THIS RECEIVABLES PURCHASE AGREEMENT (the "Agreement") is made
as of December 18, 1997, among:
(1) SYNTHETIC FUNDING CORPORATION, a Delaware corporation (the
"Seller");
(2) EAGLEFUNDING CAPITAL CORPORATION, a Delaware corporation
("EagleFunding");
(3) BANCBOSTON SECURITIES INC. ("BSI"), as agent (the "Deal
Agent"); and
(4) SYNTHETIC INDUSTRIES, INC., a Delaware corporation
("Synthetic"), in its capacity as the initial Collection Agent
hereunder (in such capacity, the "Collection Agent").
IT IS AGREED as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms.
(a) Certain capitalized terms used throughout this Agreement
are defined above or in this Section 1.01.
(b) As used in this Agreement and its exhibits, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined).
"Adjusted Base Rate" means at any time, the rate of interest
equal to the sum of (i) the Applicable Base Rate Margin and (ii) the Base Rate
in effect at such time and from time to time.
"Adjusted Eurodollar Rate" means, with respect to any Purchase
Period for all Capital allocated to such Purchase Period, an interest rate per
annum equal to the sum of
(a) a per annum rate equal to the Applicable Eurodollar
Margin; plus
(b) the quotient, stated as a percentage, of (i) the per annum
rate determined by the Deal Agent at which Dollar deposits for such Purchase
Period are offered by BankBoston, N.A. based on information presented on
Telerate Page 3750 as of 11:00 a.m. London time on the second Business Day prior
to the first day of such Purchase Period, divided by (ii) a number equal to 1.00
minus the Eurodollar Reserve Percentage, if applicable.
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"Administrative Fee" means the fee payable by the Seller to
the Deal Agent annually in advance on the Closing Date and on each anniversary
of the Closing Date, and identified as the "Administrative Fee" in the Fee
Letter. If a Termination Date occurs prior to December 18, 2002 for any reason
other than (i) the date of the declaration or automatic occurrence of the
Termination Date pursuant to Section 7.01, or (ii) as the result of the
occurrence of a Reinvestment Termination Date resulting from the failure of the
condition precedent of Section 3.02 to be satisfied, the Deal Agent shall be
required to refund to the Seller the unearned portion of the Administrative Fee
(calculated based on a year of 365 or 366 days, as the case may be, and the
actual number of days elapsed from the Closing Date (or such anniversary) to
such Termination Date.
"Adverse Claim" means a lien, security interest, charge,
encumbrance or other right or claim of any Person.
"Affected Party" has the meaning assigned to that term in
Section 2.10(a).
"Affiliate" when used with respect to a Person means any other
Person controlling, controlled by or under common control with such Person.
"Aggregate Reserves" means, on any day, the greater of (i) the
sum of the Dilution Reserve, the Loss Reserve and the Yield Reserve, in each
case as in effect on such day, and (ii) the product of (A) a fraction, the
numerator of which is .15 and the denominator of which is the remainder of 1.0
minus .15, multiplied by (B) the aggregate amount of Capital outstanding on such
day.
"Alternative Rate" means, with respect to any Purchase Period
for all Capital allocated to such Purchase Period, an interest rate per annum
equal to the Adjusted Eurodollar Rate or the Adjusted Base Rate as the Seller
shall select by notice to the Deal Agent in accordance with the terms of this
Agreement; provided, however, that the "Alternative Rate" for such Capital
allocated to such Purchase Period shall be the Adjusted Base Rate if (a) on or
before the first day of such Purchase Period, the Purchaser shall have notified
the Deal Agent that a Eurodollar Disruption Event has occurred, (b) such
Purchase Period is a period of 29 days or less, or (c) such Capital is less than
$1,000,000.
"Applicable Base Rate Margin" means the "Applicable Margin" as
such term is defined in the Revolving Credit Agreement applicable to "Base Rate
Loans" thereunder (as such agreement is in effect on the date hereof without
giving effect to any amendments or modifications thereof).
"Applicable Eurodollar Rate Margin" means the "Applicable
Margin" as such term is defined in the Revolving Credit Agreement applicable to
Eurodollar Rate Loans thereunder (as such agreement is in effect on the date
hereof without giving effect to any amendments or modifications thereof).
"Asset Report" means a report, in substantially the form of
Exhibit C, furnished by the Collection Agent to the Deal Agent for the Purchaser
pursuant to Section 6.06(b).
"Asset Report Date" means, with respect to any calendar month,
the eighth day of such month, or if such date is not a Business Day, the next
Business Day to occur thereafter.
"Assignment and Acceptance" means an assignment and acceptance
pursuant to which the assignee agrees to purchase an interest in the Purchased
Interest and this Agreement from the Purchaser, in form and substance
satisfactory to the Deal Agent and the Seller, entered into by the Purchaser and
such assignee pursuant to Section 10.04.
"Average Maturity" means, on any day, that period (expressed
in days) computed as of the last day of the calendar month relating to the Asset
Report most recently delivered hereunder, as the average days outstanding of the
Receivables in accordance with the following formula: the quotient of (a) the
Outstanding Balance of Receivables on the first day of such month plus the
Outstanding Balance of Receivables on the last day of the month, divided by two,
and then multiplied by 30; divided by (b) the aggregate amount of the original
principal balances of all Receivables which became Receivables during such
month.
"Bankruptcy Code" means the United States Bankruptcy Reform
Act of 1978 (11 U.S.C. xx.xx. 101, et seq.), as amended from time to time, or
any successor statute.
"Base Rate" means, on any day, a fluctuating rate of interest
per annum equal to the higher of (a) the per annum rate of interest announced
from time to time by BankBoston, N.A. at its head office in Boston,
Massachusetts as its "base rate", and (ii) 1/2 of one percent per annum above
the Federal Funds Rate.
"Benefit Plan" means any employee benefit plan as defined in
Section 3(3) of ERISA in respect of which the Seller or any ERISA Affiliate of
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 a day of the year other than a Saturday
or a Sunday on which (a) banks are required to be open in Xxx Xxxx Xxxx,
Xxxxxxx, Xxxxxxx and Boston, Massachusetts and (b) if the term "Business Day" is
used in connection with the Adjusted Eurodollar Rate, dealings in dollar
deposits are carried on in the London interbank market.
"Capital" means the sum of the amounts paid to the Seller for
the initial Purchase and in connection with each Capital Increase pursuant to
Section 2.02, reduced from time to time by any amounts paid by the Seller as a
reduction to Capital and any Collections received and distributed on account of
such Capital pursuant to Section 2.06; provided, however, that such Capital
shall not be reduced by any distribution of any portion of Collections if at any
time such distribution is rescinded or must be returned for any reason.
"Capital Increase" means any increase in the aggregate
outstanding Capital hereunder pursuant to Sections 2.01 and 2.02.
"Capital Limit" means, at any time, an amount equal to the
remainder of (a) the Eligible Receivables Balance at such time, minus (b) the
Aggregate Reserve at such time.
"Closing Date" means December 23, 1997.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor.
"Collection Account" has the meaning specified in Section 6.07
"Collection Account Bank" means the financial institution
maintaining the Collection Account, which initially shall be BankBoston, N.A.
"Collection Agent" means at any time the Person then
authorized pursuant to Article VI to service, administer and collect
Receivables.
"Collection Agent Fee" has the meaning assigned to that term
in Section 2.09(b).
"Collection Agent Fee Percentage" means, at any time, the per
annum rate used to calculated the Collection Agent Fee pursuant to Section
2.09(b),as set forth in the Asset Report most recently delivered to the Deal
Agent hereunder.
"Collection Agent Termination Event" means the occurrence of
any of the following:
(i) any Event of Termination;
(ii) a material failure on the part of the Collection Agent to
observe or perform any of its duties or obligations as Collection Agent under
this Agreement or as "Collection Agent" under the Originator Sale Agreement, as
determined by the Deal Agent in the exercise of its reasonable commercial
judgment and such failure shall continue uncured or unwaived for a period of 15
days after written notice thereof to the Collection Agent; or
(iii) in the event that the Collection Agent is Synthetic or
any of its Affiliates, Synthetic shall fail to comply at any time with any of
the provisions of Section 12.1 of the Revolving Credit Agreement, or any other
similar provisions of the Revolving Credit Agreement (including, without
limitation, any replacement or refinancing of the Revolving Credit Agreement)
which from time to time may contain financial covenants or related "Events of
Default" (and in the event that the Revolving Credit Agreement is canceled or
terminated (and not replaced or refinanced), or otherwise ceases to be in force
at any time hereafter, the foregoing provisions shall apply to the
above-referenced sections of the Revolving Credit Agreement, as such provisions
were in effect on the day prior to the day on which the Revolving Credit
Agreement was so canceled or terminated, or otherwise ceased to be in force),
and such failure to comply shall continue uncured or unwaived for a period of 30
days or more.
"Collection Date" means the date following the Termination
Date on which the aggregate outstanding Capital has been reduced to zero, the
Purchaser has received all Yield and other amounts due to it in connection with
this Agreement and the Deal Agent has received all amounts due to it in
connection with this Agreement.
"Collections" means, (a) with respect to any Receivable, all
cash collections and other cash proceeds of such Receivable, including, without
limitation, all cash proceeds of the Related Security with respect to such
Receivable, and any "Collection" of such Receivable deemed to have been received
pursuant to Section 2.07, and (b) any amounts paid to the Seller (or the Deal
Agent, the Collection Agent, the Purchaser or any assignees thereof) pursuant to
the terms of the Originator Sale Agreement.
"Commercial Paper" means the short-term promissory notes of
EagleFunding denominated in dollars, issued by EagleFunding in connection with
the transactions contemplated by the Facility Documents, including any portion
of such short-term promissory notes that are identified on the books and records
of EagleFunding as issued in respect of the transactions contemplated by the
Facility Documents.
"Concentration Limit" for any Obligor means at any time the
percentage of the aggregate Outstanding Balance of Eligible Receivables in
effect at such time, as follows: (a) for any single Obligor having an
indebtedness rating of at least "A-1" or its equivalent by each of S&P, Xxxxx'x
and DCR (if rated by DCR), there shall be no "Concentration Limit"; (b) for any
single Obligor having an indebtedness rating of at least "A-2" or its equivalent
by each of S&P, Xxxxx'x and DCR (if rated by DCR) (but not satisfying the
criteria set forth in clause (a) above), 10.0%; (c) for any single Obligor
having an indebtedness rating of at least "A-3" or its equivalent by each of
S&P, Xxxxx'x and DCR (if rated by DCR) (but not satisfying the criteria set
forth in either of clauses (a) or (b) above), 5.0%; and (d) any other single
Obligor, 2.0%; unless, a "Special Concentration Limit" has been determined for a
particular Obligor by the mutual agreement of the Deal Agent and the Seller, in
which case, such Special Concentration Limit shall apply; provided, however, the
Concentration Limit for any Obligor shall be calculated as if such Obligor and
all of such Obligor's Affiliates were one single Obligor. The parties hereto
agree that, as of the date hereof and unless otherwise agreed to by each of the
Deal Agent and the Seller, a "Special Concentration Limit" of 4.0% exists for
Xxxx Industries Inc. Any amendment or modification of the Concentration Limit
and the Special Concentration Limit shall not be effective absent written
confirmation by each Rating Agency then rating the Commercial Paper at the
request of EagleFunding in accordance with Section 10.01(c) of this Agreement.
"Contract" means an invoice issued by the Originator to a
Person, or an agreement between the Originator and a Person, in each case in
substantially the form of one of the forms set forth in Exhibit A or otherwise
acceptable to the Deal Agent, pursuant to or under which such Obligor shall be
obligated to make one or more payments to the Originator.
"Coverage Shortfall Event" means, at any time, the aggregate
Capital outstanding hereunder exceeds the lesser of (i) the Purchase Limit in
effect at such time or (ii) the Capital Limit in effect at such time.
"CP Dealer Fee" means, on any day, the fees payable to the
Dealer in respect of any Commercial Paper.
"CP Disruption Event" means the inability of EagleFunding, at
any time, whether as a result of a prohibition, a contractual restriction or any
other event or circumstance whatsoever, to raise funds through the issuance of
its commercial paper notes (whether or not constituting "Commercial Paper"
hereunder) in the United States commercial paper market.
"CP Rate" means, with respect to any Purchase Period for all
Capital allocated to such Purchase Period, the rate equivalent to the rate (or
if more than one rate, the weighted average of the rates) at which commercial
paper notes of EagleFunding having a term equal to such Purchase Period and to
be issued to fund or maintain the applicable Purchase by EagleFunding may be
sold by any placement agent or commercial paper dealer selected by EagleFunding,
as agreed between each such agent or dealer and EagleFunding and notified by
EagleFunding or such agent or dealer to the Deal Agent and the Collection Agent,
including an increment to such rate sufficient in amount to enable EagleFunding
to collect all amounts of CP Dealer Fees payable in respect of all such
commercial paper notes issued for the term of such Purchase Period; provided,
however, if the rate (or rates) as agreed between any such agent or dealer and
EagleFunding with regard to any Purchase Period for the applicable Purchase is a
discount rate (or rates), the "CP Rate" for such Purchase Period shall be the
rate (or if more than one rate, the weighted average of the rates) resulting
from converting such discount rate (or rates) to an interest-bearing equivalent
rate per annum.
"Credit and Collection Policy" means those credit and
collection policies and practices relating to Contracts and Receivables
described in Schedule II, as modified in compliance with this Agreement.
"Daily Settlement Report" has the meaning assigned to that
term in Section 5.01(c)(viii).
"DCR" means Duff & Xxxxxx Credit Rating Co., and any successor
thereto.
"Deal Agent's Account" means a special account (account number
24207) in the name of the Deal Agent (or for so long as EagleFunding is the
Purchaser, in the name of EagleFunding), maintained at Bankers Trust Company for
the benefit of the Deal Agent and the Purchaser.
"Dealer" means any dealer or placement agent in respect of the
Commercial Paper.
"Debt" of any Person means (a) indebtedness of such Person for
borrowed money, (b) obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) obligations of such Person to pay the
deferred purchase price of property or services beyond ordinary course of
business payment terms for trade payables, (d) obligations of such Person as
lessee under leases which shall have been or should be, in accordance with GAAP,
recorded as capital leases, (e) obligations secured by an Adverse Claim upon
property or assets owned by such Person, even though such Person has not assumed
or become liable for the payment of such obligations and (f) obligations of such
Person under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kinds referred to in clauses (a) through (e) above.
"Defaulted Receivable" means a Receivable (a) as to which any
payment, or part thereof, remains unpaid for more than 90 days from the original
due date for such payment, (b) as to which the Obligor thereof has taken any
action, or suffered any event to occur, of the type described in Section
7.01(f), or (c) which, consistent with the Credit and Collection Policy, has
been or should be written off the Seller's books as uncollectible.
"Delinquency Ratio" means, in respect of any calendar month,
the arithmetic average of the ratios (each expressed as a percentage) for each
of the three most recently ended calendar months, computed as of the last day of
each such month, by dividing
(a) the aggregate Outstanding Balance of all
Receivables that were 61-90 days past due as of the last day
of such calendar month plus (without duplication) the amount
of all Receivables which, consistent with the Credit and
Collection Policy, were or should have been written off the
books of the Seller during such month, by
(b) the sum of the aggregate Outstanding Balances of
all Receivables as of the last day of the fourth calendar
month next preceding the calendar month then ended.
"Dilution Factors" means, with respect to the Receivables, any
credits, rebates, freight charges, discounts, allowances, disputes, chargebacks,
returned or repossessed goods, inventory transfers, allowances for early
payments and other allowances or adjustments granted in accordance with the
Originator's and the Seller's usual practices.
"Dilution Ratio" means, in respect of any calendar month, the
arithmetic average of the ratios (each expressed as a percentage) for each of
the 12 most recently ended calendar months, computed as of the last day of each
such month, by dividing
(a) the aggregate reduction as a result of any of the Dilution
Factors in the aggregate original principal balance of the Receivables
during the period of one month then ended, by
(b) the aggregate original principal balances of all
Receivables which became Receivables during the calendar month next
preceding the calendar month then ended.
"Dilution Reserve" means, at any time, the product of (a) the
aggregate outstanding Capital at such time multiplied by (b) a fraction, the
numerator of which is the Dilution Reserve Percentage in effect at such time and
the denominator of which is the remainder of 1 minus the sum of the Dilution
Reserve Percentage, the Loss Reserve Percentage and the Yield Reserve
Percentage, each as in effect at such time.
"Dilution Reserve Percentage" means the ratio (expressed as a
percentage) computed as of the last day of each calendar month as the greater of
(a) 3.0% and (b) the Dilution Ratio for such month.
"Eligible Receivable" means, at any time, a Receivable:
(a) the Obligor of which is not an Affiliate of any of the
parties hereto, and is not government or a governmental subdivision or agency;
(b) which is not a Defaulted Receivable and with respect to which
no scheduled payment, or any part thereof, remains unpaid for more than
30 days from the original due date therefor, and the Obligor of which
is not the Obligor of any Defaulted Receivables in the aggregate amount
of 20% or more of the aggregate Outstanding Balance of all Receivables
of such Obligor;
(c) which arises under a Contract (i) the performance of which
has been completed by the Seller and by all other parties other than
the Obligor, (ii) that requires such Receivable to be paid in full
within 60 days of the original invoice date therefor (provided,
however, that at any time of determination hereunder, no more than 1.0%
of the Outstanding Balance of Purchased Receivables may have terms
which require payment in full within a number of days of the original
invoice date therefor of between 61 and 90, inclusive) and (iii) that
has been duly authorized and, together with such Receivable, is in full
force and effect and constitutes the legal, valid and binding
obligation of the Obligor of such Receivable, enforceable against such
Obligor in accordance with its terms and is not subject to any dispute,
offset, counterclaim or defense whatsoever;
(d) (i) which is an "account" within the meaning of Section
9-106 of the UCC of all applicable jurisdictions, (ii) which has been
invoiced by the Originator and as to which all performance and other
action required to be taken in connection therewith by the Originator
(and, if applicable, the Seller) for the Obligor has been so performed
or taken, (iii) is denominated and payable only in United States
dollars in the United States, (iv) no portion of which is payable on
account of sales taxes, and (v) in which the Originator can grant a
perfected security interest;
(e) which arises in the ordinary course of the Originator's
business in connection with a sale of goods within the United States;
(f) the assignment of which (including, without limitation,
the sale of an undivided percentage interest therein and the assignment
of any Related Security) does not contravene or conflict with any
applicable laws, rules or regulations or any contractual or other
restriction, limitation or encumbrance;
(g) which does not have an Adverse Claim filed against it and is
not otherwise subject to an Adverse Claim and has not been compromised,
adjusted or modified in any material respect (including by extension of
time of payment or the granting of any discounts, allowances or credits
(other than as stated on the invoice));
(h) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no party to the
Contract related thereto is in violation of any such law, rule or
regulation in any material respect;
(i) which satisfies, and has been originated in accordance with,
all applicable requirements of the Credit and Collection Policy;
(j) as to which the Deal Agent has not notified the Seller and
the Collection Agent that the Deal Agent has determined, in its
reasonable business judgement as detailed in such notice, that the
Obligor of such Receivable is an unreasonable risk;
(k) the Obligor of which is not a Person to whom the
Originator or any of its Affiliates owe any accounts payable or other
Debt and is otherwise not a Person in respect of which the Originator
maintains any contra accounts on its books and records; and
(l) with respect to which, (i) prior to the Purchase thereof,
Seller has a first priority ownership interest therein, free and clear
of any Adverse Claim, and (ii) from and after the Purchase thereof,
EagleFunding has a properly perfected first priority undivided
percentage ownership interest therein, free and clear of any Adverse
Claim.
"Eligible Receivables Balance" means, at any time, the
aggregate Outstanding Balance of Eligible Receivables which constitute Purchased
Receivables, minus the sum of, (a) in the case of each Obligor, the amount (if
any) by which the aggregate Outstanding Balance of any Eligible Receivables
owing by such Obligor and its Affiliates exceeds the Concentration Limit for
such Obligor, and (b) the excess of the Outstanding Balance of Purchased
Receivables which have payment terms of between 61 days and 90 days, inclusive,
over 1.0% of the Outstanding Balance of Purchased Receivables and (c) the excess
of the Outstanding Balance of Eligible Receivables in respect of which the
Obligor is not a resident of the United States or Canada over 2.0% of the
Outstanding Balance of all Eligible Receivables.
"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 (a) any corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Code) as the Seller; (b) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c) of the
Code) with the Seller or (c) a member of the same affiliated service group
(within the meaning of Section 414(m) of the Code) as the Seller, any
corporation described in clause (a) above or any trade or business described in
clause (b) above.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Disruption Event" means, with respect to all
Capital allocated to any Purchase Period, any of the following: (a) a
determination by the Purchaser that it would be contrary to law or to the
directive of any central bank or other governmental authority (whether or not
having the force of law) to obtain United States dollars in the London interbank
market to make, fund or maintain any Purchase for such Purchase Period, (b) the
failure of BankBoston, N.A. to furnish timely information for purposes of
determining the Adjusted Eurodollar Rate, (c) a determination by the Purchaser
that the rate at which deposits of United States dollars are being offered in
the London interbank market does not accurately reflect the cost to the
Purchaser of making, funding or maintaining any Purchase for such Purchase
Period or (d) the inability of the Purchaser to obtain United States dollars in
the London interbank market to make, fund or maintain any Purchase for such
Purchase Period.
