TRANSFER AND ADMINISTRATION AGREEMENT
TRANSFER AND ADMINISTRATION AGREEMENT (this "Agreement"),
dated as of September 3, 1998, by and among XXXX FUNDING COMPANY, a Delaware
corporation, as transferor (in such capacity, the "Transferor"), XXXX
INDUSTRIES, INC., a Georgia corporation, individually and as Collection Agent
(in such capacity, the "Collection Agent"), ENTERPRISE FUNDING CORPORATION, a
Delaware corporation (the "Company"), THE FINANCIAL INSTITUTIONS FROM TIME TO
TIME PARTIES HERETO, as Bank Investors, and NATIONSBANK, N.A., a national
banking association ("NationsBank"), as agent for the Company and the Bank
Investors (in such capacity, the "Agent").
PRELIMINARY STATEMENTS
WHEREAS, the Transferor may desire to convey, transfer and
assign, from time to time, undivided percentage interests in certain accounts
receivable, and the Company may desire to, and the Bank Investors, if requested,
shall, accept such conveyance, transfer and assignment of such undivided
percentage interests, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings:
"Administration Fee" means the fee payable by the Transferor
to the Administrative Agent pursuant to Section 2.7(a) hereof, the terms of
which are set forth in the Fee Letter.
"Administrative Agent" means NationsBank, N.A., as
administrative agent.
"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 (including any UCC financing statement
or any similar instrument filed against such Person's assets or properties).
"Affected Assets" means, collectively, the Receivables and the
Related Security, Collections and Proceeds relating thereto.
9
"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. A Person shall be deemed to control
another Person if the controlling Person 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 voting stock, by contract or
otherwise.
"Aged Receivables Ratio" means, as of the last day of each
Fiscal Month, the percentage equivalent of a fraction, (i) the numerator of
which shall be the sum of (A) the aggregate Outstanding Balance of Receivables
that were unpaid for 61-90 days after their respective original due dates and
(B) the aggregate Outstanding Balance of Receivables that were charged-off as
uncollectible during such Fiscal Month prior to the date which is 90 days after
their respective original due dates and (ii) the denominator of which shall be
the aggregate Receivables originated by the Seller during the third prior Fiscal
Month.
"Agent" means NationsBank, N.A., in its capacity as agent for
the Company and the Bank Investors, and any successor thereto appointed pursuant
to Article IX.
"Aggregate Unpaids" means, at any time, an amount equal to the
sum of (i) the aggregate accrued and unpaid Discount with respect to all Tranche
Periods at such time, (ii) the Net Investment at such time, and (iii) all other
amounts owed (whether due or accrued) hereunder by the Transferor to the Company
at such time.
"Arrangement Fee" means the fee payable by the Seller to the
Administrative Agent pursuant to Section 2.7(b) hereof, the terms of which are
set forth in the Fee Letter.
"Assignment Amount" means, with respect to a Bank Investor at
any time, an amount equal to the least of (i) such Bank Investor's Pro Rata
Share of the Net Investment at such time, (ii) such Bank Investor's Pro Rata
Share of the sum of the Outstanding Balances of all Receivables (other than
Defaulted Receivables) at such time and (iii) such Bank Investor's unused
Commitment.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit G attached hereto.
"Average Collection Period" means at any time a period of days
equal to the product of (i) a fraction the numerator of which shall be the
amount set forth in the most recent Investor Report as the "Beginning Balance"
of the Receivables and the denominator of which shall be the Collections as set
forth in the most recent Investor Report and (ii) thirty (30).
"Bank Investor" means NationsBank, N.A. and each other
financial institution identified as such on the signature pages hereof and their
respective successors and assigns.
"Bankruptcy Code" means the United States Bankruptcy Code, 11
U.S.C. ss.ss.101 et seq., as amended.
"Base Rate" or "BR" means, a rate per annum equal to the
greater of (i) the prime rate of interest announced by NationsBank from time to
time, changing when and as said prime rate changes (such rate not necessarily
being the lowest or best rate charged by NationsBank and (ii) the sum of (a)
1.50% and (b) the rate equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day for such transactions received
by NationsBank from three Federal funds brokers of recognized standing selected
by it.
"Benefit Plan" means any employee pension benefit plan as
defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA, in
respect of which the Transferor the Seller or any ERISA Affiliate of the
Transferor, or the Seller is, or at any time during the immediately preceding
six years was, an "employer" as defined in Section 3(5) of ERISA.
"Business Day" means any day excluding Saturday, Sunday and
any day on which banks in New York, New York, Charlotte, North Carolina or
Atlanta, Georgia are authorized or required by law to close, and, when used with
respect to the determination of any Eurodollar Rate or any notice with respect
thereto, any such day which is also a day for trading by and between banks in
United States dollar deposits in the London interbank market.
"BR Tranche" means a Tranche as to which Discount is
calculated at the Base Rate.
"BR Tranche Period" means, with respect to a BR Tranche,
either (i) prior to the Termination Date, a period of up to 30 days requested by
the Transferor and agreed to by the Company, NationsBank on behalf of the
Liquidity Providers, or the Agent, as the case may be, commencing on a Business
Day requested by the Transferor and agreed to by the Company, NationsBank, on
behalf of the Liquidity Providers, or the Agent, as the case may be, or (ii)
after the Termination Date, a period of one day. If such BR Tranche Period would
end on a day which is not a Business Day, such BR Tranche Period shall end on
the next succeeding Business Day.
"Capitalized Lease" of a Person means any lease of property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with GAAP.
"Certificate" means the certificate issued to the Agent for
the benefit of the Company and the Bank Investors pursuant to Section 2.2(d)
hereof.
"Class 1 Obligor" means any Obligor whose long-term senior
unsecured debt (i) is rated below Baa3 by Xxxxx'x or below BBB- by S&P or (ii)
has not been rated by Xxxxx'x or S&P.
"Class 2 Obligor" means any Obligor or parent of any Obligor
whose long-term senior unsecured debt is rated Baa3 or higher by Xxxxx'x and
BBB- or higher by S&P.
"Closing Date" means September 3, 1998.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor thereto.
"Collateral Agent" means NationsBank, N.A., as collateral
agent for any Liquidity Provider, any Credit Support Provider, the holders of
Commercial Paper and certain other parties.
"Collection Account" means the account, established by the
Agent, for the benefit of the Company and the Bank Investors, pursuant to
Section 2.12.
"Collection Agent" means at any time the Person then
authorized pursuant to Section 6.1 to service, administer and collect
Receivables.
"Collection Agent Default" has the meaning specified in
Section 6.4 hereof.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including, without
limitation, all Finance Charges, if any, all cash proceeds of Related Security
with respect to such Receivable, and all Deemed Collections of such Receivable.
"Commercial Paper" means the promissory notes issued by the
Company in the commercial paper market.
"Commitment" means (i) with respect to each Bank Investor
party hereto, the commitment of such Bank Investor to make acquisitions from the
Transferor or the Company in accordance herewith in an amount not to exceed the
dollar amount set forth opposite such Bank Investor's signature on the signature
page hereto under the heading "Commitment", minus the dollar amount of any
Commitment or portion thereof assigned pursuant to an Assignment and Assumption
Agreement plus the dollar amount of any increase to such Bank Investor's
Commitment consented to by such Bank Investor prior to the time of
determination, (ii) with respect to any assignee of a Bank Investor party hereto
taking pursuant to an Assignment and Assumption Agreement, the commitment of
such assignee to make acquisitions from the Transferor or the Company not to
exceed the amount set forth in such Assignment and Assumption Agreement minus
the dollar amount of any Commitment or portion thereof assigned by such Bank
Investor pursuant to an Assignment and Assumption Agreement prior to such time
of determination and (iii) with respect to any assignee of an assignee referred
to in clause (ii), the commitment of such assignee to make acquisitions from the
Transferor or the Company not to exceed the sum of (A) the amount set forth in
an Assignment and Assumption Agreement between such assignee and its Assignor,
plus (B) the amount of the Commitment (if any) of such Assignee immediately
prior to such assignment.
"Commitment Termination Date" means September 1, 1999, or such
later date to which the Commitment Termination Date may be extended by
Transferor, the Agent and the Bank Investors not later than 60 days prior to the
then current Commitment Termination Date.
"Company" means Enterprise Funding Corporation, and its
successors and assigns.
"Concentration Factor" means on any date of determination (i)
with respect to any Class 1 Obligor, 2.5% of the aggregate Outstanding Balance
of Eligible Receivables on such date, (ii) with respect to any Class 2 Obligor,
5% of the aggregate Outstanding Balance of Eligible Receivables on such date,
and (iii) without duplication with clauses (i) or (ii) above, 5% of the
aggregate Outstanding Balance of Eligible Receivables owed by Canadian dollar
Obligors on such date if the Canadian foreign currency short-term rating is
"A-1" and "P-1" or its equivalent from S&P and Xxxxx'x or 2% if such rating
falls below "A-1" and "P-1" or its equivalent.
"Concentration Percentage" means the greater of (i) three (3)
times the percentage applicable to the Concentration Factor applicable to Class
1 Obligors and (ii) one (1) times the percentage applicable to the Concentration
Factor applicable to Class 2 Obligors.
"Conduit Assignee" shall mean any commercial paper conduit
administered by NationsBank and designated by NationsBank from time to time to
accept an assignment from the Company of all or a portion of the Net Investment.
"Contract" means an invoice in substantially the form of one
of the forms attached hereto as Exhibit A or otherwise approved by the Company,
pursuant to or under which an Obligor shall be obligated to pay for merchandise
purchased or services rendered.
"CP Rate" means, with respect to any CP Tranche Period, the
rate equivalent to the rate (or if more than one rate, the weighted average of
the rates) at which Commercial Paper having a term equal to such CP Tranche
Period may be sold by any placement agent or commercial paper dealer selected by
the Company, provided, however, that if the rate (or rates) as agreed between
any such agent or dealer and the Company is a discount rate, then the rate (or
if more than one rate, the weighted average of the rates) resulting from the
Company's converting such discount rate (or rates) to an interest-bearing
equivalent rate per annum.
"CP Tranche" means a Tranche as to which Discount is
calculated at a CP Rate.
"CP Tranche Period" means, with respect to a CP Tranche, a
period of days not to exceed 90 days commencing on a Business Day requested by
the Transferor and agreed to by the Company pursuant to Section 2.3. If a CP
Tranche Period would end on a day which is not a Business Day, such CP Tranche
Period shall end on the next succeeding Business Day.
"Credit and Collection Policy" shall mean the Seller's credit
and collection policy or policies and practices, relating to Contracts and
Receivables existing on the date hereof and referred to in Exhibit B attached
hereto, as modified from time to time in compliance with Section 5.2(c).
"Credit Support Agreement" means the agreement between the
Company and the Credit Support Provider evidencing the obligation of the Credit
Support Provider to provide credit support to the Company in connection with the
issuance by the Company of Commercial Paper.
"Credit Support Provider" means the Person or Persons who
provides credit support to the Company in connection with the issuance by the
Company of Commercial Paper.
"Dealer Fee" means the fee payable by the Transferor to the
Collateral Agent, pursuant to Section 2.4 hereof, the terms of which are set
forth in the Fee Letter.
"Deemed Collections" means any Collections on any Receivable
deemed to have been received pursuant to Section 2.9(a) or (b) hereof.
"Defaulted Receivable" means a Receivable: (i) as to which any
payment, or part thereof, remains unpaid for more than 90 days from the original
due date for such Receivable; (ii) as to which an Event of Bankruptcy has
occurred and is continuing with respect to the Obligor thereof; (iii) which has
been identified by the Transferor or the Collection Agent as uncollectible; or
(iv) which, consistent with the Credit and Collection Policy, should be written
off as uncollectible.
"Delinquency Ratio" means, the ratio (expressed as a
percentage) computed as of the last day of each Fiscal Month by dividing (i) the
aggregate Outstanding Balance of all Delinquent Receivables as of such date by
(ii) the aggregate Outstanding Balance of all Receivables (other than Defaulted
Receivables) as of such date.
"Delinquent Receivable" means a Receivable: (i) as to which
any payment, or part thereof, remains unpaid for more than 60 days from the
original due date for such Receivable and (ii) which is not a Defaulted
Receivable.
"Designated Obligor" means, at any time, each Obligor and its
Affiliates; provided, however, that any Obligor shall cease to be a Designated
Obligor three (3) Business Days after notice is given to the Transferor by the
Agent that such Obligor is no longer a Designated Obligor.
"Dilution Horizon Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each Fiscal Month by dividing (i) the
aggregate Outstanding Balance of Receivables originated by the Seller during the
immediately preceding Fiscal Month by (ii) the difference between the aggregate
Outstanding Balance of Receivables and the aggregate Outstanding Balance of all
Defaulted Receivables, each as of such last day.
"Dilution Ratio" means, the ratio (expressed as a percentage)
computed as of the last day of each Fiscal Month by dividing (i) the aggregate
amount of any Receivables that are reduced or canceled as a result of any
defective, rejected or returned merchandise or services and all credits,
rebates, discounts, disputes, warranty claims, repossessed or returned goods,
chargebacks, allowances, other dilutive factors, and any other billing or other
adjustment (whether effected through the granting of credits against the
applicable Receivables or by the issuance of a check or other payment in respect
of (and as payment for) such reduction) by the Seller, the Transferor or the
Collection Agent, provided to Obligors in respect of Receivables during such
Fiscal Month (excluding from the foregoing contractual payment discounts
included in the Payment Discount Reserve) by (ii) the aggregate Outstanding
Balance of all Receivables which arose during the preceding Fiscal Month.
"Dilution Reserve Ratio" means, as of any Investor Report Date
and continuing until (but not including the next Investor Report Date, an amount
equal to:
(AxB+C) x D
Where:
A = 1.5
B = the average Dilution Ratio for the immediately preceding twelve (12) Fiscal
Months
C = the Dilution Volatility Factor for the Fiscal Month immediately preceding
such Investor Report Date
D = the Dilution Horizon Ratio for the Fiscal Month immediately preceding such
Investor Report Date
"Dilution Volatility Factor" means for any Fiscal Month, the
result of (a) the highest Dilution Ratio during the preceding twelve (12) Fiscal
Months minus the average Dilution Ratio for the preceding twelve (12) Fiscal
Months, times (b) the highest Dilution Ratio for the preceding twelve (12)
Fiscal Months divided by the average Dilution Ratio for the preceding twelve
(12) Fiscal Months.
"Discount" means, with respect to any Tranche Period:
(TR x TNI x AD)
360
Where:
TR = the Tranche Rate applicable to such Tranche Period;
TNI = the portion of the Net Investment allocated to such Tranche Period;
AD = the actual number of days during such Tranche Period;
provided, however, that no provision of this Agreement shall require the payment
or permit the collection of Discount in excess of the maximum amount permitted
by applicable law; and provided, further, that Discount shall not be considered
paid by any distribution if at any time such distribution is rescinded or must
be returned for any reason.
"Discount Reserve" means, at any time, an amount equal to:
TD + LY
Where:
TD = the sum of the unpaid Discount for all Tranche Periods.
LY = the Liquidation Yield
"Early Collection Fee" means, for any Tranche Period (such
Tranche Period to be determined without regard to the last sentence in Section
2.3(a) hereof) during which the portion of the Net Investment that was allocated
to such Tranche Period is reduced for any reason whatsoever, the excess, if any,
of (i) the additional Discount that would have accrued during such Tranche
Period if such reductions had not occurred, minus (ii) the income, if any,
received by the recipient of such reductions from investing the proceeds of such
reductions.
"Eligible Investments" means any of the following (a)
negotiable instruments or securities represented by instruments in bearer or
registered or in book-entry form which evidence (i) obligations fully guaranteed
by the United States of America; (ii) time deposits in, or bankers acceptances
issued by, any depositary institution or trust company incorporated under the
laws of the United States of America or any state thereof and subject to
supervision and examination by Federal or state banking or depositary
institution authorities; provided, however, that at the time of investment or
contractual commitment to invest therein, the certificates of deposit or
short-term deposits, if any, or long-term unsecured debt obligations (other than
such obligation whose rating is based on collateral or on the credit of a Person
other than such institution or trust company) of such depositary institution or
trust company shall have a credit rating from Xxxxx'x and S&P of at least "P-1"
and "A-1", respectively, in the case of the certificates of deposit or
short-term deposits, or a rating not lower than one of the two highest
investment categories granted by Xxxxx'x and by S&P; (iii) certificates of
deposit having, at the time of investment or contractual commitment to invest
therein, a rating from Xxxxx'x and S&P of at least "P-1" and "A-1",
respectively; or (iv) investments in money market funds rated in the highest
investment category or otherwise approved in writing by the applicable rating
agencies; (b) demand deposits in any depositary institution or trust company
referred to in (a)(ii) above or in any other depository institution or trust
company where such deposits are swept each Business Day into an account at a
depository institution or trust company referred to in (a)(ii) above; (c)
commercial paper (having original or remaining maturities of no more than 30
days) having, at the time of investment or contractual commitment to invest
therein, a credit rating from Xxxxx'x and S&P of at least "P-1" and "A-1",
respectively; (d) Eurodollar time deposits having a credit rating from Xxxxx'x
and S&P of at least "P-1" and "A-1", respectively; and (e) repurchase agreements
involving any of the Eligible Investments described in clauses (a)(i), (a)(iii)
and (d) hereof so long as the other party to the repurchase agreement has at the
time of investment therein, a rating from Xxxxx'x and S&P of at least "P-1" and
"A-1", respectively.
"Eligible Receivable" means, at any time, any Receivable:
(i) which has been originated by the Seller, sold to the
Transferor pursuant to (and in accordance with) the Receivables
Purchase Agreement and to which the Transferor has good title thereto,
free and clear of all Adverse Claims;
(ii) which (together with the Collections and Related Security
related thereto) has been the subject of either a valid transfer and
assignment from the Transferor to the Agent, on behalf of the Company
and the Bank Investors, of all of the Transferor's right, title and
interest therein or the grant of a first priority perfected security
interest therein (and in the Collections and Related Security related
thereto), effective until the termination of this Agreement.
(iii) the Obligor of which is a United States or Canadian
resident, is a Designated Obligor at the time of the initial creation
of an interest therein hereunder, is not an Affiliate of any of the
parties hereto, and is not a government or a governmental subdivision
or agency;
(iv) which is not a Defaulted Receivable at the time of the
initial creation of an interest therein hereunder;
(v) which is not a Delinquent Receivable at the time of the
initial creation of an interest of the Company therein;
(vi) which, (A) arises pursuant to a Contract with respect to
which each of the Seller and the Transferor has performed all
obligations required to be performed by it thereunder, including
without limitation shipment of the merchandise and/or the performance
of the services purchased thereunder; (B) has been billed; and (C)
according to the Contract related thereto, is required to be paid in
full within 120 days of the original billing date therefor, provided,
however, that no greater than 15% of the aggregate Outstanding Balance
of Eligible Receivables shall be required to be paid in more than 60
days;
(vii) which is an "eligible asset" as defined in Rule 3a-7
under the Investment Company Act of 1940, as amended;
(viii) a purchase of which with the proceeds of Commercial
Paper would constitute a "current transaction" within the meaning of
Section 3(a)(3) of the Securities Act of 1933, as amended;
(ix) which is an "account" within the meaning of Article 9
of the UCC of all applicable jurisdictions;
(x) which is denominated and payable only in United States
dollars in the United States or in Canadian dollars in Canada;
(xi) which arises under a Contract that, together with the
Receivable related thereto, is in full force and effect as to all
material terms thereof and constitutes the legal, valid and binding
obligation of the related Obligor enforceable against such Obligor in
accordance with its terms and is not subject to any litigation,
dispute, offset, counterclaim or other defense, provided, that, to the
extent the portion of such Receivable which is subject to any of the
foregoing is identifiable, the remaining portion of such Receivable may
constitute an Eligible Receivable;
(xii) which, together with the Contract related thereto, does
not contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no part of the
Contract related thereto is in violation of any such law, rule or
regulation in any material respect;
(xiii) which (A) satisfies all applicable requirements of the
Credit and Collection Policy, (B) is assignable without the consent of,
or notice to, the Obligor thereunder, and (C) complies with such other
criteria and requirements as the Agent (exercising its reasonable
judgment) may from time to time specify to the Transferor following
five days' notice;
(xiv) which was generated in the ordinary course of the
Seller's business;
(xv) the Obligor of which has been directed to make all
payments to a specified account of the Seller with respect to which
there shall be a Lock-Box Agreement in effect;
(xvi) as to which the Agent has not notified the Transferor
that such Receivable or class of Receivables is not acceptable for
purchase hereunder because of the nature of the business of the
Obligor;
(xvii) the assignment of which under the Receivables Purchase
Agreement by the Seller and hereunder by the Transferor does not in any
material respect violate, conflict or contravene any applicable laws,
rules, regulations, orders or writs or any contractual or other
restriction, limitation or encumbrance; and
(xviii) which has not been compromised, adjusted or modified
(including by the extension of time for payment or the granting of any
discounts, allowances or credits); provided, however, that only such
portion of such Receivable that is the subject of such compromise,
adjustment or modification shall be deemed to be ineligible pursuant to
the terms of this clause (xviii).
"ERISA" means the U.S. Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" means, with respect to any Person, (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code (as in effect from time to
time, the "Code")) as such Person; (ii) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with such Person; or (iii) a member of the same affiliated service group
(within the meaning of Section 414(m) of the Code) as such Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above.
"Estimated Maturity Period" shall mean, at any time, the
period, rounded upward to the nearest whole number of days, equal to the
weighted average number of days until due of the Receivables as calculated by
the Collection Agent in good faith and set forth in the most recent Investor
Report, such calculation to be based on the assumptions that (a) each Receivable
within a particular aging category, (as set forth in the Investor Report) will
be paid on the last day of such aging category and (b) the last day of the last
such aging category coincides with the last date on which any Outstanding
Balance of any Receivables would be written off as uncollectible or charged
against any applicable reserve or similar account in accordance with the
objective requirements of the Credit and Collection Policy and the Seller's
normal accounting practices applied on a basis consistent with those reflected
in the Seller's financial statements, provided, however, that if the Agent, the
Company or any of the Bank Investors shall reasonably disagree with any such
calculation, the Agent may recalculate the Estimated Maturity Period, and such
recalculation, in the absence of manifest error, shall be conclusive.
"Eurodollar Rate" means, with respect to any Eurodollar
Tranche Period, a rate which is 0.75% in excess of a rate per annum equal to the
sum (rounded upwards, if necessary, to the next higher 1/100 of 1%) of (A) the
rate obtained by dividing (i) the applicable LIBOR Rate by (ii) a percentage
equal to 100% minus the reserve percentage used for determining the maximum
reserve requirement as specified in Regulation D (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) that is
applicable to the Agent during such Eurodollar Tranche Period in respect of
eurocurrency or eurodollar funding, lending or liabilities (or, if more than one
percentage shall be so applicable, the daily average of such percentage for
those days in such Eurodollar Tranche Period during which any such percentage
shall be applicable) plus (B) the then daily net annual assessment rate (rounded
upwards, if necessary, to the nearest 1/100 of 1%) as estimated by the Agent for
determining the current annual assessment payable by the Agent to the Federal
Deposit Insurance Corporation in respect of eurocurrency or eurodollar funding,
lending or liabilities.
"Eurodollar Tranche" means a Tranche as to which Discount is
calculated at the Eurodollar Rate.
"Eurodollar Tranche Period" means, with respect to a
Eurodollar Tranche, prior to the Termination Date, a period of up to one month
requested by the Transferor and agreed to by the Company, NationsBank, on behalf
of the Liquidity Provider, or the Agent, as the case may be, commencing on a
Business Day requested by the Transferor and agreed to by the Company,
NationsBank, on behalf of the Liquidity Provider, or the Agent, as applicable;
provided, however, that if such Eurodollar Tranche Period would expire on a day
which is not a Business Day, such Eurodollar Tranche Period shall expire on the
next succeeding Business Day; provided, further, that if such Eurodollar Tranche
Period would expire on (a) a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Eurodollar
Tranche Period shall expire on the next preceding Business Day or (b) a Business
Day for which there is no numerically corresponding day in the applicable
subsequent calendar month, such Eurodollar Tranche Period shall expire on the
last Business Day of such month.
"Event of Bankruptcy" means, with respect to any Person, (i)
that such Person (a) shall generally not pay its debts as such debts become due
or (b) shall admit in writing its inability to pay its debts generally or (c)
shall make a general assignment for the benefit of creditors; (ii) any
proceeding shall be instituted by or against such Person seeking to adjudicate
it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any substantial part of
its property or (iii) if such Person is a corporation, such Person or any
Subsidiary shall take any corporate action to authorize any of the actions set
forth in the preceding clauses (i) or (ii).
