EXHIBIT 10.4
RECEIVABLES PURCHASE AGREEMENT
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DATED AS OF SEPTEMBER 25, 2001
AMONG
RALCORP RECEIVABLES CORPORATION, AS SELLER,
RALCORP HOLDINGS, INC., AS MASTER SERVICER,
FALCON ASSET SECURITIZATION CORPORATION
AND
BANK ONE, NA (MAIN OFFICE CHICAGO), INDIVIDUALLY AND AS AGENT
RECEIVABLES PURCHASE AGREEMENT
THIS RECEIVABLES PURCHASE AGREEMENT, dated as of September 25, 2001, is
among Ralcorp Receivables Corporation, a Nevada corporation ("SELLER"), Ralcorp
Holdings, Inc., a Missouri corporation ("RALCORP"), as initial Master Servicer
(the Master Servicer together with Seller, the "SELLER PARTIES" and each a
"SELLER PARTY"), the entities listed on Schedule A to this Agreement (together
with any of their respective successors and assigns hereunder, the "FINANCIAL
INSTITUTIONS"), Falcon Asset Securitization Corporation ("CONDUIT") and Bank
One, NA (Main Office Chicago), as agent for the Purchasers hereunder or any
successor agent hereunder (together with its successors and assigns hereunder,
the "AGENT"). Unless defined elsewhere herein, capitalized terms used in this
Agreement shall have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Purchaser Interests to the Purchasers
from time to time.
Conduit may, in its absolute and sole discretion, purchase Purchaser
Interests from Seller from time to time.
In the event that Conduit declines to make any purchase, the Financial
Institutions shall, at the request of Seller, purchase Purchaser Interests from
time to time. In addition, the Financial Institutions have agreed to provide a
liquidity facility to Conduit in accordance with the terms hereof.
Bank One, NA (Main Office Chicago) has been requested and is willing to act
as Agent on behalf of Conduit and the Financial Institutions in accordance with
the terms hereof.
ARTICLE I.
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
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(a) Upon the terms and subject to the conditions hereof, Seller may, at its
option, sell and assign Purchaser Interests to the Agent for the benefit of one
or more of the Purchasers. In accordance with the terms and conditions set forth
herein, Conduit may, at its option, instruct the Agent to purchase on behalf of
Conduit, or if Conduit shall decline to purchase, the Agent shall purchase, on
behalf of the Financial Institutions, Purchaser Interests from time to time in
an aggregate amount not to exceed at such time the lesser of (i) the Purchase
Limit and (ii) the aggregate amount of the Commitments during the period from
the date hereof to but not including the Facility Termination Date.
(b) Seller may, upon at least 30 days' notice to the Agent, terminate in
whole or reduce in part, ratably among the Financial Institutions, the unused
portion of the Purchase Limit; provided that each partial reduction of the
Purchase Limit shall be in an amount equal to $5,000,000 or an integral multiple
thereof.
Section 1.2 Increases Seller shall provide the Agent with prior notice in a
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form set forth as Exhibit II hereto of each Incremental Purchase (a "PURCHASE
NOTICE") by 2:00 p.m. (Chicago time), at least two (2) Business Days prior to
the requested funding date. Each Purchase Notice shall be subject to Section 6.2
hereof and, except as set forth below, shall be irrevocable and shall specify
the requested Purchase Price (which shall not be less than $1,000,000 or a
larger integral multiple of $100,000) and date of purchase and, in the case of
an Incremental Purchase to be funded by the Financial Institutions, the
requested Discount Rate and Tranche Period; PROVIDED, HOWEVER, that not more
than five (5) Purchase Notices may be delivered in any one calendar month and
not more than one (1) unfunded Purchase Notice may be outstanding at any one
time. Following receipt of a Purchase Notice, the Agent will determine whether
Conduit agrees to make the purchase. If Conduit declines to make a proposed
purchase, Seller may cancel the Purchase Notice or, in the absence of such a
cancellation, the Incremental Purchase of the Purchaser Interest will be made by
the Financial Institutions. On the date of each Incremental Purchase, upon
satisfaction of the applicable conditions precedent set forth in Article VI,
Conduit or the Financial Institutions, as applicable, shall deposit to the
Facility Account, in immediately available funds, no later than 12:00 noon
(Chicago time), an amount equal to (i) in the case of Conduit, the aggregate
Purchase Price of the Purchaser Interests Conduit is then purchasing or (ii) in
the case of a Financial Institution, such Financial Institution's Pro Rata Share
of the aggregate Purchase Price of the Purchaser Interests the Financial
Institutions are purchasing.