"Eurodollar Reserve Percentage" means, for any day with
respect to a Purchase Period to which Capital has been allocated hereunder, the
maximum rate (expressed as a decimal) at which any lender subject thereto would
be required to maintain reserves under Regulation D of the Board of Governors of
the Federal Reserve System (or any successor or similar regulations relating to
such reserve requirements) against Eurocurrency Liabilities, if such liabilities
were outstanding. The Eurodollar Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in the maximum rate
described above.
"Event of Termination" has the meaning assigned to that term
in Section 7.01.
"Facility Documents" means this Agreement, the Lock- Box
Agreements, the Collection Account Agreement, the Originator Sale Agreement, the
Intercreditor Agreement, the Fee Letter, the Liquidity Agreement, the Liquidity
Security Agreement, and all other certificates, instruments, UCC financing
statements, reports, notices, agreements and documents executed or delivered
under or in connection with this Agreement, in each case as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
this Agreement.
"Federal Funds Rate" means, for any day, a fluctuating
interest rate per annum 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 which is a
Business Day, the average of the quotations for such day for such transactions
received by the Liquidity Agent from three Federal funds brokers of recognized
standing selected by it.
"Fee Letter" has the meaning assigned to that term in Section
2.09(a).
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, in each case consistently
applied.
"Indemnified Amounts" has the meaning assigned to that term in
Section 8.01.
"Indemnified Parties" has the meaning assigned to that term in
Section 8.01.
"Intercreditor Agreement" means that certain Intercreditor
Agreement, dated as of December 18, 1997, among BankBoston, N.A. (in its
capacity as "Agent" under the Revolving Credit Agreement), the Originator, the
Collection Agent, the Seller, the Purchaser and the Deal Agent, as the same may
be amended, restated, supplemented or otherwise modified or replaced, from time
to time thereafter.
"Investment" means, with respect to any Person, any direct or
indirect loan, advance or investment by such Person in any other Person, whether
by means of share purchase, capital contribution, loan or otherwise, excluding
the acquisition of Receivables and other Purchased Property (and interests
therein) pursuant to the Originator Sale Agreement and excluding commission,
travel and similar advances to officers, employees and directors made in the
ordinary course of business.
"Investment Company Act" means the Investment Company Act of
1940, as amended.
"IRS" shall mean the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Issuer" means EagleFunding and any other Purchaser whose
principal business consists of issuing commercial paper or other rated
securities to fund the acquisition and maintenance of interests in, or the
making of loans secured by a grant of security interests in, receivables,
accounts, instruments, chattel paper, general intangibles and other similar
assets.
"Liquidation Fee" means, for the Capital allocated to a
Purchase Period (computed without regard to any shortened duration of such
Purchase Period as a result of the occurrence of the Termination Date) during
which such Capital is reduced or the applicable Yield Rate for such Capital is
for any reason changed, the amount, if any, by which (a) the additional Yield
(calculated without taking into account any Liquidation Fee) which would have
accrued on the reduction of such Capital during such Purchase Period (as so
computed) if such reductions had remained as Capital or if the applicable Yield
Rate had remained unchanged, as the case may be, exceeds (b) the sum of (i)
Yield actually received by a Purchaser in respect of such Capital for such
Purchase Period and (ii) if applicable, the income, if any, received by such
Purchaser from such Purchaser's investing the proceeds of reductions of Capital.
"Liquidity Agent" means BankBoston, N.A., in its capacity as
"Liquidity Agent" under the Liquidity Agreement, together with any successor or
permitted assign in such capacity.
"Liquidity Agreement" means that certain Liquidity Agreement
dated as of even date herewith by and among EagleFunding, the financial
institutions party thereto from time to time as "Liquidity Providers," and the
Liquidity Agent, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"Liquidity Fee" means the fee payable by the Seller and
identified as the "Liquidity Fee" in the Fee Letter.
"Liquidity Fee Percentage" means, at any time, the per annum
rate used to calculate the "Liquidity Fee" under the Fee Letter, as in effect at
such time.
"Liquidity Providers" means the financial institutions party
to the Liquidity Agreement from time to time as "Liquidity Providers"
thereunder.
"Liquidity Security Agreement" means that certain Security
Agreement dated as of even date herewith by and among EagleFunding and Bankers
Trust Company, as "Collateral Agent" thereunder, as the same may be amended,
restated, supplemented or otherwise modified from time to time.
"Lock-Box" means a post office box to which Collections are
remitted for retrieval by a Lock-Box Bank and deposited by such Lock-Box Bank
into a Lock-Box Account.
"Lock-Box Account" means an account maintained for the purpose
of receiving Collections at a bank or other financial institution which has
executed a Lock-Box Agreement.
"Lock-Box Agreement" means an agreement, in substantially the
form of Exhibit B, among the Originator, the Seller, the Collection Agent and
the Deal Agent under the Receivables Purchase Agreement and a Lock-Box Bank.
"Lock-Box Bank" means any of the banks or other financial
institutions holding one or more Lock-Box Accounts.
"Loss Horizon Factor" means, as of any date, a ratio computed
by dividing (i) the aggregate Outstanding Balance of all Receivables acquired by
the Seller during the three most recently ended calendar months by (ii) the
Eligible Receivables Balance computed as of the last day of the most recently
ended calendar month.
"Loss Reserve" means, at any time, the product of aggregate
outstanding Capital at such time times a fraction, the numerator of which is the
Loss Reserve Percentage in effect at such time and the denominator of which is
the remainder of 1 minus the sum of the Dilution Reserve Percentage, the Loss
Reserve Percentage and the Yield Reserve Percentage, each as in effect at such
time.
"Loss Reserve Percentage" means, as of any date, the greatest of
(a) the product (stated as a percentage) of (i) a factor of
2.0, times (ii) the Loss Horizon Factor as of the last day of the most
recently ended calendar month, times (iii) the largest Loss Reserve
Ratio for any of the next preceding twelve calendar months, computed as
of the last day of each such month (including, without limitation, the
most recently ended calendar month);
(b) the quotient (stated as a percentage), computed as of the
last day of the most recently ended calendar month of
(i) the sum, for each of the four largest Obligors
described in clause (d) of the definition of the term
"Concentration Limit" (determined on the basis of the
aggregate amount of Outstanding Balances of Eligible
Receivables owing by such Obligors on such day), of the lesser
of (A) the aggregate amount of Outstanding Balances of
Eligible Receivables of such Obligor on such day, and (B) the
product of the Concentration Limit described in such clause
(d) and the aggregate Outstanding Balance of all Eligible
Receivables in effect at such time; divided by
(ii) the aggregate Outstanding Balance of all
Eligible Receivables in effect at such time;
(c) the quotient (stated as a percentage), computed as of the
last day of the most recently ended calendar month of
(i) the sum, for each of the two largest Obligors
described in clause (c) of the definition of the term
"Concentration Limit" (determined on the basis of the
aggregate amount of Outstanding Balances of Eligible
Receivables owing by such Obligors on such day), of the lesser
of (A) the aggregate amount of Outstanding Balance of Eligible
Receivables of such Obligor on such day, and (B) the product
of the Concentration Limit described in such clause (c) and
the aggregate Outstanding Balance of all Eligible Receivables
in effect at such time; divided by
(ii) the aggregate Outstanding Balance of all
Eligible Receivables in effect at such time; and
(d) the quotient (stated as a percentage), computed as of the
last day of the most recently ended calendar month of
(i) for the largest Obligor described in clause (b)
of the definition of the term "Concentration Limit"
(determined on the basis of the aggregate amount of
Outstanding Balances of Eligible Receivables owing by the
Obligors on such day), the lesser of (A) the aggregate
Outstanding Balance of Eligible Receivables of such Obligor on
such day, and (B) the product of the Concentration Limit
described in such clause (b) and the aggregate Outstanding
Balance of all Eligible Receivables in effect at such time;
divided by
(ii) the aggregate Outstanding Balance of all
Eligible Receivables in effect at such time.
"Loss Reserve Ratio" means, in respect of any calendar month,
the arithmetic average of the ratios (each expressed as a percentage) for each
of the three most recently ended calendar months, computed as of the last day of
each such month, by dividing
(a) the aggregate Outstanding Balance of all
Receivables that became Defaulted Receivables during such
month plus (without duplication) the amount of all Receivables
which were written off the books of the Seller during such
month, by
(b) the sum of the original principal balances of all
Receivables acquired by the Seller during the fifth calendar
month next preceding such month.
"Monthly Payment Date" means, with respect to any calendar
month, the tenth day of such month, or if such date is not a Business Day, the
next Business Day to occur thereafter.
"Moody's" means Xxxxx'x Investors Service, Inc., and any
successor thereto.
"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 Seller or any
ERISA Affiliate on behalf of its employees.
"Obligor" means a Person obligated to make payments pursuant
to a Contract.
"Originator" means Synthetic.
"Originator Sale Agreement" means the Receivables Purchase and
Sale Agreement, dated as of December 18, 1997, among the Originator, the Seller
and the Collection Agent, together with all instruments, documents and
agreements executed by the Originator in connection therewith, in each case as
the same may from time to time be amended, supplemented or otherwise modified in
accordance with the terms hereof.
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal balance thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any Person succeeding to the functions thereof.
"Permitted Investments" means (a) securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof having maturities of no more than 90 days from
the date of acquisition (or, if earlier, maturing no later than the next
occurring end of any Purchase Period); (b) time deposits and certificates of
deposit having maturities of no more than 90 days from the date of acquisition
(or, if earlier, maturing no later than the next occurring end of any Purchase
Period), maintained with or issued by any commercial bank having capital and
surplus in excess of $500,000,000 and having a short-term rating of not less
than P-1 or the equivalent thereof from Moody's, A-1 or the equivalent thereof
from S&P, and D-1 or the equivalent thereof from DCR (if rated by DCR); (c)
repurchase obligations for underlying securities of the types described in
clauses (a) or (b) above with a term of not more than ten days and maturing no
later than 90 days after the date of acquisition (or, if earlier, maturing no
later than the next occurring end of any Purchase Period); and (d) commercial
paper maturing within 90 days after the date of acquisition (or, if earlier,
maturing no later than the next occurring end of any Purchase Period) and having
a rating of not less than P-1 or the equivalent thereof from Moody's, A-1 or the
equivalent thereof from S&P, and D-1 or the equivalent thereof from DCR (if
rated by DCR).
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, government (or any agency or political subdivision
thereof) or other entity.
"Program Fee" means the fee payable by the Seller and
identified as the "Program Fee" in the Fee Letter.
"Program Fee Percentage" means, at any time, the per annum
rate used to calculate the "Program Fee" under the Fee Letter, as in effect at
such time.
"Purchase" means a purchase by the Purchaser of interests in
the Purchased Property from the Seller pursuant to Article II, including without
limitation, any such purchase in consideration of the remittance by the
Collection Agent to the Seller of Collections of Purchased Receivables pursuant
to Section 2.05.
"Purchase Limit" means, at any time, $40,000,000, as such
amount may be adjusted from time to time pursuant to Section 2.03, provided,
however, that at all times, on or after the Termination Date, the "Purchase
Limit" shall mean the aggregate outstanding Capital.
"Purchase Period" for any outstanding Capital means (a) if
Yield in respect of all or any part thereof is computed by reference to the CP
Rate, a period of 1 to and including 60 days, (b) if Yield in respect thereof is
computed by reference to the Adjusted Eurodollar Rate, a period of one, two or
three months and (c) if Yield in respect thereof is computed at the Adjusted
Base Rate, a period of 1 to and including 31 days, in each case, as determined
pursuant to Section 2.04.
"Purchased Interest" means the undivided percentage ownership
interest in the Purchased Property conveyed by Seller to the Purchaser under
this Agreement, which percentage interest shall be computed as of the close of
business on each Business Day as a fraction, the numerator of which equals
Capital plus the Aggregate Reserves and the denominator of which equals the
Eligible Receivables Balance at such time. The Purchased Interest shall be
determined from time to time in accordance with the provisions of Section
2.05(c).
"Purchased Property" means (a) at any time prior to the
Termination Date, (i) all then outstanding Receivables, (ii) all Related
Security relating to such Receivables and (iii) all Collections with respect to,
and other proceeds of, such Receivables and (b) at all times on and after the
Termination Date, (i) all Receivables outstanding as of the close of business of
the Collection Agent on the date preceding the Termination Date (including any
interest or finance charges accruing before or after the Termination Date which
relate to any Receivable outstanding as of the close of business on the day
preceding the Termination Date), (ii) all Related Security related to such
Receivables and (iii) all Collections with respect to, and other proceeds of,
such Receivables.
"Purchased Receivable" means any Receivable included in the
Purchased Property and in which a Purchased Interest has been purchased under
this Agreement.
"Purchaser" means EagleFunding or any other Person that
agrees, pursuant to an Assignment and Acceptance, to purchase an interest in
this Agreement and in the Purchased Interest pursuant to Sections 2.02 or 2.05
of this Agreement, and to assume the obligations of the EagleFunding under this
Agreement.
"Rate Variance Factor" means that number which reflects the
Deal Agent's reasonable estimate of the potential variance in selected interest
rates over a period of time designated by the Deal Agent, as shall be computed
from time to time by the Deal Agent. The Deal Agent shall notify the Collection
Agent in writing of the Rate Variance Factor in effect from time to time.
"Rating Agency" has the meaning assigned to such term in
Section 10.01 of this Agreement.
"Receivable" means the indebtedness of any Obligor under a
Contract whether constituting an account, chattel paper, instrument, general
intangible or any other type of property, (a) which arises from a sale of
merchandise or the performance of services by the Originator and (b) in which
the Seller has acquired an interest pursuant to the Originator Sale Agreement.
Each Receivable shall include the right to payment of any interest or finance
charges and other obligations of such Obligor with respect thereto.
"Records" means all Contracts and other documents, books,
records and other information (including without limitation, computer programs,
tapes, disks, punch cards, data processing software and related property and
rights) maintained with respect to Receivables and the related Obligors which
the Seller has itself generated, in which the Seller has acquired an interest
pursuant to the Originator Sale Agreement or in which the Seller has otherwise
obtained an interest.
"Reinvestment Termination Date" means that Business Day which
the Seller designates as the Reinvestment Termination Date by notice to the Deal
Agent at least 30 Business Days prior to such Business Day or, if any of the
conditions precedent in Section 3.02 are not satisfied, that Business Day which
the Deal Agent designates as the Reinvestment Termination Date by notice to the
Seller at least one Business Day prior to such Business Day.
"Related Security" means with respect to any Receivable:
(a) all of the Seller's interest in the merchandise (including
returned, repossessed or foreclosed merchandise), if any, relating to
the sale which gave rise to such Receivable;
(b) all other Adverse Claims and property subject thereto from
time to time purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise;
(c) the assignment to the Deal Agent, for the benefit of the
Purchaser, of all UCC financing statements covering any collateral
securing payment of such Receivable;
(d) all guarantees, indemnities, warranties, letters of
credit, insurance policies and proceeds and premium refunds thereof and
other agreements or arrangements of whatever character from time to
time supporting or securing payment of such Receivable whether pursuant
to the Contract related to such Receivable or otherwise;
(e) all Records;
(f) all of the Seller's right and title to, and interest in,
the Originator Sale Agreement and the assignment to the Deal Agent of
all UCC financing statements filed by the Seller against the Originator
under or in connection with the Originator Sale Agreement; and
(g) all proceeds of the foregoing.
"Revolving Credit Agreement" means that certain Loan and
Security Agreement dated as of even date herewith by and among the Originator,
the financial institutions parties thereto as "Lenders" and BankBoston, N.A., as
agent to the Lenders, as the same may be amended, restated, supplemented,
replaced or otherwise modified from time to time, any successor agreement, and
any agreement pursuant to which the Debt issued under any such "Revolving Credit
Agreement" is refinanced.
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"Stop Event" means any of the following events:
(a) An Event of Termination;
(b) A regulatory, tax or accounting body has ordered that the
activities of the Purchaser, or any Affiliate of the Purchaser,
contemplated hereby be terminated or, as a result of any other event or
circumstance, the activities of the Purchaser contemplated hereby may
reasonably be expected to cause the Purchaser, the Person then acting
as the administrator or the manager for the Purchaser (if any), or any
of their respective Affiliates to suffer materially adverse regulatory,
accounting or tax consequences.
"Termination Date" means the earliest of (a) the Reinvestment
Termination Date, (b) the date of termination of the Purchase Limit pursuant to
Section 2.03, (c) the date of the declaration or automatic occurrence of the
Termination Date pursuant to Section 7.01, (d) the date on which some or all of
the "Liquidity Commitments" under the Liquidity Agreement shall cease to be
effective or shall terminate without renewal, and (e) December 18, 2002.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
"United States" means the United States of America.
"Yield" means, for all Capital allocated to any Purchase
Period during any such Purchase Period, the product of
YRT x C x ED
360
where:
C = the Capital allocated to such Purchase Period,
ED = the actual number of days elapsed during such Purchase Period, and
YRT = the Yield Rate for such Purchase Period;
provided, however that (a) no provision of this Agreement shall require the
payment or permit the collection of Yield in excess of the maximum permitted by
applicable law and (b) Yield shall not be considered paid by any distribution if
at any time such distribution is rescinded or must otherwise be returned for any
reason.
"Yield Rate" means, for any Purchase Period for all Capital
allocated to such Purchase Period:
(a) to the extent a Purchaser will be funding the applicable
Purchase on the first day of such Purchase Period through the issuance
of commercial paper, a rate equal to the CP Rate for such Purchase
Period, and
(b) to the extent a Purchaser will not be funding the
applicable Purchase on the first day of such Purchase Period through
the issuance of commercial paper, a rate equal to the Alternative Rate
for such Purchase Period or such other rate as the Deal Agent and the
Seller shall agree to in writing.
"Yield Reserve" means at any time an amount equal to the sum
of (a) the product of (i) the aggregate outstanding Capital at such time times
(ii) a rate equal to the sum of (v) the Liquidity Fee Percentage at such time,
plus (w) the Program Fee Percentage at such time, plus (x) the Collection Agent
Fee Percentage at such time, plus (y) the Applicable Base Rate Margin, plus (z)
the product of (1) the Rate Variance Factor times (2) the Base Rate then in
effect, times (iii) a fraction, the numerator of which equals a factor of 2.0
times the Average Maturity at such time and the denominator of which equals 360
plus (b) all accrued and unpaid Yield, Liquidity Fee, Program Fee and Collection
Agent Fee minus any Collections of Purchased Receivables set aside for payment
thereof pursuant to Section 2.05(a).
"Yield Reserve Percentage" means at any time an amount equal
to a ratio (expressed as a percentage) computed by dividing (i) the Yield
Reserve on such day by (ii) the Eligible Receivables Balance on such day.
SECTION 1.02. 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 1.03. Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding."
ARTICLE II
THE PURCHASE FACILITY.
SECTION 2.01. Purchases of Purchased Interests; Stop Events.
(a) On the terms and conditions hereinafter set forth, the Purchaser shall
purchase Purchased Interests from the Seller and make Capital Increases from
time to time during the period from the date hereof until the Termination Date.
Under no circumstances shall the Purchaser make the initial Purchase or any
Capital Increase if, after giving effect to such Purchase or Capital Increase, a
Coverage Shortfall Event would exist or the Purchased Interest would exceed
100%.
(b) Notwithstanding anything to the contrary herein, upon the
occurrence and during the continuation of a Stop Event, the Purchaser shall not
issue Commercial Paper in order to fund or maintain its investments in the
Purchased Interests. In addition, after the occurrence of a Stop Event triggered
by Section 7.01(n), the Purchaser shall not issue Commercial Paper without
written confirmation from each Rating Agency then rating the Commercial Paper at
the request of EagleFunding, that the ratings of such Commercial Paper will not
be reduced or withdrawn as a result thereof. Each of Seller and Collection Agent
agrees to give the Deal Agent prompt written notice of the occurrence of any
Stop Event. It is expressly understood that the occurrence of a Stop Event
(other than a Stop Event arising as a result of an Event of Termination) shall
not relieve the Purchaser of its obligations to fund or maintain investments in
Purchased Interests.
(c) If at any time a court characterizes the transactions
hereunder as loans by the Purchaser to the Seller, then the Seller hereby
pledges, grants a security interest in and assigns to the Deal Agent, for the
benefit of the Purchaser, all of its right and title to and interest in the
Purchased Property, including the Purchased Receivables, Related Security and
Collections related thereto, as security for such loans and for the payment and
performance of all obligations of the Seller hereunder (including, without
limitation, its indemnification obligations under Article VIII). The security
interest granted pursuant to the foregoing sentence shall be released and
terminated upon the occurrence of the Collection Date.
SECTION 2.02. The Initial Purchase, Subsequent Purchases and
Capital Increases. (a) Subject to the conditions described in Section 2.01(a),
the initial Purchase and each Capital Increase shall be made in accordance with
the procedures described in Section 2.02(b). After the date of the initial
Purchase, until the occurrence of the Termination Date, the Purchaser shall on
each day make subsequent Purchases of Purchased Property in accordance with
Section 2.05 and the Purchased Interest shall be automatically recalculated in
accordance with Section 2.05(c). Subsequent Purchases of Purchased Property and
Capital Increases are made in consideration of the Purchaser's agreement to
permit the Collection Agent to remit Collections of Purchased Property to the
Seller in accordance with Section 2.05. After the Collection Date has occurred,
the Purchaser and the Deal Agent, in accordance with their respective interests,
shall assign and transfer to the Seller their respective remaining interest in
the Purchased Property to the Seller in accordance with Section 2.06 free and
clear of any Adverse Claim resulting or arising from any act or omission by the
Purchaser or the Deal Agent, but without any other representation or warranty,
express or implied.