"Excluded Receivables" means (i) the types or items of
property described in the UCC-1 financing statements attached hereto as Exhibit
N-1 and Exhibit N-2, arising under or in connection with any present or former
private-label credit card program of the Seller, it being understood that the
property described in such financing statements is not the subject of the
transaction described in this Agreement and (ii) all accounts receivable of any
Person who merges or consolidates with the Seller after the date hereof,
including the accounts receivable of any of such Person's Subsidiaries;
provided, however, that (x) payments under such accounts receivable are not
remitted to any Lock-Box Account and (y) the Seller, the Transferor, the Agent
and the Majority Bank Investors may agree in writing to include such accounts
receivable at a later date.
"Excluded Taxes" shall have the meaning specified in Section
8.3 hereof.
"Executive Officer" means those officers of the Seller or the
Transferor, as the case may be, who are deemed to be "Executive Officers"
thereof pursuant to Rule 405 of Regulation C of the Securities and Exchange Act
of 1934, as amended, or any officer of the Seller or the Transferor, as the case
may be, who is a vice president thereof, or any individual performing a similar
role as any individual who is a vice president of the Seller or the Transferor
on the Closing Date. The term "Executive Officer" shall also include the
Director-Treasury Management and the Financial Manager of the Seller or the
Transferor.
"Facility Fee" means the fee payable by the Transferor to the
Company pursuant to Section 2.7(a) hereof, the terms of which are set forth in
the Fee Letter.
"Facility Limit" means $200,000,000; provided that such amount
may not at any time exceed the aggregate Commitments at any time in effect.
"Fee Letter" means the letter agreement dated the date hereof
between the Transferor and the Company with respect to the fees to be paid by
the Transferor hereunder, as amended, modified or supplemented from time to
time.
"Finance Charges" means, with respect to a Contract, any
finance, interest, late or similar charges owing by an Obligor pursuant to such
Contract.
"Fiscal Month" means an accounting period of the Seller
consisting of either four or five weeks. The Fiscal Months of the Seller for
fiscal year 1998 and fiscal year 1999 (through the month of December, 1999) are
set forth on Schedule 1 hereto and the Fiscal Months for subsequent fiscal years
of the Seller will be determined on a basis consistent with the determination of
such Fiscal Months for fiscal year 1998. An updated Schedule 1 will be delivered
by the Collection Agent to the Agent prior to the commencement of each fiscal
year.
"GAAP" has the meaning set forth in statements from Auditing
Standards No. 69 entitled "The Meaning of 'Present Fairly in Conformance with
Generally Accepted Accounting Principles in the Independent Auditors Reports"
issued by the Auditing Standards Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board that are applicable to the circumstances.
"Guaranty" means, with respect to any Person any agreement by
which such Person assumes, guarantees, endorses, contingently agrees to purchase
or provide funds for the payment of, or otherwise becomes liable upon, the
obligation 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 other creditor of such other Person against loss, including, without
limitation, any comfort letter, operating agreement or take-or-pay contract and
shall include, without limitation, the contingent liability of such Person in
connection with any application for a letter of credit.
"Incremental Transfer" means a Transfer which is made pursuant
to Section 2.2(a) hereof.
"Indebtedness" means, with respect to any Person such Person's
(i) obligations for borrowed money, (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of such Person's business 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 and (vi) obligations for which
such Person is obligated pursuant to a Guaranty.
"Indemnified Amounts" has the meaning specified in Section 8.1
hereof.
"Indemnified Parties" has the meaning specified in Section 8.1
hereof.
"Interest Component" shall mean, (i) with respect to any
Commercial Paper issued on an interest-bearing basis, the interest payable on
such Commercial Paper at its maturity (including any dealer commissions) and
(ii) with respect to any Commercial Paper issued on a discount basis, the
portion of the face amount of such Commercial Paper representing the discount
incurred in respect thereof (including any dealer commissions).
"Investor Report" means a report, in substantially the form
attached hereto as Exhibit E or in such other form as is mutually agreed to by
the Transferor and the Agent, furnished by the Collection Agent pursuant to
Section 2.11(a) hereof.
"Investor Report Date" means the twenty-second (22nd) day of
each calendar month, provided, that, if such day is not a Business Day in any
month, the Investor Report Date for such month shall be the next succeeding
Business Day.
"Law" means any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.
"LIBOR Rate" means, with respect to any Eurodollar Tranche
Period, the rate at which deposits in dollars are offered to the Agent, in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days before the first day of such Eurodollar Tranche Period in an amount
approximately equal to the Eurodollar Tranche to which the Eurodollar Rate is to
apply and for a period of time approximately equal to the applicable Eurodollar
Tranche Period.
"Liquidation Yield" means, at any time, an amount equal to:
(RVF x LBR x NI) x (EMP x 1.5)
-----------
360
Where:
RVF = the Rate Variance Factor at such time;
LBR = the Base Rate at such time which is applicable to the liquidation period
after a Termination Event;
NI = the Net Investment at such time; and
EMP = the Estimated Maturity Period of the Receivables.
"Liquidity Provider" means the Bank Investors who will provide
liquidity support to the Company in connection with the issuance by the Company
of Commercial Paper.
"Liquidity Provider Agreement" means the agreement between the
Company and the Liquidity Provider evidencing the obligation of the Liquidity
Provider to provide liquidity support to the Company in connection with the
issuance by the Company of Commercial Paper.
"Lock-Box Account" means an account maintained by the
Transferor at a Lock-Box Bank for the purpose of receiving Collections from
Receivables.
"Lock-Box Agreement" means an agreement among the Seller, the
Transferor, the Agent, the Collection Agent and a Lock-Box Bank in substantially
the form of Exhibit D hereto.
"Lock-Box Bank" means each of the banks set forth in Exhibit C
hereto and such banks as may be added thereto or deleted therefrom pursuant to
Section 2.8(b) hereof.
"Loss and Dilution Reserve" means on any day the result of:
NI NI
1-RRR
Where:
NI = Net Investment
RRR = Required Reserve Ratio
"Loss Horizon Ratio" means as of any Investor Report Date and
continuing until the next Investor Report Date, the quotient of (i) the
aggregate Outstanding Balance of Receivables originated by the Seller during the
preceding three (3) Fiscal Months and (ii) the difference between the aggregate
Outstanding Balance of Receivables and the aggregate Outstanding Balance of
Defaulted Receivables.
"Loss Reserve Ratio" means, as of any Investor Report Date and
continuing until the next Investor Report Date an amount equal to:
1.5 x ARR x LHR x PTF
Where:
ARR = the highest three (3) Fiscal Month rolling average of the
Aged Receivables Ratio during the immediately preceding twelve
(12) Fiscal Months.
LHR = Loss Horizon Ratio.
PTF = Payment Terms Factor.
"Loss-to-Liquidation Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each Fiscal Month by dividing (i) the
aggregate Outstanding Balance of all Receivables which became Defaulted
Receivables during such period, by (ii) the aggregate amount of Collections in
the form of cash received by the Collection Agent during such period.
"Majority Bank Investors" shall mean, at any time, the Agent
and those Bank Investors which hold Commitments aggregating in excess of 51% of
the Facility Limit as of such date.
"Material Adverse Effect" means any event or condition which
would have a material adverse effect on (i) the collectibility of the
Receivables, (ii) the condition (financial or otherwise), businesses or
properties of the Transferor or of the Seller and its Subsidiaries taken as a
whole, (iii) the ability of the Transferor or Seller to perform their respective
obligations under the Transaction Documents to which it is a party and (iv) the
interests of the Agent, the Company or the Bank Investors under the Transaction
Documents.
"Maximum Percentage Factor" means 98%.
"Minimum Required Reserve Ratio" means as of any Investor
Report Date and continuing until the next Investor Report Date, the sum of the
Concentration Percentage and the product of (i) the twelve (12) Fiscal Month
average Dilution Ratio and (ii) the Dilution Horizon Ratio.
"Moody's" means Xxxxx'x Investors Service, Inc. and its
successors.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding five years contributed to by the Transferor,
the Seller or any ERISA Affiliate of the Transferor or the Seller on behalf of
its employees.
"Net Investment" means the sum of the cash amounts paid to the
Transferor for each Incremental Transfer less the aggregate amount of
Collections received and applied by the Agent to reduce such Net Investment
pursuant to Section 2.5, 2.6 or 2.9 hereof; provided that the Net Investment
shall be restored and reinstated in the amount of any Collections so received
and applied if at any time the distribution of such Collections is rescinded or
must otherwise be returned for any reason; and provided further that the Net
Investment may be increased by the amount described in Section 9.9(d) as
described therein.
"Net Receivables Balance" means at any time the Outstanding
Balance of the Eligible Receivables at such time reduced by the sum of (i) the
aggregate amount by which the Outstanding Balance of all Eligible Receivables of
each Designated Obligor (or group of Designated Obligors in the case of Canadian
Obligors) exceeds the Concentration Factor for such Designated Obligor (or group
of Designated Obligors in the case of Canadian Obligors), plus (ii) the
aggregate Outstanding Balance of all Eligible Receivables which are Defaulted
Receivables or Delinquent Receivables, plus (iii) the aggregate Outstanding
Balance of all Eligible Receivables of each of the fifty (50) Obligors with the
greatest dollar values of Receivables transferred hereunder with respect to
which either 20% or more of such Obligor's Receivables are Defaulted Receivables
or 40% or more of such Obligor's Receivables are Delinquent Receivables.
"Obligor" means a Person obligated to make payments for the
provision of goods and services pursuant to a Contract.
"Official Body" means any government or political subdivision
or any agency, authority, bureau, central bank, commission, department or
instrumentality of any such government or political subdivision, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
"Other Transferor" means any Person other than the Transferor
that has entered into a receivables purchase agreement or transfer and
administration agreement with the Company.
"Outstanding Balance" means, with respect to any Receivable at
any time, the then outstanding principal amount thereof excluding any accrued
and outstanding Finance Charges related thereto.
"Payment Discount Reserve" means the product of (x) the
aggregate of available contractual payment discounts with respect to the
Receivables, whether or not exercised, as calculated at the end of any Fiscal
Month, and (y) the Payment Discount Factor.
"Payment Discount Factor" means 1.1 times the quotient of (x)
the sum of available contractual payment discounts with respect to the
Receivables exercised over the immediately preceding twelve (12) Fiscal Months
and (y) the sum of all available contractual payment discounts with respect to
the Receivables, whether or not exercised, during the twelve (12) Fiscal Months
immediately preceding the just-concluded Fiscal Month (but not including the
just-concluded Fiscal Month), provided, however, that the Payment Discount
Factor shall not exceed 100%.
"Payment Terms Factor" means, as of any Investor Report Date
and continuing up to, but not including, the next Investor Report Date, (x) 1.0
when the weighted average of the periods within which Receivables are required
to be paid falls within one (1) to forty-five (45) days, (y) 1.17 when the
weighted average of the periods within which Receivables are required to be paid
falls within forty-six (46) to sixty (60) days, and (z) 1.33 when the weighted
average of the periods within which Receivables are required to be paid is
greater than sixty(60) days. For purposes of this calculation, Receivables
exclude contractual payment discount terms designated by the Receivables Systems
as "cash against documents" and "letter of credit".
"Percentage Factor" shall mean the fraction (expressed as a
percentage) computed at any time of determination as follows:
NI + LDR + DR + TAR + PDR + SFR
NRB
Where:
NI = the Net Investment at the time of such computation;
LDR = the Loss and Dilution Reserve at the time of such computation;
DR = the Discount Reserve at the time of such computation;
TAR = the Translation Adjustment Reserve at the time of such computation;
PDR = the Payment Discount Reserve at the time to such computation;
SFR = the Servicing Fee Reserve at the time of such computation; and
NRB = the Net Receivables Balance at the time of such computation.
The Percentage Factor shall be calculated by the Collection
Agent on the day of the initial Incremental Transfer hereunder. Thereafter,
until the Termination Date, the Collection Agent shall recompute the Percentage
Factor at the time of each Incremental Transfer pursuant to Section 2.2(a) and
as of the close of business on each Business Day and report such recomputations
to the Agent in the Investor Report and as otherwise requested by the Agent. The
Percentage Factor shall remain constant from the time as of which any such
computation or recomputation is made until the time as of which the next such
recomputation shall be made, notwithstanding any additional Receivables arising,
any Incremental Transfer made pursuant to Section 2.2(a) or any reinvestment
Transfer made pursuant to Section 2.2(b) and 2.5 during any period between
computations of the Percentage Factor. The Percentage Factor, as calculated at
the close of business on the Business Day immediately preceding the Termination
Date, shall remain constant at all times thereafter until such time as the
Agent, on behalf of the Company and the Bank Investors, shall have received the
Aggregate Unpaids, in cash, at which time the Percentage Factor shall be
recomputed in accordance with Section 2.6.
"Person" means any corporation, limited liability company,
natural person, firm, joint venture, partnership, trust, unincorporated
organization, enterprise, government or any department or agency of any
government.
"Potential Termination Event" means an event which but for the
lapse of time or the giving of notice, or both, would constitute a Termination
Event.
"Pro Rata Share" means, for a Bank Investor, the Commitment of
such Bank Investor divided by the sum of the Commitments of all Bank Investors.
"Proceeds" means "proceeds" as defined in Section 9-306(1) of
the UCC.
"Program Fee" means the fee payable by the Transferor to the
Company pursuant to Section 2.7(a) hereof, the terms of which are set forth in
the Fee Letter.
"Purchased Interest" means the interest in the Receivables
acquired by the Liquidity Provider through purchase pursuant to the terms of the
Liquidity Provider Agreement.
"Purchase Termination Date" means the date upon which the
Transferor shall cease, for any reason whatsoever, to make purchases of
Receivables from the Seller under the Receivables Purchase Agreement or the
Receivables Purchase Agreement shall terminate for any reason whatsoever.
"Rate Variance Factor" means the number, computed from time to
time in good faith by the Agent, that reflects the largest potential variance
(from minimum to maximum) in selected interest rates over a period of time
selected by the Agent from time to time, set forth in a written notice by the
Agent to the Transferor and the Collection Agent.
"Receivable" means the indebtedness owed to the Seller by any
Obligor (without giving effect to any purchase under the Receivables Purchase
Agreement by the Transferor at any time) under a Contract and sold by the Seller
to the Transferor pursuant to the Receivables Purchase Agreement, whether
constituting an account, chattel paper, instrument, investment property or
general intangible, arising in connection with the sale of merchandise or the
rendering of services by the Seller, and includes the right to payment of any
Finance Charges and other obligations of such Obligor with respect thereto;
provided, however, that the term Receivable shall not include any Excluded
Receivables. Notwithstanding the foregoing, once a Receivable has been deemed
collected pursuant to Section 2.9 hereof, it shall no longer constitute a
Receivable hereunder.
"Receivables Purchase Agreement" means the Receivables
Purchase Agreement of even date herewith by and between the Seller and the
Transferor, as purchaser, as such agreement may be amended, modified or
supplemented and in effect from time to time.
"Receivables Systems" has the meaning specified in Section
3.3(l) hereof.
"Records" means all Contracts and other documents, books,
records and other information (including, without limitation, computer programs,
tapes, discs, punch cards, data processing software, to the extent assignable,
and related property and rights) maintained with respect to Receivables and the
related Obligors.
"Reinvestment Termination Date" means the second Business Day
after the delivery by the Company to the Transferor of written notice that the
Company elects to commence the amortization of its interest in the Net
Investment or otherwise liquidate its interest in the Transferred Interest.
"Related Commercial Paper" shall mean Commercial Paper issued
by the Company the proceeds of which were used to acquire, or refinance the
acquisition of, an interest in Receivables with respect to the Transferor.
"Related Security" means with respect to any Receivable, all
of the Transferor's rights, title and interest in, to and under:
(i) the merchandise (including returned or repossessed
merchandise), if any, the sale of which by the Seller gave rise to such
Receivable;
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure payment
of such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise, together with all financing statements signed
by an Obligor describing any collateral securing such Receivable;
(iii) all guarantees, indemnities, warranties, insurance (and
proceeds and premium refunds thereof) or other agreements or
arrangements of any kind from time to time supporting or securing
payment of such Receivable whether pursuant to the Contract related to
such Receivable or otherwise;
(iv) all Records related to such Receivable;
(v) all rights and remedies of the Transferor under the
Receivables Purchase Agreement, together with all financing statements
filed by the Transferor against the Seller in connection therewith; and
(vi) all Proceeds of any of the foregoing.
"Required Reserve Ratio" means the greater of (i) the Minimum
Required Reserve Ratio and (ii) the sum of the Loss Reserve Ratio and the
Dilution Reserve Ratio.
"Section 8.2 Costs" has the meaning specified in Section
8.2(d) hereof.
"Seller" means Xxxx Industries, Inc., a Georgia corporation
and its successors and permitted assigns.
"Servicing Fee" means the fees payable by the Company or the
Bank Investors to the Collection Agent, with respect to a Tranche, in an amount
equal to 1% per annum on the amount of the Net Investment allocated to such
Tranche pursuant to Section 2.3 hereof. Such fee shall accrue from the date of
the initial purchase of an interest in the Receivables to the date on which the
Percentage Factor is reduced to zero. Such fee shall be payable only from
Collections pursuant to, and subject to the priority of payments set forth in,
Section 2.5 hereof. After the Termination Date, such fee shall be payable only
from Collections pursuant to, and subject to the priority of payments set forth
in, Section 2.6 hereof.
"Servicing Fee Reserve" means at any time an amount equal to
the product of (i) the aggregate Outstanding Balance of all Receivables at such
time, (ii) the Servicing Fee percentage and (iii) a fraction having as the
numerator, the sum of (a) 1.5 times the Estimated Maturity Period plus (b) 30,
and as the denominator, 360.
"Xxxx Financial Covenants" means the financial covenants set
forth in Schedule 2 hereto.
"Standard & Poor's" or "S&P" means Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc..
"Subordinated Note" shall have the meaning specified in the
Receivables Purchase Agreement.
"Subsidiary" of a Person means any Person more than 50% of the
outstanding voting interests of which shall at any time be owned or controlled,
directly or indirectly, by such Person or by one or more Subsidiaries of such
Person or any similar business organization which is so owned or controlled.
"Taxes" shall have the meaning specified in Section 8.3 hereof.
"Termination Date" means the earliest of (i) the Business Day
designated by the Transferor to the Agent as the Termination Date at any time
following 60 days' written notice to the Company, (ii) the effective date of
termination of the commitment of the Liquidity Provider under the Liquidity
Provider Agreement, (iii) the effective date of termination of the commitment of
the Credit Support Provider under the Credit Support Agreement, (iv) the day
upon which the Termination Date is declared or automatically occurs pursuant to
Section 7.2(a) hereof, (v) two Business Days prior to the Commitment Termination
Date, (vi) the day on which a Reinvestment Termination Date shall occur, (vi)
the Purchase Termination Date, or (vii) September 1, 1999 (or such later date as
may be agreed to in writing by the Company and the Bank Investors from time to
time).
"Termination Event" means an event described in Section 7.1
hereof.
"Tranche" means a portion of the Net Investment allocated to a
Tranche Period pursuant to Section 2.3 hereof.
"Tranche Period" means a CP Tranche Period, a BR Tranche
Period or a Eurodollar Tranche Period.
"Tranche Rate" means the CP Rate, the Base Rate or the
Eurodollar Rate.
"Transaction Costs" has the meaning specified in Section
8.4(a) hereof.
"Transaction Documents" means, collectively, this Agreement,
the Receivables Purchase Agreement, the Fee Letter, the Lock-Box Agreements, the
Certificates, the Transfer Certificates and all of the other instruments,
documents and other agreements executed and delivered by the Seller or the
Transferor in connection with any of the foregoing, in each case, as the same
may be amended, restated, supplemented, extended, renewed or otherwise modified
from time to time.
"Transfer" means a conveyance, transfer and assignment by the
Transferor to the Company or the Bank Investors of an undivided percentage
ownership interest in Receivables hereunder (including, without limitation, as a
result of any reinvestment of Collections in Transferred Interests pursuant to
Section 2.2(b) and 2.5).
"Transfer Certificate" has the meaning specified in Section
2.2(a) hereof.
"Transfer Date" means, with respect to each Transfer, the
Business Day on which such Transfer is made.
"Transfer Price" means with respect to any Incremental
Transfer, the amount paid to the Transferor by the Company or the Bank Investors
as described in the applicable Transfer Certificate.
"Transferor" means Xxxx Funding Company, a Delaware
corporation, and its successors and permitted assigns.
"Transferor Material Adverse Effect" means a material adverse
effect on: (a) the financial condition, business, assets or operations of the
Transferor; (b) the ability of the Transferor to perform its obligations under
this Agreement or the other Transaction Documents to which it is a party; (c)
the validity, enforceability, perfection or priority of the Company's, the Bank
Investors' or the Agent's interest in the Transferred Interest; or (d) the
collectability or enforceability of a significant portion of the Receivables.
"Transferred Interest" means, at any time of determination, an
undivided percentage ownership interest in (i) each and every then outstanding
Receivable, (ii) all Related Security with respect to each such Receivable,
(iii) all Collections with respect thereto, and (iv) other Proceeds of the
foregoing, which undivided ownership interest shall be equal to the Percentage
Factor at such time, and only at such time (without regard to prior
calculations). The Transferred Interest in each Receivable, together with
Related Security, Collections and Proceeds with respect thereto, shall at all
times be equal to the Transferred Interest in each other Receivable, together
with Related Security, Collections and Proceeds with respect thereto. To the
extent that the Transferred Interest shall decrease as a result of a
recalculation of the Percentage Factor, the Agent, on behalf of the Company or
the Bank Investors, as applicable, shall be considered to have reconveyed to the
Transferor an undivided percentage ownership interest in each Receivable,
together with Related Security, Collections and Proceeds with respect thereto,
in an amount equal to such decrease such that in each case the Transferred
Interest in each Receivable shall be equal to the Transferred Interest in each
other Receivable.
"Translation Adjustment Reserve" means the product of (i) 0.10
and (ii) the Outstanding Balance of Eligible Receivables due and payable in
Canadian dollars.
"UCC" means, with respect to any state, the Uniform Commercial
Code as from time to time in effect in such state.
"U.S." or "United States" means the United States of America.
"Year 2000 Compliant" has the meaning specified in Section
3.3(l) hereof.
SECTION 1.2. Other Terms. 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.
SECTION 1.3. Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including", the words "to" and "until" each means "to but excluding", and the
word "within" means "from and excluding a specified date and to and including a
later specified date".
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Facility. Upon the terms and subject to the
conditions herein set forth, provided that the Termination Date shall not have
occurred, (x) the Transferor may, at its option, convey, transfer and assign to
the Agent, on behalf of the Company or the Bank Investors, as applicable, and
(y) the Agent, on behalf of the Company may, at the Company's option, or the
Agent, on behalf of the Bank Investors, shall, if so requested, accept such
conveyance, transfer and assignment from the Transferor of, without recourse
except as provided herein, undivided percentage ownership interests in the
Receivables, together with Related Security, Collections and Proceeds with
respect thereto, from time to time. By accepting any conveyance, transfer and
assignment hereunder, none of the Company, any Bank Investor or the Agent
assumes or shall have any obligations or liability under any of the Contracts,
all of which shall remain the obligations and liabilities of the Transferor and
the Seller.
SECTION 2.2. Transfers; Certificates; Eligible Receivables (a)
Incremental Transfers. Upon the terms and subject to the conditions herein set
forth the Transferor may, at its option, convey, transfer and assign to the
Agent, on behalf of the Company or the Agent, on behalf of the Bank Investors,
as applicable, and the Agent, on behalf of the Company may, provided that the
Termination Date shall not have occurred, at the Company's option, or the Agent,
on behalf of the Bank Investors, provided that the Termination Date shall not
have occurred and that the Bank Investors shall have previously accepted the
assignment by the Company of all of its interest in the Affected Assets, shall,
if so requested by the Transferor, accept such conveyance, transfer and
assignment from the Transferor, without recourse except as provided herein,
undivided percentage ownership interests in the Receivables, together with
Related Security, Collections and Proceeds with respect thereto (each, an
"Incremental Transfer"); provided that after giving effect to the payment to the
Transferor of such Transfer Price the sum of the Net Investment plus, in the
case where the Transferred Interest is held by the Agent on behalf of the
Company, the Interest Component of all outstanding Related Commercial Paper,
would not exceed the Facility Limit; and, provided further, that the
representations and warranties set forth in Section 3.1 (other than those
representations and warranties which by their terms relate solely to an earlier
date) shall be true and correct (subject only to such qualifications or
exceptions as shall have been disclosed to, and consented to by, the Agent in
writing) both immediately before and immediately after giving effect to any such
Incremental Transfer and the payment to the Transferor of the Transfer Price
related thereto and an Investor Report shall have been delivered with respect to
such Incremental Transfer as required by Section 3.2 hereof.