Section 1.3 Decreases. Seller shall provide the Agent with prior written
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notice in conformity with the Required Notice Period (a "REDUCTION NOTICE") of
any proposed reduction of Aggregate Capital from Collections. Such Reduction
Notice shall designate (i) the date (the "PROPOSED REDUCTION DATE") upon which
any such reduction of Aggregate Capital shall occur (which date shall give
effect to the applicable Required Notice Period), and (ii) the amount of
Aggregate Capital to be reduced which shall be applied ratably to the Purchaser
Interests of Conduit and the Financial Institutions in accordance with the
amount of Capital (if any) owing to Conduit, on the one hand, and the amount of
Capital (if any) owing to the Financial Institutions (ratably, based on their
respective Pro Rata Shares), on the other hand (the "AGGREGATE REDUCTION"). Only
one (1) Reduction Notice shall be outstanding at any time.
Section 1.4 Payment Requirements. All amounts to be paid or deposited by
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any Seller Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (Chicago
time) on the day when due in immediately available funds, and if not received
before 11:00 a.m. (Chicago time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the Conduit, for the account of such Purchaser, at 1 Bank ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ until otherwise notified by the Conduit. Upon notice to
Seller, the Agent may debit the Facility Account for all amounts due and payable
hereunder. All computations of Yield, per annum fees calculated as part of any
CP Costs, per annum fees hereunder and per annum fees under the Fee Letter shall
be made on the basis of a year of 360 days for the actual number of days
elapsed. If any amount hereunder shall be payable on a day which is not a
Business Day, such amount shall be payable on the next succeeding Business Day.
ARTICLE II.
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Notwithstanding any limitation on recourse contained
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in this Agreement, Seller shall immediately pay to the Agent when due, for the
account of the relevant Purchaser or Purchasers on a full recourse basis: (i)
such fees as set forth in the Fee Letter (which fees shall be sufficient to pay
all fees owing to the Financial Institutions), (ii) all CP Costs, (iii) all
amounts payable as Yield, (iv) all amounts payable as Deemed Collections (which
shall be immediately due and payable by Seller and applied to reduce outstanding
Aggregate Capital hereunder in accordance with Sections 2.2 and 2.3 hereof), (v)
all amounts required pursuant to Section 2.6, (vi) all amounts payable pursuant
to Article X, if any, (vii) all Master Servicer costs and expenses, including
the Servicing Fee, in connection with servicing, administering and collecting
the Receivables, (viii) all Broken Funding Costs, and (ix) all Default Fees
(collectively, the "OBLIGATIONS"). If Seller fails to pay any of the Obligations
when due, Seller agrees to pay, on demand, the Default Fee in respect thereof
until paid. Notwithstanding the foregoing, no provision of this Agreement or the
Fee Letter shall require the payment or permit the collection of any amounts
hereunder in excess of the maximum permitted by applicable law. If at any ▇▇▇▇
▇▇▇▇▇▇ receives any Collections or is deemed to receive any Collections, Seller
shall immediately pay such Collections or Deemed Collections to the Master
Servicer for application in accordance with the terms and conditions hereof and,
at all times prior to such payment, such Collections or Deemed Collections shall
be held in trust by Seller for the exclusive benefit of the Purchasers and the
Agent.
Section 2.2 Collections Prior to Amortization. Prior to the
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Amortization Date, any Collections and/or Deemed Collections received by the
Master Servicer shall be set aside and held in trust by the Master Servicer for
the payment of any accrued and unpaid Aggregate Unpaids or for a Reinvestment as
provided in this Section 2.2. If at any time any Collections are received by the
Master Servicer prior to the Amortization Date, (i) the Master Servicer shall
set aside the Termination Percentage (hereinafter defined) of Collections
evidenced by the Purchaser Interests of each Terminating Financial Institution
and (ii) Seller hereby requests and the Purchasers (other than any Terminating
Financial Institutions) hereby agree to make, simultaneously with such receipt,
a reinvestment (each a "REINVESTMENT") with that portion of the balance of each
and every Collection received by the Master Servicer that is part of any
Purchaser Interest (other than any Purchaser Interests of Terminating Financial
Institutions), such that after giving effect to such Reinvestment, the amount of
Capital of such Purchaser Interest immediately after such receipt and
corresponding Reinvestment shall be equal to the amount of Capital immediately
prior to such receipt. On each Settlement Date prior to the occurrence of the
Amortization Date, the Master Servicer shall remit to the Agent's account the
amounts set aside during the preceding Settlement Period that have not been
subject to a Reinvestment and apply such amounts (if not previously paid in
accordance with Section 2.1) first, to reduce unpaid CP Costs, Yield and other
Obligations and second, to reduce the Capital of all Purchaser Interests of
Terminating Financial Institutions, applied ratably to each Terminating
Financial Institution according to its respective Termination Percentage. If
such Capital, CP Costs, Yield and other Obligations shall be reduced to zero,
any additional Collections received by the Master Servicer (i) if applicable,
shall be remitted to the Agent's account no later than 11:00 a.m. (Chicago time)
to the extent required to fund any Aggregate Reduction on such Settlement Date
and (ii) any balance remaining thereafter shall be remitted from the Master
Servicer to Seller on such Settlement Date. Each Terminating Financial
Institution shall be allocated a ratable portion of Collections from the date of
any assignment by Conduit pursuant to Section 13.6 (the "TERMINATION DATE")
until such Terminating Financing Institution's Capital shall be paid in full.