(b) The initial Purchase shall be made on at least three
Business Days' notice from the Seller to the Deal Agent. Each subsequent Capital
Increase shall be made on notice from the Seller to the Deal Agent received by
the Deal Agent prior to 10:00 a.m. (Boston, Massachusetts time) on the Business
Day next preceding the proposed Business Day of such Capital Increase; provided,
however, that if the Yield to accrue with respect to such Capital Increase is
computed by reference to the Adjusted Eurodollar Rate, such notice must be
received by the Deal Agent prior to 10:00 a.m. (Boston, Massachusetts time) on
the third Business Day next preceding the date of such Capital Increase. Each
such notice shall specify (i) the aggregate amount of such Purchase or Capital
Increase, which shall be in an amount equal to $250,000 or an integral multiple
thereof (unless Yield is to accrue with respect to such Purchase or Capital
Increase by reference to the Adjusted Eurodollar Rate, in which case, the
minimum amount of such Purchase or Capital Increase shall be $1,000,000), (ii)
the date of such Purchase or Capital Increase, (iii) the duration of the initial
Purchase Periods for the Capital arising as a result of such Purchase or Capital
Increase, and (iv) the rate at which Yield is to accrue on such Capital for such
Purchase Periods. The Deal Agent shall notify the Seller whether the duration
and applicable rates of the initial Purchase Periods described in such notice
are acceptable or, if not acceptable, the Deal Agent shall advise the Seller of
such Purchase Periods and rates as may be acceptable. On the date of such
Purchase or Capital Increase, as the case may be, the Purchaser shall, upon
satisfaction of the applicable conditions set forth in Article III, make
available to the Seller in same day funds, at Account No. 00000000, Synthetic
Funding Corporation Operating Account at BankBoston, N.A., the amount of such
initial Purchase or Capital Increase, as the case may be.
(c) It is expressly acknowledged that each Purchase or Capital
Increase hereunder shall be made without recourse to the Seller; provided,
however, that the Seller shall be liable to the Deal Agent and the Purchaser (i)
for all representations, warranties, covenants and indemnities made hereunder,
(ii) for all obligations to remit any deemed Collections of Purchased
Receivables pursuant to Section 2.07, and (iii) for all fees, costs, expenses,
taxes and other indemnifications owed under this Agreement.
SECTION 2.03. Termination or Reduction of the Purchase Limit.
The Seller may, upon at least three Business Days' notice to the Deal Agent,
terminate in whole or reduce in part the portion of the Purchase Limit that
exceeds the sum of the aggregate Capital; provided, however, that each partial
reduction of the Purchase Limit shall be in an aggregate amount equal to
$5,000,000 or an integral multiple thereof.
SECTION 2.04. Selection of Purchase Periods. At all times
hereafter until the Termination Date, the Seller shall, subject to the Deal
Agent's and the Purchaser's approval and the limitations described below, select
(a) Purchase Periods and allocate a portion of the outstanding Capital to each
selected Purchase Period, so that the outstanding Capital is at all times
allocated to a Purchase Period and (b) Yield Rates to apply to such Capital for
such Purchase Periods. The initial Purchase Period(s) and Yield Rate(s)
applicable to the Capital arising as a result of the initial Purchase or any
Capital Increase shall be specified in the notice relating to the Purchase or
Capital Increase described in Section 2.02(b). Each subsequent Purchase Period
shall commence on the last day of the immediately preceding Purchase Period, and
the duration of and Yield Rate applicable to such subsequent Purchase Period
shall be such as the Seller shall select and the Deal Agent shall approve on
notice from the Seller received by the Deal Agent (including notice by
telephone, confirmed in writing) not later than 11:00 A.M. (Boston,
Massachusetts time) on the Business Day next preceding such last day, except
that (a) if the Deal Agent shall not have received such notice before 11:00 A.M.
(Boston, Massachusetts time) or the Deal Agent and the Seller shall not have so
mutually agreed before 12:30 P.M. (Boston, Massachusetts time) on the Business
Day next preceding such last day, such Purchase Period shall be one day and the
applicable Yield Rate shall be the Adjusted Base Rate and (b) if the Seller is
requesting that Yield accrue at the Adjusted Eurodollar Rate for such Purchase
Period, such notice must be received by the Deal Agent no later than 11:00 A.M.
(Boston, Massachusetts time) on the third Business Day prior to such last day.
Any Purchase Period which would otherwise end on a day which is not a Business
Day shall be extended to the next succeeding Business Day; provided, however,
that if Yield in respect of such Purchase Period is computed by reference to the
Adjusted Eurodollar Rate, and such next succeeding Business Day is in the next
calendar month, then such Purchase Period shall end on the next preceding
Business Day. In addition, whenever any Purchase Period as to which Yield
accrues at the Adjusted Eurodollar Rate commences on the last Business Day in a
month or on a day for which there is no numerically corresponding day in the
month in which such Purchase Period ends, the last day of such Purchase Period
shall occur on the last Business Day of the month in which such Purchase Period
ends. Furthermore, if a CP Disruption Event shall have occurred and be
continuing, the Purchaser, or the Deal Agent on its behalf, may, upon notice to
the Seller, terminate any Purchase Period then in effect if the Purchaser has
funded the Capital allocated to such Purchase Period by issuing its commercial
paper notes. Any Purchase Period which commences before the Termination Date and
would otherwise end on a date occurring after the Termination Date shall end on
the Termination Date. On or after the Termination Date, the Deal Agent shall
have the right to allocate outstanding Capital to Purchase Periods of such
duration as shall be selected by the Deal Agent. The Purchaser shall, on the
first day of each Purchase Period, notify the Deal Agent of the Yield Rate for
the Capital allocated to such Purchase Period.
SECTION 2.05. Non-Liquidation Settlement Procedures. (a) On
each day prior to the Termination Date, the Collection Agent shall cause all
Collections received by it or deposited in the Lock-Box Accounts to be
transferred in same day funds to the Collection Account and shall instruct the
Collection Account Bank: (i) out of the percentage interest representing the
Purchased Interest in Collections of Purchased Receivables received on such day,
to set aside and hold in trust in the Collection Account, for the Purchaser, an
amount equal to the Yield, Program Fee, Liquidity Fee and Collection Agent Fee
accrued through such day and not so previously set aside, (ii) on each Business
Day occurring in the week prior to the date on which the Administrative Fee is
payable, out of the percentage interest representing the Purchased Interest in
Collections of Purchased Receivables received on such day, to set aside and hold
in trust in the Collection Account, for the Deal Agent, an amount equal to the
Administrative Fee to be so paid, and (iii) except as otherwise required under
Section 2.05(b) below, to reinvest the remainder of such Collections in
Purchased Interests by paying such Collections to the Seller. Each such payment
shall constitute a Purchase by the Purchaser of Purchased Interests in all
Purchased Property not previously purchased hereunder, as such Purchased
Interest is recomputed pursuant to Section 2.05(c) below, it being agreed that
such Purchased Property shall, to the extent of the Purchased Interest,
automatically become the property of the Purchaser when the Seller acquires an
interest in such new Purchased Property from the Originator. On the last day of
each Purchase Period to occur prior to the Termination Date, the Collection
Agent shall deposit to the Deal Agent's Account the amounts in respect of Yield
set aside as described in clause (i) of the first sentence of this Section 2.05.
On each Monthly Payment Date to occur prior to the Termination Date, the
Collection Agent shall deposit to the Deal Agent's Account the amounts in
respect of Program Fee, Liquidity Fee and Collection Agent Fee set aside as
described in clause (i) of the first sentence of this Section 2.05. On the
Business Day prior to the date on which the Administrative Fee is due and
payable under the Fee Letter, the Collection Agent shall deposit to the Deal
Agent's Account the amounts in respect of the Administrative Fee set aside as
described in clause (ii) of the first sentence of this Section 2.05. Upon
receipt of such funds by the Deal Agent, the Deal Agent shall distribute them
first, to the Purchaser, on the next succeeding last day of a Purchase Period,
in full payment of the accrued and unpaid Yield for such Purchase Period,
second, to the Purchaser, on the next succeeding Monthly Payment Date, in full
payment of the accrued and unpaid Program Fee for the related calendar month,
third, to the Purchaser (or to the Liquidity Agent on behalf of the Purchaser),
on the next succeeding Monthly Payment Date, in full payment of the accrued and
unpaid Liquidity Fee for the related calendar month, fourth, to the Deal Agent,
on the next succeeding date on which the Administrative Fee is payable under the
Fee Letter, in full payment of the Administrative Fee for the following year,
and fifth, to the Collection Agent, on the next succeeding Monthly Payment Date,
in full payment of any accrued and unpaid Collection Agent Fee payable with
respect to the Purchased Receivables for the related calendar month.
(b) Notwithstanding anything to the contrary contained in this
Section 2.05 or any other provision in this Agreement, if, on any Business Day
prior to the Termination Date a Coverage Shortfall Event exists, then the Seller
shall remit to the Deal Agent, prior to any reinvestment of funds in Purchased
Interests and in any event no later than the close of business of the Deal Agent
on the third succeeding Business Day, a payment (to be applied by the Deal Agent
to outstanding Capital allocated to Purchase Periods selected by the Deal Agent,
in its sole discretion) in such amount as may be necessary to reduce outstanding
Capital so that a Coverage Shortfall Event no longer exists.
(c) The Purchased Interest shall be initially computed on the
date of the initial Purchase hereunder. Thereafter until the Termination Date,
the Purchased Interest shall be automatically recomputed (or deemed to be
recomputed) on each Business Day and concurrently with each Capital Increase
based on the aggregate Capital then outstanding and on the Eligible Receivables
Balance and Aggregate Reserves as computed for such day. From and after the
Termination Date, the Purchased Interest, as computed (or deemed recomputed) as
of the close of business on the day immediately preceding the Termination Date,
shall remain constant until the Collection Date, on which date the Purchased
Interest shall become zero.
SECTION 2.06. Liquidation Settlement Procedures.
(a) On the Termination Date and on each Business Day
thereafter, the Collection Agent shall segregate, set aside and hold in trust
for the Purchaser, in the Collection Account, the percentage interest
representing the Purchased Interest in Collections of Purchased Receivables
received on such day.
(b) On the Termination Date and on each Business Day
thereafter, the amounts set aside in the Collection Account in accordance with
clause (a) above shall be withdrawn from the Collection Account solely upon
direction of the Deal Agent to be applied in the following order of priority;
(i) (A) First, to pay any accrued and unpaid Collection Agent
Fee (if the Collection Agent is a party other than the Originator or an
Affiliate thereof) which is then due and payable, and (B) second, to be
retained in the Collection Account to the extent of any daily accrued
and unpaid amounts of such Collection Agent Fee which are not then due
and payable, until the next relevant payment date therefor, and not to
be applied to any of the following items;
(ii)(A) First, to pay accrued and unpaid Yield which is then
due and payable, and (B) second, to be retained in the Collection
Account to the extent of any accrued and unpaid amounts of such Yield
which are not then due and payable, and not to be applied to any of the
following items;
(iii)(A) First, to pay all Capital then outstanding relating
to any Yield which is then due and payable, and (B) second, to be
retained in the Collection Account to the extent of any Capital
remaining outstanding;
(iv)(A) First, to pay accrued and unpaid Liquidity Fee which
is then due and payable, and (B) second, to be retained in the
Collection Account to the extent of any accrued and unpaid amounts of
such Liquidity Fee which are not then due and payable, and not to be
applied to any of the following items;
(v)(A) First, to pay accrued and unpaid Program Fee which is
then due and payable, and (B) second, to be retained in the Collection
Account to the extent of any accrued and unpaid amounts of such Program
Fee which are not then due and payable, and not to be applied to any of
the following items;
(vi) (A) First, to pay any Administrative Fee which is then
due and payable, and (B) second, to be retained in the Collection
Account to the extent of the Administrative Fee payable in respect of
the next succeeding annual period, until the next relevant payment date
therefor, and not to be applied to any of the following items;
(vii) (A) First, to pay the portion of any other accrued and unpaid
obligations which have not been paid pursuant to clauses (i) through
(vi) above and which are then due and payable by the Seller to the
Purchaser or the Deal Agent under this Agreement or any of the other
Facility Documents, and (B) second, to be retained in the Collection
Account to the extent of any accrued and unpaid amounts of such
obligations which are not then due and payable, until the next relevant
payment date therefor, and not to be applied to any of the following
items;
(viii) (A) First, to pay any accrued and unpaid Collection Agent Fee
(if the Collection Agent is the Originator or an Affiliate thereof)
which is then due and payable, and (B) second, to be retained in the
Collection Account to the extent of any accrued and unpaid amounts of
such Collection Agent Fee which are not then due and payable, until the
next relevant payment date therefor.
Following the Collection Date, the Collection Agent shall pay to the Seller any
remaining Collections set aside and held by the Collection Agent pursuant to
clause (a) of this Section 2.06.
(c) If at any time on or after the Termination Date, the Deal
Agent or the Seller determines that as of the close of business on the day
immediately preceding the Termination Date the outstanding amount of Capital was
greater than the lesser of (i) the Purchase Limit, or (ii) the Capital Limit,
then the Seller shall immediately pay to the Deal Agent, for the benefit of the
Purchaser, the amount (to be applied against Capital) which would have been
required to make the outstanding amount of Capital equal to the lesser of (i)
the Purchase Limit, or (ii) the Capital Limit on or as of the close of business
on the date immediately preceding the Termination Date.
SECTION 2.07. Special Settlement Procedures. If on any day the
Outstanding Balance of any Purchased Receivable is either (a) reduced or
adjusted as a result of any defective, rejected, returned, repossessed or
foreclosed merchandise, any defective or rejected services, any failure to
provide services, any discount, rebate or any other adjustment made or performed
by the Seller or any other Person (including, without limitation, those
described in the definition of "Dilution Factors") or (b) reduced or canceled as
a result of a setoff in respect of any claim by the Obligor thereof against the
Originator, the Seller or any other Person (whether such claim arises out of the
same or a related transaction or an unrelated transaction), the Seller shall be
deemed to have received on such day a Collection of such Purchased Receivable in
the amount of such reduction, cancellation or adjustment. If on any day any of
the representations or warranties in Section 4.01(h) is no longer true with
respect to a Purchased Receivable or the Seller discovers or is notified that a
Purchased Receivable was not an Eligible Receivable on the day it was purchased,
the Seller shall be deemed to have received on such day a Collection of such
Purchased Receivable in full. If on any day the representation and warranty in
Section 4.01(i) is no longer true the Seller shall, in accordance with Section
2.05(b) and/or 2.06(c), immediately pay to the Deal Agent, for the benefit of
the Purchaser, an amount sufficient to make such representation true and
accurate.
SECTION 2.08. Payments and Computations, Etc. (a) All amounts
to be paid or deposited by the Seller or the Collection Agent hereunder shall be
paid or deposited in accordance with the terms hereof no later than 11:00 A.M.
(Boston, Massachusetts time) on the day when due in lawful money of the United
States in immediately available funds to the Deal Agent's Account. The Seller
shall, to the extent permitted by law, pay to the Deal Agent interest on all
amounts not paid or deposited when due hereunder (whether owing by the Seller
individually or by the Collection Agent) at 2.0% per annum above the Adjusted
Base Rate, payable on demand; provided, however, that such interest rate shall
not at any time exceed the maximum rate permitted by applicable law. Such
interest shall be retained by the Deal Agent except to the extent that such
failure to make a timely payment or deposit has continued beyond the date for
distribution by the Deal Agent of such overdue amount to the Purchaser, in which
case such interest accruing after such date shall be for the account of, and
distributed by the Deal Agent to the Purchaser. All computations of interest and
all computations of Yield, Collection Agent Fee, Program Fee, Liquidation Fee
and other 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.
(b) Whenever any payment hereunder shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of Yield, interest or any fee payable
hereunder, as the case may be; provided, however, that, if such extension would
cause payment of Yield on or Capital in respect of any Purchased Property on
which Yield accrues at the Adjusted Eurodollar Rate to be made in the next
following month, such payment shall be made on the next preceding Business Day.
(c) If any Purchase or Capital Increase requested by the
Seller and approved by the Purchaser and the Deal Agent pursuant to Section 2.02
or any selection of a subsequent Purchase Period for any Capital requested by
the Seller and approved by the Deal Agent pursuant to Section 2.05 is not for
any reason other than the act or omission of Purchaser contrary to this
Agreement made or effectuated, as the case may be, on the date specified
therefor, the Seller shall indemnify the Purchaser against any loss, cost or
expense incurred by the Purchaser, including, without limitation, any loss
(including loss of anticipated profits, net of anticipated profits in the
reemployment of such funds in the manner determined by the Purchaser), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by the Purchaser to fund or maintain such Purchase or
Capital Increase, as the case may be, during such Purchase Period.
SECTION 2.09. Fees. (a) The Seller shall pay to the Purchaser
(either directly or through the Deal Agent) and to the Deal Agent certain fees
in the amounts and on the dates set forth in a fee letter executed among the
Seller, the Purchaser and the Deal Agent, dated on or about the date hereof (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Fee Letter").
(b) The Purchaser shall pay to the Collection Agent a
collection fee (the "Collection Agent Fee") of 1% per annum on the average daily
amount of the Outstanding Balance of Purchased Receivables, from the date hereof
until the Collection Date, payable on the last day of each Purchase Period to
which such Capital is allocated; provided, however, that such fee shall be
payable only from Collections pursuant to, and subject to the priority of
payment set forth in, Sections 2.05 and 2.06; and provided, further, that, upon
three Business Days' notice to the Deal Agent, the Collection Agent may (if not
Synthetic or an Affiliate thereof), elect to be paid, as such fee, another
percentage per annum on the average daily amount of outstanding Capital, but in
no event shall the Collection Agent Fee payable in respect of any month after
the date any such election is made exceed 110% of the reasonable and appropriate
costs and expenses of the Collection Agent incurred during such month.
(c) The Seller shall pay to the Deal Agent, written two
Business Days after the Deal Agent's written demand therefor, for the benefit of
the Purchaser, the Liquidation Fee relating to the Purchased Property.
SECTION 2.10. Increased Costs; Capital Adequacy; Illegality.
(a) If either (i) the introduction of or any change (including, without
limitation, any change by way of imposition or increase of reserve requirements)
in any law, regulation, treaty or official directive, or in the interpretation
or application thereof by any central bank or other governmental agency or
authority charged with the administration thereof (whether or not having the
force of law), or (ii) the compliance by the Deal Agent, the Purchaser or any
affiliate of either thereof (each of which, an "Affected Party") with any
guideline or request from any central bank or other governmental agency or
authority (whether or not having the force of law), (A) shall subject an
Affected Party to any tax (except for taxes on the overall net income of such
Affected Party imposed by the United States of America or any political
subdivision thereof), duty or other charge with respect to the Purchased
Property, or any right or obligation to make Purchases hereunder, or on any
payment made hereunder or (B) shall impose, modify or deem applicable any
reserve requirement (including, without limitation, any reserve requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
any reserve requirement, if any, included in the determination of Yield),
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Affected Party or (C) shall impose
any other condition affecting the Purchased Property or the Purchaser's rights
or obligations hereunder, the result of which is to increase the cost to any
Affected Party or to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement, then within ten days after demand by such
Affected Party (which demand shall be accompanied by a statement setting forth
the basis for such demand), the Seller shall pay directly to such Affected Party
such additional amount or amounts as will compensate such Affected Party for
such additional or increased cost incurred or such reduction suffered; provided,
however, that no Affected Party shall be entitled to charge, nor shall the
Seller be obligated to pay, any such amount relating to a period more than 90
days prior to the date on which such statement is presented.
(b) If either (i) the introduction of or any change
(including, without limitation, any change by way of imposition or increase of
reserve requirements) in any law, regulation, treaty or official directive, or
in the interpretation or application thereof, in each case occurring after the
date hereof, by any central bank or other governmental agency or authority
charged with the administration thereof (whether or not having the force of
law), or (ii) the compliance by an Affected Party with any guideline or request
from any central bank or other governmental agency or authority (whether or not
having the force of law) in each case promulgated after the date hereof,
including, without limitation, compliance by an Affected Party with any request
or directive regarding capital adequacy, has or would have the effect of
reducing the rate of return on the capital of any Affected Party as a
consequence of its obligations hereunder or otherwise arising in connection
herewith to a level below that which any such Affected Party could have achieved
but for such introduction, change or compliance (taking into consideration the
policies of such Affected Party with respect to capital adequacy and assuming
full utilization of such Affected Party's capital) by an amount deemed by such
Affected Party to be material, then from time to time, within ten days after
demand by such Affected Party (which demand shall be accompanied by a statement
setting forth the basis for such demand), the Seller shall pay directly to such
Affected Party such additional amount or amounts as will compensate such
Affected Party for such reduction; provided, however, that no Affected Party
shall be entitled to charge, nor shall the Seller be obligated to pay, any such
amount relating to a period more than 90 days prior to the date on which such
statement is presented.