The Transferor shall, by notice to the Agent given by
telecopy, offer to convey, transfer and assign to the Agent, on behalf of the
Company or the Bank Investors, as applicable, undivided percentage ownership
interests in the Receivables and the other Affected Assets relating thereto at
least three (3) Business Days prior to the proposed date of any Incremental
Transfer (or, in the case of the initial Incremental Transfer, one (1) Business
Day prior to such Incremental Transfer). Each such notice shall specify (w)
whether such request is made to the Agent, on behalf of the Company or on behalf
of the Bank Investors (it being understood and agreed that once any Transferred
Interest hereunder is acquired on behalf of the Bank Investors, the Agent, on
behalf of Bank Investors, shall be required to purchase all Transferred
Interests held by the Agent on behalf of the Company in accordance with Section
9.9 and thereafter no additional Incremental Transfers shall be acquired on
behalf of the Company hereunder), (x) the desired Transfer Price (which shall be
at least $5,000,000 or integral multiples of $1,000,000 in excess thereof) or,
to the extent that the then available unused portion of the Facility Limit is
less than such amount, such lesser amount equal to such available portion of the
Facility Limit), (y) the desired date of such Incremental Transfer and (z) the
desired Tranche Period(s) and allocations of the Net Investment of such
Incremental Transfer thereto as required by Section 2.3. The Agent will promptly
notify the Company or each of the Bank Investors, as the case may be, of the
Agent's receipt of any request for an Incremental Transfer to be made to the
Agent on behalf of such Person. To the extent that any such Incremental Transfer
is requested of the Agent, on behalf of the Company, the Company shall instruct
the Agent to accept or reject such offer by notice given to the Transferor and
the Agent by telephone or telecopy by no later than the close of its business on
the Business Day following its receipt of any such request. Each notice of
proposed Transfer shall be irrevocable and binding on the Transferor and,
provided that the certificate described in the last sentence of this paragraph
is delivered to the Transferor in timely fashion, the Transferor shall indemnify
the Company and each Bank Investor against any loss or expense actually incurred
by the Company or any Bank Investor, either directly or indirectly (including,
in the case of the Company, through the Liquidity Provider Agreement) as a
result of any failure by the Transferor to complete such Incremental Transfer
(except to the extent the Transferor has selected a BR Tranche Period for such
Incremental Transfer) including, without limitation, any loss (including loss of
anticipated profits) or expense incurred by the Company or any Bank Investor,
either directly or indirectly (including, in the case of the Company, pursuant
to the Liquidity Provider Agreement) by reason of the liquidation or
reemployment of funds acquired by the Company (or the Liquidity Provider) or any
Bank Investor (including, without limitation, funds obtained by issuing
commercial paper or promissory notes or obtaining deposits as loans from third
parties) for the Company or any Bank Investor to fund such Incremental Transfer.
The Company or each Bank Investor (as applicable) incurring such loss or expense
shall deliver a certificate setting forth the calculation of such losses and
expenses to the Transferor within ten (10) days after the failure of the
Transferor to complete such Incremental Transfer.
On the date of the initial Incremental Transfer, the Agent, on
behalf of the Company or the Bank Investors, as applicable, shall deliver
written confirmation to the Transferor of the Transfer Price, the Tranche
Period(s) and the Tranche Rate(s) relating to such Transfer and the Transferor
shall deliver to the Agent the Transfer Certificate in the form of Exhibit F
hereto (the "Transfer Certificate"). The Agent shall indicate the amount of the
initial Incremental Transfer together with the date thereof on the grid attached
to the Transfer Certificate. On the date of each subsequent Incremental
Transfer, the Agent shall send written confirmation to the Transferor of the
Transfer Price, the Tranche Period(s), the Transfer Date and the Tranche Rate(s)
applicable to such Incremental Transfer. The Agent shall indicate the amount of
the Incremental Transfer together with the date thereof as well as any decrease
in the Net Investment on the grid attached to the Transfer Certificate. The
Transfer Certificate shall evidence the Incremental Transfers. Following each
Incremental Transfer, the Company shall deposit to the Transferor's account at
the location indicated in Section 10.3 hereof, in immediately available funds,
an amount equal to the Transfer Price for such Incremental Transfer made to the
Company and the Bank Investors, respectively.
By no later than 11:00 a.m. (New York time) on any Transfer
Date, the Company or each Bank Investor, as the case may be, shall remit its
share (which, in the case of an Incremental Transfer to the Bank Investors,
shall be equal to such Bank Investor's Pro Rata Share) of the aggregate Transfer
Price for such Transfer to the account of the Agent specified therefor from time
to time by the Agent by notice to such Persons. The obligation of each Bank
Investor to remit its Pro Rata Share of any such Transfer Price shall be several
from that of each other Bank Investor, and the failure of any Bank Investor to
so make such amount available to the Agent shall not relieve any other Bank
Investor of its obligation hereunder. Following each Incremental Transfer and
the Agent's receipt of funds from the Company or the Bank Investors as
aforesaid, the Agent shall remit the Transfer Price to the Transferor's account
at the location indicated in Section 10.3 hereof, in immediately available
funds, an amount equal to the Transfer Price for such Incremental Transfer.
Unless the Agent shall have received notice from the Company or any Bank
Investor, as applicable, that such Person will not make its share of any
Transfer Price relating to any Incremental Transfer available on the applicable
Transfer Date therefor, the Agent may (but shall have no obligation to) make the
Company's or any such Bank Investor's share of any such Transfer Price available
to the Transferor in anticipation of the receipt by the Agent of such amount
from the Company or such Bank Investor. To the extent the Company or any such
Bank Investor fails to remit any such amount to the Agent after any such advance
by the Agent on such Transfer Date, the Company or such Bank Investor, on the
one hand, and the Transferor, on the other hand, shall be required to pay such
amount, together with interest thereon at a per annum rate equal to the Federal
funds rate (as determined in accordance with clause (ii) of the definition of
"Base Rate"), in the case of the Company or any such Bank Investor, or the Base
Rate, in the case of the Transferor, to the Agent upon its demand therefor
(provided that the Company shall have no obligation to pay such interest amounts
except to the extent that it shall have sufficient funds to pay the face amount
of its Commercial Paper in full). Until such amount shall be repaid, such amount
shall be deemed to be Net Investment paid by the Agent and the Agent shall be
deemed to be the owner of a Transferred Interest hereunder. Upon the payment of
such amount to the Agent (x) by the Transferor, the amount of the aggregate Net
Investment shall be reduced by such amount or (y) by the Company or such Bank
Investor, such payment shall constitute such Person's payment of its share of
the applicable Transfer Price for such Transfer.
(b) Reinvestment Transfers. On each Business Day occurring
after the initial Incremental Transfer hereunder and prior to the Termination
Date, the Transferor hereby agrees to convey, transfer and assign to the Agent,
on behalf of the Company or the Bank Investors, and in consideration of
Transferor's agreement to maintain at all times prior to the Termination Date a
Net Receivables Balance in an amount at least sufficient to maintain the
Percentage Factor at an amount not greater than the Maximum Percentage Factor,
the Agent, on behalf of the Company may, and the Agent, on behalf of the Bank
Investors shall agree to purchase from the Transferor undivided percentage
ownership interests in each and every Receivable, together with Related
Security, Collections and Proceeds with respect thereto, to the extent that
Collections are available for such Transfer in accordance with Section 2.5
hereof, such that after giving effect to such Transfer, (i) the amount of the
Net Investment at the close of business on such Business Day shall be equal to
the amount of the Net Investment at the close of the business on the Business
Day immediately preceding such Business Day plus the Transfer Price of any
Incremental Transfer made on such day, if any, and (ii) the Transferred Interest
in each Receivable, together with Related Security, Collections and Proceeds
with respect thereto, shall be equal to the Transferred Interest in each other
Receivable, together with Related Security, Collections and Proceeds with
respect thereto.
(c) All Transfers. Each Transfer shall constitute a purchase
by the Agent, on behalf of the Company or the Bank Investors, as applicable, of
undivided percentage ownership interests in each and every Receivable, together
with Related Security, Collections and Proceeds with respect thereto, then
existing, as well as in each and every Receivable, together with Related
Security, Collections and Proceeds with respect thereto, which arises at any
time after the date of such Transfer. The Agent's aggregate undivided percentage
ownership interest in the Receivables, together with the Related Security,
Collections and Proceeds with respect thereto, held on behalf of the Company or
the Bank Investors, as applicable, shall equal the Percentage Factor in effect
from time to time. The Agent shall hold the Transferred Interests on behalf of
the Company and each Bank Investor in accordance with each of the Company's and
each Bank Investor's percentage interest in the Transferred Interest (determined
on the basis of the relationship that the portion of the Net Investment funded
by such Person bears to the aggregate Net Investment of the Company and all of
the Bank Investors at such time).
(d) Certificate. The Transferor shall issue to the Agent the
Certificate, in the form of Exhibit M, on or prior to the date hereof.
(e) Percentage Factor. The Percentage Factor shall be
initially computed as of the opening of business of the Collection Agent on the
date of the initial Incremental Transfer hereunder. Thereafter until the
Termination Date, the Percentage Factor shall be automatically recomputed as of
the close of business of the Collection Agent on each day (other than a day
after the Termination Date). The Percentage Factor shall remain constant from
the time as of which any such computation or recomputation is made until the
time as of which the next such recomputation, if any, shall be made. The
Percentage Factor, as computed as of the day immediately preceding the
Termination Date shall remain constant at all times on and after the Termination
Date until the date on which the Net Investment has been reduced to zero, and
all accrued Discount and Servicing Fees have been paid in full and all other
Aggregate Unpaids have been paid in full.
SECTION 2.3. Selection of Tranche Periods and Tranche Rates.
(a) Prior to the Termination Date; Transferred Interest held
on behalf of the Company. At all times hereafter, but prior to the Termination
Date and not with respect to any portion of the Transferred Interest held on
behalf of the Bank Investors (or any of them), the Transferor may, subject to
the Company's approval and the limitations described below, request Tranche
Periods and allocate a portion of the Net Investment to each selected Tranche
Period, so that the aggregate amounts allocated to outstanding Tranche Periods
at all times shall equal the Net Investment held on behalf of the Company. The
Transferor shall give the Company irrevocable notice by telephone of the new
requested Tranche Period(s) at least three (3) Business Days prior to the
expiration of any then existing Tranche Period; provided, however, that the
Company may select, in its sole discretion, any such new Tranche Period if (i)
the Transferor fails to provide such notice on a timely basis or (ii) the
Company determines, in its sole discretion, that the Tranche Period requested by
the Transferor is unavailable or for any reason commercially undesirable. The
Company confirms that it is its intention to allocate all or substantially all
of the Net Investment held on behalf of it to one or more CP Tranche Periods;
provided that the Company may determine, from time to time, in its sole
discretion, that funding such Net Investment by means of one or more CP Tranche
Periods is not possible or is not desirable for any reason. If the Liquidity
Provider acquires from the Company a Purchased Interest with respect to the
Receivables pursuant to the terms of the Liquidity Provider Agreement,
NationsBank, on behalf of the Liquidity Provider, may exercise the right of
selection granted to the Company hereby. The initial Tranche Period applicable
to any such Purchased Interest shall be a period of not greater than 14 days and
such Tranche shall be a BR Tranche. Thereafter, provided that the Termination
Date shall not have occurred, the Tranche Period applicable thereto shall be the
BR Rate or the Eurodollar Rate, as determined by NationsBank. In the case of any
Tranche Period outstanding upon the Termination Date, such Tranche Period shall
end on such date.
(b) After the Termination Date; Transferred Interest Held on
behalf of the Company. At all times on and after the Termination Date, with
respect to any portion of the Transferred Interest which shall be held by the
Agent on behalf of the Company, the Company or NationsBank, as applicable, shall
select all Tranche Periods and Tranche Rates applicable thereto.
(c) Prior to the Termination Date; Transferred Interest Held
on Behalf of Bank Investor. At all times with respect to any portion of the
Transferred Interest held by the Agent on behalf of the Bank Investors, but
prior to the Termination Date, the initial Tranche Period applicable to such
portion of the Net Investment allocable thereto shall be a period of not greater
than 14 days and such Tranche shall be a BR Tranche. Thereafter, with respect to
such portion, and with respect to any other portion of the Transferred Interest
held on behalf of the Bank Investors (or any of them), provided that the
Termination Date shall not have occurred, the Tranche Period applicable thereto
shall be, at the Transferor's option, either a BR Tranche or a Eurodollar
Tranche. The Transferor shall give the Agent irrevocable notice by telephone of
the new requested Tranche Period at least three (3) Business Days prior to the
expiration of any then existing Tranche Period. In the case of any Tranche
Period outstanding upon the occurrence of the Termination Date, such Tranche
Period shall end on the date of such occurrence.
(d) After the Termination Date; Transferred Interest Held on
behalf of Bank Investor. At all times on and after the Termination Date, with
respect to any portion of the Transferred Interest held by the Agent on behalf
of the Bank Investors, the Agent shall select all Tranche Periods and Tranche
Rates applicable thereto.
(e) Eurodollar Rate Protection; Illegality. (i) If the Agent
is unable to obtain on a timely basis the information necessary to determine the
LIBOR Rate for any proposed Eurodollar Tranche, then
(A) the Agent shall forthwith notify the
Company or Bank Investors, as applicable, and the Transferor
that the Eurodollar Rate cannot be determined for such
Eurodollar Tranche, and
(B) while such circumstances exist, none of
the Company, the Bank Investors or the Agent shall allocate
the Net Investment of any additional Transferred Interests
purchased during such period or reallocate the Net Investment
allocated to any then existing Tranche ending during such
period, to a Eurodollar Tranche.
(ii) If, with respect to any outstanding Eurodollar Tranche,
the Company or any of the Bank Investors on behalf of which the Agent holds any
Transferred Interest therein notifies the Agent that it is unable to obtain
matching deposits in the London interbank market to fund its purchase or
maintenance of such Transferred Interest or that the Eurodollar Rate applicable
to such Transferred Interest will not adequately reflect the cost to the Person
of funding or maintaining its respective Transferred Interest for such Tranche
Period then the Agent shall forthwith so notify the Transferor, whereupon
neither the Agent nor the Company or the Bank Investors, as applicable, shall,
while such circumstances exist, allocate any Net Investment of any additional
Transferred Interest purchased during such period or reallocate the Net Interest
allocated to any Tranche Period ending during such period, to a Eurodollar
Tranche.
(iii) Notwithstanding any other provision of this Agreement,
if the Company or any of the Bank Investors, as applicable, shall notify the
Agent that such Person has determined (or has been notified by any Liquidity
Provider) that the introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful (either for the Company, such Bank
Investor, or such Liquidity Provider, as applicable), or any central bank or
other governmental authority asserts that it is unlawful, for the Company, such
Bank Investor or such Liquidity Provider, as applicable, to fund the purchases
or maintenance of Transferred Interests at the Eurodollar Rate, then (x) as of
the effective date of such notice from such Person to the Agent, the obligation
or ability of the Company or such Bank Investor, as applicable, to fund its
purchase or maintenance of Transferred Interests at the Eurodollar Rate shall be
suspended until such Person notifies the Agent that the circumstances causing
such suspension no longer exist and (y) the Net Investment of each Eurodollar
Tranche in which such Person owns an interest shall either (1) if such Person
may lawfully continue to maintain such Transferred Interest at the Eurodollar
Rate until the last day of the applicable Tranche Period, be reallocated on the
last day of such Tranche Period to another Tranche Period in respect of which
the Net Investment allocated thereto accrues Discount at a Tranche Rate other
than the Eurodollar Rate or (2) if such Person shall determine that it may not
lawfully continue to maintain such Transferred Interest at the Eurodollar Rate
until the end of the applicable Tranche Period, such Person's share of the Net
Investment allocated to such Eurodollar Tranche shall be deemed to accrue
Discount at the Base Rate from the effective date of such notice until the end
of such Tranche Period.
SECTION 2.4. Discount, Fees and Other Costs and
Expenses. Notwithstanding the limitation on recourse under Section 2.1
hereof, the Transferor shall pay, as and when due in accordance with
this Agreement, all fees hereunder, Discount (including Discount due
the Company or any Bank Investor), all amounts payable pursuant to
Article VIII hereof, if any, and the Servicing Fees. On the last day of
each Tranche Period, the Transferor shall pay to the Agent, on behalf
of the Company or the Bank Investors, as applicable, an amount equal to
the accrued and unpaid Discount for such Tranche Period together with,
in the event the Transferred Interest is held on behalf of the Company,
an amount equal to the discount accrued on the Company's Commercial
Paper to the extent such Commercial Paper was issued in order to fund
the Transferred Interest in an amount in excess of the Transfer Price
of an Incremental Transfer. The Transferor shall pay to the Agent, on
behalf of the Company, on each day on which Related Commercial Paper is
issued by the Company, the Dealer Fee. Discount shall accrue with
respect to each Tranche on each day occurring during the Tranche Period
related thereto. Nothing in this Agreement shall limit in any way the
obligations of the Transferor to pay the amounts set forth in this
Section 2.4.
SECTION 2.5. Non-Liquidation Settlement and
Reinvestment Procedures. On each day after the date of any Incremental
Transfer but prior to the Termination Date and provided that no
Potential Termination Event shall have occurred and be continuing, the
Collection Agent shall out of the Percentage Factor of Collections
received on or prior to such day and not previously applied or
accounted for: (i) set aside and hold in trust for the Agent, on behalf
of the Company or the Bank Investors, as applicable (or deposit into
the Collection Account if so required pursuant to Section 2.12 hereof)
an amount equal to all Discount and the Servicing Fee accrued through
such day and not so previously set aside or paid and (ii) apply the
balance of such Percentage Factor of Collections remaining after
application of Collections as provided in clause (i) of this Section
2.5 hereof to the Transferor, for the benefit of the Agent, on behalf
of the Company or the Bank Investors, as applicable, to the purchase of
additional undivided percentage interests in each Receivable pursuant
to Section 2.2(b) hereof. On the last day of each Tranche Period, from
the amounts set aside as described in clause (i) of the first sentence
of this Section 2.5 hereof, the Collection Agent shall deposit to the
Agent's account, for the benefit of the Company or the Bank Investors,
as applicable, an amount equal to the accrued and unpaid Discount for
such Tranche Period and shall deposit to its own account an amount
equal to the accrued and unpaid Servicing Fee for such Tranche Period.
The Agent, upon its receipt of such amounts in the Agent's account,
shall distribute such amounts to the Company and/or the Bank Investors
entitled thereto as set forth above; provided that if the Agent shall
have insufficient funds to pay all of the above amounts in full on any
such date, the Agent shall pay such amounts ratably (based on the
amounts owing to each such Person) to all such Persons entitled to
payment thereof. In addition, the Collection Agent shall remit to the
Transferor at the end of each Tranche Period, such portion of
Collections not allocated to the Agent, on behalf of Company or the
Bank Investors, as applicable.
SECTION 2.6. Liquidation Settlement Procedures. If at
any time on or prior to the Termination Date, the Percentage Factor is
greater than the Maximum Percentage Factor, then the Transferor shall
immediately pay to the Agent, for the benefit of the Company or the
Bank Investors, as applicable, from previously received Collections, an
amount equal to the amount such that, when applied in reduction of the
Net Investment, will result in a Percentage Factor less than or equal
to the Maximum Percentage Factor. Such amount shall be applied to the
reduction of the Net Investment of Tranche Periods selected by the
Agent. On the Termination Date and on each day thereafter, and on each
day on which a Potential Termination Event has occurred and is
continuing, the Collection Agent shall set aside and hold in trust for
the Agent, on behalf of the Company or the Bank Investors, as
applicable (or deposit into the Collection Account if so required
pursuant to Section 2.12 hereof) the Percentage Factor of all
Collections received on such day and shall set aside and hold in trust
for the Transferor such portion of Collections not allocated to the
Agent, on behalf of the Company or the Bank Investors, as applicable.
On the Termination Date or the day on which a Potential Termination
Event occurs, the Collection Agent shall deposit to the Agent's
account, for the benefit of the Company or the Bank Investors, as
applicable, any amounts set aside pursuant to Section 2.5 above. On the
last day of each Tranche Period to occur on or after the Termination
Date or during the continuance of a Potential Termination Event, the
Collection Agent shall deposit to the Agent's account to the extent not
already so deposited, for the benefit of the Company or the Bank
Investors, as applicable, the amounts so set aside for the Agent, on
behalf of the Company or the Bank Investors, pursuant to the second
preceding sentence, but not to exceed the sum of (i) the accrued
Discount for such Tranche Period, (ii) the portion of the Net
Investment allocated to such Tranche Period, and (iii) all other
Aggregate Unpaids. On such day, the Collection Agent shall deposit to
its account, from the amounts set aside for the Company and the Bank
Investors pursuant to the preceding sentence which remain after payment
in full of the aforementioned amounts, the accrued Servicing Fee for
such Tranche Period. If there shall be insufficient funds on deposit
for the Collection Agent to distribute funds in payment in full of the
aforementioned amounts, the Collection Agent shall distribute funds
first, in payment of the accrued Discount, second, if the Transferor,
the Seller or any Affiliate of the Transferor or the Seller is not then
the Collection Agent, to the Collection Agent's account, in payment of
the Servicing Fee payable to the Collection Agent, third, in reduction
of the Net Investment allocated to any Tranche Period ending on such
date, fourth, in payment of all fees payable by the Transferor
hereunder, fifth, in payment of all other Aggregate Unpaids and sixth,
if the Transferor, the Seller or any Affiliate of the Transferor or the
Seller is the Collection Agent, to its account as Collection Agent, in
payment of the Servicing Fee payable to such Person as Collection
Agent. The Agent, upon its receipt of such amounts in the Agent's
account, shall distribute such amounts to the Company and/or the Bank
Investors entitled thereto as set forth above; provided that if the
Agent shall have insufficient funds to pay all of the above amounts in
full on any such date, the Agent shall pay such amounts in the order of
priority set forth above and, with respect to any such category above
for which the Agent shall have insufficient funds to pay all amounts
owing on such date, ratably (based on the amounts in such categories
owing to such Persons) among all such Persons entitled to payment
thereof.
Following the date on which the Net Investment has
been reduced to zero, all accrued Discount and Servicing Fees have been
paid in full and all other Aggregate Unpaids have been paid in full,
(i) the Collection Agent shall recompute the Percentage Factor, (ii)
the Agent, on behalf of the Company and the Bank Investors, shall be
considered to have reconveyed to the Transferor all of the Agent's
right, title and interest in and to the Affected Assets (including the
Transferred Interest), (iii) the Collection Agent shall pay to the
Transferor any remaining Collections set aside and held by the
Collection Agent pursuant to the third sentence of this Section 2.6 and
(iv) the Agent, on behalf of the Company and the Bank Investors, shall
execute and deliver to the Transferor, at the Transferor's expense,
such documents or instruments as are necessary or reasonably requested
by the Transferor to terminate the Agent's interests in the Affected
Assets. Any such documents shall be prepared by or on behalf of the
Transferor. On the last day of each Tranche Period, the Collection
Agent shall remit to the Transferor such portion of Collections set
aside for the Transferor pursuant to this Section 2.6.
SECTION 2.7. Fees. Notwithstanding any limitation
on recourse contained in this Agreement, the Transferor shall pay the
following non-refundable fees:
(a) On the Investor Report Date, to the
Company solely for its own account, the Program Fee and the
Administration Fee, and to the Administrative Agent, on behalf
of the Bank Investors, the Facility Fee.
(b) On the date of execution and delivery
hereof, to the Administrative Agent solely for its own
account, the Arrangement Fee.
SECTION 2.8. Protection of Ownership Interest of the
Company and the Bank Investors. (a) The Transferor agrees that it will,
and will cause the Seller to, from time to time, at its expense,
promptly execute and deliver all instruments and documents and take all
actions as may be necessary or as the Agent may reasonably request in
order to perfect or protect the Transferred Interest or to enable the
Agent, the Company or the Bank Investors to exercise or enforce any of
their respective rights hereunder. Without limiting the foregoing, the
Transferor will, and will cause the Seller to, upon the request of the
Agent, the Company or any of the Bank Investors, in order to accurately
reflect this purchase and sale transaction, (x) execute and file such
financing or continuation statements or amendments thereto or
assignments thereof as may be requested by the Agent, the Company or
any of the Bank Investors and (y) to the extent reasonably practicable,
xxxx its respective master data processing records and other documents
with a legend describing the conveyance to the Transferor of the
Receivables (in the case of the Seller) and to the Agent, for the
benefit of the Company and the Bank Investors, of the Transferred
Interest. The Transferor shall, and will cause the Seller to, upon
request of the Agent, the Company or any of the Bank Investors obtain
such additional search reports as the Agent, the Company or any of the
Bank Investors shall reasonably request. To the fullest extent
permitted by applicable law, the Agent shall be permitted to sign and
file continuation statements and amendments thereto and assignments
thereof without the Transferor's or the Seller's signature. Carbon,
photographic or other reproduction of this Agreement or any financing
statement shall be sufficient as a financing statement. The Transferor
shall not, and shall not permit the Seller to, change its respective
name, identity or corporate structure (within the meaning of Section
9-402(7) of the UCC as in effect in the States of New York and Georgia)
nor relocate its respective chief executive office or any office where
Records are kept unless it shall have: (i) given the Agent at least ten
(10) days prior notice thereof and (ii) prepared at Transferor's
expense and delivered to the Agent all financing statements,
instruments and other documents necessary to preserve and protect the
Transferred Interest or requested by the Agent in connection with such
change or relocation. Any filings under the UCC or otherwise that are
occasioned by such change in name or location shall be made at the
expense of Transferor.