This ratable portion shall be calculated on the Termination Date of each
Terminating Financial Institution as a percentage equal to (i) Capital of such
Terminating Financial Institution outstanding on its Termination Date, divided
by (ii) the Aggregate Capital outstanding on such Termination Date (the
"TERMINATION PERCENTAGE"). Each Terminating Financial Institution's Termination
Percentage shall remain constant prior to the Amortization Date. On and after
the Amortization Date, each Termination Percentage shall be disregarded, and
each Terminating Financial Institution's Capital shall be reduced ratably with
all Financial Institutions in accordance with Section 2.3.
Section 2.3 Collections Following Amortization. On the Amortization Date
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and on each day thereafter, the Master Servicer shall set aside and hold in
trust, for the holder of each Purchaser Interest, all Collections received on
such day and an additional amount (out of the funds received by the Master
Servicer in its capacity as such) for the payment of any accrued and unpaid
Obligations owed by Seller and not previously paid by Seller in accordance with
Section 2.1. On and after the Amortization Date, the Master Servicer shall, at
any time upon the request from time to time by (or pursuant to standing
instructions from) the Agent (i) remit to the Agent's account the amounts set
aside pursuant to the preceding sentence, and (ii) apply such amounts to reduce
the Capital associated with each such Purchaser Interest and any other Aggregate
Unpaids.
Section 2.4 Application of Collections. If there shall be insufficient
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funds on deposit for the Master Servicer to distribute funds in payment in full
of the aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable),
the Master Servicer shall distribute funds:
FIRST, to the payment of the Master Servicer's reasonable out-of-pocket
costs and expenses in connection with servicing, administering and collecting
the Receivables , including the Servicing Fee, if Seller or one of its
Affiliates is not then acting as the Master Servicer,
SECOND, to the reimbursement of the Agent's costs of collection and
enforcement of this Agreement,
THIRD, ratably to the payment of all accrued and unpaid fees under the Fee
Letter, CP Costs and Yield,
FOURTH, (to the extent applicable) to the ratable reduction of the
Aggregate Capital (without regard to any Termination Percentage),
FIFTH, for the ratable payment of all other unpaid Obligations, provided
that to the extent such Obligations relate to the payment of Master Servicer
costs and expenses, including the Servicing Fee, when Seller or one of its
Affiliates is acting as the Master Servicer, such costs and expenses will not be
paid until after the payment in full of all other Obligations, and
SIXTH, after the Aggregate Unpaids have been indefeasibly reduced to zero,
to Seller.
Collections applied to the payment of Aggregate Unpaids shall be distributed in
accordance with the aforementioned provisions, and, giving effect to each of the
priorities set forth above in this Section 2.4, shall be shared ratably (within
each priority) among the Agent and the Purchasers in accordance with the amount
of such Aggregate Unpaids owing to each of them in respect of each such
priority.
Section 2.5 Payment Recission. No payment of any of the Aggregate Unpaids
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shall be considered paid or applied hereunder to the extent that, at any time,
all or any portion of such payment or application is rescinded by application of
law or judicial authority, or must otherwise be returned or refunded for any
reason. Seller shall remain obligated for the amount of any payment or
application so rescinded, returned or refunded, and shall promptly pay to the
Agent (for application to the Person or Persons who suffered such recission,
return or refund) the full amount thereof, plus the Default Fee from the date of
any such recission, return or refunding.
Section 2.6 Maximum Purchaser Interests. Seller shall ensure that the
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Purchaser Interests of the Purchasers shall at no time exceed in the aggregate
100%. If the aggregate of the Purchaser Interests of the Purchasers exceeds
100%, Seller shall pay to the Agent within one (1) Business Day an amount to be
applied to reduce the Aggregate Capital (as allocated by the Agent), such that
after giving effect to such payment the aggregate of the Purchaser Interests
equals or is less than 100%.
Section 2.7 Clean-Up Call. In addition to Seller's rights pursuant to
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Section 1.3, Servicer shall have the right (after providing written notice to
the Agent in accordance with the Required Notice Period), at any time following
the reduction of the Aggregate Capital to a level that is less than 10.0% of the
original Purchase Limit, to repurchase from the Purchasers all, but not less
than all, of the then outstanding Purchaser Interests. The purchase price in
respect thereof shall be an amount equal to the Aggregate Unpaids through the
date of such repurchase, payable in immediately available funds. Such repurchase
shall be without representation, warranty or recourse of any kind by, on the
part of, or against any Purchaser or the Agent.
ARTICLE III.