(c) If as a result of any event or circumstance similar to
those described in Section 2.10(a) or 2.10(b), any Affected Party is required to
compensate a bank or other financial institution providing liquidity support,
credit enhancement or other similar support to such Affected Party in connection
with this Agreement or the funding or maintenance of Purchases hereunder, then
within ten days after demand by such Affected Party, the Seller shall pay to
such Affected Party such additional amount or amounts as may be necessary to
reimburse such Affected Party for any amounts to be paid by it.
(d) In determining any amount provided for in this Section
2.10, the Affected Party may use any reasonable averaging and attribution
methods. Any Affected Party making a claim under this Section 2.10 shall submit
to the Seller a certificate as to the calculation of such additional or
increased cost or reduction, which certificate shall be conclusive absent
manifest error.
(e) If the Purchaser shall notify the Deal Agent that a
Eurodollar Disruption Event as described in clause (a) of the definition of
"Eurodollar Disruption Event" has occurred, the Deal Agent shall in turn so
notify the Seller, whereupon all Capital in respect of which Yield accrues at
the Adjusted Eurodollar Rate for the then current Purchase Period shall
immediately be converted into Capital in respect of which Yield accrues at the
Adjusted Base Rate for the remainder of such Purchase Period.
(f) Without prejudice to the survival of any other agreement
of the Seller hereunder, the agreements and obligations of the Seller contained
in this Section 2.10 shall survive the termination of this Agreement.
SECTION 2.11. Taxes. (a) Any and all payments by the Seller or
the Collection Agent hereunder shall be made, in accordance with Section 2.08,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of the Purchaser and the Deal Agent, net
income taxes and branch profits taxes that are imposed by the United States and
franchise taxes, net income taxes and branch profits taxes that are imposed on
the Purchaser or the Deal Agent by the state or foreign jurisdiction under the
laws of which the Purchaser or the Deal Agent (as the case may be) is organized
or conducts business or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Seller or the Collection Agent shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Purchaser or the Deal Agent, (i) the Seller shall make an
additional payment to the Purchaser or the Deal Agent, as the case may be, in an
amount sufficient so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.11), the
Purchaser or the Deal Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Seller or
the Collection Agent, as the case may be, shall make such deductions and (iii)
the Seller or the Collection Agent, as the case may be, shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) The Seller will indemnify the Purchaser and the Deal Agent for
the full amount of Taxes (including, without limitation, any Taxes imposed by
any jurisdiction on amounts payable under this Section 2.11) paid by the
Purchaser or the Deal Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto;
provided that the Purchaser or the Deal Agent, as appropriate, making a demand
for indemnity payment shall provide the Seller, at its address referred to in
Section 10.02, with a certificate from the relevant taxing authority or from a
responsible officer of the Purchaser or the Deal Agent stating or otherwise
evidencing that the Purchaser or the Deal Agent has made payment of such Taxes
and will provide a copy of or extract from documentation, if available,
furnished by such taxing authority evidencing assertion or payment of such
Taxes. This indemnification shall be made within ten days from the date the
Purchaser or the Deal Agent (as the case may be) makes written demand therefor.
(c) Within 30 days after the date of any payment by the Seller of
any Taxes, the Seller will furnish to the Deal Agent, at its address referred to
in Section 10.02, appropriate evidence of payment thereof.
(d) Within 30 days of the written request of the Seller
therefor, the Deal Agent and the Purchaser, as appropriate, shall execute and
deliver to the Seller such certificates, forms or other documents which can be
furnished consistent with the facts and which are reasonably necessary to assist
the Seller in applying for refunds of taxes remitted hereunder.
(e) If, in connection with an agreement or other document
providing liquidity support, credit enhancement or other similar support to the
Purchaser in connection with this Agreement or the funding or maintenance of
Purchases hereunder, the Purchaser is required to compensate a bank or other
financial institution in respect of taxes under circumstances similar to those
described in this Section 2.11 then within ten days after written demand by the
Purchaser (which demand shall be accompanied by a statement setting forth the
basis of such demand), the Seller shall pay to the Purchaser such additional
amount or amounts as may be necessary to reimburse such Purchaser for any
amounts paid by it.
(f) Without prejudice to the survival of any other agreement
of the Seller hereunder, the agreements and obligations of the Seller contained
in this Section 2.11 shall survive the termination of this Agreement.
SECTION 2.12. Assignment of the Originator Sale Agreement. The
Seller hereby represents, warrants and confirms to the Deal Agent that the
Seller has assigned to the Deal Agent, for the benefit of itself and the
Purchaser hereunder, all of the Seller's right and title to and interest in the
Originator Sale Agreement. The Seller confirms and agrees that the Deal Agent
shall have, following an Event of Termination, the sole right to enforce the
Seller's rights and remedies under the Originator Sale Agreement for the benefit
of the Purchaser, but without any obligation on the part of the Deal Agent, the
Purchaser or any of their respective Affiliates, to perform any of the
obligations of the Seller under the Originator Sale Agreement. The Seller
further confirms and agrees that such assignment to the Deal Agent shall
terminate upon the Collection Date; provided, however, that the rights of the
Deal Agent and the Purchaser pursuant to such assignment with respect to rights
and remedies in connection with any indemnities and any breach of any
representation, warranty or covenants made by the Originator pursuant to the
Originator Sale Agreement, which rights and remedies survive the termination of
the Originator Sale Agreement, shall be continuing and shall survive any
termination of such assignment.
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase. The
initial Purchase hereunder is subject to the conditions precedent (a) that the
Deal Agent shall have received on or before the date of such purchase the items
listed in Schedule I, each (unless otherwise indicated) dated such date, in form
and substance satisfactory to the Deal Agent and the Purchaser, and (b) that all
fees and expenses required to be paid prior to the initial Purchase pursuant to
the Fee Letter have been paid.
SECTION 3.02. Conditions Precedent to All Purchases and
Remittances of Collections. Each Purchase (including the initial Purchase) from
the Seller by the Purchaser, the right of the Collection Agent to remit
Collections to the Seller pursuant to Section 2.05 and each Capital Increase
shall be subject to the further conditions precedent that (a) with respect to
any such Purchase or Capital Increase, on or prior to the date of such Purchase
or Capital Increase, the Collection Agent shall have delivered to the Deal
Agent, in each case in form and substance satisfactory to the Deal Agent, a
completed Asset Report dated within 30 days prior to the date of such Purchase
or Capital Increase, and a completed Daily Settlement Report dated no more than
one Business Day prior to the date of such Purchase or Capital Increase, and in
each case containing such additional information as may be reasonably requested
by the Deal Agent; (b) on the date of such Purchase, remittance of Collections
or Capital Increase the following statements shall be true and the Seller by
accepting the amount of such Purchase or by receiving the proceeds of such
reinvestment shall be deemed to have certified that:
(i) The representations and warranties contained in Section
4.01 are correct on and as of such day as though made on and as of such
date,
(ii) No event has occurred and is continuing, or would result
from such purchase or reinvestment, which constitutes an Event of
Termination,
(iii) On and as of such day, after giving effect to such
Purchase, remittance of Collections or Capital Increase, a Coverage
Shortfall Event does not exist and the Purchased Interest does not
exceed 100%, and
(iv) No law or regulation shall prohibit, and no order,
judgment or decree of any federal, state or local court or governmental
body, agency or instrumentality shall prohibit or enjoin, the making of
such Purchase, remittance of Collections or Capital Increase by the
Purchaser in accordance with the provisions hereof.
and (c) the Deal Agent shall have received such other approvals, opinions or
documents as the Deal Agent may reasonably request.
Notwithstanding the fact that any of the above-described
conditions precedent may not have been satisfied in connection with any Purchase
hereunder, prior to the Termination Date and as a result of the Seller's
acceptance of the amount of any Capital Increase, and/or its receipt of the
proceeds of any reinvestment of Collections (x) the Seller shall be deemed to
have certified to the Deal Agent that such conditions precedent have, in fact,
been satisfied and (y) the Purchase of the Purchased Interests shall be deemed
to have been made automatically pursuant to Section 2.01 and Section 2.05.
SECTION 3.03. Conditions Precedent to Certain Capital
Increases. Each Capital Increase hereunder shall be subject to the further
condition precedent that, on the date of such Capital Increase, no event has
occurred and is continuing, or would result from such Capital Increase, which
constitutes an "Event of Default" or similar event (however named) under the
Revolving Credit Agreement or event which with the giving of notice or passage
of time or both would constitute an "Event of Default" or similar event (however
named) thereunder, and the Seller by accepting the amount of such Capital
Increase shall be deemed to have certified to such effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Seller.
The Seller represents and warrants as follows:
(a) The Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction named at the
beginning hereof and is duly qualified to do business, and is in good standing,
in every jurisdiction in which the nature of its business requires it to be so
qualified and the failure to do so could reasonably be expected to materially
and adversely affect the Seller's ability to perform hereunder or the ability to
assign or collect the Purchased Receivables hereunder; however, notwithstanding
the foregoing, the Seller is not qualified to do business in the State of
Georgia on the Closing Date and shall not be required to do so until the tenth
day following the Closing Date.
(b) The execution, delivery and performance by the Seller of
this Agreement, the Originator Sale Agreement and all other Facility Documents
to be entered into by it, including the Seller's use of the proceeds of
Purchases and reinvestments of Collections, are within the Seller's corporate
powers, have been duly authorized by all necessary corporate action, do not
contravene (i) the Seller's charter or by-laws, (ii) any law, rule or regulation
applicable to the Seller, (iii) any contractual restriction binding on or
affecting the Seller or its property or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting the Seller or its property, and do
not result in or require the creation of any lien, security interest or other
charge or encumbrance upon or with respect to any of its properties (other than
in favor of the Deal Agent for the benefit of the Purchaser with respect to the
Purchased Receivables and related Purchased Property); and no transaction
contemplated hereby or by the Originator Sale Agreement requires compliance with
any bulk sales act or similar law. This Agreement, the Originator Sale Agreement
and each other Facility Document to be entered into by the Seller have each been
duly executed and delivered by the Seller.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Seller of this
Agreement, the Originator Sale Agreement or any other Facility Document to be
entered into by it, except for the filing of the UCC financing statements
described in Schedule I, all of which financing statements have been duly filed
and are in full force and effect.
(d) This Agreement, the Originator Sale Agreement and each
other Facility Document to be entered into by the Seller constitute the legal,
valid and binding obligation of the Seller enforceable against the Seller in
accordance with their respective terms subject to bankruptcy and similar laws
affecting creditors generally and principles of equity.
(e) (i) The Seller has furnished to the Deal Agent (A) copies
of the Originator's audited consolidated balance sheet as at September
30, 1996, and the related audited consolidated statements of income and
cash flow for the fiscal year of the Originator then ended reported on
by Deloitte & Touche LLP, which financial statements present fairly in
all material respects in accordance with GAAP the financial position of
the Originator and its consolidated subsidiaries as at September 30,
1996, and the results of operations of the Originator and its
consolidated subsidiaries for the fiscal year of the Originator then
ended, and (B) copies of the Originator's unaudited consolidated
balance sheet as at June 30, 1997, and the related unaudited
consolidated statements of income and cash flow for the nine-month
period then ended, which financial statements present fairly in all
material respects in accordance with GAAP the financial position of the
Originator and its consolidated subsidiaries as at June 30, 1997, and
the results of operations of the Originator and its consolidated
subsidiaries for the nine-month period then ended; and
(ii) since June 30, 1997, (A) no material adverse change has
occurred in the business, assets, liabilities, financial condition,
results of operations or business prospects of the Originator and its
subsidiaries taken as a whole, and (B) no event has occurred or failed
to occur which has had, or may have, singly or in the aggregate, a
Materially Adverse Effect.
(f) Except as described in Schedule 7.1(k) of the Revolving
Credit Agreement as in effect on the date hereof, there is no pending or
threatened action or proceeding affecting the Originator and its subsidiaries as
a whole or the Seller before any court, governmental agency or arbitrator that
could reasonably be expected to have a Material Adverse Effect. None of the
Originator, the Seller, or any other subsidiary of the Originator is in default
with respect to any order of any court, arbitrator or governmental body except
for defaults with respect to orders of governmental agencies which defaults are
not material to the business or operations of the Originator and its
subsidiaries taken as a whole or the Seller.
(g) No proceeds of any Purchase or Capital Increase will be
used by the Seller (i) to acquire any security in any transaction which is
subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended,
or (ii) for any purpose other than to fund a purchase of Receivables and related
assets from the Originator.
(h) Each Receivable, together with the Contract related
thereto, shall, at all times, be owned by the Seller free and clear of any
Adverse Claim except as provided herein, and upon each Purchase, remittance of
Collections or Capital Increase, the Purchaser shall acquire a valid and
perfected first priority undivided percentage ownership interest in each
Purchased Receivable then existing or thereafter arising and in the Related
Security and Collections with respect thereto, which percentage shall correspond
at any time hereunder to the Purchased Interest in effect at such time, free and
clear of any Adverse Claim except as provided hereunder. No effective financing
statement or other instrument similar in effect covering any Receivable or the
Related Security or Collections with respect thereto shall at any time be on
file in any recording office except such as may be filed in favor of the Deal
Agent relating to this Agreement or in favor of Seller relating to the
Originator Sale Agreement. The purchases of the Receivables and related assets
by the Seller from the Originator constitute valid and true sales and transfers
for consideration (and not merely a pledge of such Receivables and assets for
security purposes), enforceable against creditors of the Originator, and no such
Receivables or related assets shall constitute property of the Originator.
(i) As of the close of business on each Business Day prior to
the Termination Date, a Coverage Shortfall Event shall not exist.
(j) No Asset Report or Daily Settlement Report (if prepared by
the Seller or any Affiliate thereof, or to the extent that information contained
therein is supplied by the Seller or such Affiliate), information, exhibit,
financial statement, document, book, record or report furnished or to be
furnished by the Seller to the Deal Agent or the Purchaser in connection with
this Agreement is or will be inaccurate in any material respect as of the date
it is or shall be dated or (except as otherwise disclosed to the Deal Agent or
the Purchaser, as the case may be, at such time) as of the date so furnished,
and no such document contains or will contain any material misstatement of fact
or omits or shall omit to state a material fact or any fact necessary to make
the statements contained therein not misleading.
(k) The principal place of business and chief executive office
of the Seller and the office where the Seller keeps all the Records are located
at the address of the Seller referred to in Section 10.02 hereof (or at such
other locations as to which the notice and other requirements specified in
Section 6.08 shall have been satisfied).
(l) 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 and the names, addresses and account numbers of all accounts to which
Collections of the Receivables outstanding before the initial Purchase hereunder
have been sent, are specified in Schedule III (which shall be deemed to be
amended in respect of terminating or adding any Lock-Box Account or Lock-Box
Bank upon satisfaction of the notice and other requirements specified in respect
thereof). The Seller has no other lock-box accounts or similar deposit accounts
for the collection of the Purchased Property except for the Lock-Box Accounts.
(m) Except as described in Schedule IV, the Seller has no
trade names, fictitious names, assumed names or "doing business as" names or
other names under which it has done or is doing business.
(n) The Originator Sale Agreement is the only agreement
pursuant to which the Seller purchases Receivables; the Seller has furnished to
the Deal Agent true, correct and complete copies of the Originator Sale
Agreement; and the Originator Sale Agreement is in full force and effect and no
event or circumstance has occurred that would constitute (or, with the giving of
notice or the passage of time or both, would constitute) an Event of Termination
pursuant to Section 7.01(k).
(o) The Seller shall have given reasonably equivalent value to
the Originator in consideration for the transfer by the Originator to the Seller
of the Receivables and Related Security under the Originator Sale Agreement, no
such transfer shall have been made for or on account of an antecedent debt owed
by the Originator to the Seller, and no such transfer is or may be voidable or
subject to avoidance under any section of the Bankruptcy Code.
(p) A copy of the Certificate of Incorporation of the Seller
as in effect on the date of this Agreement is attached as Exhibit E hereto, and
Synthetic has confirmed in writing to the Seller that, so long as the Seller is
not "insolvent" within the meaning of the Bankruptcy Code, Synthetic will not
cause the Seller to file a voluntary petition under the Bankruptcy Code or any
other bankruptcy or insolvency laws. Each of the Seller and Synthetic has
received advice from its counsel which is consistent with the conclusions set
forth in the legal opinion(s) of King & Spalding, counsel to the Originator and
the Seller, issued in connection with the Originator Sale Agreement and relating
to the issues of substantive consolidation and true sale of the Receivables and
the related property.
(q) The Seller is not "insolvent" (within the meaning of such
term in the Bankruptcy Code); at the time of (and immediately after) each
transfer of Purchased Receivables to the Seller under the Originator Sale
Agreement, the Seller shall not have been insolvent; and at the time of (and
immediately after) each purchase hereunder, the Seller shall not have been
insolvent.
(r) The Seller accounts for the transfers to it from the
Originator of interests in Receivables, Related Security and Collections under
the Originator Sale Agreement as sales of such Receivables, Related Security and
Collections in its books, records and financial statements, in each case
consistent with GAAP and with the requirements set forth herein.
(s) The sole and exclusive business of the Seller is the
purchase of Receivables and Related Security pursuant to the Originator Sale
Agreement for its own account and for resale to the Purchaser pursuant to the
terms of this Agreement.
(t) The Seller is operated as an entity with assets and
liabilities distinct from those of the Originator and any Affiliates thereof
(other than the Seller), and the Seller hereby acknowledges that the Deal Agent
and the Purchaser are entering into the transactions contemplated by this
Agreement in reliance upon the Seller's identity as a separate legal entity from
the Originator and from each such other Affiliate.
(u) The Seller is not an "investment company" or a company
controlled by an "investment company" registered or required to be registered
under the Investment Company Act, or otherwise subject to any other federal or
state statute or regulation limiting its ability to incur indebtedness.
(v) The Seller is not engaged, principally or as one of its
important activities, in the business of extending credit for the purpose of
"purchasing" or "carrying" any "margin stock" (as each of the quoted terms is
defined or used in Regulation G, T, U or X). No part of the proceeds of any
Purchased Receivable has been used for so purchasing or carrying margin stock or
for any purpose which violates, or which would be inconsistent with, the
provisions of Regulation G, T, U or X.
(w) Each of the Seller, the Collection Agent and the Deal
Agent has the right (whether by license, sublicense or assignment) to use all of
the computer software used by the Collection Agent and/or the Originator to
account for the Purchased Property to the extent necessary to administer the
Purchased Property, and, in the case of the Seller and the Collection Agent, to
assign (by way of sale or collateral pledge) or sublicense such rights to use
all of such software to the Deal Agent.
(x) The Seller has filed or caused to be filed all Federal,
state and local tax returns which are required to be filed by it, and has paid
or caused to be paid all taxes shown to be due and payable on such returns or on
any assessments received by it, other than any taxes or assessments, the
validity of which are being contested in good faith by appropriate proceedings
and with respect to which the Seller has set aside adequate reserves on its
books in accordance with GAAP and which proceedings have not given rise to any
Adverse Claim.
ARTICLE V
GENERAL COVENANTS OF THE SELLER
SECTION 5.01. General Covenants.
(a) Compliance with Laws; Preservation of Corporate Existence.
The Seller shall comply in all material respects with all applicable laws
(including, without limitation, ERISA and the Code), rules, regulations, orders
and Facility Documents and preserve and maintain its corporate existence,
rights, franchises, qualifications and privileges where the failure to comply
could reasonably be expected to materially adversely affect the Seller's ability
to perform its obligations hereunder or the ability to assign or collect the
Purchased Receivables hereunder.
(b) Sales, Liens, Etc. Except as otherwise specifically
provided herein, the Seller shall not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to, any Purchased Receivable or the related Contract,
Collections or Related Security, or upon or with respect to any Lock-Box
Account, the Collection Account or any other account to which any Collections of
any Receivable are sent, or assign any right to receive income in respect
thereof or (ii) create or suffer to exist any Adverse Claim upon or with respect
to any of the Seller's other assets.