(b) The Collection Agent shall instruct all Obligors to cause
all Collections to be deposited directly with a Lock-Box Bank. Any
Lock-Box Account maintained by a Lock-Box Bank pursuant to the related
Lock-Box Agreement shall be under the exclusive ownership and control
of the Agent which is hereby granted to the Agent by the Seller and the
Transferor. The Collection Agent shall be permitted to give
instructions to the Lock-Box Banks for so long as it shall not have
received written notice of the occurrence of either a Collection Agent
Default or any other Termination Event, provided that, upon its receipt
of written notice from the Agent that such Collection Agent Default or
Termination Event is waived in accordance with the provisions of this
Agreement, the right of the Collection Agent to give such instructions
shall be restored. The Collection Agent shall not add any bank as a
Lock-Box Bank to those listed on Exhibit C attached hereto unless such
bank has entered into a Lock-Box Agreement. The Collection Agent shall
not terminate any bank as a Lock-Box Bank unless the Agent shall have
received fifteen (15) days' prior notice of such termination. If the
Transferor, the Seller or the Collection Agent receives any
Collections, the Transferor, the Seller or the Collection Agent, as
applicable, shall immediately, but in any event within two (2) Business
Days of receipt, remit (and shall cause the Seller to remit) such
Collections to a Lock-Box Account.
SECTION 2.9. Deemed Collections; Application of
Payments. (a) If on any day the Outstanding Balance of a Receivable is
either (x) reduced or canceled as a result of any defective, rejected
or returned merchandise or services, any discount, credit, rebate,
dispute, warranty claim, repossessed or returned goods, chargeback,
allowance, any billing adjustment, dilutive factor or other adjustment,
or (y) reduced or canceled as a result of a setoff or offset in respect
of any claim by any Person (whether such claim arises out of the same
or a related transaction or an unrelated transaction), the Transferor
shall be deemed to have received on such day a Collection of such
Receivable in the amount of such reduction or cancellation and the
Transferor shall pay to the Collection Agent an amount equal to such
reduction or cancellation and such amount shall be applied by the
Collection Agent as a Collection in accordance with Section 2.5 or 2.6
hereof, as applicable, provided, that prior to the Commitment
Termination Date, such amount shall not be required to be actually paid
by the Transferor if the exclusion of such Receivable from the
calculation of the Percentage Factor would not cause the Percentage
Factor to exceed the Maximum Percentage Factor. Whenever such amount
referred to above is paid by the Transferor, the Net Investment shall
be reduced by the amount of such payment applied to the reduction of
the Net Investment and actually received by the Agent.
(b) If on any day any of the representations or warranty in
Article III was or becomes untrue with respect to a Receivable (whether
on or after the date of any transfer of an interest therein to the
Agent, the Company or the Bank Investors as contemplated hereunder),
the Transferor shall be deemed to have received on such day a
Collection of such Receivable in full and the Transferor shall on such
day pay to the Collection Agent an amount equal to the Outstanding
Balance of such Receivable and such amount shall be allocated and
applied by the Collection Agent as a Collection allocable to the
Transferred Interest in accordance with Section 2.5 or 2.6 hereof, as
applicable, provided, that prior to the Commitment Termination Date,
such amount shall not be required to be actually paid by the Transferor
if the exclusion of such Receivable from the calculation of the
Percentage Factor would not cause the Percentage Factor to exceed the
Maximum Percentage Factor. The Net Investment shall be reduced by the
amount of such payment applied to the reduction of the Net Investment
and actually received by the Agent.
(c) Any payment by an Obligor in respect of any indebtedness
owed by it to the Transferor or the Seller shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and
unless otherwise instructed by the Agent, be applied as a Collection of
any Receivable of such Obligor included in the Transferred Interest
(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 indebtedness of such Obligor.
SECTION 2.10. Payments and Computations, Etc. All
amounts to be paid or deposited by the Transferor or the Collection
Agent hereunder shall be paid or deposited in accordance with the terms
hereof no later than 11:00 a.m. (New York City time) on the day when
due in immediately available funds; if such amounts are payable to the
Agent (whether on behalf of the Company or any Bank Investor or
otherwise) they shall be paid or deposited in the account indicated in
Section 10.3 hereof, until otherwise notified by the Agent. The
Transferor shall, to the extent permitted by law, pay to the Agent, for
the benefit of the Company and the Bank Investors upon demand, interest
on all amounts not paid or deposited when due hereunder at a rate equal
to 2% per annum plus the Base Rate. All computations of Discount,
interest and all per annum fees hereunder shall be made on the basis of
a year of 360 days for the actual number of days (including the first
but excluding the last day) elapsed. Any computations by the Agent of
amounts payable by the Transferor hereunder shall be binding upon the
Transferor absent manifest error.
SECTION 2.11. Reports. (a) Prior to the twenty-second
(22nd) day of each calendar month, the Collection Agent shall prepare
and forward to the Agent and the Administrative Agent (i) an Investor
Report as of the end of the last day of the immediately preceding
Fiscal Month, (ii) if requested by the Agent or the Administrative
Agent, a listing by Obligor of all Receivables together with an aging
of such Receivables and (iii) such other information as the Agent or
the Administrative Agent may reasonably request.
(b) On each Investor Report Date, the Collection Agent shall
prepare and forward to the Administrative Agent and the Agent a
certification as to the Net Receivables Balance, the Percentage Factor
and such other information as the Agent may request from time to time
as at the close of business on the immediately preceding Business Day.
SECTION 2.12. Collection Account. There shall be
established on the day of the initial Incremental Transfer hereunder
and maintained with the Agent, a segregated account (the "Collection
Account"), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Agent, on behalf of
the Company and the Bank Investors. During the existence of a
Collection Agent Default or a Termination Event, the Collection Agent
shall remit daily within forty-eight hours of receipt to the Collection
Account all Collections received with respect to any Receivables. Funds
on deposit in the Collection Account (other than investment earnings)
shall be invested by the Agent in Eligible Investments that will mature
so that such funds will be available prior to the last day of each
successive Tranche Period following such investment. On the last day of
each Tranche Period, all interest and earnings (net of losses and
investment expenses) on funds on deposit in the Collection Account
shall be retained in the Collection Account and be available to make
any payments required to be made hereunder (including Discount) by the
Transferor. On the date on which the Net Investment is zero, all
accrued Discount and Servicing Fees have been paid in full and all
other Aggregate Unpaids have been paid in full, any funds remaining on
deposit in the Collection Account shall be paid to the Transferor.
SECTION 2.13. Sharing of Payments, Etc. If the
Company or any Bank Investor (for purposes of this Section only, being
a "Recipient") shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of setoff, or otherwise)
on account of Transferred Interest owned by it (other than pursuant to
Section 2.7, or Article VIII and other than as a result of the
differences in the timing of the applications of Collections pursuant
to Section 2.5 or 2.6) in excess of its ratable share of payments on
account of Transferred Interest obtained by the Company and/or the Bank
Investors entitled thereto, such Recipient shall forthwith purchase
from the Company and/or the Bank Investors entitled to a share of such
amount participations in the Percentage Interests owned by such Persons
as shall be necessary to cause such Recipient to share the excess
payment ratably with each such other Person entitled thereto; provided,
however, that if all or any portion of such excess payment is
thereafter recovered from such Recipient, such purchase from each such
other Person shall be rescinded and each such other Person shall repay
to the Recipient the purchase price paid by such Recipient for such
participation to the extent of such recovery, together with an amount
equal to such other Person's ratable share (according to the proportion
of (a) the amount of such other Person's required payment to (b) the
total amount so recovered from the Recipient) of any interest or other
amount paid or payable by the Recipient in respect of the total amount
so recovered.
SECTION 2.14. Right of Setoff. Without in any way
limiting the provisions of Section 2.13, each of the Company and the
Bank Investors is hereby authorized (in addition to any other rights it
may have) at any time after the occurrence of the Termination Date or
during the continuance of a Potential Termination Event to set-off,
appropriate and apply (without presentment, demand, protest or other
notice which are hereby expressly waived) any deposits and any other
indebtedness held or owing by the Company or such Bank Investor to, or
for the account of, the Transferor against the amount of the Aggregate
Unpaids owing by the Transferor to such Person or to the Agent on
behalf of such Person (even if contingent or unmatured).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the
Transferor. The Transferor represents and warrants to the Agent, the
Company and the Bank Investors that:
(a) Corporate Existence and Power. The Transferor is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all corporate
power and all material governmental licenses, authorizations, consents
and approvals required to carry on its business in each jurisdiction in
which its business is now conducted. The Transferor is duly qualified
to do business in, and is in good standing in, every other jurisdiction
in which the nature of its business requires it to be so qualified,
except where the failure to be so qualified or in good standing would
not have a Transferor Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by the Transferor of this
Agreement, the Receivables Purchase Agreement, the Fee Letter, the
Certificates, the Transfer Certificates and the other Transaction
Documents to which the Transferor is a party are within the
Transferor's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or
filing with, any Official Body or official thereof (except as
contemplated by Section 2.8 hereof), and do not (i) contravene (1) any
provision of applicable law, rule or regulation, the contravention of
which would have a Transferor Material Adverse Effect, (2) the
Certificate of Incorporation or Bylaws of the Transferor, or (3) any
judgment, injunction, order, writ, or decree, the contravention of
which would have a Transferor Material Adverse Effect or (ii) violate
or constitute a default under any material agreement or instrument
binding upon the Transferor or (iii) result in the creation or
imposition of any Adverse Claim on the assets of the Transferor (except
as contemplated by Section 2.8 hereof).
(c) Binding Effect. Each of this Agreement, the Receivables
Purchase Agreement, the Fee Letter, the Certificates and the other
Transaction Documents to which the Transferor is a party constitutes
and the Transfer Certificate upon payment of the Transfer Price set
forth therein will constitute the legal, valid and binding obligation
of the Transferor, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors generally and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(d) Perfection. Immediately preceding each Transfer hereunder,
the Transferor shall be the owner of all of the Receivables, free and
clear of all Adverse Claims. On or prior to each Transfer and each
recomputation of the Transferred Interest, all financing statements and
other documents required to be recorded or filed in order to perfect
and protect Agent's Transferred Interest against all creditors of and
purchasers from the Transferor and the Seller will have been duly filed
in each filing office necessary for such purpose and all filing fees
and taxes, if any, payable in connection with such filings shall have
been paid in full.
(e) Accuracy of Information. All information heretofore
furnished by the Transferor (including without limitation, the Investor
Reports, any reports delivered pursuant to Section 2.11 hereof and the
Transferor's financial statements) to the Company, any Bank Investors,
the Agent or the Administrative Agent for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
such information hereafter furnished by the Transferor to the Company,
any Bank Investors, the Agent or the Administrative Agent will be
complete and correct in every material respect on the date such
information is stated or certified, to the extent necessary to give the
recipient a true and accurate knowledge of the subject matter, or, in
the case of financial statements, present fairly, in accordance with
GAAP consistently applied throughout the periods involved, the
financial position of the Transferor as at the date thereof in the
results of operations for such period. All financial projections and
other pro forma financial information delivered to the Agent and the
Bank Investors, or any of them, have been based on good faith estimates
and assumptions believed by the Transferor to be reasonable at the time
made and at the time furnished to the Agent and/or the Bank Investors.
(f) Tax Status. The Transferor has filed or caused to be filed
all tax returns (federal, state and local) required to be filed by it
and has paid or made adequate provision for the payment of all taxes,
assessments and other governmental charges, if any, which it is
obligated to pay, the failure of which to file or pay (as the case may
be) would have a Transferor Material Adverse Effect; provided, however,
that this Section shall not require the payment or discharge of any
such tax, assessment, charge, levy or claim which is being contested in
good faith by appropriate proceedings which operate to suspend the
collection thereof and for which adequate reserves have been
established on the books of the Transferor in accordance with GAAP.
(g) Action, Suits. Except as set forth in Exhibit H hereof,
there are no actions, suits or proceedings pending, or to the knowledge
of the Transferor threatened, against or affecting the Transferor or
its properties, in or before any court, arbitrator or other body, which
may be, individually or in the aggregate (i) asserting the invalidity
of this Agreement or any other Transaction Document to which the
Transferor is a party, (ii) seeking to prevent the sale and assignment
of any Receivable or other Affected Assets or the consummation of any
of the other transactions contemplated by this Agreement or any other
Transaction Document to which the Transferor is a party, or (iii)
seeking any determination or ruling that would have a Transferor
Material Adverse Effect.
(h) Place of Business. The principal place of business and
chief executive office of the Transferor are located at the address of
the Transferor indicated in Section 9.3 hereof and the offices where
the Transferor keeps all its Records, are located at the address(es)
described on Exhibit I or such other locations notified to the Company
in accordance with Section 2.8 hereof in jurisdictions where all action
required by Section 2.8 hereof has been taken and completed.
(i) Good Title. Upon each Transfer and each recomputation of
the Transferred Interest, the Agent shall acquire a valid undivided
percentage ownership interest to the extent of the Transferred Interest
or a first priority perfected security interest in each Receivable that
exists on the date of such Transfer and recomputation and in the
Related Security (other than Related Security consisting of instruments
and letters of credit which will be delivered to the Agent following
the Agent's request therefor, and other than merchandise, including
returned or repossessed merchandise, provided, however, that such
merchandise is not located in any jurisdiction contemplated in Sections
4.1(i) and (j) of this Agreement) and Collections with respect thereto,
in each case free and clear of any Adverse Claim other than any Adverse
Claim arising pursuant to the Transaction Documents.
(j) Tradenames, Etc. As of the date hereof: (i) the
Transferor's chief executive office is located at the address for
notices set forth in Section 10.3 hereof; (ii) the Transferor has no
subsidiaries or divisions; and (iii) the Transferor has, within the
last five (5) years, operated only under the tradenames identified in
Exhibit J hereto, and, within the last five (5) years, has not changed
its name, merged with or into or consolidated with any other
corporation or been the subject of any proceeding under the Bankruptcy
Code, except as disclosed in Exhibit J hereto.
(k) Nature of Receivables. Each Receivable (x) represented by
the Transferor or the Collection Agent to be an Eligible Receivable
(including in any Investor Report or other report delivered pursuant to
Section 2.11 hereof) or (y) included in the calculation of the Net
Receivables Balance in fact satisfies at such time the definition of
"Eligible Receivable" set forth herein.
(l) Coverage Requirement; Amount of Receivables. The
Percentage Factor does not exceed the Maximum Percentage Factor. As of
August 8, 1998, the aggregate Outstanding Balance of the Receivables in
existence was $276,459,847 and the Net Receivable Balance was
$255,023,094.
(m) Credit and Collection Policy. Since the effective date(s)
indicated thereon, there have been no material changes in the Credit
and Collection Policy other than as permitted hereunder. Since such
date, no material adverse change has occurred in the overall rate of
collection of the Receivables.
(n) No Termination Event. No event has occurred and is
continuing and no condition exists which constitutes a Termination
Event or a Potential Termination Event.
(o) Not an Investment Company. The Transferor is not, and is
not controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(p) ERISA. Each of the Transferor and its ERISA Affiliates is
in compliance in all material respects with ERISA and no lien exists in
favor of the Pension Benefit Guaranty Corporation on any of the
Receivables.
(q) Lock-Box Accounts. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the Lock-Box
Accounts at such Lock-Box Banks, are specified in Exhibit C hereto (or
at such other Lock-Box Banks and/or with such other Lock-Box Accounts
as have been notified to the Collateral Agent and for which Lock-Box
Agreements have been executed in accordance with Section 2.8(b) hereof
and delivered to the Collection Agent). All Obligors have been
instructed to make payment to a Lock-Box Account and only Collections
are deposited into the Lock-Box Accounts.
(r) Bulk Sales. No transaction contemplated hereby or by the
Receivables Purchase Agreement requires compliance with any bulk sales
act or similar law.
(s) Transfers Under Receivables Purchase Agreement. Each
Receivable which has been transferred to the Transferor by the Seller
has been purchased by the Transferor from the Seller pursuant to, and
in accordance with, the terms of the Receivables Purchase Agreement.
(t) Preference; Voidability. The Transferor shall have given
reasonably equivalent value to the Seller in consideration for the
transfer to the Transferor of the Receivables and Related Security from
the Seller, and each such transfer shall not have been made for or on
account of an antecedent debt owed by the Seller to the Transferor.
(u) Representations and Warranties of the Seller. Each of the
representations and warranties of the Seller set forth in Section 4.01
of the Receivables Purchase Agreement are true and correct in all
material respects and the Transferor hereby reaffirms all such
representations and warranties for the benefit of the Agent, the
Company, the Bank Investors and the Administrative Agent.
SECTION 3.2. Reaffirmation of Representations and
Warranties by the Transferor. On each day that a Transfer is made
hereunder, the Transferor, by accepting the proceeds of such Transfer,
whether delivered to the Transferor pursuant to Section 2.2(a) or
Section 2.5 hereof, shall be deemed to have certified that all
representations and warranties described in Section 3.1 hereof (other
than any representations and warranties which by their terms relate
solely to an earlier date, and subject to such qualifications and
exceptions as shall have been disclosed to, and consented to by, the
Agent in writing) are correct on and as of such day as though made on
and as of such day. Each Incremental Transfer shall be subject to the
further condition precedent that prior to the date of such Incremental
Transfer, the Collection Agent shall have delivered to the Agent and
the Administrative Agent, in form and substance satisfactory to the
Agent and the Administrative Agent, a completed Investor Report and a
Net Receivables Balance certification dated within ten (10) days prior
to the date of such Incremental Transfer (or in the case of the initial
Incremental Transfer, dated as of the Closing Date), together with a
listing by Obligor, if requested, and such additional information as
may be reasonably requested by the Administrative Agent or the Agent;
and the Transferor shall be deemed to have represented and warranted
that such conditions precedent have been satisfied.
SECTION 3.3. Representations and Warranties of the
Collection Agent. The Seller, in its capacity as Collection Agent,
represents and warrants, and the Seller shall cause any Affiliate,
should such Affiliate become the Collection Agent, to represent and
warrant, to the Company and the Bank Investors that:
(a) Corporate Existence and Power. The Collection Agent is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all corporate
power and all material governmental licenses, authorizations, consents
and approvals required to carry on its business in each jurisdiction in
which its business is now conducted. The Collection Agent is duly
qualified to do business in, and is in good standing in, every other
jurisdiction in which the nature of its business requires it to be so
qualified, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by the Collection Agent of this
Agreement are within the Collection Agent's corporate powers, have been
duly authorized by all necessary corporate action, require no action by
or in respect of, or filing with, any Official Body or official
thereof, and do not (i) contravene (1) any provision of applicable law,
rule or regulation, the contravention of which would have a Material
Adverse Effect, (2) the Articles of Incorporation or Bylaws of the
Collection Agent, or (3) any judgment, injunction, order, writ or
decree, the contravention of which would have a Material Adverse
Effect, (ii) violate or constitute a default under any material
agreement or instrument binding upon the Collection Agent or (iii)
result in the creation or imposition of any Adverse Claim on the
Affected Assets of the Collection Agent other than in accordance with
the Transaction Documents.
(c) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of the Collection Agent, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of
creditors and to general principles of equity (regardless of whether
such enforceability is considered in a proceeding at law or in equity).
(d) Accuracy of Information. All information heretofore
furnished by the Collection Agent to the Agent, the Company, any Bank
Investor or the Administrative Agent for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
such information hereafter furnished by the Collection Agent to the
Agent, the Company, any Bank Investor or the Administrative Agent will
be complete and correct in every material respect, on the date such
information is stated or certified, to the extent necessary to give the
recipient a true and accurate knowledge of the subject matter, or, in
the case of financial statements, present fairly, in accordance with
GAAP consistently applied throughout the periods involved, the
financial position of the Collection Agent and its Subsidiaries, on a
consolidated basis, as at the date thereof in the results of operations
for such period. All financial projections and other pro forma
financial information delivered to the Agent and the Bank Investors, or
any of them, have been based on good faith estimates and assumptions
believed by the Collection Agent to be reasonable at the time made and
at the time furnished to the Agent and/or the Bank Investors.
(e) Action, Suits. Except as set forth in Exhibit H, there are
no actions, suits or proceedings pending, or to the knowledge of the
Collection Agent threatened, against or affecting the Collection Agent
or its properties, in or before any court, arbitrator or other body,
which may be, individually or in the aggregate, (i) asserting the
invalidity of this Agreement or any other Transaction Document to which
the Collection Agent is a party, (ii) seeking to prevent the sale and
assignment of any Receivable or other Affected Assets or the
consummation of any of the other transactions contemplated by this
Agreement or any other Transaction Document to which the Collection
Agent is a party, or (iii) seeking any determination or ruling that
would have a Material Adverse Effect.
(f) Nature of Receivables. Each Receivable included in the
calculation of the Net Receivables Balance in fact satisfies at such
time the definition of "Eligible Receivable" and is not a Receivable of
the type described in clauses (i) through (iii) of the definition of
"Net Receivables Balance".
(g) Amount of Receivables. As of August 8, 1998, the aggregate
Outstanding Balance of the Receivables in existence was $276,459,847
and the Net Receivable Balance was $255,023,094.
(h) Credit and Collection Policy. Since the effective date(s)
indicated thereon, there have been no material changes in the Credit
and Collection Policy other than as permitted hereunder. Since such
date, no material adverse change has occurred in the overall rate of
collection of the Receivables.
(i) Collections and Servicing. Since January 3, 1998, there
has been no material adverse change in the ability of the Collection
Agent to service and collect the Receivables.
(j) Not an Investment Company. The Collection Agent is not,
and is not controlled by, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(k) Lock-Box Accounts. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the Lock-Box
Accounts at such Lock-Box Banks, are specified in Exhibit C (or at such
other Lock-Box Banks and/or with such other Lock-Box Accounts as have
been notified to the Transferor and the Agent and for which Lock-Box
Agreements have been executed in accordance with Section 2.8(b) hereof
and delivered to the Collection Agent). All Obligors have been
instructed to make payment to a Lock-Box Account and only Collections
are deposited into the Lock-Box Accounts.
(l) Year 2000 Compliance. The Collection Agent has (i)
initiated a review and assessment of all areas within its and each of
its Subsidiaries' business and operations (including those affected by
suppliers, vendors and customers) that could be adversely affected by
the "Year 2000 Problem" (that is, the risk that computer applications
used by the Collection Agent or any of its Subsidiaries (or suppliers,
vendors and customers) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), (ii) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. Based on the
foregoing, the Collection Agent believes that all computer applications
(including those of its suppliers, vendors and customers) that are
material to its or any of its Subsidiaries' business and operations are
reasonably expected on a timely basis to be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000
(that is, be "Year 2000 Compliant"), except to the extent that a
failure to do so could not reasonably be expected (a) to have a
Material Adverse Effect, or (b) to result in a Termination Event.
The Collection Agent (i) has completed a review and
assessment of all computer applications (including, but not limited to
those of its suppliers, vendors, customers and any third party
servicers), which are related to or involved in the origination,
collection, management or servicing of the Receivables (the "Receivable
Systems") and (ii) has determined that such Receivable Systems are Year
2000 Compliant or will be Year 2000 Compliant on or before January 1,
1999 and thereafter.
The costs of all assessment, remediation, testing and
integration related to the Collection Agent's plan for becoming Year
2000 Compliant will not have a Material Adverse Effect.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. On or prior to
the date of execution hereof, the Transferor shall deliver to the Agent
the following documents, instruments and fees all of which shall be in
a form and substance acceptable to the Agent:
(a) A copy of the resolutions of the Board of Directors of the
Transferor certified by its Secretary or Assistant Secretary approving
the execution, delivery and performance by the Transferor of this
Agreement, the Receivables Purchase Agreement and the other Transaction
Documents to be delivered by the Transferor hereunder or thereunder.
(b) A copy of the resolutions of the Board of Directors of the
Seller certified by its Secretary or Assistant Secretary approving the
execution, delivery and performance by the Seller of this Agreement,
the Receivables Purchase Agreement and the other Transactions Documents
to be delivered by the Collection Agent hereunder or thereunder.
(c) The Certificate of Incorporation of the Transferor
certified by the Secretary of State or other similar official of the
Transferor's jurisdiction of incorporation dated a date reasonably
prior to the Closing Date.
(d) The Articles of Incorporation of the Seller certified by
the Secretary of State or other similar official of the Seller's
jurisdiction of incorporation dated a date reasonably prior to the
Closing Date.
(e) A Good Standing Certificate for the Transferor issued by
the Secretary of State or a similar official of the Transferor's
jurisdiction of incorporation and certificates of qualification as a
foreign corporation issued by the Secretaries of State or other similar
officials of each jurisdiction where such qualification is material to
the transactions contemplated by this Agreement and the other
Transaction Documents, in each case, dated a date reasonably prior to
the Closing Date.