CONDUIT FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with respect to the
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Capital associated with each Purchaser Interest of Conduit for each day that any
Capital in respect of such Purchaser Interest is outstanding. Each Purchaser
Interest funded substantially with Pooled Commercial Paper will accrue CP Costs
each day on a pro rata basis, based upon the percentage share the Capital in
respect of such Purchaser Interest represents in relation to all assets held by
Conduit and funded substantially with related Pooled Commercial Paper.
Section 3.2 CP Costs Payments. On each Settlement Date, Seller shall pay
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to the Agent (for the benefit of Conduit) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the Capital associated with all
Purchaser Interests of Conduit for the immediately preceding Accrual Period in
accordance with Article II.
Section 3.3 Calculation of CP Costs. On or before the 5th Business Day
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immediately preceding each Settlement Date, Conduit shall calculate the
aggregate amount of CP Costs allocated to the Capital of the Purchaser Interests
for the applicable Accrual Period and shall notify Seller of such aggregate
amount.
ARTICLE IV.
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each Purchaser Interest of the
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Financial Institutions shall accrue Yield for each day during its Tranche Period
at either the LIBO Rate or the Base Rate in accordance with the terms and
conditions hereof. Until Seller gives notice to the Agent of another Discount
Rate in accordance with Section 4.4, the initial Discount Rate for any Purchaser
Interest transferred to the Financial Institutions by Conduit pursuant to the
terms and conditions hereof shall be the Base Rate. If the Financial
Institutions acquire by assignment from Conduit any Purchaser Interest pursuant
to Article XIII, each Purchaser Interest so assigned shall each be deemed to
have a new Tranche Period commencing on the date of any such assignment.
Section 4.2 Yield Payments. On the Settlement Date for each Purchaser
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Interest of the Financial Institutions, Seller shall pay to the Agent (for the
benefit of the Financial Institutions) an aggregate amount equal to the accrued
and unpaid Yield for the entire Tranche Period of each such Purchaser Interest
in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche Periods.
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(a) With consultation from (and approval by) the Agent, Seller shall from
time to time request Tranche Periods for the Purchaser Interests of the
Financial Institutions, provided that, if at any time the Financial Institutions
shall have a Purchaser Interest, Seller shall always request Tranche Periods
such that at least one Tranche Period shall end on the date specified in clause
(A) of the definition of Settlement Date.
(b) Seller or the Agent, upon notice to and consent by the other received
at least three (3) Business Days prior to the end of a Tranche Period (the
"TERMINATING TRANCHE") for any Purchaser Interest, may, effective on the last
day of the Terminating Tranche: (i) divide any such Purchaser Interest into
multiple Purchaser Interests, (ii) combine any such Purchaser Interest with one
or more other Purchaser Interests that have a Terminating Tranche ending on the
same day as such Terminating Tranche or (iii) combine any such Purchaser
Interest with a new Purchaser Interests to be purchased on the day such
Terminating Tranche ends, provided, that in no event may a Purchaser Interest of
Conduit be combined with a Purchaser Interest of the Financial Institutions.
Section 4.4 Financial Institution Discount Rates. Seller may select the
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LIBO Rate or the Base Rate for each Purchaser Interest of the Financial
Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least three (3)
Business Days prior to the expiration of any Terminating Tranche with respect to
which the LIBO Rate is being requested as a new Discount Rate and (ii) at least
one (1) Business Day prior to the expiration of any Terminating Tranche with
respect to which the Base Rate is being requested as a new Discount Rate, give
the Agent irrevocable notice of the new Discount Rate for the Purchaser Interest
associated with such Terminating Tranche. Until Seller gives notice to the Agent
of another Discount Rate, the initial Discount Rate for any Purchaser Interest
transferred to the Financial Institutions pursuant to the terms and conditions
hereof shall be the Base Rate.
Section 4.5 Suspension of the LIBO Rate.
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(a) If any Financial Institution notifies the Agent that it has
determined that funding its Pro Rata Share of the Purchaser Interests of the
Financial Institutions at a LIBO Rate would violate any applicable law, rule,
regulation, or directive of any governmental or regulatory authority, whether or
not having the force of law, or that (i) deposits of a type and maturity
appropriate to match fund its Purchaser Interests at such LIBO Rate are not
available or (ii) such LIBO Rate does not accurately reflect the cost of
acquiring or maintaining a Purchaser Interest at such LIBO Rate, then the Agent
shall suspend the availability of such LIBO Rate and require Seller to select
the Base Rate for any Purchaser Interest accruing Yield at such LIBO Rate.