(c) General Reporting Requirements. The Seller will
provide to the Deal Agent (with a copy for the Purchaser) the following:
(i) as soon as available and in any event within 90 days after
the end of each fiscal year of the Seller, a copy of the balance sheet
of the Seller and the related statement of income for such year, each
prepared in accordance with GAAP consistently applied and reported on
by nationally recognized independent public accountants acceptable to
the Deal Agent (the Deal Agent acknowledges that in each case any of
the "Big 5" accounting firms will be acceptable to the Deal Agent);
(ii) as soon as available and in any event within 45 days
after the end of each of the first three quarters of each fiscal year
of Synthetic, consolidated balance sheets of Synthetic and its
consolidated subsidiaries and the related statements of income,
shareholders' equity and cash flows each for the period commencing at
the end of the previous fiscal year and ending with the end of such
quarter, prepared in accordance with GAAP and certified by a senior
financial officer of Synthetic;
(iii) as soon as available and in any event within 90 days
after the end of each fiscal year of Synthetic, a copy of the
consolidated balance sheets of Synthetic and its consolidated
subsidiaries and the related statements of income, shareholders' equity
and cash flows for such year, each prepared in accordance with GAAP
consistently applied and reported on by nationally recognized
independent public accountants;
(iv) promptly after the sending or filing thereof (as the case
may be), copies of (1) all reports which Synthetic sends to any of its
securityholders, (2) all reports and registration statements which
Synthetic files with the Securities and Exchange Commission or any
national securities exchange other than registration statements
relating to employee benefit plans and to registrations of securities
for selling securityholders and (3) all reports, notices and/or
certificates which Synthetic sends to any of its "Lenders" under the
Revolving Credit Agreement, in each such case to the extent that the
Seller has received the same from Synthetic pursuant to the Originator
Sale Agreement;
(v) promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any Reportable Event defined in
Article IV of ERISA which the Seller or any ERISA Affiliate files under
ERISA with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation or the U.S. Department of Labor or which the Seller or any
ERISA Affiliate receives from such Corporation;
(vi) as soon as possible and in any event within three days
after the occurrence of each Event of Termination or each event which,
with the giving of notice or lapse of time or both, would constitute an
Event of Termination, a statement of the chief financial officer or
chief accounting officer of the Seller setting forth details of such
Event of Termination or event and the action which the Seller has taken
and proposes to take with respect thereto;
(vii) promptly following receipt thereof, copies of all
financial statements, settlement statements, portfolio and other
reports, notices, disclosures, certificates, budgets and other written
material delivered to the Seller by the Originator pursuant to the
terms of the Originator Sale Agreement;
(viii) no later than 10:00 a.m. Boston, Massachusetts time on
each Business Day, and at the time of any Capital Increase, a
certificate in form and substance satisfactory to the Deal Agent
setting forth, as of close business of the next preceding Business Day,
the Purchase Limit, the Capital Limit, the outstanding Capital, the
Aggregate Reserves, and the Purchased Interest (and demonstrating
compliance with the representation and warranty set forth in Section
4.01(i)) (the "Daily Settlement Report"); and
(ix) promptly following the Deal Agent's request therefor,
such other information respecting the Receivables or the conditions or
operations, financial or otherwise, of the Seller as the Deal Agent may
from time to time request in order to protect the interests of the Deal
Agent or the Purchaser in connection with this Agreement.
(d) Merger, Etc. The Seller will not merge or consolidate
with, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions), all or substantially all of its
assets (whether now owned or hereafter acquired), or acquire all or
substantially all of the assets or capital stock or other ownership interest of
any Person, other than, with respect to asset dispositions, in connection
herewith.
(e) Accounting of Purchases. The Seller will not account for
or treat (whether in financial statements or otherwise) the transactions
contemplated by the Originator Sale Agreement in any manner other than the sale
of the "Transferred Assets" (as defined therein) by the Originator to the
Seller.
(f) [Reserved].
(g) Nature of Business. The Seller will engage in no business
other than the purchase of Receivables and Related Security from the Originator,
the resale or grant of such Receivables and Related Security to the Purchaser
and the other transactions permitted or contemplated by this Agreement.
(h) Originator Receivables. With respect to each Receivable
acquired by the Seller from the Originator, the Seller will (i) acquire such
Receivable pursuant to and in accordance with the terms of the Originator Sale
Agreement, (ii) take all action necessary to perfect, protect and more fully
evidence the Seller's ownership of such Receivable, including, without
limitation, (A) filing and maintaining effective financing statements (Form
UCC-1) against the Originator in all necessary or appropriate filing offices,
and filing continuation statements, amendments or assignments with respect
thereto in such filing offices and (B) executing or causing to be executed such
other instruments or notices as may be necessary or appropriate and (iii) take
all additional action that the Deal Agent may reasonably request to perfect,
protect and more fully evidence the respective interests of the parties to this
Agreement in the Receivables and other Purchased Property related thereto.
(i) Maintenance of Separate Existence. The Seller will do all
things necessary to maintain its corporate existence separate and apart from the
Originator and all other Affiliates of the Seller, including, without
limitation, (i) practicing and adhering to corporate formalities, such as
maintaining appropriate corporate books and records; (ii) maintaining at all
times at least one "Independent Director", as defined in and as required under
the Seller's Certificate of Incorporation; (iii) owning or leasing pursuant to
written leases all office furniture and equipment necessary to operate its
business; (iv) refraining from (A) guaranteeing or otherwise becoming liable for
any obligations of any of its Affiliates, (B) having obligations guaranteed by
its Affiliates, (C) holding itself out as responsible for debts of any of its
Affiliates or for decisions or actions with respect to the affairs of any of its
Affiliates, and (D) being named as a direct or contingent beneficiary or loss
payee on any insurance policy of any Affiliate; (v) maintaining all of its
deposit and other bank accounts and all of its assets separate from those of any
other Person; (vi) maintaining all of its financial records separate and apart
from those of any other Person and ensuring that any of the Originator's
consolidated financial statements contain appropriate disclosures concerning the
Seller's separate existence; (vii) compensating all its employees, officers,
consultants and agents for services provided to it by such Persons, or
reimbursing any of its Affiliates in respect of services provided to it by
employees, officers, consultants and agents of such Affiliate, out of its own
funds; (viii) maintaining office space that is physically segregated from that
of any of its Affiliates (even if such office space is subleased from or is on
or near premises occupied by any of its Affiliates) and a separate telephone
number which will be answered only in its name; (ix) accounting for and managing
all of its liabilities separately from those of any of its Affiliates; (x)
allocating, on an arm's-length basis, all shared corporate operating services,
leases and expenses, including, without limitation, those associated with the
services of shared consultants and agents and shared computer equipment and
software; (xi) refraining from paying dividends or making distributions, loans
or other advances to any of its Affiliates except, in each case, as duly
authorized by its board of directors and in accordance with applicable
corporation law; (xii) refraining from filing or otherwise initiating or
supporting the filing of a motion in any bankruptcy or other insolvency
proceeding involving the Seller, the Originator or any other Affiliate of the
Seller to substantively consolidate assets and liabilities of the Seller with
the assets and liabilities of any such Person or any other Affiliate of the
Seller; (xiii) maintaining adequate capitalization in light of its business and
purpose; (xiv) conducting all of its business (whether written or oral) solely
in its own name; (xv) require that its employees, if any, when conducting its
business identify themselves as such and not as employees of any other Affiliate
of the Seller (including, without limitation, by means of providing appropriate
employees with business or identification cards identifying such employees as
the Seller's employees); and (xvi) taking all other actions necessary to
maintain the accuracy of the factual assumptions set forth in the legal
opinion(s) of King & Spalding, counsel to the Originator and the Seller, issued
in connection with the Originator Sale Agreement and relating to the issues of
substantive consolidation and true sale of the Receivables and the related
property.
(j) Supplemental Opinions. The Seller will cause to be
delivered to the Deal Agent within 30 days following the Deal Agent's request
therefor, but in no event more frequently than once during each calendar year
commencing after the first anniversary date of the initial Purchase,
supplemental opinions of outside counsel to the Seller and the Originator in the
form of Exhibit D or otherwise in form and substance reasonably satisfactory to
the Deal Agent, reaffirming the opinions set forth in the opinion letters of
King & Spalding delivered to the Deal Agent in connection with the initial
Purchase hereunder pursuant to Section 3.01 or providing in reasonable detail
the reasons why any such opinions cannot be reaffirmed.
(k) Transactions with Affiliates. The Seller will not enter
into, or be a party to, any transaction with any of its Affiliates, except (i)
the transactions permitted or contemplated by this Agreement and the Originator
Sale Agreement, and (ii) other transactions (including, without limitation, the
lease of office space or computer equipment or licensing of software by the
Seller to or from an Affiliate) (A) in the ordinary course of business, (B)
pursuant to the reasonable requirements of the Seller's business, (C) upon fair
and reasonable terms that are substantially similar to the terms that could be
obtained in a comparable arm's-length transaction with a Person not an Affiliate
of the Seller, and (D) not inconsistent with the factual assumptions set forth
in the opinion letter issued by King & Spalding delivered to the Deal Agent
pursuant to Section 3.01 (relating to the issues of substantive consolidation
and true sale of the Receivables and the related property), as such assumptions
may be modified in any subsequent opinion letter delivered pursuant to Section
5.01(j). It is understood that any compensation arrangement for officers shall
be permitted under clause (ii)(A), (B) and (C) above if such arrangement has
been expressly approved by the board of directors of the Seller.
(l) Debt; Investments. The Seller will not incur any Debt
other than (i) Debt arising hereunder or under the Originator Sale Agreement and
(ii) Debt owing to the Originator evidenced by a subordinated non-negotiable
promissory note in form and substance satisfactory to the Deal Agent and not
inconsistent with the factual assumptions set forth in the opinion letter issued
by King & Spalding delivered to the Deal Agent pursuant to Section 3.01
(relating to the issues of substantive consolidation and true sale of the
Receivables and the related property), as such assumptions may be modified in
any subsequent opinion letter delivered pursuant to Section 5.01(j). The Seller
will not make any Investments (including, without limitation, the creation of,
and the making of capital contributions to, a subsidiary) other than Permitted
Investments.
(m) Change in the Originator Sale Agreement. The Seller will
not (a) amend, modify, waive or terminate any terms or conditions of the
Originator Sale Agreement or of any other Facility Document to which it is a
party, or (b) without the prior consent of the Deal Agent, exercise any
discretionary rights granted to the Seller under the Originator Sale Agreement
pursuant to provisions thereof providing for certain actions to be taken "with
the consent of the Buyer", "acceptable to the Buyer" as "specified by the
Buyer", "in the reasonable judgment of the Buyer" or similar provisions.
(n) Amendment to Certificate of Incorporation. The Seller will
not amend, modify or otherwise make any change to its Certificate of
Incorporation, except in accordance with the terms and provisions thereof.
(o) Audits. At any time and from time to time upon prior
written notice to the Seller during regular business hours and on an annual (or
more frequent) basis, if requested by the Deal Agent, the Seller will permit the
Deal Agent, or its agents or representatives, (i) to examine and make copies of
and abstracts from all Records, and (ii) to visit the offices and properties of
the Seller for the purpose of examining such Records, and to discuss matters
relating to the Receivables or the Seller's performance hereunder with any of
the officers or employees of the Seller having knowledge of such matters. Each
such audit shall be at the sole expense of the Seller (subject to the Seller's
right under the Originator Sale Agreement to recover such expenses from the
Originator).
(p) Keeping of Records and Books of Account. The Seller will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing the 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 Purchased Receivables (including, without
limitation, records adequate to permit the daily identification of all
collections of and adjustments to each Purchased Receivable).
(q) Location of Records. The Seller will keep its chief place
of business and chief executive office, and the offices where it keeps the
Records, at the address of the Seller referred to in Section 10.02, or, in any
such case, upon 30 days' prior written notice to the Deal Agent, at such other
locations within the United States where all action required by Section 6.08
shall have been taken and completed.
(r) Credit and Collection Policies. The Seller will, and will
cause the Collection Agent to, comply in all material respects with the Credit
and Collection Policy in regard to each Purchased Receivable and the related
Contract. The Seller shall not, without the written consent of the Deal Agent
(i) make any change in the character of its business or (ii) make or agree to
make any material change in the Credit and Collection Policy.
(s) Change in Payment Instructions to Obligors. The Seller
will not add or terminate any bank as a Lock-Box Bank from those listed in
Schedule III to the Originator Sale Agreement or Schedule III hereto or make any
change in its instructions to Obligors regarding payments to be made to any
Lock-Box Bank, unless the Deal Agent shall have given its prior written consent
to such addition, termination or change (which consent shall not be unreasonably
withheld) and the Deal Agent shall have received (i) ten Business Days' prior
notice of such addition, termination or change, (ii) prior to the effective date
of such addition, termination or change, (x) executed copies of Lock-Box
Agreements executed by each new Lock-Box Bank and the Seller and (y) copies of
all agreements and documents signed by either the Seller or the respective
Lock-Box Bank with respect to any new Lock-Box Account, and (iii) the prior
written consent of the Purchaser to such addition, termination or change (which
consent shall not be unreasonably withheld).
(t) Change in Corporate Name. The Seller will not make
any change to its corporate name, or use any trade names, fictitious names,
assumed names or "doing business as" names.
(u) Taxes. The Seller will file or cause to be filed all
federal, state and local tax returns which are required to be filed by it. The
Seller shall pay or cause to be paid all taxes shown to be due and payable on
such returns or on any assessments received by it, other than any taxes or
assessments, the validity of which are being contested in good faith by
appropriate proceedings and with respect to which the Seller shall have set
aside adequate reserves on its books in accordance with GAAP.
(u) Facility Documents. The Seller will comply in all material
respects with the terms of and employ the procedures outlined in and enforce the
obligations of the Originator under the Originator Sale Agreement, enforce all
of the other rights of the Seller under each of the other Facility Documents to
which it is a party, take all such action to such end as may be from time to
time reasonably requested by the Deal Agent, and maintain all such Facility
Documents in full force and effect and make to the Originator such reasonable
demands and requests for information and reports or for action as the Seller is
entitled to make thereunder and as may be from time to time reasonably requested
by the Deal Agent.
(v) Segregation of Collections. The Seller will prevent the
deposit into any of the Lock-Box Accounts of any funds other than Collections
and, to the extent that any such funds are nevertheless deposited into any of
such Lock-Box Accounts, promptly identify any such funds to the Collection Agent
for segregation and remittance to the owner thereof.
(w) Accounting Treatment. The Seller will not prepare any
financial statements or other statements (including any tax filings which are
not consolidated with those of the Originator) which shall account for the
transactions contemplated by the Originator Sale Agreement in any manner other
than as the sale of, or a capital contribution of, the "Transferred Assets" (as
defined therein) by the Originator to the Seller.
(x) Qualification to Do Business. The Seller will duly qualify
to do business, and be in good standing, in every jurisdiction in which the
nature of its business requires it to be so qualified and the failure to do so
could reasonably be expected to materially and adversely affect the Seller's
ability to perform hereunder or the ability to assign or collect the Purchased
Receivables. Without limiting the foregoing, the Seller will qualify to do
business in the State of Georgia within ten days from the Closing Date.
ARTICLE VI
ADMINISTRATION, COLLECTION AND MONITORING OF ASSETS
SECTION 6.01. Appointment and Designation of the Collection
Agent. The Seller, the Purchaser and the Deal Agent hereby appoint the Person
(the "Collection Agent") designated by the Deal Agent from time to time with the
approval of the Purchaser pursuant to this Section 6.01, as their agent to
service, administer and collect the Receivables and otherwise to enforce their
respective rights and interests in, to and under the Receivables, the Related
Security and the Contracts. The Collection Agent's authorization under this
Agreement shall terminate on the Collection Date. Until the Deal Agent gives
notice to the Seller of a designation of a new Collection Agent after the
occurrence of a Collection Agent Termination Event, or consents to the
appointment by the Seller of a new "Collection Agent" under and pursuant to the
Originator Sale Agreement, Synthetic is hereby designated as, and hereby agrees
to perform the duties and obligations of, the Collection Agent pursuant to the
terms hereof. The Deal Agent may (with the approval of the Purchaser after the
occurrence of a Collection Agent Termination Event) designate as Collection
Agent any Person to succeed Synthetic 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.
Each of the Seller and the Collection Agent hereby grants to any successor
Collection Agent an irrevocable power of attorney to take any and all steps in
the Seller's or the Collection Agent's name, as applicable, and on behalf of the
Seller or the Purchaser, as may be necessary or desirable, in the determination
of the successor Collection Agent, to collect all amounts due under any and all
Receivables, including, without limitation, endorsing the Seller's name on
checks and other instruments representing Collections and enforcing such
Receivables and the related Contracts. The Collection Agent may, with the prior
consent of the Deal Agent, subcontract with any other Person for servicing,
administering or collecting the Receivables, provided that the Collection Agent
shall remain liable for the performance of the duties and obligations of the
Collection Agent pursuant to the terms hereof. Notwithstanding anything to the
contrary contained in this Agreement, the Collection Agent, if not the Seller or
an Affiliate thereof, shall have no obligation to collect, enforce or take any
other action described in this Article VI with respect to any Receivable that is
not a Purchased Receivable other than to deliver to the Seller the Collections
and documents with respect to any such Receivable that is not a Purchased
Receivable as described in Sections 6.03 and 6.06(b).
SECTION 6.02. Collection of Receivables by the Collection
Agent; Extensions and Amendments of Receivables. The Collection Agent shall take
or cause to be taken all such actions as may be necessary or advisable to
collect each Receivable from time to time, all in accordance with applicable
laws, rules and regulations, with reasonable care and diligence, and in
accordance with the Credit and Collection Policy; provided, however, that, (a)
the Deal Agent shall have the right to direct the Collection Agent (whether the
Collection Agent is the Seller, the Originator or otherwise) to commence or
settle any legal action, to enforce collection of any Purchased Receivable or to
foreclose upon or repossess any Related Security, (b) the Collection Agent shall
not make the Deal Agent or the Purchaser a party to any litigation without the
express written consent of the Deal Agent or the Purchaser, as the case may be.
If the Termination Date shall not have occurred, Synthetic, while it is
Collection Agent, may, in accordance with the Credit and Collection Policy, (a)
extend the maturity or adjust the Outstanding Balance of any Defaulted
Receivable as Synthetic may determine to be appropriate to maximize Collections
thereof and (b) adjust the Outstanding Balance of any Receivable to reflect the
reductions or cancellations described in the first sentence of Section 2.07, in
each such case in accordance with the requirements of the Credit and Collection
Policy and provided that such extension or adjustment shall not alter the status
of such Receivable as a Defaulted Receivable or limit the rights of the
Purchaser or Deal Agent under this Agreement. Except as otherwise permitted
pursuant to the next preceding sentence, neither the Collection Agent nor the
Seller will extend, amend, cancel or otherwise modify the terms of any Purchased
Receivable, or amend, modify, cancel or waive any term or condition of any
Contract related thereto without the prior written approval of the Deal Agent.
SECTION 6.03. Distribution and Application of Collections. The
Collection Agent shall set aside for the account of the Seller and the Purchaser
their respective allocable shares of the Collections of Receivables in
accordance with Sections 2.05 and 2.06. The Collection Agent shall as soon as
practicable following receipt turn over to the Seller the Collections of any
Receivable which is not a Purchased Receivable less, in the event neither
Synthetic nor an Affiliate thereof is the Collection Agent, all reasonable and
appropriate out-of-pocket costs and expenses of such Collection Agent of
servicing, collecting and administering the Receivables to the extent not
covered by the Collection Agent Fee received by it.
SECTION 6.04. Other Rights of the Deal Agent. At any time
following the occurrence of a Collection Agent Termination Event or the
designation of a Collection Agent other than Synthetic, the Seller or any
Affiliate of either thereof pursuant to Section 6.01:
(a) The Deal Agent may or, at the request of the Deal Agent,
the Seller shall (in either case, at the Seller's expense) direct the
Obligors of Receivables, or any of them, to pay all amounts payable
under any Receivable directly to the Deal Agent or its designee;
(b) The Deal Agent may or, at the request of the Deal Agent,
the Seller shall (in either case, at the Seller's expense) give each of
the Obligors notice of the Purchaser's interests in the Purchased
Receivables; and
(c) The Seller shall, at the Deal Agent's request and at the
Seller's expense, (i) assemble all Records and make the same available
to the Deal Agent or its designee at a place selected by the Deal Agent
or its designee, and (ii) segregate all cash, checks and other
instruments received by it from time to time constituting Collections
of Receivables in a manner acceptable to the Deal Agent and, promptly
following receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Deal
Agent or its designee.
SECTION 6.05. Records; Audits. (a) The Collection Agent will
maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing the 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 timely and full collection of all Receivables (including,
without limitation, records adequate to permit the daily identification of each
new Purchased Receivable and all Collections of and adjustments to each existing
Purchased Receivable).
(b) The Collection Agent, whether or not the Seller or an
Affiliate thereof, shall hold all Records in trust for the Seller and the
Purchaser in accordance with their respective interests. Subject to the receipt
of contrary instructions from the Deal Agent, the Seller will deliver all
Records to such Collection Agent; provided, however, that the Collection Agent,
if other than the Seller, shall as soon as practicable upon demand deliver to
the Seller all Records in its possession relating to Receivables of the Seller
other than Purchased Receivables, and copies of Records in its possession
relating to Purchased Receivables.
(c) The Collection Agent will, from time to time during
regular business hours as requested by the Deal Agent, permit the Deal Agent, or
its agents or representatives, (i) to examine and make copies of and 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 the Receivables or the Collection Agent's or the Seller's performance
hereunder with any of the officers or employees of the Collection Agent or the
Seller having knowledge of such matters.
SECTION 6.06. Receivable Reporting. (a) The Collection Agent,
so long as it is Synthetic or an Affiliate thereof, and otherwise the Seller,
will deliver to the Deal Agent (i) prior to the Asset Report Date occurring
during each calendar month hereafter, a report identifying the Purchased
Receivables (and the aged balance thereof), by Obligor and invoice number, as of
the last day of the next preceding month, (ii) on the Termination Date, a report
identifying the Purchased Receivables (and the aged balance thereof), by Obligor
and invoice number, on the day immediately preceding the Termination Date, (iii)
upon the Deal Agent's request, on each day, a report identifying the Purchased
Receivables (and the aged balance thereof), by Obligor and invoice number on
such day and (iv) prior to the Asset Report Date occurring in each calendar
month hereafter, a report identifying the outstanding accounts payable of the
Originator as of the last day of the next preceding month, identified by the
relevant account payee.