(f) A Good Standing Certificate for the Seller issued by the
Secretary of State or a similar official of the Seller's jurisdiction
of incorporation and certificates of qualification as a foreign
corporation issued by the Secretaries of State or other similar
officials of each jurisdiction when such qualification is material to
the transactions contemplated by this Agreement and the Receivables
Purchase Agreement and the other Transaction Documents, in each case,
dated a date reasonably prior to the Closing Date.
(g) A Certificate of the Secretary or Assistant Secretary of
the Transferor substantially in the form of Exhibit L-1 attached
hereto.
(h) A Certificate of the Secretary or Assistant Secretary of
the Seller substantially in the form of Exhibit L-2 attached hereto.
(i) Proper financing statements (Form UCC-1) naming the
Transferor as the debtor in favor of the Agent, for the benefit of the
Company and the Bank Investors, secured party or other similar
instruments or documents as may be necessary or in the reasonable
opinion of the Agent desirable under the UCC of all appropriate
jurisdictions or any comparable law to perfect the Agent's undivided
percentage interest in all Receivables and the Related Security and
Collections relating thereto.
(j) Proper financing statements (Form UCC-1) naming the Seller
as the debtor in favor of the Transferor as secured party and the
Agent, for the benefit of the Company and the Bank Investors, as
assignee of the secured party or other similar instruments or documents
as may be necessary or in the reasonable opinion of the Agent desirable
under the UCC of all appropriate jurisdictions or any comparable law to
perfect the Transferor's ownership interest in all Receivables.
(k) Proper partial release or termination statements (Form
UCC-3), if any, necessary to terminate all security interests and other
rights of any person in Receivables previously granted by Transferor.
(l) Proper partial release or termination statements (Form
UCC-3), if any, necessary to terminate all security interests and other
rights of any person in Receivables previously granted by the Seller.
(m) Certified copies of request for information or copies
(Form UCC-11) (or a similar search report certified by parties
acceptable to the Agent) dated a date reasonably near the date of the
initial Incremental Transfer listing all effective financing statements
which name the Transferor or the Seller (under their respective present
names and any previous names) as debtor and which are filed in
jurisdictions in which the filings were made pursuant to items (i) or
(j) above together with copies of such financing statements (none of
which shall cover any Receivables or Contracts).
(n) Executed copies of the Lock-Box Agreements relating to
each of the Lock-Boxes and the Lock-Box Accounts.
(o) An opinion of Powell, Goldstein, Xxxxxx & Xxxxxx LLP,
special counsel to the Transferor and the Seller covering the matters
set forth in Exhibit K-1 hereto.
(p) An opinion of Xxxxxx X. Xxxxxxxx, Esq., General Counsel to
the Seller and the Transferor covering the matters set forth in Exhibit
K-2 hereto.
(q) An opinion of Powell, Goldstein, Xxxxxx & Xxxxxx LLP,
special counsel to the Transferor and the Seller, covering certain
bankruptcy and insolvency matters in form and substance satisfactory to
the Agent and Agent's counsel.
(r) A computer tape setting forth all Receivables and the
Outstanding Balances thereon and such other information as the Agent
may reasonably request.
(s) An executed copy of this Agreement, the Receivables
Purchase Agreement, the Fee Letter and each of the other Transaction
Documents to be executed by the Seller or the Transferor.
(t) The Transfer Certificate, duly executed by the Transferor.
(u) The Certificate, duly executed by the Transferor and
appropriately completed.
(v) The Arrangement Fee in accordance with Section 2.7(b).
(w) An Investor Report for the Fiscal Month ended August 8,
1998.
(x) Evidence of the appointment of Corporation Service Company
as agent for process as required by Section 10.4(d) hereof.
(y) Such other documents, instruments, certificates and
opinions as the Agent or the Administrative Agent, shall reasonably
request.
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of Transferor. At all times
from the date hereof to the later to occur of (i) the Termination Date
or (ii) the date on which the Net Investment has been reduced to zero,
all accrued Discount and Servicing Fees shall have been paid in full
and all other Aggregate Unpaids shall have been paid in full, in cash,
unless the Agent shall otherwise consent in writing:
(a) Financial Reporting. The Transferor will, and will cause
the Seller and each of the Transferor's and the Seller's Subsidiaries
to, maintain, for itself and each of its respective Subsidiaries, a
system of accounting established and administered in accordance with
GAAP, and furnish to the Agent:
(i) Annual Reporting. Within ninety (90) days after the close
of the Transferor's and the Seller's fiscal years, audited financial
statements, prepared in accordance with GAAP on a consolidated basis
for the Seller and its Subsidiaries and prepared on a consolidating
basis for the Transferor, in each case, including balance sheets as of
the end of such period, related statements of operations, shareholder's
equity and cash flows, accompanied (in the case of the Seller's
consolidated financial statements) by an unqualified audit report
certified by independent certified public accountants, acceptable to
the Agent, prepared in accordance with generally accepted auditing
principles and any management letter prepared by said accountants and
by a certificate of said accountants that, in the course of the
foregoing, they have obtained no knowledge of any Termination Event or
Potential Termination Event, or if, in the opinion of such accountants,
any Termination Event or Potential Termination Event shall exist,
stating the nature and status thereof.
(ii) Quarterly Reporting. Within forty-five (45) days after
the close of the first three quarterly periods of each of the
Transferor's and the Seller's fiscal years, (x) for the Seller and its
Subsidiaries, consolidated unaudited balance sheets as at the close of
each such period and consolidated related statements of operations,
shareholder's equity and cash flows for the period from the beginning
of such fiscal year to the end of such quarter, and (y) for the
Transferor, consolidating, unaudited balance sheets at the close of
such period and consolidating statements of operations, shareholder's
equity and cash flows from the beginning of such fiscal year to the end
of such quarter, all certified by its chief financial officer.
(iii) Compliance Certificate. Together with the financial
statements required hereunder, a compliance certificate signed by the
Transferor's or the Seller's, as applicable, chief financial officer
stating that (x) the attached financial statements have been prepared
in accordance with GAAP and fairly present the financial condition of
the Transferor or the Seller as applicable and (y) to the best of such
Person's knowledge, no Termination Event or Potential Termination Event
exists, or if any Termination Event or Potential Termination Event
exists, stating the nature and status thereof and, for any Certificate
delivered pursuant to paragraph (i) above, showing the computation of,
and showing compliance with, each of the financial ratios and
restrictions set forth in Section 5.3 hereof.
(iv) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of the Transferor or the Seller,
copies of all financial statements, reports and proxy statements so
furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies
of all registration statements and annual, quarterly, monthly or other
regular reports which the Seller or any subsidiary files with the
Securities and Exchange Commission.
(vi) Notice of Termination Events or Potential Termination
Events. As soon as possible and in any event within two (2) Business
Days after an Executive Officer of the Transferor obtains actual
knowledge of the occurrence of each Termination Event or each Potential
Termination Event, a statement of the chief financial officer or chief
accounting officer of the Transferor setting forth details of such
Termination Event or Potential Termination Event and the action which
the Transferor proposes to take with respect thereto.
(vii) Change in Credit and Collection Policy and Debt Ratings.
Within ten (10) days after the date any material change in or amendment
to the Credit and Collection Policy is made, a copy of the Credit and
Collection Policy then in effect indicating such change or amendment.
Within five (5) days after the date of any change in the Transferor's
or the Seller's public or private debt ratings, if any, a written
certification of the Transferor's or the Seller's public and private
debt ratings after giving effect to any such change.
(viii) Credit and Collection Policy. Within ninety (90) days
after the close of each of the Seller's and the Transferor's fiscal
years, a complete copy of the Credit and Collection Policy then in
effect.
(ix) ERISA. Promptly after the filing or receiving thereof,
copies of all reports and notices with respect to any Reportable Event
(as defined in Article IV of ERISA other than those Reportable Events
for which the thirty (30) day notice requirement is waived) which the
Transferor, the Seller or any ERISA Affiliate of the Transferor or the
Seller files under ERISA with the Internal Revenue Service, the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor or which
the Transferor, the Seller or any ERISA Affiliates of the Transferor or
the Seller receives from the Internal Revenue Service, the Pension
Benefit Guaranty Corporation or the U.S. Department of Labor.
(x) Year 2000. Simultaneously with the certificate to be
delivered under clause (iii) above, a certificate signed by an
Executive Officer of each of the Transferor and the Collection Agent
that no material event, problems or conditions have occurred which in
the opinion of management would (i) prevent or materially delay the
Transferor's or the Collection Agent's plan to become Year 2000
Compliant or (ii) cause or be likely to cause the Transferor's
representations and warranties with respect to being or becoming Year
2000 compliant to no longer be true.
(xi) Nonconsolidated Financial Statements of the Transferor.
Notwithstanding the requirements of clauses (i) and (ii) of this
Section 5.1(a), in the event GAAP does not permit the financial
statements referenced therein to be prepared on a consolidated basis
for the Seller and the Transferor, such financial statements shall be
prepared separately for each of the Seller and the Transferor.
(xii) Other Information. Such other information (including
non-financial information) as the Agent or the Administrative Agent may
from time to time reasonably request with respect to the Seller, the
Transferor or any Subsidiary of any of the foregoing.
(b) Conduct of Business. The Transferor will carry on and
conduct its business solely for the corporate purposes specified in its
Certificate of Incorporation and do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic
corporation in its jurisdiction of incorporation and maintain all
requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
(c) Compliance with Laws. The Transferor will comply with all
laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it or its respective properties may be
subject, the failure to comply with which would have a Transferor
Material Adverse Effect.
(d) Furnishing of Information and Inspection of Records. The
Transferor will, and will cause the Seller to, furnish to the Agent
from time to time such information with respect to the Receivables as
the Agent may reasonably request, including, without limitation,
listings identifying the Obligor and the Outstanding Balance for each
Receivable. The Transferor will, and will cause the Seller to, at any
time and from time to time during regular business hours, and upon
reasonable advance notice, permit the Agent, or its agents or
representatives, (i) to examine and make copies of and take abstracts
from all Records and (ii) to visit the offices and properties of the
Transferor or the Seller, as applicable, for the purpose of examining
such Records, and to discuss matters relating to Receivables or the
Transferor's or the Seller's performance hereunder and under the other
Transaction Documents to which such Person is a party with any of the
officers, directors, employees or independent public accountants of the
Transferor or the Seller, as applicable, having knowledge of such
matters.
(e) Keeping of Records and Books of Account. The Transferor
will, and will cause the Seller 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 daily identification of each
new Receivable and all Collections of and adjustments to each existing
Receivable). The Transferor will, and will cause the Seller to, give
the Agent notice of any material change in the administrative and
operating procedures of the Transferor or the Seller, as applicable,
referred to in the previous sentence.
(f) Performance and Compliance with Receivables and Contracts.
The Transferor, at its expense, will, and will cause the Seller to,
timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by the Transferor
or the Seller under the Contracts related to the Receivables, subject,
however, to the right of the Seller or Transferor to dispute or contest
its obligations so to perform or to comply with any such provision,
covenant or other promise where it reasonably believes that such
performance or compliance is not required or is not in the best
interest of the Seller or the Transferor (as the case may be), and such
failure to perform or comply would not have a material adverse effect
on the collectability or enforceability of the related Receivables.
(g) Credit and Collection Policies. The Transferor will, and
will cause the Seller to, comply in all material respects with the
Credit and Collection Policy in regard to each Receivable and the
related Contract.
(h) Collections. The Transferor shall, and shall cause the
Seller to, instruct all Obligors to cause all Collections other than
Collections remitted directly to the Collection Account to be deposited
directly to a Lock-Box Account.
(i) Collections Received. The Transferor shall, and shall
cause the Seller to, hold in trust, and deposit, immediately, but in
any event not later than two (2) Business Days following its receipt
thereof, to a Lock-Box Account all Collections received from time to
time by the Transferor or the Seller, as the case may be.
(j) Sale Treatment. The Transferor will not (i) and will not
permit the Seller to, account for (including for accounting and tax
purposes), or otherwise treat, the transactions contemplated by the
Receivables Purchase Agreement in any manner other than as a sale of
Receivables by the Seller to the Transferor, or (ii) account for (other
than for tax purposes) or otherwise treat the transactions contemplated
hereby in any manner other than as a sale of Receivables by the
Transferor to the Agent on behalf of the Company or the Bank Investors,
as applicable. In addition, the Transferor shall, and shall cause the
Seller to, disclose (in a footnote or otherwise) in all of its
respective financial statements (including any such financial
statements consolidated with any other Persons' financial statements)
the existence and nature of the transaction contemplated hereby and by
the Receivables Purchase Agreement and the interest of the Transferor
(in the case of the Seller's financial statements) and the Agent, on
behalf of the Company and the Bank Investors, in the Affected Assets.
(k) Separate Business. The Transferor shall at all times (i)
to the extent the Transferor's office is located in the offices of the
Seller or any Affiliate of the Seller, pay fair market rent for its
executive office space located in the offices of the Seller or any
Affiliate of the Seller, (ii) have at all times a member of its board
of directors which is not and has never been an employee, officer or
director of the Seller or any Affiliate of the Seller or of any major
creditor of the Seller or any Affiliate of the Seller and is a person
who is familiar and has experience with asset securitization, (iii)
maintain the Transferor's books, financial statements, accounting
records and other corporate documents and records separate from those
of the Seller or any other entity, (iv) not commingle the Transferor's
assets with those of the Seller or any other entity, (v) act solely in
its corporate name and through its own authorized officers and agents,
(vi) make investments directly or by brokers engaged and paid by the
Transferor or its agents (provided that if any such agent is an
Affiliate of the Transferor it shall be compensated at a fair market
rate for its services), (vii) separately manage the Transferor's
liabilities from those of the Seller or any Affiliates of the Seller
and pay its own liabilities, including all administrative expenses,
from its own separate assets, except that the Seller may pay the
organizational expenses of the Transferor, and (viii) pay from the
Transferor's assets all obligations and indebtedness of any kind
incurred by the Transferor. The Transferor shall abide by all corporate
formalities, including the maintenance of current minute books, and the
Transferor shall cause its financial statements to be prepared in
accordance with GAAP in a manner that indicates the separate existence
of the Transferor and its assets and liabilities. The Transferor shall
(A) pay all its liabilities, (B) not assume the liabilities of the
Seller or any Affiliate of the Seller, (C) not lend funds or extend
credit to the Seller or any affiliate of the Seller except pursuant to
the Receivables Purchase Agreement in connection with the purchase of
Receivables thereunder and (D) not guarantee the liabilities of the
Seller or any Affiliates of the Seller. The officers and directors of
the Transferor (as appropriate) shall make decisions with respect to
the business and daily operations of the Transferor independent of and
not dictated by any controlling entity. The Transferor shall not engage
in any business not permitted by its Certificate of Incorporation as in
effect on the Closing Date, or as amended in accordance with Section
5.1(l).
(l) Year 2000 Compliance. The Transferor will promptly notify
the Agent in the event the Transferor discovers or determines that any
computer application (including those of its suppliers, vendors and
customers) that is material to its business and operations will not be
Year 2000 Compliant on a timely basis, except to the extent that such
failure could not reasonably be expected (i) to have a Transferor
Material Adverse Effect, or (ii) to result in a Termination Event. For
purposes of this paragraph, none of the Company, the Bank Investors,
the Credit Support Provider and the Liquidity Provider shall be deemed
to constitute a supplier, vendor or customer of the Transferor.
SECTION 5.2. Negative Covenants of the Transferor. At
all times from the date hereof to the later to occur of (i) the
Termination Date or (ii) the date on which the Net Investment has been
reduced to zero, all accrued Discount and Servicing Fees shall have
been paid in full and all other Aggregate Unpaids shall have been paid
in full, in cash, unless the Agent shall otherwise consent in writing:
(a) No Sales, Liens, Etc. Except as otherwise provided herein
and in the Receivables Purchase Agreement, the Transferor will not
sell, assign (by operation of law or otherwise) or otherwise dispose
of, or create or suffer to exist any Adverse Claim upon (or the filing
of any financing statement) or with respect to (x) any of the Affected
Assets, (y) any inventory or goods, the sale of which may give rise to
a Receivable or any Receivable or related Contract, or (z) any account
which concentrates in a Lock-Box Bank to which any Collections of any
Receivable are sent, or assign any right to receive income in respect
thereof.
(b) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2 hereof, the Transferor will not
extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related
thereto.
(c) No Change in Business or Credit and Collection Policy. The
Transferor will not make any change in the character of its business or
in the Credit and Collection Policy, which change would, in either
case, impair the collectibility of any Receivable or otherwise have a
Transferor Material Adverse Effect.
(d) No Mergers, Etc. The Transferor will not (i) consolidate
or merge with or into any other Person, or (ii) sell, lease or transfer
all or substantially all of its assets to any other Person (other than
the sale of Transferred Interests pursuant to this Agreement).
(e) Change in Payment Instructions to Obligors. The Transferor
will not add or terminate any bank as a Lock-Box Bank or any account as
a Lock-Box Account to or from those listed in Exhibit C hereto or make
any change in its instructions to Obligors regarding payments to be
made to any Lock-Box Account, unless (i) such instructions are to
deposit such payments to another existing Lock-Box Account or (ii) the
Agent shall have received written notice of such addition, termination
or change at least 30 days prior thereto and the Agent shall have
received a Lock-Box Agreement executed by each new Lock-Box Bank or an
existing Lock-Box Bank with respect to each new Lock-Box Account, as
applicable.
(f) Deposits to Lock-Box Accounts. The Transferor will not
deposit or otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box Account cash or cash proceeds other than
Collections of Receivables.
(g) Change of Name, Etc. The Transferor will not change its
name, identity or structure or the location of its chief executive
office, unless at least 10 days prior to the effective date of any such
change the Transferor or the Seller, as applicable, delivers to the
Agent (i) such documents, instruments or agreements, executed by the
Transferor or the Seller, as applicable, as are necessary to reflect
such change and to continue the perfection of the Agent's ownership
interests or security interests in the Affected Assets and (ii) new or
revised Lock-Box Agreements executed by the Lock-Box Banks which
reflect such change and enable the Agent to continue to exercise its
rights contained in Section 2.8 hereof.
(h) Amendment to Receivables Purchase Agreement. The
Transferor will not supplement the Receivables Purchase Agreement or
waive any provision thereof, in each case except with the prior written
consent of the Agent and the Administrative Agent; nor shall the
Transferor take, or permit the Seller to take, any other action under
the Receivables Purchase Agreement that shall have a material adverse
affect on the Agent, the Company or any Bank Investor or which is
inconsistent with the terms of this Agreement.
(i) Other Debt. Except as provided for herein, the Transferor
will not create, incur, assume or suffer to exist any indebtedness
whether current or funded, or any other liability other than (i)
indebtedness of the Transferor representing fees, expenses and
indemnities arising hereunder or under the Receivables Purchase
Agreement for the purchase price of the Receivables under the
Receivables Purchase Agreement, and (ii) other indebtedness or
obligations incurred in the ordinary course of its business (and solely
for use in connection with the corporate purposes set forth in its
Certificate of Incorporation) in an amount not to exceed $100,000 at
any time outstanding.
(j) ERISA Matters. The Transferor will not (i) engage or
permit any of its respective ERISA Affiliates to engage in any
prohibited transaction (as defined in Section 4975 of the Code and
Section 406 of ERISA) for which an exemption is not available or has
not previously been obtained from the U.S. Department of Labor; (ii)
permit to exist any accumulated funding deficiency (as defined in
Section 302(a) of ERISA and Section 412(a) of the Code) or funding
deficiency with respect to any Benefit Plan other than a Multiemployer
Plan; (iii) fail to make any payments to any Multiemployer Plan that
the Transferor, the Seller or any ERISA Affiliate of the Transferor or
the Seller is required to make under the agreement relating to such
Multiemployer Plan or any law pertaining thereto; (iv) terminate any
Benefit Plan so as to result in any liability; or (v) permit to exist
any occurrence of any reportable event described in Title IV of ERISA
which represents a material risk of a liability to the Transferor, the
Seller, or any ERISA Affiliate of the Transferor of the Seller under
ERISA or the Code, if such prohibited transactions, accumulated funding
deficiencies, payments, terminations and reportable events occurring
within any fiscal year of the Transferor and the Seller, in the
aggregate, involve a payment of money or an incurrence of liability by
the Transferor, the Seller or any ERISA Affiliate of the Transferor or
the Seller, in an amount in excess of $1,000,000.
(k) Payment to the Seller. With respect to any Receivable sold
by the Seller to the Transferor, the Transferor shall, and shall cause
the Seller to, effect such sale under, and pursuant to the terms of,
the Receivables Purchase Agreement, including, without limitation, the
payment by the Transferor either in cash or by increase in the amount
of the Subordinated Note to the Seller of an amount equal to the
purchase price for such Receivable as required by the terms of the
Receivables Purchase Agreement.
(l) Corporate Documents. The Transferor shall not amend,
alter, change or repeal Articles III, IV(b), VI, VII, VIII(a) or (e)
and XI of its Certificate of Incorporation so long as it possesses any
assets.
SECTION 5.3. Financial Covenant. The Transferor shall
maintain a tangible net worth which is not less than an amount equal to
the sum of (i) the Outstanding Balance of all Defaulted Receivables at
such time, (ii) the Outstanding Balance of all Delinquent Receivables
at such time and (iii) the sum of the Outstanding Balances of the three
largest Receivables of the Class 1 Obligors; provided, however, that in
any case, the tangible net worth shall never be less than $15,000,000.
SECTION 5.4. Affirmative Covenants of the Collection
Agent. At all times from the date hereof to the later to occur of (i)
the Termination Date or (ii) the date on which the Net Investment has
been reduced to zero, all accrued Discount and Servicing Fees shall
have been paid in full and all other Aggregate Unpaids shall have been
paid in full, in cash, unless the Agent shall otherwise consent in
writing:
(a) Conduct of Business. The Collection Agent will carry on
and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is
conducted.
(b) Compliance with Laws. The Collection Agent will comply
with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it or its respective properties
may be subject.
(c) Furnishing of Information and Inspection of Records. The
Collection Agent will furnish to the Agent from time to time such
information with respect to the Receivables as the Agent may reasonably
request, including, without limitation, listings identifying the
Obligor and the Outstanding Balance for each Receivable. The Collection
Agent will, at any time and from time to time during regular business
hours and upon reasonable advance notice permit the Agent, or its
agents or representatives, (i) to examine and make copies of and take
abstracts from all Records and (ii) to visit the offices and properties
of the Collection Agent for the purpose of examining such Records, and
to discuss matters relating to Receivables or the Transferor's, the
Seller's or the Collection Agent's performance hereunder and under the
other Transaction Documents to which such Person is a party with any of
the officers, directors, employees or independent public accountants of
the Collection Agent having knowledge of such matters. Absent a
Termination Event or a change in the information systems of the Seller,
the Collection Agent, or the Transferor, the Agent shall be entitled to
one such examination and visit per annum at the Transferor's expense.
The cost of any additional visits during the course of such year, so
long as neither a Termination Event nor a change in the information
systems of the Seller, the Collection Agent or the Transferor has
occurred, shall be borne by the Agent. Notwithstanding the foregoing,
the Collection Agent or, in any case where the Collection Agent is not
an affiliate of the Seller, the Seller may restrict access to certain
facilities, so long as such restrictions comply with reasonably adopted
procedures pertaining to safety and security. Any Person conducting any
such examination and visit on behalf of the Agent, the Company, and the
Bank Investors shall use reasonable efforts to maintain the
confidentiality of non-public information received during such
examination and visit.
(d) Keeping of Records and Books of Account. The Collection
Agent will 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 daily identification of each new Receivable and
all Collections of and adjustments to each existing Receivable). The
Collection Agent will give the Agent notice of any material change in
the administrative and operating procedures of the Collection Agent
referred to in the previous sentence.
(e) Notice of Agent's Interest. In the event that the
Transferor or the Seller shall sell or otherwise transfer any interest
in accounts receivable, any computer tapes or files or other documents
or instruments provided by the Collection Agent in connection with any
such sale or transfer shall disclose the Transferor's ownership of the
Receivables and the Agent's interest therein.
(f) Credit and Collection Policies. The Collection Agent will
comply in all material respects with the Credit and Collection Policy
in regard to each Receivable and the related Contract.
(g) Collections. The Collection Agent shall instruct all
Obligors to cause all Collections other than Collections remitted
directly to be deposited directly to a Lock-Box Account.
(h) Collections Received. The Collection Agent shall hold in
trust, and deposit, immediately, but in any event not later than two
(2) Business Days of its receipt thereof, to a Lock-Box Account all
Collections received from time to time by the Collection Agent.
(i) Year 2000 Compliance. The Collection Agent will promptly
notify the Agent in the event the Collection Agent discovers or
determines that any computer application (including those of its
suppliers, vendors and customers) (i) that is necessary for the
origination, collection, management, or servicing of the Receivables
will not be Year 2000 compliant on or before January 1, 1999 and
thereafter, or (ii) that is otherwise material to its or any of its
Subsidiaries' business and operations will not be Year 2000 compliant
on a timely basis, except to the extent that, in the case of (ii)
above, such failure could not reasonably be expected (a) to have a
Material Adverse Effect, or (b) to result in a Termination Event.