(b) If less than all of the Financial Institutions give a notice to the
Agent pursuant to Section 4.5(a), each Financial Institution which gave such a
notice shall be obliged, at the request of the Seller, Conduit or the Agent, to
assign all of its rights and obligations hereunder to (i) another Financial
Institution or (ii) another financial institution nominated by the Seller or the
Agent that is acceptable to Conduit and willing to participate in this Agreement
through the Liquidity Termination Date in the place of such notifying Financial
Institution; PROVIDED THAT (i) the notifying Financial Institution receives
payment in full, pursuant to an Assignment Agreement, of an amount equal to such
notifying Financial Institution's Pro Rata Share of the Capital and Discount
owing to all of the Financial Institutions and all accruing but unpaid fees and
other costs and expenses payable in respect of its Pro Rata Share of the
Purchaser Interests of the Financial Institutions, and (ii) the replacement
Financial Institution otherwise satisfies the requirements of Section 12.1(b).
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Seller Parties. Each
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Seller Party hereby represents and warrants to the Agent and the Purchasers, as
to itself, as of the date hereof and as of the date of each Incremental Purchase
and the date of each Reinvestment that:
(a) Corporate Existence and Power. Such Seller Party is a corporation duly
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organized, validly existing and in good standing under the laws of its state of
incorporation. Such Seller Party is duly qualified to do business and is in good
standing as a foreign corporation, and has and holds all corporate power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is conducted except
where the failure to so qualify or so hold could not reasonably be expected to
have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and Delivery. The
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execution and delivery by such Seller Party of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and, in the case of Seller, Seller's use of
the proceeds of purchases made hereunder, are within its corporate powers and
authority and have been duly authorized by all necessary corporate action on its
part. This Agreement and each other Transaction Document to which such Seller
Party is a party has been duly executed and delivered by such Seller Party.
(c) No Conflict. The execution and delivery by such Seller Party of this
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Agreement and each other Transaction Document to which it is a party, and the
performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate or articles of incorporation or by-laws, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or by which it or any
of its property is bound, or (iv) any order, writ, judgment, award, injunction
or decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of such Seller Party or
its Subsidiaries (except as created hereunder) except, in any case, where such
contravention or violation could not reasonably be expected to have a Material
Adverse Effect; and no transaction contemplated hereby requires compliance with
any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the financing
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statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by such Seller Party of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings pending,
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or to the knowledge of such Seller Party's officers, threatened, against or
affecting such Seller Party, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. Such Seller Party is not in default with respect to any order of
any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction Document to
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which such Seller Party is a party constitute the legal, valid and binding
obligations of such Seller Party enforceable against such Seller Party in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished by such
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Seller Party or any of its Affiliates to the Agent or the Purchasers for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby, taken as a whole,
is, and all such information hereafter furnished by such Seller Party or any of
its Affiliates to the Agent or the Purchasers will be, true and accurate in
every material respect on the date such information is stated or certified and
does not and will not contain any material misstatement of fact or omit to state
a material fact or any fact necessary to make the statements contained therein
not misleading.
(h) Use of Proceeds. No proceeds of any purchase hereunder will be
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used (i) for a purpose that violates, or would be inconsistent with, Regulation
T, U or X promulgated by the Board of Governors of the Federal Reserve System
from time to time or (ii) to acquire any security of any other Person in any
transaction which is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.
(i) Good Title . Immediately prior to each purchase hereunder, Seller
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shall be the legal and beneficial owner of the Receivables and Related Security
with respect thereto, free and clear of any Adverse Claim, except as created by
the Transaction Documents. There have been duly filed all financing statements
or other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Seller's ownership
interest in each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the financing
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statements contemplated hereby, is effective to, and shall, upon each purchase
hereunder, transfer to the Agent for the benefit of the relevant Purchaser or
Purchasers (and the Agent for the benefit of such Purchaser or Purchasers shall
acquire from Seller) a valid and perfected first priority undivided percentage
ownership interest or security interest in each Receivable existing or hereafter
arising and in the Related Security and Collections with respect thereto, free
and clear of any Adverse Claim, except as created by the Transactions Documents.
There have been duly filed all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect the Agent's (on behalf of the Purchasers) ownership or
security interest in the Receivables, the Related Security and the Collections.
(k) Places of Business and Locations of Records. The principal places of
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business and chief executive office of such Seller Party and the offices where
it keeps all of its Records are located at the address(es) listed on Exhibit III
or such other locations of which the Agent has been notified in accordance with
Section 7.2(a) in jurisdictions where all action required by Section 14.4(a) has
been taken and completed. Seller's Federal Employer Identification Number is
correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set forth in Section
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7.1(j) and Section 8.2 have at all times been satisfied and duly performed. The
names and addresses of all Collection Banks, together with the account numbers
of the Collection Accounts of Seller at each Collection Bank and the post office
box number of each Lock-Box, are listed on Exhibit IV. Seller has not granted
any Person, other than the Agent as contemplated by this Agreement, dominion and
control of any Lock-Box or Collection Account, or the right to take dominion and
control of any such Lock-Box or Collection Account at a future time or upon the
occurrence of a future event.
