator under the federal bankruptcy code or
other federal, state or other applicable bankruptcy, insolvency or
reorganization statutes. No automatic stay under the federal bankruptcy code
with respect to any Originator or other federal, state or other applicable
bankruptcy, insolvency or reorganization statutes to which any Originator is
subject shall postpone the obligations of Performance Guarantor under this
Undertaking.
Section 10. Setoff. Regardless of the other means of obtaining
payment of any of the Guaranteed Obligations, Recipient (and its assigns) is
hereby authorized at any time and from time to time, without notice to
Performance Guarantor (any such notice being expressly waived by Performance
Guarantor) and to the fullest extent permitted by law, to set off and apply any
deposits and other sums against the obligations of Performance Guarantor under
this Undertaking, whether or not Recipient (or any such assign) shall have made
any demand under this Undertaking and although such obligations may be
contingent or unmatured.
Section 11. Taxes. All payments to be made by Performance
Guarantor hereunder shall be made free and clear of any deduction or
withholding. If Performance Guarantor is required by law to make any deduction
or withholding on account of tax or otherwise from any such payment, the sum due
from it in respect of such payment shall be increased to the extent necessary to
ensure that, after the making of such deduction or withholding, Recipient
receive a net sum equal to the sum which they would have received had no
deduction or withholding been made.
Section 12. Further Assurances. Performance Guarantor agrees
that it will from time to time, at the request of Recipient (or its assigns),
provide information relating to the business and affairs of Performance
Guarantor as Recipient may reasonably request. Performance Guarantor also agrees
to do all such things and execute all such documents as Recipient (or its
assigns) may reasonably consider necessary or desirable to give full effect to
this Undertaking and to perfect and preserve the rights and powers of Recipient
hereunder.
Section 13. Successors and Assigns. This Performance
Undertaking shall be binding upon Performance Guarantor, its successors and
permitted assigns, and shall inure to the benefit of and be enforceable by
Recipient and its successors and assigns. Performance Guarantor may not assign
or transfer any of its obligations hereunder without the prior written consent
of each of Recipient and the Agent. Without limiting the generality of the
foregoing sentence, Recipient may assign or otherwise transfer the Sale
Agreement, any other documents executed in connection therewith or delivered
thereunder or any other agreement or note held by them evidencing, securing or
otherwise executed in connection with the Guaranteed Obligations, or sell
participations in any interest therein, to any other entity or other person, and
such other entity or other person shall thereupon become vested, to the extent
set forth in the agreement
95
100
evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to the Beneficiaries herein.
Section 14. Amendments and Waivers. No amendment or waiver of
any provision of this Undertaking nor consent to any departure by Performance
Guarantor therefrom shall be effective unless the same shall be in writing and
signed by Recipient, the Agent and Performance Guarantor. No failure on the part
of Recipient to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right.
Section 15. Notices. All notices and other communications
provided for hereunder shall be made in writing and shall be addressed as
follows: if to Performance Guarantor, at the address set forth beneath its
signature hereto, and if to Recipient, at the addresses set forth beneath its
signature hereto, or at such other addresses as each of Performance Guarantor or
any Recipient may designate in writing to the other. Each such notice or other
communication shall be effective (1) if given by telecopy, upon the receipt
thereof, (2) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (3)
if given by any other means, when received at the address specified in this
Section 15.
Section 16. GOVERNING LAW. THIS UNDERTAKING SHALL BE CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF NEW YORK.
Section 17. CONSENT TO JURISDICTION. EACH OF PERFORMANCE
GUARANTOR AND RECIPIENT HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE
BOROUGH OF MANHATTAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS UNDERTAKING, THE SALE AGREEMENT OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION THEREWITH OR DELIVERED THEREUNDER AND EACH OF THE PERFORMANCE
GUARANTOR AND RECIPIENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM.