SECTION 5.5. Negative Covenants of the Collection Agent. At
all times from the date hereof to the later to occur of (i) the
Termination Date or (ii) the date on which the Net Investment has been
reduced to zero, all accrued Discount and Servicing Fees shall have
been paid in full and all other Aggregate Unpaids shall have been paid
in full, in cash, unless the Agent shall otherwise consent in writing:
(a) No Extension or Amendment of Receivables. Except as
otherwise permitted in Section 6.2 hereof, the Collection Agent will
not extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Contract related
thereto.
(b) No Change in Business or Credit and Collection Policy. The
Collection Agent will not make any change in the character of its
business or in the Credit and Collection Policy, which change would, in
either case, impair the collectibility of any Receivable or otherwise
have a Material Adverse Effect.
(c) No Mergers, Etc. The Collection Agent will not (i)
consolidate or merge with or into any other Person, or (ii) sell, lease
or transfer all or substantially all of its assets to any other Person,
provided, however, the Collection Agent may merge or consolidate with
another corporation, if (A) the Collection Agent shall be the
continuing or surviving corporation; and (B) immediately prior to and
immediately after such merger or consolidation, and after giving effect
thereto, no Termination Event or Potential Termination Event shall then
exist or would result therefrom; provided, further, however, that so
long as the Seller is the Collection Agent, no accounts receivable of
any Person with whom the Collection Agent shall have merged or
consolidated (including such accounts receivable arising from such
Person's businesses or divisions after the date thereof) shall be sold
to the Transferor pursuant to the Receivables Purchase Agreement, be
deemed to be a Receivable hereunder, or be collected or deposited in
any Lock-Box or Lock-Box Account, unless the Agent, the Majority Bank
Investors and the Transferor shall have consented thereto in writing.
(d) Change in Payment Instructions to Obligors. The Collection
Agent will not add or terminate any bank as a Lock-Box Bank or any
account as a Lock-Box Account to or from those listed in Exhibit C
hereto or make any change in its instructions to Obligors regarding
payments to be made to any Lock-Box Account, unless (i) such
instructions are to deposit such payments to another existing Lock-Box
Account or (ii) the Agent shall have received written notice of such
addition, termination or change at least 30 days prior thereto and the
Agent shall have received a Lock-Box Agreement executed by each new
Lock-Box Bank or an existing Lock-Box Bank with respect to each new
Lock-Box Account, as applicable.
(e) Deposits to Lock-Box Accounts. The Collection Agent will
not deposit or otherwise credit, or cause or permit to be so deposited
or credited, to any Lock-Box Account cash or cash proceeds other than
Collections of Receivables.
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Collection Agent. The
servicing, administering and collection of the Receivables shall be
conducted by such Person (the "Collection Agent") so designated from
time to time in accordance with this Section 6.1. Until the Company
gives notice to the Seller of the designation of a new Collection
Agent, the Seller is hereby designated as, and hereby agrees to perform
the duties and obligations of, the Collection Agent pursuant to the
terms hereof. The Collection Agent may not delegate any of its rights,
duties or obligations hereunder, or designate a substitute Collection
Agent, without the prior written consent of the Agent, and provided
that the Collection Agent shall continue to remain solely liable for
the performance of the duties as Collection Agent hereunder
notwithstanding any such delegation hereunder. The Agent may, and upon
the direction of the Majority Investors the Agent shall, after the
occurrence of a Collection Agent Default or any other Termination Event
designate as Collection Agent any Person (including itself) to succeed
the Seller or any successor Collection Agent, on the condition in each
case that any such Person so designated shall agree to perform the
duties and obligations of the Collection Agent pursuant to the terms
hereof. At any time during the existence of a Termination Event, the
Agent may notify any Obligor of the Transferred Interest.
SECTION 6.2. Duties of Collection Agent.
(a) The Collection Agent shall take or cause to be taken all
such action as may be necessary or advisable to collect each Receivable
from time to time, with reasonable care and diligence, and in
accordance with the Credit and Collection Policy. Each of the
Transferor, the Company, the Agent and the Bank Investors hereby
appoints as its agent the Collection Agent, from time to time
designated pursuant to Section 6.1 hereof, to enforce its respective
rights and interests in and under the Affected Assets. To the extent
permitted by applicable law, each of the Transferor and the Seller (to
the extent not then acting as Collection Agent hereunder) hereby grants
to any Collection Agent appointed hereunder an irrevocable power of
attorney to take any and all steps in the Transferor's and/or the
Seller's name and on behalf of the Transferor or the Seller necessary
or desirable, in the reasonable determination of the Collection Agent,
to collect all amounts due under any and all Receivables, including,
without limitation, endorsing the Transferor's and/or the Seller's name
on checks and other instruments representing Collections and enforcing
such Receivables and the related Contracts. The Collection Agent shall
set aside for the account of the Transferor and the Agent their
respective allocable shares of the Collections of Receivables in
accordance with Sections 2.5 and 2.6 hereof. The Collection Agent shall
segregate and deposit to the Agent's account the Agent's allocable
share of Collections of Receivables when required pursuant to Article
II hereof. So long as no Termination Event shall have occurred and be
continuing, the Collection Agent may, in accordance with the Credit and
Collection Policy, extend the maturity of Receivables, but not beyond
sixty (60) days past the original due date of such Receivables, and
extend the maturity or adjust the Outstanding Balance as the Collection
Agent may determine 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 a Defaulted
Receivable. The Transferor shall deliver to the Collection Agent and
the Collection Agent shall hold in trust for the Transferor and the
Agent, on behalf of the Company and the Bank Investors, in accordance
with their respective interests, all Records which evidence or relate
to Receivables or Related Security. Notwithstanding anything to the
contrary contained herein, at any time during the existence of a
Termination Event, the Agent shall have the absolute and unlimited
right to direct the Collection Agent (whether the Collection Agent is
the Seller or any other Person) to commence or settle any legal action
to enforce collection of any Receivable or to foreclose upon or
repossess any Related Security. The Collection Agent shall not make the
Agent, the Company or any of the Bank Investors a party to any
litigation without the prior written consent of such Person.
(b) The Collection Agent shall, as soon as practicable
following receipt thereof, turn over to the Transferor any collections
of any indebtedness of any Person which is not on account of a
Receivable. If the Collection Agent is not the Transferor or the Seller
or an Affiliate of the Transferor or the Seller, the Collection Agent,
by giving three (3) Business Days' prior written notice to the Agent,
may revise the percentage used to calculate the Servicing Fee so long
as the revised percentage will not result in a Servicing Fee that
exceeds 110% of the reasonable and appropriate out-of-pocket costs and
expenses of such Collection Agent incurred in connection with the
performance of its obligations hereunder as documented to the
reasonable satisfaction of the Agent, provided, however, that at any
time after the Percentage Factor equals or exceeds 100%, any
compensation to the Collection Agent in excess of the Servicing Fee
initially provided for herein shall be an obligation of the Transferor
and shall not be payable, in whole or in part, from Collections
allocated to the Company or the Bank Investors, as applicable. The
Collection Agent, if other than the Transferor or the Seller or an
Affiliate of the Transferor or the Seller, shall as soon as practicable
upon demand, deliver to the Seller all Records in its possession which
evidence or relate to indebtedness of an Obligor which is not a
Receivable.
(c) On or before 90 days after the end of each fiscal year of
the Collection Agent, beginning with the fiscal year ending January 2,
1999, the Collection Agent shall cause a firm of independent public
accountants (who may also render other services to the Collection
Agent, the Transferor, the Seller or any Affiliates of any of the
foregoing) to furnish a report to the Agent to the effect that they
have (i) compared the information contained in the Investor Reports
delivered during such fiscal year then ended with the information
contained in the Contracts and the Collection Agent's records and
computer systems for such period, and that, on the basis of such
examination and comparison, such firm is of the opinion that the
information contained in the Investor Reports reconciles with the
information contained in the Contracts and the Collection Agent's
records and computer system and that the servicing of the Receivables
has been conducted in compliance with this Agreement, (ii) confirmed
the Net Receivables Balance as of the end of each Fiscal Month during
such fiscal year, and (iii) verified that the Receivables treated by
the Collection Agent as Eligible Receivables in fact satisfied the
requirements of the definition thereof contained herein, except, in
each case for (a) such exceptions as such firm shall believe to be
immaterial (which exceptions need not be enumerated) and (b) such other
exceptions as shall be set forth in such statement.
(d) Notwithstanding anything to the contrary contained in this
Article VI, the Collection Agent, if not the Transferor, the Seller or
any Affiliate of the Transferor or the Seller, shall have no obligation
to collect, enforce or take any other action described in this Article
VI with respect to any indebtedness that is not included in the
Transferred Interest other than to deliver to the Transferor the
collections and documents with respect to any such indebtedness as
described in Section 6.2(b) hereof. Nothing contained in this
Agreement, however, shall prohibit the Seller or the Transferor (as
applicable) from pursuing independent legal action to collect such
indebtedness not part of the Transferred Interest.
SECTION 6.3. Rights After Designation of New
Collection Agent. At any time following the designation of a Collection
Agent (other than the Transferor, the Seller or any Affiliate of the
Transferor or the Seller) pursuant to Section 6.1 hereof:
(i) The Agent may direct that payment of all amounts payable
under any Receivable be made directly to the Agent or its designee.
(ii) The Transferor shall, at the Agent's request and at the
Transferor's expense, give notice of the Agent's, the Transferor's
and/or the Bank Investors' ownership of Receivables to each Obligor and
direct that payments be made directly to the Agent or its designee.
(iii) The Transferor shall, at the Agent's request, (A)
assemble all of the Records, and shall make the same available to the
Agent or its designee at a place selected by the Agent or its designee,
and (B) segregate all cash, checks and other instruments received by it
from time to time constituting Collections of Receivables in a manner
acceptable to the Agent and shall, promptly upon receipt, remit all
such cash, checks and instruments, duly endorsed or with duly executed
instruments of transfer, to the Agent or its designee.
(iv) The Transferor and the Seller hereby authorize the Agent
to take any and all steps in the Transferor's or the Seller's name and
on behalf of the Transferor and the Seller necessary or desirable, in
the determination of the Agent, to collect all amounts due under any
and all Receivables, including, without limitation, endorsing the
Transferor's or the Seller's name on checks and other instruments
representing Collections and enforcing such Receivables and the related
Contracts.
SECTION 6.4. Collection Agent Default. The occurrence of any
one or more of the following events shall constitute a Collection Agent
Default:
(a) (i) the Collection Agent shall fail to observe or perform
any term, covenant or agreement to be observed or performed by it
hereunder (other than as referred to in clause (ii) immediately
hereafter), and such failure shall remain unremedied for two (2)
Business Days after notice to the Collection Agent if such failure is
the failure to deliver an Investor Report when due pursuant to Section
2.8(b), or thirty (30) days after notice to the Collection Agent in all
other cases, or (ii) the Collection Agent shall fail to make any
payment or deposit required to be made by it hereunder when due; or
(b) any representation, warranty, certification or statement
made by the Collection Agent in this Agreement, the Receivables
Purchase Agreement or in any of the other Transaction Documents or in
any certificate or report delivered by it pursuant to any of the
foregoing shall prove to have been incorrect in any material respect
when made or deemed made; or
(c) failure of the Collection Agent to pay when due any
amounts due under any agreement under which any Indebtedness greater
than $20,000,000 is governed or the default by the Collection Agent in
the performance of any term, provision or condition contained in any
agreement under which any Indebtedness greater than $20,000,000 was
created or is governed, in each of the foregoing cases after giving
effect to any applicable grace or cure period; or any Indebtedness of
the Collection Agent greater than $20,000,000 shall be declared to be
due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the scheduled date of maturity thereof; or
(d) any Event of Bankruptcy shall occur with respect to the
Collection Agent; or
(e) failure of the Collection Agent (so long as such
Collection Agent is the Seller or an Affiliate of the Seller) to
satisfy any of the Xxxx Financial Covenants; or
(f) there shall have occurred any material adverse change in
the operations of the Collection Agent since the end of the last fiscal
year ending prior to the date of its appointment as Collection Agent
hereunder or any other event shall have occurred which, in the
commercially reasonably judgment of the Agent, materially and adversely
affects the Collection Agent's ability to either collect the
Receivables or to perform under this Agreement.
SECTION 6.5. Responsibilities of the Transferor and
the Seller. Anything herein to the contrary notwithstanding, the
Transferor shall, or shall cause the Seller to, (i) perform all of the
Seller's obligations under the Contracts related to the Receivables to
the same extent as if interests in such Receivables had not been sold
hereunder and under the Receivables Purchase Agreement, and the
exercise by the Agent, the Company and the Bank Investors of their
rights hereunder and under the Receivables Purchase Agreement shall not
relieve the Transferor or the Seller from such obligations and (ii) pay
when due any taxes, including without limitation, any sales taxes
payable in connection with the Receivables and their creation and
satisfaction. Neither the Agent, the Company nor any of the Bank
Investors shall have any obligation or liability with respect to any
Receivable or related Contracts, nor shall it be obligated to perform
any of the obligations of the Seller thereunder.
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. Termination Events. The occurrence of any one or
more of the following events shall constitute a Termination Event:
(a) the Transferor shall fail to make any payment or deposit
to be made by it hereunder or under the Receivables Purchase Agreement
when due hereunder or thereunder; or
(b) any representation, warranty, certification or statement
made by the Transferor in this Agreement, any other Transaction
Document to which it is a party or in any other document delivered
pursuant hereto or thereto shall prove to have been incorrect in any
material respect when made or deemed made; or
(c) the Transferor, or the Collection Agent, shall default in
the performance of any payment or undertaking (other than those covered
by clause (a) above) (i) to be performed or observed under Sections
5.1(a)(vi), 5.1(a)(vii), 5.1(f), 5.1(g), 5.1(i), 5.1(l), or Sections
5.2(a), (c), (d), (e), (f) or (g) or (ii) to be performed or observed
under any other provision hereof and such default in the case of this
clause (ii) shall continue for a period of thirty (30) days after the
earlier of (x) the date upon which any Executive Officer of the
Transferor or the Seller obtains actual knowledge of such failure or
(y) the date upon which the Transferor has received written notice of
such failure from the Agent; or
(d) failure of the Transferor to pay when due any amounts due
under any agreement to which Transferor is a party and under which any
Indebtedness greater than $100,000 is governed or the default by the
Transferor in the performance of any term, provision or condition
contained in any agreement to which any such Person is a party and
under which any Indebtedness owing by the Transferor greater than
$100,000 was created or is governed, in each of the foregoing cases
after giving effect to any applicable grace or cure period; or any
Indebtedness owing by the Transferor greater than $100,000 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;
or
(e) any Event of Bankruptcy shall occur with respect to the
Transferor; or
(f) the Agent, on behalf of the Company and the Bank
Investors, shall, for any reason, fail or cease to have a valid and
perfected first priority ownership or security interest in the Affected
Assets free and clear of any Adverse Claims; or
(g) a Collection Agent Default shall have occurred; or
(h) the Receivables Purchase Agreement shall have terminated;
or
(i) Since the date hereof, any Transferor Material Adverse
Effect or Material Adverse Effect shall have occurred; or
(j) the Liquidity Provider or the Credit Support Provider
shall have given notice that an event of default has occurred and is
continuing under any of its respective agreements with the Company; or
(k) the Commercial Paper issued by the Company shall not be
rated lower than "A-2" by Standard & Poor's and or "P-2" by Xxxxx'x; or
(l) (i) the Percentage Factor exceeds the Maximum Percentage
Factor unless the Transferor reduces the Net Investment or increases
the balance of the Affected Assets on the next Business Day so as to
reduce the Percentage Factor to less than or equal to 98%; (ii) the
Percentage Factor equals or exceeds 100% at any time; or (iii) the Net
Investment plus, in the case where the Transferred Interest is held by
the Company, the Interest Component of all outstanding Related
Commercial Paper, shall exceed the Facility Limit; or
(m) the Dilution Ratio for any Fiscal Month exceeds 10%; or
(n) the three (3) Fiscal Month average Loss to Liquidation
Ratio exceeds 0.80%; or
(o) the three (3) Fiscal Month average Delinquency Ratio for
any Fiscal Month exceeds 1.5%; or
(p) the date on which the Transferor ceases to make purchases
of Receivables under the Receivables under the Receivables Purchase
Agreement.
SECTION 7.2. Termination. (a) Upon the occurrence of any
Termination Event, the Agent may, or at the direction of the Majority
Bank Investors shall, by notice to the Transferor and the Collection
Agent declare the Termination Date to have occurred; provided, however,
that in the case of any event described in Section 7.1(e), 7.1(f),
7.1(g) (to the extent that the applicable Collection Agent Default
arose under Section 6.4(d)), 7.1(l)(ii), 7.1(l)(iii) or 7.1(p) above,
the Termination Date shall be deemed to have occurred automatically
upon the occurrence of such event. Upon any such declaration or
automatic occurrence, the Agent shall have, in addition to all other
rights and remedies under this Agreement or otherwise, all other rights
and remedies provided under the UCC of the applicable jurisdiction and
other applicable laws, all of which rights shall be cumulative.
(b) At all times after the declaration or automatic occurrence
of the Termination Date pursuant to Section 7.2(a) (other than the
occurrence of the Termination Date as a result of the Termination
Events described in Section 7.1(j), 7.1(k) and, to the extent the
Transferor has provided sixty (60) days' prior written notice to the
Agent of the termination of purchases under the Receivables Purchase
Agreement, 7.1(p)), the Base Rate plus 2.00% shall be the Tranche Rate
applicable to the Net Investment for all existing and future Tranches.
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor. Without
limiting any other rights which the Agent, the Company or the Bank
Investors may have hereunder or under applicable law, the Transferor
hereby agrees to indemnify the Company, the Bank Investors, the Agent,
the Administrative Agent, the Collateral Agent, the Liquidity Provider
and the Credit Support Provider and any successors and permitted
assigns and their respective any officers, directors and employees
(collectively, "Indemnified Parties") from and against any and all
damages, losses, claims, liabilities, costs and expenses, including,
without limitation, reasonable attorneys' fees (which such attorneys
may be employees of the Liquidity Provider, the Credit Support
Provider, the Agent, the Administrative Agent or the Collateral Agent,
as applicable) and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or
incurred by any of them in any action or proceeding between the
Transferor or the Seller (including, in its capacity as the Collection
Agent) and any of the Indemnified Parties or between any of the
Indemnified Parties and any third party or otherwise arising out of or
as a result of this Agreement, the other Transaction Documents, the
ownership or maintenance, either directly or indirectly, by the Agent,
the Company or any Bank Investor of the Transferred Interest or any of
the other transactions contemplated hereby or thereby, excluding,
however, (i) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of an Indemnified Party or
(ii) recourse (except as otherwise specifically provided in this
Agreement) for uncollectible Receivables. Without limiting the
generality of the foregoing, the Transferor shall indemnify each
Indemnified Party for Indemnified Amounts relating to or resulting
from:
(i) any representation or warranty made by the Transferor or
the Seller (including, in its capacity as the Collection Agent) or any
officers of the Transferor or the Seller (including, in its capacity as
the Collection Agent) under or in connection with this Agreement, the
Receivable Purchase Agreement, any of the other Transaction Documents,
any Investor Report or any other information or report delivered by the
Transferor or the Collection Agent pursuant hereto, which shall have
been false or incorrect in any material respect when made or deemed
made;
(ii) the failure by the Transferor or the Seller (including,
in its capacity as the Collection Agent) to comply with any applicable
law, rule or regulation with respect to any Receivable or the related
Contract, or the nonconformity of any Receivable or the related
Contract with any such applicable law, rule or regulation;
(iii) the failure (x) to vest and maintain vested in the
Agent, on behalf of the Company and the Bank Investors, an undivided
first priority, perfected percentage ownership interest (to the extent
of the Transferred Interest) in the Affected Assets free and clear of
any Adverse Claim or (y) to create or maintain a valid and perfected
first priority security interest in favor of the Agent, for the benefit
of the Company and the Bank Investors, in the Affected Assets as
contemplated pursuant to Section 10.11, free and clear of any Adverse
Claim;
(iv) the failure to file, or any delay in filing, financing
statements, continuation statements, or other similar instruments or
documents under the UCC of any applicable jurisdiction or other
applicable laws with respect to any of the Affected Assets;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being the 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
merchandise or services related to such Receivable or the furnishing or
failure to furnish such merchandise or services;
(vi) any failure of the Collection Agent to perform its duties
or obligations in accordance with the provisions hereof; or
(vii) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of
whatever sort arising out of or in connection with merchandise or
services which are the subject of any Receivable;
(viii) the transfer of an ownership interest in any Receivable
other than an Eligible Receivable;
(ix) the failure by the Transferor or the Seller (individually
or as Collection Agent) to comply with any term, provision or covenant
contained in this Agreement or any of the other Transaction Documents
to which it is a party or to perform any of its respective duties under
the Contracts;
(x) the Percentage Factor exceeding the Maximum Percentage
Factor at any time;
(xi) the failure of the Seller to pay when due any taxes,
including without limitation, sales, excise or personal property taxes
payable in connection with any of the Receivables;
(xii) any repayment by any Indemnified Party of any amount
previously distributed in reduction of Net Investment which such
Indemnified Party believes in good faith is required to be made;
(xiii) the commingling by the Transferor, the Seller or the
Collection Agent of Collections of Receivables at any time with other
funds;
(xiv) any investigation, litigation or proceeding related to
this Agreement, any of the other Transaction Documents, the use of
proceeds of Transfers by the Transferor or the Seller, the ownership of
Transferred Interests, or any Receivable, Related Security or Contract;
(xv) the failure of any Lock-Box Bank to remit any amounts
held in the Lock-Boxes and/or the Lock-Box Accounts pursuant to the
instructions of the Collection Agent, the Transferor, the Seller or the
Agent (to the extent such Person is entitled to give such instructions
in accordance with the terms hereof and of any applicable Lock-Box
Agreement) whether by reason of the exercise of set-off rights or
otherwise, except as permitted in the applicable Lock-Box Agreement;
(xvi) any inability to obtain any judgment in or utilize the
court or other adjudication system of, any state in which an Obligor
may be located as a result of the failure of the Transferor or the
Seller to qualify to do business or file any notice of business
activity report or any similar report;
(xvii) any failure of the Transferor to give reasonably
equivalent value to the Seller in consideration of the purchase by the
Transferor from the Seller of any Receivable, or any attempt by any
Person to void, rescind or set-aside any such transfer under statutory
provisions or common law or equitable action, including, without
limitation, any provision of the Bankruptcy Code; or
(xviii) any action taken by the Transferor, the Seller, or the
Collection Agent (if the Transferor, the Seller or any Affiliate or
designee of the Transferor or the Seller) in the enforcement or
collection of any Receivable; provided, however, that if the Company
enters into agreements for the purchase of interests in receivables
from one or more Other Transferors, the Company shall allocate such
Indemnified Amounts which are in connection with the Liquidity Provider
Agreement, the Credit Support Agreement or the credit support furnished
by the Credit Support Provider to the Transferor and each Other
Transferor; and provided, further, that if such Indemnified Amounts are
attributable to the Transferor, the Seller or the Collection Agent and
not attributable to any Other Transferor, the Transferor shall be
solely liable for such Indemnified Amounts or if such Indemnified
Amounts are attributable to Other Transferors and not attributable to
the Transferor, the Seller or the Collection Agent, such Other
Transferors shall be solely liable for such Indemnified Amounts.