(m) Material Adverse Effect. (i) The initial Master Servicer represents
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and warrants that since June 30, 2001, no event has occurred that would have a
material adverse effect on the financial condition or operations of the initial
Master Servicer and its Subsidiaries or the ability of the initial Master
Servicer to perform its obligations under this Agreement, and (ii) Seller
represents and warrants that since the date of this Agreement, no event has
occurred that would have a material adverse effect on (A) the financial
condition or operations of Seller, (B) the ability of Seller to perform its
obligations under the Transaction Documents, or (C) the collectibility of the
Receivables generally or any material portion of the Receivables.
(n) Names. Since its incorporation in September 2001, Seller has not
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used any corporate names, trade names or assumed names other than the name in
which it has executed this Agreement.
(o) Ownership of Seller. Ralcorp owns, directly or indirectly, 100% of the
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issued and outstanding capital stock of Seller, free and clear of any Adverse
Claim. Such capital stock is validly issued, fully paid and nonassessable, and
there are no options, warrants or other rights to acquire securities of Seller.
(p) Not a Holding Company or an Investment Company. Such Seller Party
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is not a "holding company" or a "subsidiary holding company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or any successor statute. Such Seller Party is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(q) Compliance with Law. Such Seller Party has complied in all respects
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with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation, except where such contravention or
violation could not reasonably be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Seller Party has
-----------------------------------------------
complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract, and has not made any change
to such Credit and Collection Policy, except such material change as to which
the Agent has been notified in accordance with Section 7.1(a)(vii).
(s) Payments to Originators. With respect to each Receivable transferred to
-----------------------
Seller under the Receivables Sale Agreement, Seller has given reasonably
equivalent value to the applicable Originator in consideration therefor and such
transfer was not made for or on account of an antecedent debt. No transfer by
any Originator of any Receivable under the Receivables Sale Agreement is or may
be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C.
101 et seq.), as amended.
(t) Enforceability of Contracts. Each Contract with respect to each
-----------------------------
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable included in the Net Receivables
---------------------
Balance as an Eligible Receivable on the date of its purchase under the
Receivables Sale Agreement was an Eligible Receivable on such purchase date.
(v) Net Receivables Balance. Seller has determined that, immediately
-------------------------
after giving effect to each purchase hereunder, the Net Receivables Balance is
at least equal to the sum of (i) the Aggregate Capital, plus (ii) the Aggregate
Reserves.
(w) Accounting. The manner in which such Seller Party accounts for the
----------
transactions contemplated by this Agreement and the Receivables Sale Agreement
does not jeopardize the analysis of the transactions described in the
Receivables Sale Agreement as true sales, as set forth in the opinion to be
delivered on behalf of the Originators as described on Schedule B hereto.
Section 5.2 Financial Institution Representations and Warranties. Each
-------------------------------------------------------
Financial Institution hereby represents and warrants to the Agent and Conduit
that:
(a) Existence and Power. Such Financial Institution is a corporation or
---------------------
a banking association duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, and has all
corporate power to perform its obligations hereunder.
(b) No Conflict. The execution and delivery by such Financial
------------
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any Adverse
Claim on its assets. This Agreement has been duly authorized, executed and
delivered by such Financial Institution.
(c) Governmental Authorization. No authorization or approval or other
---------------------------
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder.
(d) Binding Effect. This Agreement constitutes the legal, valid and binding
--------------
obligation of such Financial Institution enforceable against such Financial
Institution in accordance with its terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).
ARTICLE VI.
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Incremental Purchase. The
--------------------------------------------------------
initial Incremental Purchase of a Purchaser Interest under this Agreement is
subject to the conditions precedent that (a) the Agent shall have received on or
before the date of such purchase those documents listed on Schedule B and (b)
the Agent shall have received all fees and expenses required to be paid on such
date pursuant to the terms of this Agreement and the Fee Letter.
Section 6.2 Conditions Precedent to All Purchases and Reinvestments. Each
-------------------------------------------------------
purchase of a Purchaser Interest (other than pursuant to Section 13.1) and each
Reinvestment shall be subject to the further conditions precedent that (a) in
the case of each such purchase or Reinvestment: (i) the Master Servicer shall
have delivered to the Agent on or prior to the date of such purchase, in form
and substance satisfactory to the Agent, all Monthly Reports as and when due
under Section 8.5 and (ii) upon the Agent's request, the Master Servicer shall
have delivered to the Agent at least three (3) days prior to such purchase or
Reinvestment an interim Monthly Report showing the amount of Eligible
Receivables; (b) the Facility Termination Date shall not have occurred; (c) the
Agent shall have received such other approvals, opinions or documents as it may
reasonably request and (d) on the date of each such Incremental Purchase or
Reinvestment, the following statements shall be true (and acceptance of the
proceeds of such Incremental Purchase or Reinvestment shall be deemed a
representation and warranty by Seller that such statements are then true):
(i) the representations and warranties set forth in Section 5.1 are
true and correct on and as of the date of such Incremental Purchase or
Reinvestment as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result from
such Incremental Purchase or Reinvestment, that will constitute an
Amortization Event, and no event has occurred and is continuing, or would
result from such Incremental Purchase or Reinvestment, that would
constitute a Potential Amortization Event; and
(iii) the Aggregate Capital does not exceed the Purchase Limit and the
aggregate Purchaser Interests do not exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Master Servicer shall receive any Collections without the requirement that any
further action be taken on the part of any Person and notwithstanding the
failure of Seller to satisfy any of the foregoing conditions precedent in
respect of such Reinvestment. The failure of Seller to satisfy any of the
foregoing conditions precedent in respect of any Reinvestment shall give rise to
a right of the Agent, which right may be exercised at any time on demand of the
Agent, to rescind the related purchase and direct Seller to pay to the Agent for
the benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII.