Section 18. Bankruptcy Petition. Performance Guarantor hereby
covenants and agrees that, prior to the date that is one year and one day after
the payment in full of all outstanding senior Indebtedness of Blue Ridge, it
will not institute against, or join any other Person in instituting against,
Blue Ridge any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
96
101
Section 19. Miscellaneous. This Undertaking constitutes the
entire agreement of Performance Guarantor with respect to the matters set forth
herein. The rights and remedies herein provided are cumulative and not exclusive
of any remedies provided by law or any other agreement, and this Undertaking
shall be in addition to any other guaranty of or collateral security for any of
the Guaranteed Obligations. The provisions of this Undertaking are severable,
and in any action or proceeding involving any state corporate law, or any state
or federal bankruptcy, insolvency, reorganization or other law affecting the
rights of creditors generally, if the obligations of Performance Guarantor
hereunder would otherwise be held or determined to be avoidable, invalid or
unenforceable on account of the amount of Performance Guarantor's liability
under this Undertaking, then, notwithstanding any other provision of this
Undertaking to the contrary, the amount of such liability shall, without any
further action by Performance Guarantor or Recipient, be automatically limited
and reduced to the highest amount that is valid and enforceable as determined in
such action or proceeding. Any provisions of this Undertaking which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Unless otherwise
specified, references herein to "SECTION" shall mean a reference to sections of
this Undertaking.
97
102
IN WITNESS WHEREOF, Performance Guarantor has caused this
Undertaking to be executed and delivered as of the date first above written.
XXXXXXXXXXX INTERNATIONAL, INC.
By:
---------------------------------
Name:
--------------------------------
Title:
-------------------------------
ADDRESS FOR NOTICES:
000 Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000
Attention: C. Xxxxx XxXxxxxx, Treasurer
Phone: (000) 000-0000
Fax: (000) 000-0000
98
103
SCHEDULE A
COMMITMENTS OF FINANCIAL INSTITUTIONS
FINANCIAL INSTITUTION COMMITMENT
--------------------- ----------
Bank One, NA $153,000,000
99
104
SCHEDULE B
DOCUMENTS TO BE DELIVERED TO THE AGENT
ON OR PRIOR TO THE INITIAL PURCHASE
PART I: Documents to be Delivered in Connection with the U.S.
Receivables Sale Agreement
1. Executed copies of the U.S. Receivables Sale Agreement,
duly executed by the parties thereto.
2. Copy of the Resolutions of the Board of Directors of each
Originator certified by its Secretary, authorizing each Originator's execution,
delivery and performance of the U.S. Receivables Sale Agreement and the other
documents to be delivered by it thereunder.
3. Certificate of Incorporation/Limited Partnership of each
Originator certified by the Secretary of State of the jurisdiction of
organization of each Originator on or within thirty (30) days prior to the
initial Purchase (as defined in the U.S. Receivables Sale Agreement).
4. Good Standing Certificate for each Originator issued by the
Secretaries of State of its state of organization and the State of Texas.
5. A certificate of the Secretary of each Originator
certifying: (i) the names and signatures of the officers authorized on its
behalf to execute the U.S. Receivables Sale Agreement and any other documents to
be delivered by it thereunder and (ii) a copy of each Originator's By-Laws or
limited partnership agreement, as applicable.
6. Pre-filing state and federal tax lien, judgment lien and
UCC lien searches against each Originator from the following jurisdictions:
x. Xxxxxxxxxxx Artificial Lift Systems, Inc.: Delaware and
Texas (and, insofar as tax and judgment liens are concerned, applicable
counties within each such state)
x. Xxxxxxxxxxx U.S., L.P.: State of Texas, Terrebone Parish,
LA and State of Louisiana (and, insofar as tax and judgment liens are
concerned, applicable counties within Texas)
7. Time stamped receipt copies of proper financing statements,
duly filed under the UCC on or before the date of the initial Purchase (as
defined in the U.S. Receivables Sale Agreement) in all jurisdictions as may be
necessary or, in the opinion of Seller (or its assigns), desirable, under the
UCC of all appropriate jurisdictions or any comparable law in order to perfect
the ownership interests contemplated by the U.S. Receivables Sale Agreement.
100
105
8. Time stamped receipt copies of proper UCC termination
statements, if any, necessary to release all security interests and other rights
of any Person in the Receivables, Contracts or Related Security previously
granted by such Originator.