SECTION 8.2. Indemnity for Taxes, Reserves and
Expenses. (a) If after the date hereof, the adoption of any Law or bank
regulatory guideline or any amendment or change in the interpretation
of any existing or future Law or bank regulatory guideline by any
Official Body charged with the administration, interpretation or
application thereof, or the compliance with any directive of any
Official Body (in the case of any bank regulatory guideline, whether or
not having the force of Law):
(i) shall subject any Indemnified Party to any tax, duty or
other charge (other than Excluded Taxes) with respect to this
Agreement, the other Transaction Documents, the ownership, maintenance
or financing of the Transferred Interest, the Receivables or payments
of amounts due hereunder, or shall change the basis of taxation of
payments to any Indemnified Party of amounts payable in respect of this
Agreement, the other Transaction Documents, the ownership, maintenance
or financing of the Transferred Interest, the Receivables or payments
of amounts due hereunder or its obligation to advance funds hereunder,
under the Liquidity Provider Agreement or the credit support provided
by the Credit Support Provider or otherwise in respect of this
Agreement, the other Transaction Documents, the ownership, maintenance
or financing of the Transferred Interest or the Receivables (except for
changes in the rate of general corporate, franchise, net income or
other income tax imposed on such Indemnified Party by the jurisdiction
in which such Indemnified Party's principal executive office is
located);
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System) against assets of, deposits with or for the account of,
or credit extended by, any Indemnified Party or shall impose on any
Indemnified Party or on the United States market for certificates of
deposit or the London interbank market any other condition affecting
this Agreement, the other Transaction Documents, the ownership,
maintenance or financing of the Transferred Interest, the Receivables
or payments of amounts due hereunder or its obligation to advance funds
hereunder, under the Liquidity Provider Agreement or the credit support
provided by the Credit Support Provider or otherwise in respect of this
Agreement, the other Transaction Documents, the ownership, maintenance
or financing of the Transferred Interest or the Receivables; or
(iii) imposes upon any Indemnified Party any other expense
(including, without limitation, reasonable attorneys' fees and
expenses, and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to this Agreement, the
other Transaction Documents, the ownership, maintenance or financing of
the Transferred Interest, the Receivables or payments of amounts due
hereunder or its obligation to advance funds hereunder under the
Liquidity Provider Agreement or the credit support furnished by the
Credit Support Provider or otherwise in respect of this Agreement, the
other Transaction Documents, the ownership, maintenance or financing of
the Transferred Interests or the Receivables, and the result of any of
the foregoing is to increase the cost to such Indemnified Party with
respect to this Agreement, the other Transaction Documents, the
ownership, maintenance or financing of the Transferred Interest, the
Receivables, the obligations hereunder, the funding of any purchases
hereunder, the Liquidity Provider Agreement or the Credit Support
Agreement, by an amount deemed by such Indemnified Party to be
material, then the Transferor shall pay to the Agent, for the benefit
of such Indemnified Party, such additional amount or amounts as will
compensate such Indemnified Party for such increased cost or reduction.
(b) If any Indemnified Party shall have determined that after
the date hereof, the adoption of any applicable Law or bank regulatory
guideline regarding capital adequacy, or any change therein, or any
change in the interpretation thereof by any Official Body, or any
directive regarding capital adequacy (in the case of any bank
regulatory guideline, whether or not having the force of law) of any
such Official Body, has or would have the effect of reducing the rate
of return on capital of such Indemnified Party (or its parent) as a
consequence of such Indemnified Party's obligations hereunder or with
respect hereto to a level below that which such Indemnified Party (or
its parent) could have achieved but for such adoption, change, request
or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Indemnified Party to be
material, then from time to time the Transferor shall pay to the Agent,
for the benefit of such Indemnified Party, such additional amount or
amounts as will compensate such Indemnified Party (or its parent) for
such reduction.
(c) The Agent will promptly notify the Transferor of any event
of which it has knowledge, occurring after the date hereof, which will
entitle an Indemnified Party to compensation pursuant to this Section
8.2. A notice by the Agent or the applicable Indemnified Party claiming
compensation under this Section and setting forth the additional amount
or amounts to be paid to it hereunder shall be conclusive in the
absence of manifest error. In determining such amount, the Agent or any
applicable Indemnified Party may use any reasonable averaging and
attributing methods.
(d) Anything in this Section 8.2 to the contrary
notwithstanding, if the Company enters into agreements for the
acquisition of interests in receivables from one or more Other
Transferors, the Company shall allocate the liability for any amounts
under this Section 8.2 which are in connection with the Liquidity
Provider Agreement, the Credit Support Agreement or the credit support
provided by the Credit Support Provider ("Section 8.2 Costs") to the
Transferor and each Other Transferor; provided, however, that if such
Section 8.2 Costs are attributable to the Transferor, the Seller or the
Collection Agent and not attributable to any Other Transferor, the
Transferor shall be solely liable for such Section 8.2 Costs or if such
Section 8.2 Costs are attributable to Other Transferors and not
attributable to the Transferor, the Seller or the Collection Agent,
such Other Transferors shall be solely liable for such Section 8.2
Costs.
SECTION 8.3. Taxes. All payments made hereunder by
the Transferor or the Collection Agent (each, a "payor") to the
Company, any Bank Investor or the Agent (each, a "recipient") shall be
made free and clear of and without deduction for any present or future
income, excise, stamp or franchise taxes and any other taxes, fees,
duties, withholdings or other charges of any nature whatsoever imposed
by any taxing authority on any recipient (or any assignee of such
parties) (such non-excluded items being called "Taxes"), but excluding
franchise taxes and taxes imposed on or measured by the recipient's net
income or gross receipts ("Excluded Taxes"). In the event that any
withholding or deduction from any payment made by the payor hereunder
is required in respect of any Taxes, then such payor shall:
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the recipient such additional amount or amounts as
is necessary to ensure that the net amount actually received by the
recipient will equal the full amount such recipient would have received
had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any recipient with
respect to any payment received by such recipient hereunder, the
recipient may pay such Taxes and the payor will promptly pay such
additional amounts (including any penalties, interest or expenses) as
shall be necessary in order that the net amount received by the
recipient after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such recipient would have
received had such Taxes not been asserted.
If the payor fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the recipient the
required receipts or other required documentary evidence, the payor
shall indemnify the recipient for any incremental Taxes, interest, or
penalties that may become payable by any recipient as a result of any
such failure.
SECTION 8.4. Other Costs, Expenses and Related
Matters. (a) The Transferor agrees, upon receipt of a written invoice,
to pay or cause to be paid, and to save the Company, the Bank Investors
and the Agent harmless against liability for the payment of, all
reasonable out-of-pocket expenses (including, without limitation,
attorneys', accountants' and other third parties' fees and expenses,
any filing fees and expenses incurred by the Company, the Bank
Investors and/or the Agent) or intangible, documentary or recording
taxes incurred by or on behalf of the Company, any Bank Investor and
the Agent (i) in connection with the negotiation, execution, delivery
and preparation of this Agreement, the other Transaction Documents and
any documents or instruments delivered pursuant hereto and thereto and
the transactions contemplated hereby or thereby (including, without
limitation, the perfection or protection of the Transferred Interest)
and (ii) from time to time (a) relating to any amendments, waivers or
consents under this Agreement and the other Transaction Documents, (b)
arising in connection with the Company's, any Bank Investor's, the
Agent's or the Collateral Agent's enforcement or preservation of rights
(including, without limitation, the perfection and protection of the
Transferred Interest under this Agreement), or (c) arising in
connection with any audit (subject to the provisions of Sections 5.1(d)
and 5.4(c) hereof), dispute, disagreement, litigation or preparation
for litigation involving this Agreement or any of the other Transaction
Documents (all of such amounts, collectively, "Transaction Costs").
(b) The Transferor shall pay the Agent, for the account of the
Company and the Bank Investors, as applicable, on demand any Early
Collection Fee due on account of the reduction of a Tranche on a day
prior to the last day of its Tranche Period, provided that such demand
is accompanied by a certificate of the Person demanding payment of an
Early Collection Fee setting forth in reasonable detail the calculation
of such Early Collection Fee.
SECTION 8.5. Reconveyance Under Certain
Circumstances. The Transferor agrees to accept the reconveyance from
the Agent, on behalf of the Company and/or the Bank Investors, of the
Transferred Interest if the Agent notifies Transferor of a material
breach of any representation or warranty made or deemed made pursuant
to Article III of this Agreement and Transferor shall fail to cure such
breach within 30 days (or, in the case of the representations and
warranties in Sections 3.1(d) and 3.1(j), 10 days) of such notice. The
reconveyance price shall be paid by the Transferor to the Agent, for
the account of the Company and the Bank Investors, as applicable, in
immediately available funds on such 15th day (or 3rd day, if
applicable) in an amount equal to the Aggregate Unpaids.
SECTION 8.6. Amounts Payable. The Transferor is
hereby obligated to pay all amounts due under this Article within 30
days of demand of any such payment. Each demand shall be in the form of
a certificate specifying in such detail consistent with the Company's
and/or applicable Bank Investor's internal policies.
ARTICLE IX
THE AGENT; BANK COMMITMENT
SECTION 9.1. Authorization and Action. (a) The
Company and each Bank Investor hereby irrevocably appoints and
authorizes the Agent to act as its agent under this Agreement and the
other Transaction Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and
the other Transaction Documents, together with such other powers as are
reasonably incidental thereto. The Agent (which term as used in this
sentence and in Section 9.5 and the first sentence of Section 9.6
hereof shall include its Affiliates and its own and its Affiliates'
officers, directors, employees, and agents): (a) shall not have any
duties or responsibilities except those expressly set forth in this
Agreement and shall not be a trustee or fiduciary for the Company or
any Bank Investor; (b) shall not be responsible to the Company or any
Bank Investor for any recital, statement, representation, or warranty
(whether written or oral) made in or in connection with any Transaction
Document or any certificate or other document referred to or provided
for in, or received by any of them under, any Transaction Document, or
for the value, validity, effectiveness, genuineness, enforceability, or
sufficiency of any Transaction Document, or any other document referred
to or provided for therein or for any failure by any of the Transferor,
the Seller or the Collection Agent or any other Person to perform any
of its obligations thereunder; (c) shall not be responsible for or have
any duty to ascertain, inquire into, or verify the performance or
observance of any covenants or agreements by any of the Transferor, the
Seller or the Collection Agent or the satisfaction of any condition or
to inspect the property (including the books and records) of any of the
Transferor, the Seller or the Collection Agent or any of their
Subsidiaries or Affiliates; (d) shall not be required to initiate or
conduct any litigation or collection proceedings under any Transaction
Document; and (e) shall not be responsible for any action taken or
omitted to be taken by it under or in connection with any Transaction
Document, except for its own gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 9.2. Agent's Reliance, Etc. The Agent shall
be entitled to rely upon any certification, notice, instrument,
writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and
correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any of the Transferor, the Seller or the
Collection Agent), independent accountants, and other experts selected
by the Agent. As to any matters not expressly provided for by this
Agreement, the Agent shall not be required to exercise any discretion
or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Majority Investors, and such
instructions shall be binding on the Company and all of the Bank
Investors; provided, however, that the Agent shall not be required to
take any action that exposes the Agent to personal liability or that is
contrary to any Transaction Document or applicable law or unless it
shall first be indemnified to its satisfaction by the Bank Investors
against any and all liability and expense which may be incurred by it
by reason of taking any such action.
SECTION 9.3. Termination Events. The Agent shall not
be deemed to have knowledge or notice of the occurrence of a Potential
Termination Event or a Termination Event unless the Agent has received
written notice from the Company or any Bank Investor specifying such
Potential Termination Event or Termination Event and stating that such
notice is a "Notice of Termination Event". In the event that the Agent
receives such a notice of the occurrence of a Potential Termination
Event or Termination Event, the Agent shall give prompt notice thereof
to the Company and Bank Investors. The Agent shall (subject to Section
9.2 hereof) take such action with respect to such Potential Termination
Event or Termination Event as shall reasonably be directed by the
Majority Investors, provided that, unless and until the Agent shall
have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action,
with respect to such Potential Termination Event or Termination Event
as it shall deem advisable in the best interest of the Company and the
Bank Investors.
SECTION 9.4. Rights as Bank Investor. With respect to
its Commitment, NationsBank (and any successor acting as Agent) in its
capacity as a Bank Investor hereunder shall have the same rights and
powers hereunder as any other Bank Investor and may exercise the same
as though it were not acting as the Agent, and the term "Bank Investor"
or "Bank Investors" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. NationsBank (and any
successor acting as Agent) and its Affiliates may (without having to
account therefor to the Company or any Bank Investor) accept deposits
from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with
any of the Transferor, the Seller and the Collection Agent or any of
their Subsidiaries or Affiliates as if it were not acting as Agent, and
NationsBank (and any successor acting as Agent) and its Affiliates may
accept fees and other consideration from any of the Transferor, the
Seller and the Collection Agent or any of their Subsidiaries or
Affiliates for services in connection with this Agreement or otherwise
without having to account for the same to the Company or any Bank
Investor.
SECTION 9.5. Indemnification of the Agent. The Bank
Investors agree to indemnify the Agent (to the extent not reimbursed by
the Transferor), ratably in accordance with their Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including
attorneys' fees), or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Agent
(including by the Company or any Bank Investor) in any way relating to
or arising out of this Agreement or any other Transaction Document or
the transactions contemplated thereby or any action taken or omitted by
the Agent under this Agreement or any other Transaction Document,
provided that no Bank Investors shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person indemnified. Without limitation of the
foregoing, the Bank Investors agree to reimburse the Agent, ratably in
accordance with their Pro Rata Shares, promptly upon demand for any
out-of-pocket expenses (including attorneys' fees) incurred by the
Agent in connection with the administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities
under, this Agreement and the other Transaction Documents, to the
extent that such expenses are incurred in the interests of or otherwise
in respect of the Bank Investors hereunder and/or thereunder and to the
extent that the Agent is not reimbursed for such expenses by the
Transferor. The agreements contained in this Section shall survive
payment in full of the Net Investment and all other amounts payable
under this Agreement.
SECTION 9.6. Non-Reliance. The Company and each Bank
Investor agrees that it has, independently and without reliance on the
Agent or the Company or any Bank Investor, and based on such documents
and information as it has deemed appropriate, made its own credit
analysis of the Transferor, the Seller, and the Collection Agent and
their Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Agent, the Company
or any Bank Investor, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis
and decisions in taking or not taking action under the Transaction
Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Company and the
Bank Investors by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of
any of the Transferor, the Seller or the Collection Agent or any of
their Subsidiaries or affiliates that may come into the possession of
the Agent or any of its affiliates.
SECTION 9.7. Resignation of Agent. The Agent may
resign at any time by giving notice thereof to the Company, the Bank
Investors, the Transferor, and the Collection Agent. Upon any such
resignation, the Majority Investors shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by
the Majority Investors and shall have accepted such appointment within
thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Company and
the Bank Investors, appoint a successor Agent which shall be a
commercial bank organized under the laws of the United States of
America having combined capital and surplus of at least $100,000,000.
Upon the acceptance of any appointment as Agent hereunder by a
successor, such successor shall thereupon succeed to and become vested
with all the rights, powers, discretion, privileges, and duties of the
retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article IX shall
continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
SECTION 9.8. Payments by the Agent. Unless
specifically allocated to a Bank Investor pursuant to the terms of this
Agreement, all amounts received by the Agent on behalf of the Bank
Investors shall be paid by the Agent to the Bank Investors (at their
respective accounts specified in their respective Assignment and
Assumption Agreements) in accordance with their respective related pro
rata interests in the Net Investment on the Business Day received by
the Agent, unless such amounts are received after 12:00 noon on such
Business Day, in which case the Agent shall use its reasonable efforts
to pay such amounts to the Bank Investors on such Business Day, but, in
any event, shall pay such amounts to the Bank Investors in accordance
with their respective related pro rata interests in the Net Investment
not later than the following Business Day.
SECTION 9.9. Bank Commitment; Assignment to Bank Investors.
(a) Bank Commitment. At any time on or prior to the Commitment
Termination Date, in the event that the Company does not effect an
Incremental Transfer as requested under Section 2.2(a), then at any
time, the Transferor shall have the right to require the Company to
assign its interest in the Net Investment in whole to the Bank
Investors pursuant to this Section 9.9. In addition, at any time on or
prior to the Commitment Termination Date (i) upon the occurrence of a
Termination Event that results in the Termination Date or (ii) the
Company elects to give notice to the Transferor of a Reinvestment
Termination Date, the Transferor hereby requests and directs that the
Company assign its interest in the Net Investment in whole to the Bank
Investors pursuant to this Section 9.9 and the Transferor hereby agrees
to pay the amounts described in Section 9.9(d) above. Upon any such
election by the Company or any such request by the Transferor, the
Company shall make such assignment and the Bank Investors shall accept
such assignment and shall assume all of the Company's obligations
hereunder. In connection with any assignment from the Company to the
Bank Investors pursuant to this Section 9.9, each Bank Investor shall,
on the date of such assignment, pay to the Company an amount equal to
its Assignment Amount. Upon any assignment by the Company to the Bank
Investors contemplated hereunder, the Company shall cease to make any
additional Incremental Transfers hereunder.
(b) Assignment. No Bank Investor may assign all or a portion
of its interests in the Net Investment, the Receivables, and
Collections, Related Security and Proceeds with respect thereto and its
rights and obligations hereunder to any Person unless approved in
writing by the Administrative Agent, on behalf of the Company, and the
Agent and, so long as no Termination Event then exists, by the
Transferor (which approval by the Transferor shall not be unreasonably
withheld). In the case of an assignment by the Company to the Bank
Investors or by a Bank Investor to another Person, the assignor shall
deliver to the assignee(s) an Assignment and Assumption Agreement in
substantially the form of Exhibit G attached hereto, duly executed,
assigning to the assignee a pro rata interest in the Net Investment,
the Receivables, and Collections, Related Security and Proceeds with
respect thereto and the assignor's rights and obligations hereunder and
the assignor shall promptly execute and deliver all further instruments
and documents, and take all further action, that the assignee may
reasonably request, in order to protect, or more fully evidence the
assignee's right, title and interest in and to such interest and to
enable the Agent, on behalf of such assignee, to exercise or enforce
any rights hereunder and under the other Transaction Documents to which
such assignor is or, immediately prior to such assignment, was a party.
Upon any such assignment, (i) the assignee shall have all of the rights
and obligations of the assignor hereunder and under the other
Transaction Documents to which such assignor is or, immediately prior
to such assignment, was a party with respect to such interest for all
purposes of this Agreement and under the other Transaction Documents to
which such assignor is or, immediately prior to such assignment, was a
party, to the extent of the interests so assigned (it being understood
that the Bank Investors, as assignees, shall (x) be obligated to fund
Incremental Transfers under Section 2.2(a) in accordance with the terms
thereof, notwithstanding that the Company was not so obligated and (y)
not have the right to elect the commencement of the amortization of the
Net Investment pursuant to the definition of "Reinvestment Termination
Date", notwithstanding that the Company had such right) and (ii) the
assignor shall relinquish its rights with respect to such interest for
all purposes of this Agreement and under the other Transaction
Documents to which such assignor is or, immediately prior to such
assignment, was a party. No such assignment shall be effective unless a
fully executed copy of the related Assignment and Assumption Agreement
shall be delivered to the Agent and the Transferor. All costs and
expenses of the Agent and the assignor and assignee incurred in
connection with any assignment hereunder shall be borne by the
Transferor and not by the assignor or any such assignee. No Bank
Investor shall assign any portion of its Commitment hereunder without
also simultaneously assigning an equal portion of its interest in the
Liquidity Provider Agreement.
(c) Effects of Assignment. By executing and delivering an
Assignment and Assumption Agreement, the assignor and assignee
thereunder confirm to and agree with each other and the other parties
hereto as follows: (i) other than as provided in such Assignment and
Assumption Agreement, the assignor makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement, the other Transaction Documents or any other instrument or
document furnished pursuant hereto or thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value
or this Agreement, the other Transaction Documents or any such other
instrument or document; (ii) the assignor makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Transferor, the Seller or the Collection Agent or the
performance or observance by the Transferor, the Seller or the
Collection Agent of any of their respective obligations under this
Agreement, the Receivables Purchase Agreement, the other Transaction
Documents or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, the Receivables Purchase Agreement, and such other
instruments, documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment
and Assumption Agreement and to purchase such interest; (iv) such
assignee will, independently and without reliance upon the Agent, or
any of its Affiliates, or the assignor and based on such agreements,
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Transaction Documents; (v)
such assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement,
the other Transaction Documents and any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by
the terms hereof or thereof, together with such powers as are
reasonably incidental thereto and to enforce its respective rights and
interests in and under this Agreement, the other Transaction Documents,
the Receivables, the Contracts and the Related Security; (vi) such
assignee agrees that it will perform in accordance with their terms all
of the obligations which by the terms of this Agreement and the other
Transaction Documents are required to be performed by it as the
assignee of the assignor; and (vii) such assignee agrees that it will
not institute against the Company any proceeding of the type referred
to in Section 10.9 prior to the date which is one year and one day
after the payment in full of all Commercial Paper issued by the
Company.
(d) Transferor's Obligation to Pay Certain Amounts;
Additional Assignment Amount. The Transferor shall pay to the Agent,
for the account of the Company, in connection with any assignment by
the Company to the Bank Investors pursuant to this Section 9.9, an
aggregate amount equal to all Discount to accrue through the end of
each outstanding Tranche Period plus all other Aggregate Unpaids (other
than the Net Investment). To the extent that such Discount relates to
interest or discount on Related Commercial Paper, if the Transferor
fails to make payment of such amounts at or prior to the time of
assignment by the Company to the Bank Investors, such amount shall be
paid by the Bank Investors (in accordance with their respective Pro
Rata Shares) to the Company as additional consideration for the
interests assigned to the Bank Investors and the amount of the "Net
Investment" hereunder held by the Bank Investors shall be increased by
an amount equal to the additional amount so paid by the Bank Investors.
(e) Administration of Agreement After Assignment. After any
assignment by the Company to the Bank Investors pursuant to this
Section 9.9 (and the payment of all amounts owing to the Company in
connection therewith), all rights of the Administrative Agent and the
Collateral Agent set forth herein shall be deemed to be afforded to the
Agent on behalf of the Bank Investors instead of either such party.
(f) Payments. After any assignment by the Company to the Bank
Investors pursuant to this Section 9.9, all payments to be made
hereunder by the Transferor or the Collection Agent to the Company
shall be made to the Agent's account as such account shall have been
notified to the Transferor and the Collection Agent. In the event that
the Assignment Amount paid by the Bank Investors is less than the sum
of the Net Investment plus the Interest Component of all outstanding
Commercial Paper, then to the extent payments made hereunder in respect
of the Net Investment (excluding Discount) exceed the Assignment Amount
such excess amounts shall be remitted by the Agent to the Company.
(g) Downgrade of Bank Investor. If at any time prior to any
assignment by the Company to the Bank Investors as contemplated
pursuant to this Section 9.9, the short term debt rating of any Bank
Investor shall be "A-2" or "P-2" from Standard & Poor's or Moody's,
respectively, with negative credit implications, such Bank Investor,
upon request of the Agent, shall, within 30 days of such request,
assign its rights and obligations hereunder to another financial
institution (which institution's short term debt shall be rated at
least "A-2" and "P-2" from Standard & Poor's and Moody's, respectively,
and which shall not be so rated with negative credit implications). If
the short term debt rating of a Bank Investor shall be "A-3" or "P-3",
or lower, from Standard & Poor's or Moody's, respectively (or such
rating shall have been withdrawn by Standard & Poor's or Moody's), such
Bank Investor, upon request of the Agent, shall, within five (5)
Business Days of such request, assign its rights and obligations
hereunder to another financial institution (which institution's short
term debt shall be rated at least "A-2" and "P-2" from Standard &
Poor's and Moody's, respectively, and which shall not be so rated with
negative credit implications). In either such case, if any such Bank
Investor shall not have assigned its rights and obligations under this
Agreement within the applicable time period described above, the
Company shall have the right to require such Bank Investor to accept
the assignment of such Bank Investor's Pro Rata Share of the Net
Investment; such assignment shall occur in accordance with the
applicable provisions of this Section 9.9. Such Bank Investor shall be
obligated to pay to the Company, in connection with such assignment, in
addition to the Pro Rata Share of the Net Investment, an amount equal
to the interest component of the outstanding Commercial Paper issued to
fund the portion of the Net Investment being assigned to such Bank
Investor, as reasonably determined by the Agent. Notwithstanding
anything contained herein to the contrary, upon any such assignment to
a downgraded Bank Investor as contemplated pursuant to the immediately
preceding sentence, the aggregate available amount of the Facility
Limit, solely as it relates to new Incremental Transfers by the
Company, shall be reduced by the amount of unused Commitment of such
downgraded Bank Investor; it being understood and agreed, that nothing
in this sentence or the two preceding sentences shall affect or
diminish in any way any such downgraded Bank Investor's Commitment to
the Transferor or such downgraded Bank Investor's other obligations and
liabilities hereunder and under the other Transaction Documents.
(h) Defaulting Bank Investor. Any Bank Investor that fails to
remit its Pro Rata Share of any Transfer Price (a "Defaulting Bank
Investor") shall not be entitled to receive any portion of its interest
in any Collections or Proceeds, and for purposes of voting or
consenting to matters with respect to the Transaction Documents, such
Bank Investor shall not be deemed to be a "Bank Investor" hereunder and
such Bank Investor's Commitment shall be deemed to be zero ($0), unless
and until (a) all other payments of Collections and Proceeds have been
paid in full, (b) such failure to fulfill its obligation to fund is
cured and such Bank Investor shall have paid, as and to the extent
provided in this Agreement, to the applicable party, such amount then
owing or (c) the Termination Date shall have occurred. Upon notice of
the existence of a Defaulting Bank Investor, the Agent shall use
reasonable efforts to replace such Defaulting Bank Investor. Any such
replacement shall have been consented to by the Transferor (such
consent not to be unreasonably withheld).