COVENANTS
Section 7.1 Affirmative Covenants of the Seller Parties. Until the date
---------------------------------------------
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will maintain, for itself
--------------------
and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent:
(i) Annual Reporting. As soon as practicable and in any event
-----------------
within 95 days after the close of each of such Seller Party's Fiscal
Years, (A) the financial statements for Ralcorp and its consolidated
subsidiaries described in Section 4.1(a)(i) of the Receivables Sale
Agreement, and (B) comparable unaudited stand-alone financial
statements for the Seller certified by an Authorized Officer of Seller
and prepared in accordance with GAAP.
(ii) Quarterly Reporting. As soon as practicable and in any event
------------------
within 50 days after the close of the first three Fiscal Quarters of
each of such Seller Party's Fiscal Years: (A) the certified financial
statements of Ralcorp and its Subsidiaries referenced in section
4.1(a)(ii) of the Receivables Sale Agreement, and (B) comparable
stand-alone financial statements for the Seller for the period from
the beginning of such Fiscal Year to the end of such quarter, prepared
in accordance with GAAP and certified by an Authorized Officer of
Seller
(iii) Compliance Certificate. Together with the financial
-----------------------
statements required hereunder, a compliance certificate in
substantially the form of Exhibit V signed by such Seller Party's
Authorized Officer and dated the date of such annual financial
statement or such quarterly financial statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the
--------------------------------------
furnishing thereof to the shareholders of such Seller Party copies of
all financial statements, reports and proxy statements so furnished,
except for internal communications among Ralcorp and its Subsidiaries.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies of
---------------
all registration statements and annual, quarterly, monthly or other
regular reports which any Originator or any of its Subsidiaries files
with the Securities and Exchange Commission, except registration
statements on Form S-8.
(vi) Copies of Notices. Promptly upon its receipt of any notice,
-----------------
request for consent, financial statements, certification, report or
other communication under or in connection with any Transaction
Document from any Person other than the Agent or Conduit, copies of
the same.
(vii) Change in Credit and Collection Policy. At least thirty
-----------------------------------------
(30) days prior to the effectiveness of any material change in or
material amendment to the Credit and Collection Policy, a copy of the
Credit and Collection Policy then in effect and a notice (A)
indicating such change or amendment, and (B) if such proposed change
or amendment would be reasonably likely to adversely affect the
collectibility of the Receivables or decrease the credit quality of
any newly created Receivables, requesting the Agent's consent thereto.
(viii) Other Information. Promptly, from time to time, such other
------------------
information, documents, records or reports relating to the Receivables
or the condition or operations, financial or otherwise, of such Seller
Party as the Agent may from time to time reasonably request in order
to protect the interests of the Agent and the Purchasers under or as
contemplated by this Agreement.
(b) Notices. Such Seller Party will notify the Agent in writing of
-------
any of the following promptly upon learning of the occurrence thereof,
describing the same and, if applicable, the steps being taken with respect
thereto:
(i) Amortization Events or Potential Amortization Events. The
---------------------------------------------------------
occurrence of each Amortization Event and each Potential Amortization
Event, by a statement of an Authorized Officer of such Seller Party.
(ii) Material Adverse Effect. The occurrence of any event or condition
-----------------------
that has had, or could reasonably be expected to have, a Material
Adverse Effect.
(iii) Termination Date. The occurrence of the "TERMINATION DATE" under
----------------
and as defined in the Receivables Sale Agreement.
(c) Compliance with Laws and Preservation of Corporate Existence. Such
-----------------------------------------------------------------
Seller Party will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect. Such Seller Party
will preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified in good standing as a foreign corporation in each jurisdiction
where its business is conducted, except where the failure to so preserve
and maintain or qualify could not reasonably be expected to have a Material
Adverse Effect.