(b) Prior to the Asset Report Date occurring in each calendar
month, the Collection Agent shall prepare and forward to the Deal Agent for the
Purchaser, an Asset Report relating to all Purchased Receivables, as of the
close of business of the Collection Agent on the last day of the next preceding
month.
SECTION 6.07. Collections and Lock-Boxes. The Seller and the
Collection Agent will
(i) instruct all Obligors to cause all Collections to be
either (A) remitted to a Lock-Box and will cause each Lock-Box Bank to retrieve
such Collections promptly and deposit the same to the respective Lock-Box
Accounts or (B) deposited directly with the Lock-Box Bank, and
(ii) instruct all Lock-Box Banks to transfer such Collections
in same day funds to a special-purpose segregated interest-bearing trust account
in the name of the Deal Agent (the "Collection Account") maintained with a
financial institution (the "Collection Account Bank") acceptable to the Deal
Agent, which shall initially be BankBoston, N.A. (provided, however, that in the
event that the Collection Account is maintained at a commercial bank having (x)
combined capital and surplus of at least $250,000,000 and (y) a short-term debt
rating of at least A-1 from S&P, P-1 from Xxxxx'x and D-1 from DCR (if rated by
DCR), the Collection Account need not be a trust account). In accordance with
the terms of the Collection Account Agreement, to be entered into among the
Collection Account Bank, the Collection Agent, the Purchaser and the Deal Agent,
the Collection Agent shall instruct the Collection Account Bank to allocate and
remit such Collections in accordance with Sections 2.05 and 2.06; provided,
however, that the Deal Agent may, at any time, revoke the Collection Agent's
authority with respect to the Collection Account, direct the Collection Account
Bank to cease taking instructions from the Collection Agent and to thereafter
take direction solely from the Deal Agent. If the Seller receives any
Collections, the Seller will remit such Collections to the Collection Account
(including, without limitation, any Collections deemed to have been received
pursuant to Section 2.07) within one Business Day following the Seller's receipt
thereof. The Seller will not add or terminate any bank as Lock-Box Bank from
those listed in Schedule III or make any change in its instructions to Obligors
regarding payments to be made to any Lock Box or any Lock-Box Bank, unless the
Deal Agent shall have received at least ten Business Days' prior written notice
of such addition, termination or change and all actions reasonably requested by
the Deal Agent to protect and perfect the interest of the Deal Agent and the
Purchaser in the Collections of Purchased Receivables have been taken and
completed. The Seller hereby transfers to the Deal Agent, effective upon the
initial Purchase, the exclusive ownership and control of each of the Lock-Box
Accounts. The Seller hereby agrees to take any further action necessary that the
Deal Agent may reasonably request to effect such transfer.
SECTION 6.08. UCC Matters; Protection and Perfection of
Purchased Property. The Seller will keep its principal place of business and
chief executive office, and the office where it keeps the Records, at the
address of the Seller referred to in Section 4.01(k) or, upon 30 days' prior
written notice to the Deal Agent, at such other locations within the United
States where all actions reasonably requested by the Deal Agent to protect and
perfect the interest of the Deal Agent and the Purchaser in the Purchased
Receivables have been taken and completed. The Seller will not make any change
to its corporate name or use any tradenames, fictitious names, assumed names,
"doing business as" names or other names other than those described in Schedule
IV, unless prior to the effective date of any such name change or use, the
Seller delivers to the Deal Agent such executed financing statements as the Deal
Agent may request to reflect such name change or use, together with such other
documents and instruments as the Deal Agent may request in connection therewith.
The Seller agrees that from time to time, at its expense, it will promptly
execute and deliver all further instruments and documents, and take all further
action that the Deal Agent may reasonably request in order to perfect, protect
or more fully evidence the Purchased Interests acquired by the Purchaser
hereunder, or to enable the Purchaser or the Deal Agent to exercise or enforce
any of their respective rights hereunder. Without limiting the generality of the
foregoing, the Seller will: (a) upon the request of the Deal Agent, execute and
file such financing or continuation statements, or amendments thereto or
assignments thereof, and such other instruments or notices, as may be necessary
or appropriate or as the Deal Agent may request, and (b) on or prior to the date
hereof, xxxx its master data processing records evidencing such Purchased
Receivables and related Contracts with a legend, acceptable to the Deal Agent,
evidencing that the Purchaser has acquired an interest therein as provided in
this Agreement. The Seller hereby authorizes the Deal Agent to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any of the Purchased Property now existing or
hereafter arising without the signature of the Seller where permitted by law. A
carbon, photographic or other reproduction of this Agreement or any financing
statement covering the Purchased Property or any part thereof shall be
sufficient as a financing statement. If the Seller fails to perform any of its
agreements or obligations under this Section 6.08, the Deal Agent may (but shall
not be required to) itself perform, or cause performance of, such agreement or
obligation, and the expenses of the Deal Agent incurred in connection therewith
shall be payable by the Seller upon the Deal Agent's demand therefor. For
purposes of enabling the Deal Agent to exercise its rights described in the
preceding sentence and elsewhere in this Article VI, the Seller and the
Purchaser hereby authorize the Deal Agent to take any and all steps in the
Seller's name and on behalf of the Seller and the Purchaser necessary or
desirable, in the determination of the Deal Agent, to collect all amounts due
under any and all Receivables, including, without limitation, endorsing the
Seller's name on checks and other instruments representing Collections and
enforcing such Receivables and the related Contracts.
SECTION 6.09. Obligations of the Seller With Respect to
Receivables. The Seller will (a) at its expense, regardless of any exercise by
the Deal Agent or the Purchaser of their rights hereunder, timely and fully
perform and comply with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to the Purchased
Receivables to the same extent as if Purchased Interests therein had not been
sold hereunder and (b) pay when due any taxes, including without limitation,
sales and excise taxes, payable in connection with the Purchased Receivables. In
no event shall the Deal Agent or the Purchaser have any obligation or liability
with respect to any Purchased Receivables or related Contracts, nor shall any of
them be obligated to perform any of the obligations of the Seller or the
Originator or any of their Affiliates thereunder. The Seller will and will cause
the Collection Agent to timely and fully comply in all material respects with
the Credit and Collection Policy in regard to each Purchased Receivable and the
related Contract. The Seller will not make any change in the character of its
business or make or agree to make any change in the Credit and Collection
Policy, which change would, in either case, impair the collectibility of any
Purchased Receivable.
SECTION 6.10. Applications of Collections. Any payment by an
Obligor in respect of any indebtedness owed by it to the Seller or the
Originator shall, except as otherwise specified by such Obligor or otherwise
required by contract or law and unless otherwise instructed by the Deal Agent,
be applied as a Collection of any Purchased Receivable of such Obligor, in the
order of the age of such Receivables, starting with the oldest such Purchased
Receivable, to the extent of any amounts then due and payable thereunder, before
being applied to any Receivable that is not a Purchased Receivable or other
indebtedness of such Obligor.
SECTION 6.11. Annual Servicing Report of Independent Public
Accountants. On an annual basis on or before December 31 of each calendar year,
beginning with December 31, 1998, the Collection Agent shall cause nationally
recognized independent public accountants acceptable to the Deal Agent, (the
Deal Agent acknowledges that in each case any of the "Big 5" accounting firms
will be acceptable to the Deal Agent,) to furnish a report to each of the
Collection Agent, the Seller, the Purchaser, the Deal Agent and each Rating
Agency then rating the Commercial Paper at the request of EagleFunding
substantially to the effect that (i) such accountants have examined certain
documents and records relating to the servicing of Receivables under this
Agreement, compared the information contained in the Daily Settlement Reports
and Asset Reports delivered by or on behalf of the Seller under this Agreement
during the annual period covered by such report (or such shorter initial period,
as the case may be) with such documents and records and that, on the basis of
such examination, and subject to such reasonable limitations and qualifications
as may be set forth in such report, such accountants are of the opinion that the
servicing has been conducted substantially in compliance with the terms and
conditions as set forth in Article VI of this Agreement, except for such
exceptions as they believe to be immaterial and such other exceptions as shall
be set forth in such statement and (ii) such accountants have compared the
mathematical calculations of each amount set forth in the Daily Settlement
Reports and Asset Reports delivered pursuant to this Agreement during the period
covered by such report with the Collection Agent's computer reports which were
the source of such amounts and that on the basis of such comparison, such
accountants are of the opinion that such amounts are in agreement, except for
such exceptions as they believe to be immaterial and such other exceptions as
shall be set forth in such statement.
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01. Events of Termination. If any of the following
events ("Events of Termination") shall occur:
(a) (i) The Collection Agent (if other than the Deal Agent)
shall fail to perform or observe any term, covenant or agreement hereunder
(other than as referred to in clause (ii) of this Section 7.01(a)) and such
failure shall remain unremedied for two Business Days or (ii) either the
Collection Agent (if other than the Deal Agent) or the Seller shall fail to make
any payment or deposit to be made by it hereunder when due; or
(b) (i) Any representation or warranty made or deemed to be
made by the Seller (or any of its officers or agents) under or in connection
with this Agreement or any Asset Report or other information or report delivered
pursuant hereto shall prove to have been false or incorrect in any material
respect when made or (ii) any representation or warranty made or deemed to be
made by the Originator or the Collection Agent (or any of their respective
officers or agents) under or in connection with the Originator Sale Agreement or
this Agreement (as the case may be) shall prove to have been false or incorrect
in any material respect when made; or
(c) Either the Seller or the Originator (individually or in
its capacity as Collection Agent) shall fail to perform or observe any term,
covenant or agreement (other than any term covenant, or agreement described in
either of clauses (a) or (b) above) contained in this Agreement or in the
Originator Sale Agreement on its part to be performed or observed and any such
failure shall remain unremedied for five Business Days after written notice
thereof shall have been given by the Deal Agent to the Seller; or
(d) (i) The Seller or the Originator shall fail to pay any
principal of or premium or interest on any Debt, if, in the case of the
Originator, the aggregate principal amount of such Debt is $500,000 or more,
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or (ii) any other default or any event which,
with the passage of time or the giving of notice, or both, would constitute a
default under any agreement or instrument (other than the Revolving Credit
Agreement) relating to any such Debt, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument; or
(iii) any "Event of Default" (other than a payment event of default) as such
term is defined in the Revolving Credit Agreement or any event (however named in
any successor Revolving Credit Agreement to the Revolving Credit Agreement in
effect on the date hereof) under such successor agreement which with the passage
of time or the giving of notice, or both, would constitute a default shall have
occurred and be continuing for a period which exceeds the lesser of (x) 30 days
and (y) the corresponding period set forth in documents relating to any Debt of
Synthetic or its Affiliates having an aggregate principal balance of greater
than $500,000 as the period during which the holders of such Debt are stayed
from any enforcement or acceleration as a result of the occurrences of such an
"Event of Default" or other event; or (iv) any Debt of the Seller or the
Originator, if, in the case of the Originator the aggregate principal amount of
such Debt is $500,000 or more, shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof; or
(e) Either (i) any Purchase, Capital Increase or remittance of
Collections shall for any reason, except to the extent permitted by the terms
hereof, cease to create a valid and perfected first priority undivided
percentage ownership or security interest in each Purchased Receivable and the
Related Security and Collections with respect thereto or (ii) any purchase by
the Seller of a Receivable from the Originator shall, for any reason, cease to
create in favor of the Seller a valid and perfected first priority ownership or
security interest in each Purchased Receivable and the Related Security and
Collections with respect thereto; or
(f) (i) The Seller or the Originator shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Seller or the
Originator seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property; or (ii) the Seller
or the Originator shall take any corporate action to authorize any of the
actions set forth in clause (i) above in this Section 7.01(f); or
(g) the Delinquency Ratio for any month shall exceed 4.00%, or
the Dilution Ratio for any month shall exceed 4.20%, or the Average Maturity for
any month shall exceed 75 days; or
(h) (i) There shall have occurred and be continuing an "Event
of Termination" under the Originator Sale Agreement, or (ii) the Originator Sale
Agreement shall have ceased to be valid, binding and enforceable as against any
of the parties thereto without any amendment, modification, waiver or
termination of any terms or conditions thereof, other than as agreed to in
writing by the Deal Agent, or (iii) the Originator shall have ceased for any
reason to sell all of the "Receivables" under and as defined in the Originator
Sale Agreement to the Seller pursuant to the Originator Sale Agreement, or (iv)
the assignment to the Deal Agent of all of the Seller's right and title to and
interest in the Originator Sale Agreement shall have ceased, for any reason, to
be fully effective and enforceable by the Deal Agent as against any of the
parties of the Originator Sale Agreement; or
(i) Synthetic shall cease to own (whether directly or
indirectly) 100% of the issued and outstanding stock of the Seller; or
(j) The Seller shall fail to make payment as specified in
Section 2.05(b) and such failure shall remain unremedied for two Business Days
after written notice thereof shall have been given by the Deal Agent to the
Seller; or
(k) A Collection Agent Termination Event shall have occurred
and be continuing; or
(l) The date on which some or all of the "Liquidity
Commitments" under the Liquidity Agreement shall cease to be effective or shall
terminate without renewal; or
(m) The Originator, the Seller or the Collection Agent shall
fail to perform or observe any material term, covenant or agreement contained in
the Credit and Collection Policy; or
(n) A Coverage Shortfall Event shall exist and such Coverage
Shortfall Event shall remain unremedied for five Business Days, or the Purchased
Interest shall exceed 100% and such condition shall remain unremedied for five
Business Days; or
(o) The Revolving Credit Agreement shall cease to (A) be in
full force and effect, or (B) provide for a commitment to fund (subject only to
conditions that are not materially more restrictive than those set forth in the
Revolving Credit Agreement as in effect on the date hereof) in an aggregate
amount of not less than $30,000,000; or
(p) The IRS or the PBGC shall have filed notice of one or more
Adverse Claims against the Originator, the Seller or any ERISA Affiliate under
ERISA or the Code, unless such Adverse Claim does not purport to cover the
Receivables, and such notice shall have remained in effect for more than thirty
(30) Business Days unless, prior to the expiration of such period, such Adverse
Claims shall have been adequately bonded by such Originator, Seller or the ERISA
Affiliate (as the case may be) in a transaction with respect to which the Deal
Agent has given its prior written approval; or
(q) The Seller shall have become subject to registration as an
"investment company" within the meaning of the Investment Company Act; or
(r) The Deal Agent shall have received an "Enforcement Notice"
under the Intercreditor Agreement;
then, and in any such event, the Deal Agent may, by notice to the Seller declare
the Termination Date to have occurred, except that, in the case of any event
described in Section 7.01(l), (n) or (q), or in clause (i) of Section 7.01(f)
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 Deal Agent and the Purchaser shall have, in addition to all other rights and
remedies under this Agreement or otherwise, all other rights and remedies
provided under the UCC of the applicable jurisdiction and other applicable laws,
which rights shall be cumulative.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Indemnities by the Seller. Without limiting any
other rights which the Deal Agent, the Purchaser, the Liquidity Providers or any
of their respective Affiliates may have hereunder or under applicable law, the
Seller hereby agrees to indemnify the Deal Agent, the Purchaser, each Liquidity
Provider, each of their respective Affiliates, and each of their respective
directors, officers, employees, agents and attorneys (all of the foregoing being
collectively referred to as "Indemnified Parties") from and against any and all
damages, losses, claims, liabilities and related costs and expenses, including
reasonable attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or actually
incurred by any of them arising out of or resulting from:
(i) any Purchased Receivable represented or deemed represented
by the Seller to be an Eligible Receivable which is not an Eligible
Receivable at the time such representation is made or deemed made;
(ii) reliance on any representation or warranty made or deemed
made by the Seller, the Collection Agent (if Synthetic or one of its
Affiliates) or any of their respective officers under or in connection
with this Agreement, which shall have been false or incorrect in any
material respect when made or deemed made or delivered;
(iii) the failure by the Seller or the Collection Agent (if
Synthetic or one of its Affiliates) to comply with any term, provision
or covenant contained in this Agreement or any of the other Facility
Documents, or with any applicable law, rule or regulation with respect
to any Receivable, the related Contract or the Related Security, or the
nonconformity of any Receivable, the related Contract or the Related
Security with any such applicable law, rule or regulation;
(iv) (A) the failure to vest and maintain vested in the
Purchaser or to transfer to the Purchaser, legal and equitable title to
and ownership of, a percentage ownership interest, corresponding to the
Purchased Interest, in the Receivables which are, or are purported to
be, Purchased Receivables, together with all Collections and Related
Security; or (B) the failure to grant to the Deal Agent, for the
benefit of itself and the Purchaser, a valid and perfected first
priority "security interest," under Article 9 of the UCC, in and to the
Receivables which are, or are purported to be, Purchased Receivables,
together with all Collections and Related Security; in each case free
and clear of any Adverse Claim whether existing at the time of the
Purchase of any such Receivable or at any time thereafter;
(v) the failure to prevent, as of the close of business on
each Business Day prior to the Termination Date, a Coverage Shortfall
Event from occurring;
(vi) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to
any Receivables which are, or are purported to be, Purchased
Receivables, whether at the time of any Purchase or at any subsequent
time;
(vii) any dispute, claim, offset or defense (other than the
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable which is, or is purported to be, a Purchased
Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with
its terms), or any other claim resulting from the sale of the
merchandise or services related to such Receivable or the furnishing or
failure to furnish such merchandise or services;
(viii) any failure of the Seller or the Collection Agent (if
Synthetic or one of its Affiliates) to perform its duties or
obligations in accordance with the provisions of this Agreement or any
failure by the Originator, the Seller or any Affiliate thereof to
perform its respective duties under the Contracts;
(ix) 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 or Contract;
(x) the failure to pay when due any taxes, including without
limitation, sales, excise or personal property taxes payable in
connection with the Purchased Receivables;
(xi) any repayment by the Deal Agent or the Purchaser of any
amount previously distributed in reduction of Capital or payment of
Yield or any other amount due hereunder, in each case which amount the
Deal Agent or the Purchaser believes in good faith is required to be
repaid;
(xii) the commingling of Collections of Purchased Receivables
at any time with other funds;
(xiii) any investigation, litigation or proceeding related to
this Agreement or the use of proceeds of Purchases or reinvestments or
the ownership of Purchased Property or in respect of any Receivable,
Related Security or Contract;
(xiv) any failure by the Seller to give reasonably equivalent
value to the Originator in consideration for the transfer by the
Originator to the Seller of any Receivables or Related Security, or any
attempt by any Person to void or otherwise avoid any such transfer
under any statutory provision or common law or equitable action,
including, without limitation, any provision of the Bankruptcy Code; or
(xv) the failure of the Seller, the Originator or any of their
respective agents or representatives (including, without limitation,
agents, representatives and employees of the Originator acting pursuant
to authority granted under Section 6.01) to remit to the Collection
Agent or the Deal Agent, Collections of Purchased Receivables remitted
to the Seller, the Originator or any such agent or representative.
Any amounts subject to the indemnification provisions of this Section 8.01 shall
be paid by the Seller to the Deal Agent within two Business Days following the
Deal Agent's demand therefor. Notwithstanding any other provision of this
Agreement to the contrary, the Seller shall not indemnify the Indemnified
Parties for or with respect to any Indemnified Amounts that would constitute
recourse for uncollectible Purchased Receivables due to credit reasons.
SECTION 8.02. Optional Repurchases of Purchased Interest. (a)
The Seller may, at any time upon not less than five Business Days' prior written
notice to the Deal Agent, elect to repurchase the Purchased Interest (or a
portion thereof), which repurchase shall take place on the Business Day next
succeeding the fifth Business Day to occur following the Deal Agent's receipt of
such notice, in consideration of the payment of all or a portion of outstanding
Capital and accrued Yield on such day in accordance with the terms of subsection
(b) of this Section 8.02.
(b) In the case of a repurchase from the Purchaser by the
Seller of the Purchased Interest (or a portion thereof) pursuant to this Section
8.02, the Seller shall, on the Business Day coinciding with such repurchase,
make a payment to the Deal Agent, the proceeds of which repurchase shall be
deemed to be Collections relating to the Purchased Interest received by the
Seller, and the amount of which payment shall be applied in the following order
of priority:
(i) (A) First, to pay any accrued and unpaid Collection Agent
Fee (if the Collection Agent is a party other than the Originator or an
Affiliate thereof), and (B) second, to pay any such Collection Agent
Fee to be accrued through (and including) the next scheduled payment
date therefor;
(ii)(A) First, to pay accrued and unpaid Yield with respect to
Purchase Periods associated with the portions of Capital to be reduced
in accordance with clause (vii) below, and (B) second, to pay any
Liquidation Fee payable in connection with such reduction of Capital;
(iii)(A) First, to pay accrued and unpaid Liquidity Fee which
is then due and payable, and (B) second, to pay any such Liquidity Fee
to be accrued through such date;
(iv)(A) First, to pay accrued and unpaid Program Fee which is
then due and payable, and (B) second, to pay any such Program Fee to be
accrued through such date;
(v) (A) First, to pay any Administrative Fee which is then due
and payable, and (B) second (unless such payment is sufficient to
reduce Capital to zero in accordance with the application to be made
pursuant to this Section 8.02(b)), to be retained in the Collection
Account to the extent of the Administrative Fee payable in respect of
the next succeeding annual period;
(vi) (A) First, to pay to pay the portion of any other accrued and
unpaid obligations which have not been paid pursuant to clauses (i)
through (v) above and which are then due and payable by the Seller to
the Purchaser or the Deal Agent under this Agreement or any of the
other Facility Documents;
(vii) to pay all Capital relating to any Purchase Periods
selected by the Deal Agent in the exercise of its sole discretion;
(viii) (A) First, to pay any accrued and unpaid Collection
Agent Fee (if the Collection Agent is the Originator or an Affiliate
thereof) which is then due and payable, and (B) second, to pay any such
Collection Agent Fee to be accrued through (and including) the next
scheduled payment date therefor.