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Term of Agreement. This Agreement shall
terminate on the date following the Termination Date upon which the Net
Investment has been reduced to zero, all accrued Discount and Servicing
Fees have been paid in full and all other Aggregate Unpaids have been
paid in full, in each case, in cash; provided, however, that (i) the
rights and remedies of the Agent, the Company, the Bank Investors and
the Administrative Agent with respect to any representation and
warranty made or deemed to be made by the Transferor pursuant to this
Agreement, (ii) the indemnification and payment provisions of Article
VIII, and (iii) the agreement set forth in Section 10.9 hereof, shall
be continuing and shall survive any termination of this Agreement for a
period of one (1) year.
SECTION 10.2. Waivers; Amendments. (a) No failure or
delay on the part of the Agent, the Company, the Administrative Agent
or any Bank Investor 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.
(b) Any provision of this Agreement or any other Transaction
Document may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Transferor, the Collection
Agent, the Company and the Majority Investors (and, if Article IX or
the rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by each
Bank Investor directly affected thereby, (i) increase the Commitment of
a Bank Investor, (ii) reduce the Net Investment or rate of Discount to
accrue thereon or any fees or other amounts payable hereunder, (iii)
postpone any date fixed for the payment of any scheduled distribution
in respect of the Net Investment or Discount with respect thereto or
any fees or other amounts payable hereunder or for termination of any
Commitment, (iv) change the percentage of the Commitments or the number
of Bank Investors, which shall be required for the Bank Investors or
any of them to take any action under this Section or any other
provision of this Agreement, (v) release all or substantially all of
the property with respect to which a security or ownership interest
therein has been granted hereunder to the Agent or the Bank Investors
or (vi) extend or permit the extension of the Commitment Termination
Date. In the event the Agent requests the Company's or a Bank
Investor's consent pursuant to the foregoing provisions and the Agent
does not receive a consent (either positive or negative) from the
Company or such Bank Investor within 10 Business Days of the Company's
or Bank Investor's receipt of such request, then the Company or such
Bank Investor (and its percentage interest hereunder) shall be
disregarded in determining whether the Agent shall have obtained
sufficient consent hereunder.
SECTION 10.3. Notices. Except as provided below, all
communications and notices provided for hereunder shall be in writing
(including telecopy or electronic facsimile transmission or similar
writing) and shall be given to the other party at its address or
telecopy number set forth below or at such other address or telecopy
number as such party may hereafter specify for the purposes of notice
to such party. Each such notice or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted
to the telecopy number specified in this Section 10.3 and confirmation
is received, (ii) if given by mail three (3) Business Days following
such posting, postage prepaid, U.S. certified or registered, (iii) if
given by overnight courier, one (1) Business Day after deposit thereof
with a national overnight courier service, or (iv) if given by any
other means, when received at the address specified in this Section
10.3. However, anything in this Section to the contrary
notwithstanding, the Transferor hereby authorizes the Company to effect
Transfers, Tranche Period and Tranche Rate selections based on
telephonic notices made by any Person which the Company in good faith
believes to be acting on behalf of the Transferor. The Transferor
agrees to deliver promptly to the Company a written confirmation of
each telephonic notice signed by an authorized officer of Transferor.
However, the absence of such confirmation shall not affect the validity
of such notice. If the written confirmation differs in any material
respect from the action taken by the Company, the records of the
Company shall govern absent manifest error.
If to the Company:
Enterprise Funding Corporation
c/o Merrill Xxxxx Money Markets Inc.
World Financial Center - Xxxxx Xxxxx
000 Xxxxx Xxxxxx - 11th floor
New York, New York 10281
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(with a copy to the Administrative Agent)
If to the Transferor:
Xxxx Funding Company
000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000 (Attention: Xxxxxxx X. Xxxxxxx)
Telecopy: (000) 000-0000
Payment Information:
ABA # 000000000
Account of Xxxx Industries, Inc.
Account No. 3751079206
Ref: Xxxx Funding Company
with a copy to Xxx Xxxxxxxx, General Counsel, at the above address for
the Transferor (telephone: 000-000-0000 and telecopy: 706-275-1442),
and in case of notices of Termination Events, Potential Termination
Events or Reinvestment Termination Dates, a notice to Powell,
Goldstein, Xxxxxx & Xxxxxx LLP, attention Xxxxxx X. Xxxxxxxx, Esq.
(Tel: 000-000-0000, Fax: 000-000-0000).
If to Xxxx Industries, Inc.
Xxxx Industries, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000 (Attention: Xxxxxxx X. Xxxxxxx)
Telecopy: (000) 000-0000
with a copy to Xxx Xxxxxxxx, General Counsel, at the above address for
the Transferor (telephone: 000-000-0000 and telecopy: 706-275-1442),
and in case of notices of Termination Events, Potential Termination
Events or Reinvestment Termination Dates, a notice to Powell,
Goldstein, Xxxxxx & Xxxxxx LLP, attention Xxxxxx X. Xxxxxxxx, Esq.
(Tel: 000-000-0000, Fax: 000-000-0000).
If to the Collateral Agent:
NationsBank, N.A.
NationsBank Corporate Xxxxxx--00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx--
Structured Finance
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Agent:
NationsBank, N.A.
NationsBank Corporate Xxxxxx--00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx--
Structured Finance
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Payment Information:
NationsBank, N.A.
ABA 000-000-000
Acct: Operations/Administration
Account No. 0000-00-0000
Ref: Xxxx Funding Company
If to the Administrative Agent:
NationsBank, N.A.
NationsBank Corporate Xxxxxx--00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxx--
Structured Finance
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Bank Investors, at their respective
addresses set forth on the signature pages hereto or of the Assignment
and Assumption Agreement pursuant to which it became a party hereto.
SECTION 10.4. Governing Law; Submission to Jurisdiction;
Integration.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE TRANSFEROR
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW
YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. The Transferor hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection
which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient
forum. Nothing in this Section 10.4 shall affect the right of the
Company to bring any action or proceeding against the Transferor or its
property in the courts of other jurisdictions.
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED
WITH, RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.
(c) This Agreement and the other Transaction Documents 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.
(d) The Transferor and the Seller each hereby appoint
Corporation Service Company located at 2 World Trade Center, Suite
8746, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 as the authorized agent
upon whom process may be served in any action arising out of or based
upon this Agreement, the other Transaction Documents to which such
Person is a party or the transactions contemplated hereby or thereby
that may be instituted in the United States District Court for the
Southern District of New York and of any New York State court sitting
in The City of New York by the Company, the Agent, any Bank Investor,
the Collateral Agent or any assignee of any of them.
SECTION 10.5. Severability; Counterparts. This
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when
so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same Agreement. 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.
SECTION 10.6. Successors and Assigns. (a) This
Agreement shall be binding on the parties hereto and their respective
successors and assigns; provided, however, that neither the Transferor
nor the Seller may assign any of its rights or delegate any of its
duties hereunder or under the Receivables Purchase Agreement or under
any of the other Transaction Documents to which it is a party without
the prior written consent of the Agent. No provision of this Agreement,
other than Section 9.9, shall in any manner restrict the ability of the
Company or any Bank Investor to assign, participate, grant security
interests in, or otherwise transfer any portion of the Transferred
Interest.
(b) Notwithstanding the foregoing, the Company may, from time
to time, with prior or concurrent notice to Transferor and Collection
Agent, in one transaction or a series of transactions, assign all or a
portion of the Net Investment and its rights and obligations under this
Agreement and any other Transaction Documents to which it is a party to
a Conduit Assignee. Upon and to the extent of such assignment by the
Company to a Conduit Assignee, (i) such Conduit Assignee shall be the
owner of the assigned portion of the Net Investment, (ii) the related
administrative or managing agent for such Conduit Purchaser will act as
the Administrative Agent for such Conduit Assignee, with all
corresponding rights and powers, express or implied, granted to the
Administrative Agent hereunder or under the other Transaction
Documents, (iii) such Conduit Assignee and its liquidity support
provider(s) and credit support provider(s) and other related parties
shall have the benefit of all the rights and protections provided to
the Company and its Liquidity Support Provider(s) and Credit Support
Provider(s), respectively, herein and in the other Transaction
Documents (including, without limitation, any limitation on recourse
against such Conduit Assignee or related parties, any agreement not to
file or join in the filing of a petition to commence an insolvency
proceeding against such Conduit Assignee, and the right to assign to
another Conduit Assignee as provided in this paragraph), (iv) such
Conduit Assignee shall assume, by written instrument delivered to the
Company, with copies to the Transferor, the Collection Agent and each
Bank Investor, all (or the assigned or assumed portion) of the
Company's obligations, if any, hereunder and each other Transaction
Document, and the Company shall be released from such obligations, in
each case to the extent of such assignment, and the obligations of the
Company and such Conduit Assignee shall be several and not joint, (v)
all distributions in respect of the Net Investment shall be made to the
applicable agent or administrative agent, as applicable, on behalf of
the Company and such Conduit Assignee on a pro rata basis according to
their respective interests, (vi) the definition of the term "CP Rate"
with respect to the portion of the Net Investment funded with
commercial paper issued by the Company from time to time shall be
determined in the manner set forth in the definition of "CP Rate"
applicable to the Company on the basis of the interest rate or discount
applicable to commercial paper issued by such Conduit Assignee (rather
than the Company), (vii) the defined terms and other terms and
provisions of this Agreement and the other Transaction Documents shall
be interpreted in accordance with the foregoing, and (viii) if
requested by the Agent or the agent or administrative agent with
respect to the Conduit Assignee, the parties will execute and deliver
such further agreements and documents and take such other actions as
the Agent or such agent or administrative agent may reasonably request
to evidence and give effect to the foregoing. No Assignment by the
Company to a Conduit Assignee of all or any portion of the Net
Investment shall in any way diminish the related Bank Investors'
obligation under Section 9.9 to fund any Incremental Transfer not
funded by the Company or such Conduit Assignee or to acquire from the
Company or such Conduit Assignee all or any portion of the Net
Investment.
(c) The Seller hereby agrees and consents to the assignment by
the Company from time to time of all or any part of its rights under,
interest in and title to this Agreement and the Transferred Interest to
any Liquidity Provider or to any Conduit Assignee as set forth in
Section 10.6(b). In addition, each of the Transferor and the Seller
hereby consents to and acknowledges the assignment by the Company of
all of its rights under, interest in and title to this Agreement and
the Transferred Interest to the Collateral Agent.
SECTION 10.7. Confidentiality. Except as otherwise
provided by Applicable Law, the Agent, the Company, and each Bank
Investor, by the acceptance of the benefits of this Agreement, hereby
agree to utilize all non-public information obtained pursuant to the
requirements of this Agreement or any other Transaction Document which
has been identified as confidential or proprietary by the Seller, the
Transferor, the Collection Agent or any of their Affiliates in
accordance with customary procedure of the Agent, the Company, or such
Bank Investor, as the case may be, for handling confidential
information of this nature and in accordance with safe and sound
banking practices. However, in any event, the Agent, the Company, and
the Bank Investors may make disclosure: (a) to any of their respective
Affiliates (provided such Affiliates shall agree to keep such
information confidential in accordance with the terms of this Section);
(b) as reasonably required by any bona fide transferee or participant
in connection with the contemplated transfer of any rights or interest
hereunder; (c) as required by any governmental authority or
representative thereof pursuant to legal process; (d) to the
independent auditors and other professional advisors of the Agent, the
Company, or any Bank Investor (provided they shall be notified of the
confidential nature of the information); and (e) after the happening
and during the continuance of a Termination Event, to any other Person,
in connection with the exercise of their remedial rights hereunder or
under any of the Transaction Documents.
SECTION 10.8. No Bankruptcy Petition Against the
Company. Each of the Transferor, the Collection Agent and the Seller
hereby covenants and agrees that, prior to the date which is one year
and one day after the payment in full of all outstanding Commercial
Paper or other indebtedness of the Company, it will not institute
against, or join any other Person in instituting against, the Company
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United
States or any State of the United States.
SECTION 10.9. No Recourse Against Stockholders,
Officers or Directors. No recourse under any obligation, covenant or
agreement of the Company contained in this Agreement shall be had
against Xxxxxxx Xxxxx Money Markets Inc. (or any Affiliate thereof), or
any stockholder, officer or director of the Company, as such, by the
enforcement of any assessment or by any legal or equitable proceeding,
by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is solely a corporate obligation of the
Company, and that no personal liability whatsoever shall attach to or
be incurred by Xxxxxxx Xxxxx Money Markets Inc. (or any affiliate
thereof), or the stockholders, officers or directors of the Company, as
such, or any of them, under or by reason of any of the obligations,
covenants or agreements of the Company contained in this Agreement, or
implied therefrom, and that any and all personal liability for breaches
by the Company of any of such obligations, covenants or agreements,
either at common law or at equity, or by statute or constitution, of
Xxxxxxx Xxxxx Money Markets Inc. (or any affiliate thereof) and every
such stockholder, officer or director of the Company is hereby
expressly waived as a condition of and consideration for the execution
of this Agreement.
SECTION 10.10. Characterization of the Transactions
Contemplated by the Agreement. It is the intention of the parties that
the transactions contemplated hereby constitute the sale of the
Transferred Interest, conveying good title thereto free and clear of
any Adverse Claims to the Agent, on behalf of the Company and the Bank
Investors, and that the Transferred Interest not be part of the
Transferor's estate in the event of an insolvency. If, notwithstanding
the foregoing, the transactions contemplated hereby should be deemed a
financing, the parties intend that the Transferor shall be deemed to
have granted to the Agent, on behalf of the Company and the Bank
Investors, and the Transferor hereby grants to the Agent, on behalf of
the Company and the Bank Investors, a first priority perfected and
continuing security interest in all of the Transferor's right, title
and interest in, to and under the Receivables, together with Related
Security, Collections and Proceeds with respect thereto, and together
with all of the Transferor's rights under the Receivables Purchase
Agreement with respect to the Receivables and with respect to any
obligations thereunder of the Seller with respect to the Receivables,
and that this Agreement shall constitute a security agreement under
applicable law. The Transferor hereby assigns to the Agent, on behalf
of the Company and the Bank Investors, all of its rights and remedies
under the Receivables Purchase Agreement with respect to the
Receivables and with respect to any obligations thereunder of the
Sellers with respect to the Receivables.
[THE REMAINDER OF THIS PAGE INTENTIONALLY IS LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Transfer and Administration Agreement as of the date
first written above.
ENTERPRISE FUNDING CORPORATION,
as Company
By:__/s/ Xxxxxx Newman______________________
Name: Xxxxxx Xxxxxx
Title: Vice President
XXXX FUNDING COMPANY,
as Transferor
By:__/s/ Xxxxxx X. Laughter___________________
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
XXXX INDUSTRIES, INC., individually
and as Collection Agent
By:__/s/ Xxxxxxx X. Jackson__________________
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and CFO
Commitment NATIONSBANK, N.A., as Agent
$200,000,000 and a Bank Investor
By:__/s/ Xxxxxxxx X. Heath____________________
Name: Xxxxxxxx X. Xxxxx
Title: Senior Vice President
Signature page to Transfer and Administration
Agreement dated as of September 3, 1998
::ODMA\PCDOCS\ATL\255736\1
SCHEDULE 1
TO
TRANSFER AND ADMINISTRATION AGREEMENT
Dated as of September 3, 1998
Fiscal 1998
Month-End Closing Dates
February 7, 1998 March 7, 1998 April 4, 1998 May 9, 1998 June 6, 1998
July 4, 1998 August 8, 1998 September 5, 1998 October 3, 1998 November
7, 1998 December 5, 1998 January 2, 1999
Fiscal 1999
Month-End Closing Dates
February 6, 1999 March 6, 1999 April 3, 1999 May 8, 1999 June 5, 1999
July 3, 1999 August 7, 1999 September 4, 1999 October 2, 1999 November
6, 1999 December 4, 1999 January 1, 2000
SCHEDULE 2
TO
TRANSFER AND ADMINISTRATION AGREEMENT
Dated as of September 3, 1998
Xxxx Financial Covenants
All defined terms used below are as defined in that
certain Amended and Restated Credit Agreement (the "Credit Agreement"),
dated as of March 16, 1998, by and among Xxxx Industries, Inc., the
Lenders named therein, NationsBank, N.A., as Issuing Bank and
Administrative Agent, SunTrust Bank, Atlanta, as Documentation Agent,
Wachovia Bank, N.A., as Managing Agent, Nationsbanc Xxxxxxxxxx
Securities LLC, as Arranger and Co-Syndication Agent and SunTrust
Equitable Securities Corporation, as Co-Arranger and Co-Syndication
Agent, as in effect on the date hereof. In the event that the Credit
Agreement is terminated prior to the expiration of this Transfer and
Administration Agreement, the defined terms below shall retain their
meanings as set forth in the Credit Agreement as was in effect on the
date hereof. Any amendment of any defined term in the Credit Agreement
shall not amend such term's meaning, as of the date hereof, under this
Transfer and Administration Agreement unless such amendment is approved
by the Agent and the Majority Bank Investors.
The Seller shall not, directly or indirectly:
1. EBIT to Interest Ratio. Permit, as at the end of
each fiscal quarter of the Seller, the Consolidated EBIT/Interest Ratio
to be less than 2.25 to 1.00.
2. Minimum Net Worth. Permit as at the end of each
fiscal quarter of the Seller, its Consolidated Net Worth to be less
than the sum of: (i) $510,000,000 plus (ii) 50% of the cumulative
positive Consolidated Net Income of the Seller earned after January 3,
1998 plus (iii) the aggregate net proceeds received by the Seller and
its Subsidiaries from any sale or issuance of any shares, interests,
warrants, participations or other equity instruments of the Seller or
its Subsidiaries occurring after January 3, 1998 minus (iv) the
aggregate amount of all cash and non-cash consideration paid by the
Seller and its Subsidiaries in connection with any purchase,
redemption, retirement or other acquisition of any shares, interests,
warrants, participations or other equity instruments of the Seller and
its Subsidiaries occurring after January 3, 1998 in an amount up to,
but not to exceed, $150,000,000; it being understood that (1) any
equity issuance net proceeds received by, or purchase, redemption,
retirement or other acquisition consideration paid to, a Subsidiary
from the Seller or vice-versa shall not be included in determining the
amounts described in items (iii) and (iv) above, (2) for purposes of
determining the amount of non-cash consideration paid by the Seller and
its Subsidiaries in connection with any purchase, redemption,
retirement or other acquisition of any equity instruments, the fair
market value of such consideration shall be used, or, if such non-cash
consideration is in the form of a note or other debt security, the
amount of non-cash consideration shall be deemed to be the original
principal amount of the note or debt security and (3) the ability of
the Seller and its Subsidiaries to purchase, redeem, retire, or
otherwise acquire shares or other equity instruments shall continue to
be subject to Section 10.5 of the Credit Agreement.
3. Funded Debt to EBITDA Ratio. Permit, as of the end
of each fiscal quarter of the Seller, the Consolidated Funded
Debt/EBITDA Ratio to be greater than 4.00 to 1.00.
iii
TABLE OF CONTENTS
Page
ARTICLE IDEFINITIONS.....................................................................................1
SECTION 1.1. Certain Defined Terms.............................................................1
SECTION 1.2. Other Terms......................................................................24
SECTION 1.3. Computation of Time Periods......................................................24
PURCHASES AND SETTLEMENTS...............................................................................24
SECTION 2.1. Facility.........................................................................24
SECTION 2.2. Transfers; Certificates; Eligible Receivables(a) Incremental Transfers...........24
SECTION 2.3. Selection of Tranche Periods and Tranche Rates...................................28
SECTION 2.4. Discount, Fees and Other Costs and Expenses......................................30
SECTION 2.5. Non-Liquidation Settlement and Reinvestment Procedures...........................31
SECTION 2.6. Liquidation Settlement Procedures................................................31
SECTION 2.7. Fees.............................................................................33
SECTION 2.8. Protection of Ownership Interest of the Company and the Bank Investors...........33
SECTION 2.9. Deemed Collections; Application of Payments......................................34
SECTION 2.10. Payments and Computations, Etc..................................................35
SECTION 2.11. Reports.........................................................................35
SECTION 2.12. Collection Account..............................................................36
SECTION 2.13. Sharing of Payments, Etc........................................................36
SECTION 2.14. Right of Setoff.................................................................37
ARTICLE IIIREPRESENTATIONS AND WARRANTIES...............................................................37
SECTION 3.1. Representations and Warranties of the Transferor.................................37
SECTION 3.2. Reaffirmation of Representations and Warranties by the Transferor................41
SECTION 3.3. Representations and Warranties of the Collection Agent...........................41
ARTICLE IVCONDITIONS PRECEDENT..........................................................................44
SECTION 4.1. Conditions to Closing............................................................44
ARTICLE VCOVENANTS......................................................................................47
SECTION 5.1. Affirmative Covenants of Transferor.....................................47
SECTION 5.2. Negative Covenants of the Transferor.............................................52
SECTION 5.3. Financial Covenant...............................................................54
SECTION 5.4. Affirmative Covenants of the Collection Agent....................................54
SECTION 5.5. Negative Covenants of the Collection Agent.......................................56
ARTICLE VIADMINISTRATION AND COLLECTIONS................................................................58
SECTION 6.1. Appointment of Collection Agent..................................................58
SECTION 6.2. Duties of Collection Agent.......................................................58
SECTION 6.3. Rights After Designation of New Collection Agent.................................60
SECTION 6.4. Collection Agent Default.........................................................61
SECTION 6.5. Responsibilities of the Transferor and the Seller................................62
ARTICLE VIITERMINATION EVENTS...........................................................................62
SECTION 7.1. Termination Events...............................................................62
SECTION 7.2. Termination......................................................................64
ARTICLE VIIIINDEMNIFICATION; EXPENSES; RELATED MATTERS..................................................64
SECTION 8.1. Indemnities by the Transferor....................................................64
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses.......................................67
SECTION 8.3. Taxes............................................................................69
SECTION 8.4. Other Costs, Expenses and Related Matters........................................70
SECTION 8.5. Reconveyance Under Certain Circumstances.........................................71
SECTION 8.6. Amounts Payable..................................................................71
ARTICLE IXTHE AGENT; BANK COMMITMENT....................................................................71
SECTION 9.1. Authorization and Action.........................................................71
SECTION 9.2. Agent's Reliance, Etc............................................................72
SECTION 9.3. Termination Events...............................................................72
SECTION 9.4. Rights as Bank Investor..........................................................72
SECTION 9.5. Indemnification of the Agent.....................................................73
SECTION 9.6. Non-Reliance.....................................................................73
SECTION 9.7. Resignation of Agent.............................................................74
SECTION 9.8. Payments by the Agent............................................................74
SECTION 9.9. Bank Commitment; Assignment to Bank Investors....................................74
ARTICLE XMISCELLANEOUS..................................................................................78
SECTION 10.1. Term of Agreement...............................................................78
SECTION 10.2. Waivers; Amendments.............................................................79
SECTION 10.3. Notices.........................................................................79
SECTION 10.4. Governing Law; Submission to Jurisdiction; Integration..........................82
SECTION 10.5. Severability; Counterparts......................................................83
SECTION 10.6. Successors and Assigns..........................................................83
SECTION 10.7. Confidentiality.................................................................84
SECTION 10.8. ................................................................................85
No Bankruptcy Petition Against the Company.....................................................85
SECTION 10.9. No Recourse Against Stockholders, Officers or Directors.........................85
SECTION 10.10. Characterization of the Transactions Contemplated by the Agreement.............85
iv
vii
EXHIBITS
EXHIBIT A Form of Contract
EXHIBIT B Credit and Collection Policies and Practices
EXHIBIT C List of Lock-Box Banks
EXHIBIT D Form of Lock-Box Agreement
EXHIBIT E Form of Investor Report
EXHIBIT F Form of Transfer Certificate
EXHIBIT G Form of Assignment and Assumption Agreement
EXHIBIT H List of Actions and Suits
EXHIBIT I Location of Records
EXHIBIT J List of Subsidiaries, Divisions and Tradenames
EXHIBIT K-1 Form of Opinion of Counsel for the Seller and the Transferor
EXHIBIT K-2 Form of Opinion of In-House Counsel for the Seller and the
Transferor
EXHIBIT L-1 Form of Secretary's Certificate for the Transferor
EXHIBIT L-2 Form of Secretary's Certificate for the Seller
EXHIBIT M Form of Certificate
EXHIBIT N-1 UCC-1 Financing Statement relating to Private Label Credit Card
Program with General Electric Capital Corporation
EXHIBIT N-2 UCC-1 Financing Statement relating to Private Label Credit Card
Program with Monogram Credit Card Bank of Georgia
SCHEDULES
SCHEDULE 1 Fiscal Months
SCHEDULE 2 Xxxx Financial Covenants
---------------------------------------------------------------
TRANSFER AND ADMINISTRATION AGREEMENT
among
XXXX FUNDING COMPANY
as Transferor
and
XXXX INDUSTRIES, INC.
individually and
as Collection Agent
and
ENTERPRISE FUNDING CORPORATION,
as Company
and
THE FINANCIAL INSTITUTIONS FROM
TIME TO TIME PARTIES HERETO
as Bank Investors
and
NATIONSBANK, N.A.
as Agent
Dated as of September 3, 1998
--------------------------------------------------------------
::ODMA\PCDOCS\ATL\255736\1