9. Executed Collection Account Agreements for each Lock-Box
and Collection Account (due not later than August 15, 2001).
10. A favorable opinion of legal counsel for each Originator
reasonably acceptable to Seller (or its assigns) which addresses the following
matters and such other matters as Seller (or its assigns) may reasonably
request:
--Such Originator is a corporation duly incorporated, validly
existing, and in good standing under the laws of its state of incorporation.
--Such Originator has all requisite authority to conduct its
business in each jurisdiction where failure to be so qualified would have a
material adverse effect on such Originator's business.
--The execution and delivery by each Originator of the U.S.
Receivables Sale Agreement and each other Transaction Document to which it is a
party and its performance of its obligations thereunder have been duly
authorized by all necessary corporate action and proceedings on the part of each
Originator and will not:
(a) require any action by or in respect of, or filing with,
any governmental body, agency or official (other than the filing of UCC
financing statements);
(b) contravene, or constitute a default under, any provision
of applicable law or regulation or of its articles or certificate of
incorporation or bylaws or of any agreement, judgment, injunction, order, decree
or other instrument binding upon each Originator; or
(c) result in the creation or imposition of any Adverse Claim
on assets of each Originator or any of its Subsidiaries (except as contemplated
by the U.S. Receivables Sale Agreement).
--The U.S. Receivables Sale Agreement and each other
Transaction Document to which it is a party has been duly executed and delivered
by each Originator and constitutes the legal, valid, and binding obligation of
each Originator enforceable in accordance with its terms, except to the extent
the enforcement thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and subject also to the
availability of equitable remedies if equitable remedies are sought.
--The provisions of the U.S. Receivables Sale Agreement are
effective to create a valid security interest in favor of Seller in all
Receivables and upon the filing of financing statements, Seller shall acquire a
first priority, perfected security interest in such Receivables.
--To the best of the opinion giver's knowledge, there is no
action, suit or other proceeding against each Originator or any Affiliate of
each Originator, which would materially
101
106
adversely affect the business or financial condition of each Originator and its
Affiliates taken as a whole or which would materially adversely affect the
ability of each Originator to perform its obligations under the U.S. Receivables
Sale Agreement.
11. A "TRUE SALE" opinion and "SUBSTANTIVE CONSOLIDATION"
opinion of counsel for each Originator with respect to the transactions
contemplated by the U.S. Receivables Sale Agreement.
12. A Compliance Certificate.
13. Executed copies of (i) all consents from and
authorizations by any Persons and (ii) all waivers and amendments to existing
credit facilities, that are necessary in connection with the U.S. Receivables
Sale Agreement.
14. Executed copies of the Subordinated Notes (as defined in
the U.S. Receivables Sale Agreement) by Seller in favor of each Originator.
15. A direction letter executed by each Originator authorizing
Seller (and its assignees) and directing warehousemen to allow Seller (and its
assignees) to inspect and make copies from each Originator's books and records
maintained at off-site data processing or storage facilities.
PART II: Documents to Be Delivered in Connection with the
Agreement
1. Executed copies of the Agreement, duly executed by the
parties thereto.
2. Copy of the Resolutions of the Board of Directors or
comparable body of each Seller Party [and General Partner], certified by its
Secretary authorizing such Person's execution, delivery and performance of this
Agreement and the other documents to be delivered by it hereunder.
3. Certificate of Incorporation or Limited Partnership of each
Seller Party and General Partner certified by the Secretary of State of its
jurisdiction of organization on or within thirty (30) days prior to the initial
Incremental Purchase.
4. Good Standing Certificate for each Seller Party and General
Partner issued by the Secretaries of State of its state of organization and each
jurisdiction where it has material operations, each of which is listed below:
a. Seller:
b. General Partner
c. Servicer:
102
107
5. A certificate of the Secretary of each Seller Party [and
General Partner] certifying (i) the names and signatures of the officers
authorized on its behalf to execute this Agreement and any other documents to be
delivered by it hereunder and (ii) a copy of such Person's Organic Documents.