(c) Notwithstanding anything herein or elsewhere to the
contrary, the Purchased Interest shall be recomputed as of the close of business
of the Collection Agent on the date of any repurchase made under this Section
8.02, after giving effect to the reduction of Capital arising as a result of
such repurchase, and thereafter shall be automatically recomputed or deemed
recomputed, or remain constant, as the case may be, in accordance with the
provisions of Section 2.05(c).
(d) Any repurchase made pursuant to this Section 8.02 shall be
made without recourse or warranty, express or implied (other than a
representation and warranty that the Purchased Interest (or portion thereof) so
repurchased is free and clear of any Adverse Claim created by or through the
Purchaser).
ARTICLE IX
THE DEAL AGENT.
SECTION 9.01. Authorization and Action. The Purchaser hereby
appoints and authorizes the Deal Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Deal Agent by the terms hereof, together with such powers as are reasonably
incidental thereto, including, without limitation, the power and authority to
hold and to perfect any ownership interest or security interest created pursuant
hereto or in connection herewith on behalf of the Purchaser.
SECTION 9.02. Deal Agent's Reliance, Etc. Neither the Deal
Agent nor any of its directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them as Deal Agent under or
in connection with this Agreement (including, without limitation, any action
taken or omitted to be taken by it or them if the Deal Agent is designated as
Collection Agent pursuant to Section 6.01) or any other agreement executed
pursuant hereto, except for its or their own negligence or willful malfeasance
or misfeasance. Without limiting the foregoing, the Deal Agent: (i) may consult
with legal counsel (including counsel for the Seller), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to any Person and shall not be responsible to any other Person
for any statements, warranties or representations made in or in connection with
this Agreement or in connection with any of the other agreements executed
pursuant hereto; (iii) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
this Agreement on the part of the Seller or to inspect the property (including
the books and records) of the Seller; (iv) shall not be responsible to the
Purchaser or any other Person for the due execution, legality, validity,
enforceability, genuineness or sufficiency of value of this Agreement or any
other agreement, instrument or document furnished pursuant hereto; and (v) shall
incur no liability under or in respect of this Agreement or any other agreement
executed pursuant hereto, by acting upon any notice (including notice by
telephone with respect to notices under Section 2.02), consent, certificate or
other instrument or writing (which may be by telex or facsimile) believed by it
to be genuine and signed or sent by the proper party or parties. Notwithstanding
anything in this Section 9.02 to the contrary, the foregoing provisions of this
Section 9.02 shall not run in favor of the Deal Agent in connection with any
claim against the Deal Agent made by EagleFunding.
SECTION 9.03. Deal Agent and Affiliates. With respect to any
interests which may be assigned by the Purchaser to BSI, or any Affiliate of
BSI, pursuant to Section 10.04, BSI or such Affiliate shall have the same rights
and powers under this Agreement as would the Purchaser if it were holding such
interests and may exercise the same as though it were not the Deal Agent. BSI
and its Affiliates may generally engage in any kind of business with the Seller,
the Originator or any Obligor, any of their respective Affiliates and any Person
who may do business with or own securities of the Seller, the Originator or any
Obligor or any of their respective Affiliates, all as if BSI were not the Deal
Agent and without any duty to account therefor to the Purchaser or any Liquidity
Provider.
SECTION 9.04. [Reserved].
SECTION 9.05. Resignation of the Deal Agent. The Deal Agent
may resign as Deal Agent hereunder at any time by giving not less than five (5)
Business Days' prior written notice to the Purchaser, the Seller, the Collection
Agent and each Rating Agency then rating the Commercial Paper, at the request of
EagleFunding; such resignation to become effective only upon the later to occur
of
(i) the earlier of (x) the appointment and acceptance of a
successor Deal Agent as provided below and (y) the 30th day following
delivery of such notice, and
(ii) the Purchaser's obtaining of written confirmation from
each such Rating Agency that such resignation and appointment will not
result in a withdrawal or downgrading of the then-current rating of the
Commercial Paper by such Rating Agency.
Upon any such resignation, the Purchaser shall appoint a financial institution
of its choosing as Deal Agent. Following the appointment of a successor Deal
Agent and such successor Deal Agent's acceptance thereof, such successor Deal
Agent shall succeed to and become vested with all the rights, powers, privileges
and duties of the resigning Deal Agent as Deal Agent hereunder, and the
resigning Deal Agent shall be discharged from its duties and obligations as Deal
Agent hereunder. After the Deal Agent's resignation, 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 the Deal Agent.
SECTION 9.06 Payments. If in the opinion of the Deal Agent the
distribution of any amount received by it in such capacity hereunder or under
any of the other Facility Documents might involve it in liability, it may
refrain from making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Deal
Agent is to be repaid, each Person to whom any such distribution shall have been
made shall either repay to the Deal Agent its proportionate share of the amount
so adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments and Waivers. (a) Except as provided
in Section 10.01(b), no amendment or modification of any provision of this
Agreement shall be effective without the written agreement of the Seller, the
Collection Agent and the Deal Agent, and no termination or waiver of any
provision of this Agreement or consent to any departure therefrom by the Seller
shall be effective without the written concurrence of the Deal Agent. Any waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b) Notwithstanding the provisions of Section 10.01(a), (i)
the written consent of the Purchaser shall be required for any amendment,
modification or waiver (A) reducing any Capital, or the Yield thereon, for any
Purchase Period, (B) postponing any date for any payment of any Capital or the
Yield thereon, for any Purchase Period, or for any payment of fees payable under
the terms of the Fee Letter, or (C) modifying the provisions of this Section
10.01, and (ii) the written consent of the Purchaser shall be required for any
amendment, modification or waiver increasing the Purchase Limit.
(c) Any time that the Commercial Paper is being rated by one
or more of Xxxxx'x, S&P and DCR (as applicable) (each, a "Rating Agency"), at
the request of EagleFunding, no material amendment or modification of any
material provisions hereof shall be effective absent written confirmation by
each such Rating Agency that such amendment or modification will not result in a
withdrawal or downgrading of the then-current rating of the Commercial Paper by
such Rating Agency. EagleFunding shall send, or shall cause to be sent, copies
of all amendments, modifications or supplements to this Agreement to each Rating
Agency then rating the Commercial Paper, at the request of EagleFunding, prior
to the execution thereof by all parties thereto.
SECTION 10.02. Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise stated herein, be
in writing (including telex communication and communication by facsimile copy)
and mailed, telexed, transmitted or delivered, as to each party hereto, at its
address set forth under its name on the signature pages hereof or specified in
such party's Assignment and Acceptance or at such other address as shall be
designated by such party in a written notice to the other parties hereto. All
such notices and communications shall be effective, upon receipt, or in the case
of (a) notice by mail, five days after being deposited in the United States
mails, first class postage prepaid, (b) notice by telex, when telexed against
receipt of answerback, or (c) notice by facsimile copy, when verbal
communication of receipt is obtained, except that notices and communications
pursuant to Article II shall not be effective until received.
SECTION 10.03 Setoff and Counterclaim. All payments to be made
by the Seller or the Collection Agent under this Agreement shall be made free
and clear of any counterclaim, set-off, deduction or other defense, which the
Seller or the Collection Agent may have against the Purchaser, the Deal Agent,
any Liquidity Provider, or against each other.
SECTION 10.04. No Waiver; Remedies. No failure on the part of
the Deal Agent or the Purchaser to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 10.05. Binding Effect; Assignability. This Agreement
shall be binding upon and inure to the benefit of the Seller, the Deal Agent,
the Purchaser, the Collection Agent and their respective successors and
permitted assigns. This Agreement and the Purchaser's rights and obligations
hereunder and interest herein shall be assignable in whole or in part (including
by way of the sale of participation interests therein) by the Purchaser and
their respective successors and assigns; provided however that neither the
Purchaser nor any such successor or assignee may make an assignment absent the
prior written consent of the Seller, to any Person which is not created or
organized under the laws of the United States or a political subdivision
thereof. EagleFunding shall send, or cause to be sent, notice of such proposed
assignment by the Purchaser, to each Rating Agency then rating the Commercial
Paper at the request of EagleFunding, prior to the effectiveness thereof. The
Seller may not assign any of its rights and obligations hereunder or any
interest herein without the prior written consent of the Purchaser and the Deal
Agent. The parties to each assignment or participation made pursuant to this
Section 10.05 shall execute and deliver to the Deal Agent for its acceptance and
recording in its books and records, an Assignment and Acceptance or a
participation agreement or other transfer instrument reasonably satisfactory in
form and substance to the Deal Agent and the Seller. Each such assignment or
participation shall be effective as of the date specified in the applicable
Assignment and Acceptance or other agreement or instrument only after the
execution, delivery, acceptance and recording as described in the preceding
sentence. The Deal Agent shall notify the Seller of any assignment or
participation thereof made pursuant to this Section 10.05. The Purchaser may, in
connection with any assignment or participation or any proposed assignment or
participation pursuant to this Section 10.05, disclose to the assignee or
participant or proposed assignee or participant any information relating to the
Seller and the Purchased Property furnished to the Purchaser by or on behalf of
the Seller or the Collection Agent.
SECTION 10.06. Term of this Agreement. This Agreement,
including, without limitation, the Seller's obligation to observe its covenants
set forth in Articles V and VI, and the Collection Agent's obligation to observe
its covenants set forth in Article VI, shall remain in full force and effect
until the Collection Date; provided, however, that the rights and remedies with
respect to any breach of any representation and warranty made or deemed made by
the Seller pursuant to Articles III and IV, and the indemnification and payment
provisions of Article VIII and Article IX and the provisions of Section 10.10
and Section 10.11 shall be continuing and shall survive any termination of this
Agreement.
SECTION 10.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF OBJECTION TO VENUE. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THE PURCHASER, THE SELLER
AND THE DEAL AGENT EACH HEREBY AGREES TO THE JURISDICTION OF ANY FEDERAL COURT
LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY WAIVES
ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO
THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT.
SECTION 10.08. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THE PURCHASER, THE SELLER AND THE DEAL AGENT EACH WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF
THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.
SECTION 10.09. Costs, Expenses and Taxes. (a) In addition to
the rights of indemnification granted to the Deal Agent, the Purchaser and the
Indemnified Parties under Article VIII hereof, the Seller agrees to pay on
demand all costs and expenses of EagleFunding and the Deal Agent incurred in
connection with the preparation, execution, delivery, administration (including
periodic auditing), amendment or modification of, or any waiver or consent
issued in connection with, this Agreement and the other documents to be
delivered hereunder or in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for the Deal Agent and
EagleFunding with respect thereto, and with respect to advising the Deal Agent
and the Purchaser as to their respective rights and remedies under this
Agreement and the other documents to be delivered hereunder or in connection
herewith, and all costs and expenses, if any (including reasonable counsel fees
and expenses), incurred by the Deal Agent or the Purchaser in connection with
the enforcement of this Agreement and the other documents to be delivered
hereunder or in connection herewith.
(b) The Seller shall pay on demand any and all commissions of
placement agents and dealers in respect of commercial paper notes (to the extent
not otherwise received by the Purchaser as a portion of Yield) issued to fund
the Purchase of any interests in Purchased Property and any and all stamp,
sales, excise and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
the other documents to be delivered hereunder or any agreement or other document
providing liquidity support, credit enhancement or other similar support to the
Purchaser in connection with this Agreement or the funding or maintenance of
Purchases hereunder.
(c) The Seller shall pay on demand all other costs, expenses
and taxes (excluding income taxes) incurred by an Issuer or any general or
limited partner or shareholder of such Issuer ("Other Costs"), including,
without limitation, the cost of auditing such Issuer's books by certified public
accountants, the cost of rating such Issuer's commercial paper by independent
financial rating agencies, the taxes (excluding income taxes) resulting from
such Issuer's operations, and the reasonable fees and out-of-pocket expenses of
counsel for such Issuer or any counsel for any general or limited partner or
shareholder of such Issuer with respect to (i) advising such Person as to its
rights and remedies under this Agreement and the other documents to be delivered
hereunder or in connection herewith, (ii) the enforcement of this Agreement and
the other documents to be delivered hereunder or in connection herewith or
matters relating to such Issuer's operations and (iii) advising such Person as
to the issuance of its commercial paper notes and action in connection with such
issuance.
SECTION 10.10. No Proceedings. Each of the Seller, the Deal
Agent, the Collection Agent and the Purchaser hereby agrees that it will not
institute against, or join any other Person in instituting against, any Issuer
any proceedings of the type referred to in clause (i) of Section 7.01(f) so long
as any commercial paper issued by such Issuer shall be outstanding or there
shall not have elapsed one year and one day since the last day on which any such
commercial paper shall have been outstanding.
SECTION 10.11. Recourse Against Certain Parties. No recourse
under or with respect to any obligation, covenant or agreement (including,
without limitation, the payment of any fees or any other obligations) of the
Purchaser as contained in this Agreement or any other agreement, instrument or
document entered into by it pursuant hereto or in connection herewith shall be
had against any administrator of the Purchaser or any incorporator, affiliate,
stockholder, officer, employee or director of the Purchaser or of any such
administrator, 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 the agreements of the Purchaser contained in this
Agreement and all of the other agreements, instruments and documents entered
into by it pursuant hereto or in connection herewith are, in each case, solely
the corporate obligations of the Purchaser, and that no personal liability
whatsoever shall attach to or be incurred by any administrator of the Purchaser
or any incorporator, stockholder, affiliate, officer, employee or director of
the Purchaser or of any such administrator, as such, or any other of them, under
or by reason of any of the obligations, covenants or agreements of the Purchaser
contained in this Agreement or in any other such instruments, documents or
agreements, or which are implied therefrom, and that any and all personal
liability of every such administrator of the Purchaser and each incorporator,
stockholder, affiliate, officer, employee or director of the Purchaser or of any
such administrator, or any of them, for breaches by the Purchaser of any such
obligations, covenants or agreements, which liability may arise either at common
law or at equity, by statute or constitution, or otherwise, is hereby expressly
waived as a condition of and in consideration for the execution of this
Agreement. The provisions of this Section 10.11 shall survive the termination of
this Agreement.
SECTION 10.12. Execution in Counterparts; Severability;
Integration. 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. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. This
Agreement contains 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
other than the fee letters described in Section 2.09(a).
SECTION 10.13. Confidentiality. Except to the extent otherwise
required by applicable laws, rules or regulation, unless the provider thereof
shall otherwise consent in writing the Seller agrees that it shall (i) maintain
the confidentiality of information obtained as a result of being a party hereto,
to any related documents or to any of the transactions contemplated hereby or
thereby (including, without limitation, the contents of any summary of
indicative terms and conditions with respect to such transactions, and the
provisions of this Agreement and any of the other Facility Documents)
("Confidential Information") and (ii) not disclose, deliver or otherwise make
available to any third party any part of any such Confidential Information;
provided, however, that the Seller may disclose any Confidential Information (w)
to its legal counsel, auditors and accountants, (x) as may be required or
requested by any governmental authority, regulatory body or rating agency, (y)
subject to a written confidentiality agreement having terms substantially
similar to this Section 10.13, to the Originator or any Affiliate thereof, any
financial institution or other party that extends or is considering the
extension of material debt or equity financing to the Originator or any
Affiliate, or (z) as may be required or appropriate in response to a court order
or in connection with any litigation; provided further, however, that the Seller
shall have no obligation of confidentiality whatsoever in respect of any
information which may be generally available to the public or becomes available
to the public through no fault of the Seller, the Originator or any of their
respective Affiliates.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE SELLER: SYNTHETIC FUNDING CORPORATION
By_________________________________
Title:
000 Xxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: [______________]
Facsimile No.: (706)[__________]
Telephone No.: (706)[__________]
THE COLLECTION AGENT: SYNTHETIC INDUSTRIES, INC.
By_________________________________
Title:
000 Xxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: [______________]
Facsimile No.: (706)[__________]
Telephone No.: (706)[__________]
THE DEAL AGENT: BANCBOSTON SECURITIES INC.
By_________________________________
Title:
BancBoston Securities Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
THE PURCHASER: EAGLEFUNDING CAPITAL CORPORATION
By: BankBoston, N.A., as its attorney-in-fact
By_______________________
Title:
EagleFunding Capital Corporation
c/o BancBoston Securities Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
c/o Lord Securities Corporation
0 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
SCHEDULE I
CONDITION PRECEDENT DOCUMENTS
As required by Section 3.01 of the Agreement, each of the
following items must be delivered to the Deal Agent prior to the date of the
initial Purchase:
(a) A copy of this Agreement duly executed by the Seller, the
Purchaser and the Deal Agent;
(b) A certificate of the Secretary or Assistant Secretary of
the Seller dated the date of this Agreement, certifying (i) the names and true
signatures of the incumbent officers of the Seller authorized to sign this
Agreement and the other documents to be delivered by it hereunder (on which
certificate the Deal Agent and the Purchaser may conclusively rely until such
time as the Deal Agent shall receive from the Seller a revised certificate
meeting the requirements of this paragraph (b)), (ii) that the copy of the
certificate of incorporation of the Seller attached thereto is a complete and
correct copy and that such certificate of incorporation has not been amended,
modified or supplemented and is in full force and effect, (iii) that the copy of
the by-laws of the Seller attached thereto is a complete and correct copy and
that such by-laws have not been amended, modified or supplemented and are in
full force and effect, and (iv) the resolutions of the Seller's board of
directors approving and authorizing the execution, delivery and performance by
the Seller of this Agreement and the documents related thereto;
(c) Good standing certificate for the Seller issued by the
Secretary of State of Delaware;
(d) Acknowledgment copies of proper financing statements (the
"Facility Financing Statements"), dated a date reasonably near to the date of
the initial Purchase, describing the Receivables and Related Security and (i)
naming the Originator as Seller, the Seller as purchaser and the Deal Agent as
assignee and (ii) naming the Seller as debtor and the Deal Agent, on behalf of
the Purchaser, as secured party, or other, similar instruments or documents, as
may be necessary or, in the opinion of the Deal Agent or the Purchaser,
desirable under the UCC of all appropriate jurisdictions or any comparable law
to perfect the Purchaser's interests in all Receivables and Related Security and
other Purchased Property;
(e) Acknowledgment copies of proper financing statements, if
any, necessary to release all security interests and other rights of any Person
in the Receivables and Related Security previously granted by the Originator or
the Seller;
(f) Certified copies of requests for information or copies (or
a similar search report certified by a party acceptable to the Deal Agent),
dated a date reasonably near to the date of the initial Purchase, listing all
effective financing statements (including the Facility Financing Statements)
which name the Originator or the Seller (under their present names and any
previous names) as debtor and which are filed in the jurisdictions in which the
Facility Financing Statements were filed, together with copies of such financing
statements (none of which, other than the Facility Financing Statements, shall
cover any Receivables or Contracts except to the extent permitted under the
Intercreditor Agreement);
--
(g) Executed copies of Lock-Box Agreements with each of the
Lock-Box Banks and an executed copy of the Collection Account Agreement with the
Collection Account Bank;
(h)The Intercreditor Agreement executed by all parties thereto
(i) An opinion of King & Spalding, counsel to the Originator
and the Seller, issued in connection with the Originator Sale Agreement and
relating to the issues of substantive consolidation and true sale of the
Receivables and the related property, in form and substance satisfactory to the
Deal Agent;
(j) An opinion of King & Spalding, counsel to the Seller,
issued in connection with this Agreement and relating to corporate issues,
perfection and priority of security interests, in substantially the form of
Exhibit D, and as to such other matters as the Deal Agent may reasonably
request, together with a similar opinion of King & Spalding, counsel to the
Originator, issued in connection with the Originator Sale Agreement; and
(k) Original copies of the Originator Sale Agreement and all
documents described in Section 3.01 of the Originator Sale Agreement and not
otherwise described above.
(l) A fully and correctly completed Daily Settlement Report,
as of the close of business of the Collection Agent on the next preceding
Business Day, and a fully and correctly completed Asset Report, as of the last
day of the most recently concluded calendar month.
SCHEDULE II
DESCRIPTION OF CREDIT AND COLLECTION POLICY
Attached.
SCHEDULE III
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
Lock-Box Banks:
SOUTHTRUST BANK, N.A.
One Georgia Center
000 Xxxx Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Title of Account Account No. Lock-box No.
Synthetic Industries 00-000-000 A0063
SCHEDULE IV
TRADENAMES, FICTITIOUS NAMES AND "DOING BUSINESS AS" NAMES
Product Name:
Fibermesh
EXHIBIT A
FORM OF CONTRACTS
Attached.
EXHIBIT B
FORM OF LOCK-BOX AGREEMENT
____________, 19__
[Name and Address of
Lock-Box Bank]
Re: Synthetic Industries, Inc.
Lock-Box Account No. 00-000-000
(the "Lock-Box Account")
Ladies and Gentlemen:
The undersigned, Synthetic Industries, Inc. ("Synthetic")
hereby notifies you that we have transferred exclusive ownership and control of
the above-referenced Lock-Box Account to Synthetic Funding Corporation, a
Delaware corporation, and that Synthetic Funding Corporation (the "Seller"), in
connection with certain purchase and financing arrangements between the Seller
and EagleFunding Capital Corporation (the "Purchaser"), hereby transfers
exclusive ownership and control of the above-referenced Lock-Box Account to
BancBoston Securities Inc., acting in its capacity as deal agent (the "Deal
Agent") for itself and for the Purchaser.
In connection with the foregoing, Synthetic, the Seller and
the Deal Agent each hereby instructs you, beginning on the date hereof and in
accordance with your existing procedures for management of the Lock-Box Account,
(i) to collect and deposit into the Lock-Box Account all monies, checks,
instruments and other items of payment received in the related lock-box and (ii)
to transfer to the Deal Agent an amount equal to all monies, checks, instruments
and other items of payment deposited in the Lock-Box Account on a daily basis.
All such transfers shall be made on a daily basis by depository transfer check
(DTC), automated clearing house (ACH) transfer, or wire or otherwise, as the
Deal Agent may direct you in its sole discretion, to the following account (the
"Collection Account"):
BankBoston, N.A.
Account No: __________________
Reference: BancBoston Securities Inc. Collection Account,
as Deal Agent for Synthetic Funding Securitization
or to such other account as the Deal Agent may instruct from time to time.
-3-
The Seller and Synthetic also each hereby notifies you that
the Deal Agent shall be irrevocably entitled to exercise any and all rights (if
any) of Synthetic and the Seller in respect of or in connection with the
Lock-Box Account, including, without limitation, the right to specify when
payments are to be made out of or in connection with the Lock-Box Account. All
monies in the Lock-Box Account will be held for and in trust for the Deal Agent
upon deposit therein and neither Synthetic nor the Seller will have any control
over the Lock-Box Account or the funds on deposit therein. Without limiting the
generality of the foregoing, neither Synthetic nor the Seller shall have any
right to draw against the Lock-Box Account, direct the transfer of funds therein
or otherwise assign, pledge or have access to the Lock-Box Account or the funds
on deposit therein.
You will have no duty to inquire into the source or use of any
monies, checks, drafts, instruments or other items or amounts deposited into the
Lock-Box Account. The Seller and Synthetic each hereby agrees that any deposits
of monies, checks, drafts, instruments or other items into or withdrawals from
the Lock-Box Account now or hereafter directed by the Deal Agent are authorized
by the Seller and Synthetic, and each of Synthetic and the Seller acknowledges
that it has no right to direct such transfers at any time. You shall be fully
protected in acting on any instruction of the Deal Agent with respect to the
Lock-Box Account without making any inquiry as to the Deal Agent's authority to
give such instruction.
Notwithstanding anything herein or elsewhere to the contrary,
including but not limited to any provision of the Loan and Security Agreement
dated as of December 18, 1997, by and between Synthetic and the financial
institutions party thereto from time to time as lenders and BankBoston, N.A., as
Agent (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Loan and Security Agreement"), you hereby waive any and
all rights to bankers liens and rights to deduct from or set-off against amounts
in the Lock-Box Account, except that: (i) in the event that any checks deposited
in the Lock-Box Account are returned unpaid to you, the amount thereof shall be
charged to the Lock-Box Account, and (ii) any monthly maintenance fees in
connection with the Lock-Box Account may also be charged to the Lock-Box
Account. The Seller hereby agrees that if there are insufficient funds in the
Lock-Box Account to cover any such charges to the Lock-Box Account, then it will
pay to you the amount of such deficiency on demand. In the event the Seller
fails to reimburse you as set forth above, you may so notify the Deal Agent, and
the Deal Agent may, but shall have no obligation to, pay the same.
The use of any such checks or electronic or other means of
funds transfer, together with the resolutions authorizing the same, are intended
to affirm the rights and the interests of the Deal Agent in the Lock-Box Account
and all funds deposited therein and not to derogate therefrom.
The taxpayer identification number associated with the
Lock-Box Account shall be that of the Seller and the Seller will report for
federal, state and local income tax purposes the income, if any, earned on funds
in the Lock-Box Account.
This letter agreement may not be terminated at any time by
Synthetic or the Seller, but may be terminated by either you or the Deal Agent
upon 30 days' prior written notice to the other and to the undersigned.
You will not assign or transfer your rights or obligations
hereunder (other than to the Deal Agent) without the prior written consent of
the other parties hereto. Subject to the preceding sentence, this letter
agreement shall inure to the benefit of and be binding upon all parties hereto
and their respective successors and assigns.
Any change, amendment, modification or waiver of this letter
agreement or any provision hereof will not be effective unless such change,
amendment, modification or waiver is in writing and signed by all parties
hereto.
All notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto shall be
effective if communicated in writing and personally delivered or sent by
registered, certified, express or regular mail, postage prepaid, return receipt
requested, or by telex, telecopy (receipt promptly confirmed by telephone) or
prepaid telegram (with messenger delivery specified in the case of a telegram)
or by telephone (promptly confirmed in writing) and shall be deemed to be given
for purposes of this letter agreement on the day that such communication is
delivered to the intended recipient thereof in accordance with the provisions of
this paragraph. Unless otherwise specified in a notice sent or delivered in
accordance with the foregoing provisions of this paragraph, notices, demands,
instructions and other communications shall be given to or made upon the
respective parties hereto at their respective addresses (or to their respective
telex, telecopy or telephone numbers) indicated below, or at such other address
as any party hereto may notify to the other parties in accordance with the
provisions of this paragraph.
All bank statements on the Lock-Box Account should be sent to the
Seller at:
Synthetic Funding Corporation
000 XxXxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attn:
With a copy to the Deal Agent at:
BancBoston Securities Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Mail Stop: 01-09-02
Attn: Xxxx X. Xxxxxxx III
Each of Synthetic and the Seller consents and agrees to the
foregoing, authorizes you to enter into this letter agreement, and agrees to
indemnify and hold you harmless from and against any and all claims, actions and
suits (whether groundless or otherwise), losses, damages, costs, expenses and
liabilities of every nature and character arising out of your compliance with
the terms of this letter agreement, except such as result from your gross
negligence or willful misconduct, and in no event shall you be liable for any
consequential, indirect or special damages and except that losses for
uncollected checks shall be the responsibility of the Seller to the extent not
set-off against other funds in the Lock-Box Account.
You and each of the parties hereto (other than the Seller)
hereby agree (which agreement shall, pursuant to the terms of this letter
agreement, be binding upon its successors and assigns) that you and each of the
parties hereto shall not institute against, or join any other Person in
instituting against the Seller any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any federal or
state bankruptcy or similar law, for one year and a day after the payment in
full of all of the indebtedness of the Seller and the termination of any of the
commitments under each of the "Facility Documents", as such term is defined
under the Receivables Purchase Agreement. The provisions of this paragraph shall
survive the termination of this letter agreement.
This letter agreement shall be governed by and construed in
accordance with the internal laws of The Commonwealth of Massachusetts and
applicable federal law.
This letter agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute one and the same instrument.
This letter agreement constitutes the entire agreement between
the parties hereto relating to the Lock-Box Account and the other matters herein
described and supersedes any and all prior agreements relating to such matters,
including but not limited to the Agency Account Agreement between Synthetic,
SouthTrust Bank of Georgia, N.A. and BankBoston, N.A. (formerly known as "The
First National Bank of Boston"), dated as of October 20, 1995.
[Remainder of Page Intentionally Left Blank]
Please agree to the terms of, and acknowledge receipt of, this
notice by signing in the space provided below.
Very truly yours,
SYNTHETIC INDUSTRIES, INC.
By:________________________________
Title:
Address: 000 XxXxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Telephone:
Telecopy:
SYNTHETIC FUNDING CORPORATION
By:________________________________
Title:
Address: 000 XxXxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Telephone:
Telecopy:
BANCBOSTON SECURITIES INC.,
as Deal Agent
By:________________________________
Title:
Address: 000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Mail Stop: 01-09-02
Attn: Xxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
--
Accepted this __th day
of December, 19__
[NAME OF BANK]
By:________________________________
Title:
Address: ___________________
-------------------
Attn: ______________
Telephone: (___) ________
Telecopy: (___) ________
The undersigned, BankBoston, N.A. (formerly known as "The First
National Bank of Boston") on behalf of itself and in its capacity as agent under
(a) the Fourth Amended and Restated Revolving Credit and Security Agreement
among Synthetic Industries, Inc., the financial institutions party thereto from
time to time as the "Lenders" and The First National Bank of Boston, as agent
for the Lenders, dated October 20, 1995, and (b) the "Loan and Security
Agreement" (as defined in the attached letter agreement), hereby agrees that the
attached letter agreement supersedes any and all prior agreements relating to
Account # 00-000-000 at SouthTrust Bank of Georgia, N.A. (the "Lock-Box
Account") and the other matters described in the attached letter agreement,
including but not limited to the Agency Account Agreement between itself,
Synthetic Industries, Inc. and SouthTrust Bank of Georgia, N.A., dated as of
October 20, 1995, and hereby releases, relinquishes and disclaims any and all of
its right, title and interest in, to and under the Lock-Box Account, which
release shall become effective with respect to such Agency Account upon the
effectiveness of the attached letter agreement.
Date: _________________ BANKBOSTON, N.A.
By:_______________________
Title:______________________
EXHIBIT C
FORM OF ASSET REPORT
Attached.
EXHIBIT D
FORM OF OPINION OF COUNSEL FOR THE SELLER
[Date of Initial Purchase]
To: EagleFunding Capital Corporation,
as the Purchaser under the Purchase Agreement dated as of ________,
19__, among [_________], said Purchaser and BancBoston Securities Inc.,
as Deal Agent for said Purchaser; and
BancBoston Securities Inc., as Deal Agent under said
Purchase Agreement.
[Xxxxx'x]
[S&P]
[DCR]
[Synthetic Funding Corporation]
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 3.01 of
the Purchase Agreement dated as of ______________, 19__ (the "Purchase
Agreement") among ___________________________, EagleFunding Capital Corporation
("EagleFunding") and BancBoston Securities, Inc., as Deal Agent. Terms defined
in the Purchase
Agreement are used herein as therein defined.
We have acted as counsel for the Seller in connection with the
preparation, execution and delivery of, and the initial purchase of Receivable
Interests made under, the Purchase Agreement.
In that connection we have examined:
(1) The Purchase Agreement.
(2) The documents furnished by the Seller pursuant to Section
3.01 of the Purchase Agreement, and each of the other Facility
Documents.
(3) The Certificate of Incorporation of the Seller and all
amendments thereto (the "Charter").
(4) The by-laws of the Seller and all amendments thereto (the
"By-Laws").
--
(5) Certificates from the Secretary of State of Delaware,
dated ________, 19__, the Secretary of State of [the state in which the
Seller's chief executive office is located], dated ________, 19__, the
Secretary of State of ________, dated ________, 19__, and the Secretary
of State of ________, dated ________, 19__, each attesting to the
continued corporate existence and good standing of the Seller in such
States.*
(6) Acknowledgment cop[y][ies] of [appropriate number]
financing statement[s] (the "Financing Statement[s]") under the Uniform
Commercial Code (the "UCC") as in effect in the State of [the state in
which the Seller's chief executive office is located], naming the
Seller as debtor and the Deal Agent as secured party, which Financing
Statements have been filed in the filing offices listed in Schedule I
hereto located in the respective states listed in Schedule I hereto.
(7) Certificates from [name of search report service] as to
copies of financing statements on file with the filing offices listed
in Schedule I hereto located in the respective states listed in
Schedule I hereto.
We have also examined the originals, or copies certified to our satisfaction, of
the documents listed in a certificate of the chief financial officer of the
Seller, dated the date hereof (the "Seller's Certificate"), certifying that the
documents listed in such Certificate are all of the indentures, loan or credit
agreements, security agreements, bonds and notes (except bonds and notes issued
pursuant to the aforesaid indentures and loan or credit agreements), which
affect or purport to affect the Seller's ability to sell or otherwise dispose of
Receivables or the Seller's obligations under the Purchase Agreement. In
addition, we have examined the originals, or copies certified to our
satisfaction, of such other corporate records of the Seller, certificates of
public officials and of officers of the Seller, and agreements, instruments and
documents, as we have deemed necessary as a basis for the opinions hereinafter
expressed. As to questions of fact material to such opinions, we have, when
relevant facts were not independently established by us, relied upon
certificates of the Seller or its officers or of public officials. We have
assumed the due execution and delivery, pursuant to due authorization, of the
Purchase Agreement by EagleFunding and the Deal Agent. In our examination of the
certificates referred to in (7) above, we have assumed that all financing
statements, other than the Financing Statements, in which the Seller is named as
debtor have been properly filed and indexed in the appropriate filing offices in
the states listed on Schedule I hereto, that such certificates are accurate and
complete, and that you have no knowledge of the contents of any other financing
statement.
Based upon the foregoing and upon such investigation as we
have deemed necessary, we are of the opinion that:
1. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and is duly qualified to do business, and is in good standing, in every
jurisdiction where the nature of its business requires it to be so
qualified.
2. The execution, delivery and performance by the Seller of
the Purchase Agreement, each of the Facility Documents to which it is a
party, and all other instruments and documents to be delivered by the
Seller thereunder, and the transactions contemplated thereunder, are
within the Seller's corporate powers, have been duly authorized by all
necessary corporate action, and (a) do not contravene (i) the Charter
or the By-Laws or (ii) any law, rule or regulation applicable to the
Seller or (iii) any contractual or legal restriction contained in any
document listed in the Seller's Certificate or, to the best of our
knowledge, contained in any other similar document, and (b) do not
result in or require the creation of any lien, security interest or
other charge or encumbrance upon or with respect to any of the Seller's
properties, and (c) do not require compliance with any bulk sales act
or similar law. Each of the Facility Documents to which the Seller is a
party has been duly executed and delivered on behalf of the Seller.
3. No authorization, approval, or other action by, and no
notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by the
Seller of the Purchase Agreement or any other document or instrument to
be delivered under the Purchase Agreement or for the perfection of or
the exercise by the Deal Agent or the Purchaser of its respective
rights and remedies under the Purchase Agreement, except for the
filings referred to in paragraph 6 below and as otherwise stated in
such paragraph 6.
4. The Purchase Agreement and the other Facility Documents to
which the Seller is a party constitute the legal, valid and binding
obligation of the Seller enforceable against the Seller in accordance
with its terms.
5. To the best of our knowledge there is no pending or
threatened action, suit or proceeding, or any order, writ, judgment,
award, injunction or decree, against or affecting the Seller or any of
its subsidiaries before any court, governmental agency or arbitrator
which may materially adversely affect the financial condition or
operations of the Seller or the Seller and its consolidated
subsidiaries taken as a whole or materially adversely affect the
ability of the Seller to perform its obligations under the Facility
Documents. Neither the Seller nor any subsidiary is in default with
respect to any order of any court, arbitrator or governmental body
except for defaults with respect to orders of governmental agencies
which defaults are not material to the Seller or to the business or
operations of the Seller or any subsidiary.
6. [Insert opinion as to the perfection and priority of the
Purchaser's interest in each Purchased Receivable then existing or
thereafter arising and in the Related Security and Collections with
respect thereto, such opinion to be negotiated for this transaction,
taking into account the circumstances of the transaction, the nature of
the Purchased Receivables and Related Security and applicable law.]
The opinions set forth above are subject to the following
qualifications:
(a) The enforceability of the Seller's obligations under the
Facility Documents is subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally.
(b) The enforceability of the Seller's obligations under the
Facility Documents is subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
We do not purport to be experts on, or to express any opinion
herein concerning, any law other than the general corporation law of the State
of [Delaware], law of the States of New York and [the state in which the
Seller's chief executive office is located] and the federal law of the United
States.
Copies of this opinion letter may be delivered to the
Purchaser, any financial institution providing liquidity support or credit
enhancement in connection with the transactions contemplated by the Purchase
Agreement, any financial institution acting as agent in connection with any such
liquidity support or credit enhancement facility or any successor or assign of
the foregoing, and each such Person shall be entitled to rely upon the opinions
set forth herein.
Very truly yours,
EXHIBIT E
SELLER'S CERTIFICATE OF INCORPORATION
[Execution Version]
[Synthetic]
U.S. $40,000,000
RECEIVABLES PURCHASE AGREEMENT
Dated as of December 18, 1997
Among
SYNTHETIC FUNDING CORPORATION,
as the Seller
and
EAGLEFUNDING CAPITAL CORPORATION,
as the Purchaser
and
BANCBOSTON SECURITIES INC.,
as the Deal Agent
and
SYNTHETIC INDUSTRIES, INC.,
as the Collection Agent
--
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms.....................................................................1
SECTION 1.02. Other Terms..............................................................................22
SECTION 1.03. Computation of Time Periods..............................................................23
ARTICLE II
THE PURCHASE FACILITY
SECTION 2.01. Purchases of Purchased Interests; Stop Events............................................23
SECTION 2.02. The Initial Purchase, Subsequent Purchases and Capital Increases.........................24
SECTION 2.03. Termination or Reduction of the Purchase Limit. .........................................25
SECTION 2.04. Selection of Purchase Periods............................................................25
SECTION 2.05. Non-Liquidation Settlement Procedures....................................................26
SECTION 2.06. Liquidation Settlement Procedures........................................................28
SECTION 2.07. Special Settlement Procedures............................................................30
SECTION 2.08. Payments and Computations, Etc...........................................................30
SECTION 2.09. Fees.....................................................................................31
SECTION 2.10. Increased Costs; Capital Adequacy; Illegality............................................32
SECTION 2.11. Taxes....................................................................................34
SECTION 2.12. Assignment of the Originator Sale
Agreement.....................................................................................35
ARTICLE III
CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial
Purchase.......................................................................................36
SECTION 3.02. Conditions Precedent to All Purchases and Remittances of Collections.....................36
SECTION 3.03. Conditions Precedent to Certain Capital Increases........................................37
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Seller. . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE V
GENERAL COVENANTS OF THE SELLER
SECTION 5.01. General Covenants........................................................................42
ARTICLE VI
ADMINISTRATION, COLLECTION AND MONITORING OF ASSETS
SECTION 6.01. Appointment and Designation of the Collection Agent......................................51
SECTION 6.02. Collection of Receivables by the Collection Agent; Extensions and Amendments of
Receivables....................................................................................52
SECTION 6.03. Distribution and Application of
Collections....................................................................................52
SECTION 6.04. Other Rights of the Deal Agent...........................................................53
SECTION 6.05. Records; Audits..........................................................................53
SECTION 6.06. Receivable Reporting............................................................54 Payments
SECTION 6.07. Collections and Lock-Boxes...............................................................54
SECTION 6.08. UCC Matters; Protection and Perfection of Purchased Property.............................55
SECTION 6.09. Obligations of the Seller With Respect to Receivables....................................56
SECTION 6.10. Applications of Collections..............................................................57
SECTION 6.11. Annual Servicing Report of Independent Public Accountants................................57
ARTICLE VII
EVENTS OF TERMINATION
SECTION 7.01. Events of Termination....................................................................58
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01. Indemnities by the Seller................................................................61
ARTICLE IX
THE DEAL AGENT
SECTION 9.01. Authorization and Waivers....................................................................66
SECTION 9.02. Deal Agent's Reliance, etc...............................................................66
SECTION 9.03. Deal Agent and Affiliates................................................................67
SECTION 9.04. [Reserved]...............................................................................67
SECTION 9.05. Resignation of the Deal Agent............................................................67
SECTION 9.06. Payments ................................................................................67
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Amendments and Waivers..................................................................68
SECTION 10.02. Notices, Etc............................................................................68
SECTION 10.03. Setoff and Counterclaim.................................................................69
SECTION 10.04. No Waiver; Remedies.....................................................................69
SECTION 10.05. Binding Effect; Assignability...........................................................69
SECTION 10.06. Term of this Agreement..................................................................70
SECTION 10.07. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE....................70
SECTION 10.08. WAIVER OF JURY TRIAL....................................................................70
SECTION 10.09. Costs, Expenses and Taxes...............................................................71
SECTION 10.10. No Proceedings..........................................................................72
SECTION 10.11. Recourse Against Certain Parties........................................................72
SECTION 10.12. Execution in Counterparts; Severability; Integration....................................72
SECTION 10.13. Confidentiality.........................................................................73
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE I Condition Precedent Documents
SCHEDULE II Description of Credit and Collection Policy
SCHEDULE III Lock-Box Banks and Lock-Box Accounts
SCHEDULE IV Tradenames, Fictitious Names and "Doing Business
As" Names
EXHIBITS
EXHIBIT A Form of Contracts
EXHIBIT B Form of Lock-Box Agreements
EXHIBIT C Form of Asset Report
EXHIBIT D Form of Opinion of Counsel for the Seller
EXHIBIT E Seller's Certificate of Incorporation
::ODMA\PCDOCS\WASHINGTON\36545\12 February 5, 1998 (9:09AM)
--------
* Enumerated jurisdictions should include the State of New Jersey and any
other State that has enacted legislation comparable to the New Jersey
Corporation Business Activities Reporting Act, or compliance with the
relevant statute should be otherwise confirmed.