6. Pre-filing state and federal tax lien, judgment lien and
UCC lien searches against Seller from the following jurisdictions:
a. ____________
b. ____________
7. Time stamped receipt copies of proper financing statements,
duly filed under the UCC on or before the date of the initial Incremental
Purchase in all jurisdictions as may be necessary or, in the opinion of the
Agent, desirable, under the UCC of all appropriate jurisdictions or any
comparable law in order to perfect the ownership interests contemplated by this
Agreement.
8. Time stamped receipt copies of proper UCC termination
statements, if any, necessary to release all security interests and other rights
of any Person in the Receivables, Contracts or Related Security previously
granted by Seller.
9. Executed copies of Collection Account Agreements for each
Lock-Box and Collection Account.
10. A favorable opinion of legal counsel for the Seller
Parties and General Partner reasonably acceptable to the Agent which addresses
the following matters and such other matters as the Agent may reasonably
request:
--Each Seller Party and General Partner is a ___________ duly
organized, validly existing, and in good standing under the laws of its state of
organization.
--Each Seller Party and General Partner has all requisite
authority to conduct its business in each jurisdiction where failure to be so
qualified would have a material adverse effect on such Person's business.
--The execution and delivery by each Seller Party and General
Partner of this Agreement and each other Transaction Document to which it is a
party and its performance of its obligations thereunder have been duly
authorized by all necessary corporate or partnership action and proceedings on
the part of such Person and will not:
(a) require any action by or in respect of, or filing with,
any governmental body, agency or official (other than the filing of UCC
financing statements);
(b) contravene, or constitute a default under, any provision
of applicable law or regulation or of its Organic Documents or of any material
agreement, judgment, injunction, order, decree or other instrument binding upon
such Person; or
103
108
(c) result in the creation or imposition of any Adverse Claim
on assets of such Person or any of its Subsidiaries (except as contemplated by
the Transaction Documents).
--This Agreement and each other Transaction Document to which
such Person is a party has been duly executed and delivered by such Person and
constitutes the legal, valid, and binding obligation of such Person, enforceable
in accordance with its terms, except to the extent the enforcement thereof may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally and subject also to the availability of equitable
remedies if equitable remedies are sought.
--The provisions of the Agreement are effective to create a
valid security interest in favor of the Agent for the benefit of the Purchasers
in all Receivables, and upon the filing of financing statements, the Agent for
the benefit of the Purchasers shall acquire a first priority, perfected security
interest in such Receivables.
--To the best of the opinion giver's knowledge, there is no
action, suit or other proceeding against any Seller Party, General Partner or
any of their respective Affiliates, which would materially adversely affect the
business or financial condition of such Person and its Affiliates taken as a
whole or which would materially adversely affect the ability of such Person to
perform its obligations under any Transaction Document to which it is a party.
11. If requested by Conduit or the Agent, a favorable opinion
of legal counsel for each Financial Institution, reasonably acceptable to the
Agent which addresses the following matters:
--This Agreement has been duly authorized by all necessary
corporate action of such Financial Institution.
--This Agreement has been duly executed and delivered by such
Financial Institution and, assuming due authorization, execution and delivery by
each of the other parties thereto, constitutes a legal, valid and binding
obligation of such Financial Institution, enforceable against such Financial
Institution in accordance with its terms.
12. A Compliance Certificate.
13. The Fee Letter.
14. A Monthly Report as at May 31, 2001.
15. Executed copies of (i) all consents from and
authorizations by any Persons and (ii) all waivers and amendments to existing
credit facilities, that are necessary in connection with this Agreement.
16. A direction letter executed by each Seller Party
authorizing the Agent and Conduit, and directing warehousemen to allow the Agent
and Conduit to inspect and make copies from Seller's books and records
maintained at off-site data processing or storage facilities.
104
109
17. For each Purchaser that is not incorporated under the laws
of the United States of America, or a state thereof, two duly completed copies
of United States Internal Revenue Service Form W-8BEN or W-8ECI, as applicable,
certifying in either case that such Purchaser is entitled to receive payments
under the Agreement without deduction or withholding of any United States
federal income taxes.
105