(d) Audits. Such Seller Party will furnish to the Agent from time to
------
time such information with respect to it and the Receivables as the Agent may
reasonably request. Such Seller Party will, from time to time during regular
business hours as requested by the Agent upon reasonable notice and at the sole
cost of such Seller Party, permit the Agent, or its agents or representatives
(and shall cause each Originator to permit the Agent or its agents or
representatives), (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Person relating to the
Receivables and the Related Security, including, without limitation, the related
Contracts, and (ii) to visit the offices and properties of such Person for the
purpose of examining such materials described in clause (i) above, and to
discuss matters relating to such Person's financial condition or the Receivables
and the Related Security or any Person's performance under any of the
Transaction Documents or any Person's performance under the Contracts and, in
each case, with any of the officers or employees of Seller or the Master
Servicer having knowledge of such matters (each, a "REVIEW"); PROVIDED, HOWEVER,
that, so long as no Amortization Event has occurred and is continuing, the
Seller Parties shall only be responsible for the costs and expenses of one such
Review, which shall include any two Originators, in any one calendar year unless
the first such Review in such calendar year is reasonably deemed unsatisfactory
by the Agent.
(e) Keeping and Marking of Records and Books.
----------------------------------------------
(i) The Master Servicer will (and will cause each Originator to)
maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records
evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain all documents, books,
records and other information reasonably necessary or advisable for
the collection of all Receivables (including, without limitation,
records adequate to permit the immediate identification of each new
Receivable and all Collections of and adjustments to each existing
Receivable). The Master Servicer will (and will cause each Originator
to) give the Agent notice of any material change in the administrative
and operating procedures referred to in the previous sentence.
(ii) Such Seller Party will (and will cause each Originator to)
(A) on or prior to the date hereof, ▇▇▇▇ its master data processing
records and other books and records relating to the Purchaser
Interests with a legend, acceptable to the Agent, describing the
Purchaser Interests and (B) upon the request of the Agent upon the
occurrence and during the continuation of an Amortization Event or
Potential Amortization Event: (x) ▇▇▇▇ each Contract with a legend
describing the Purchaser Interests and (y) deliver to the Agent all
Contracts (including, without limitation, all multiple originals of
any such Contract) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy.
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Such Seller Party will (and will cause each Originator to) timely and fully (i)
perform and comply with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to the Receivables,
and (ii) comply in all respects with the Credit and Collection Policy in regard
to each Receivable and the related Contract.
(g) Performance and Enforcement of Receivables Sale Agreement
---------------------------------------------------------------
and Performance Undertaking. Seller will, and will require each Originator
-----------------------------
to,perform each of its respective obligations and undertakings under and
pursuant to the Receivables Sale Agreement, will purchase Receivables thereunder
in strict compliance with the terms thereof and will vigorously enforce the
rights and remedies accorded to Seller under the Receivables Sale Agreement.
Seller will take all actions to perfect and enforce its rights and interests
(and the rights and interests of the Agent, on behalf of the Purchasers, as
Seller's assignee) under the Receivables Sale Agreement and the Performance
Undertaking as the Agent may from time to time reasonably request, including,
without limitation, making claims to which it may be entitled under any
indemnity, reimbursement or similar provision contained in the Receivables Sale
Agreement or the Performance Undertaking.
(h) Ownership. Seller will (or will cause each Originator to) take
---------
all necessary action to (i) vest legal and equitable title to the Receivables,
the Related Security and the Collections purchased under the Receivables Sale
Agreement irrevocably in Seller, free and clear of any Adverse Claims other than
Adverse Claims in favor of the Agent and the Purchasers (including, without
limitation, the filing of all financing statements or other similar instruments
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions, with or, to the fullest extent permitted by applicable law,
without Seller' signature, to perfect Seller's interest in such Receivables,
Related Security and Collections and such other action to perfect, protect or
more fully evidence the interest of Seller therein as the Agent may reasonably
request), and (ii) establish and maintain, in favor of the Agent, for the
benefit of the Purchasers, a valid and perfected first priority undivided
percentage ownership interest (and/or a valid and perfected first priority
security interest) in all Receivables, Related Security and Collections to the
full extent contemplated herein, free and clear of any Adverse Claims other than
Adverse Claims in favor of the Agent for the benefit of the Purchasers
(including, without limitation, the filing of all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law)
of all appropriate jurisdictions to perfect the Agent's (for the benefit of the
Purchasers) interest in such Receivables, Related Security and Collections and
such other action to perfect, protect or more fully evidence the interest of the
Agent for the benefit of the Purchasers as the Agent may reasonably request).
(i) Purchasers' Reliance. Seller acknowledges that the Purchasers are
---------------------
entering into the transactions contemplated by this Agreement in reliance upon
Seller's identity as a legal entity that is separate from each of the
Originators. Therefore, from and after the date of execution and delivery of
this Agreement, Seller shall take all reasonable steps, including, without
limitation, all steps that the Agent or any Purchaser may from time to time
reasonably request, to maintain Seller's identity as a separate legal entity and
to make it manifest to third parties that Seller is an entity with assets and
liabilities distinct from those of each Originator and any Affiliates thereof
and not just a division of an Originator or any such Affiliate. Without limiting
the generality of the foregoing and in addition to the other covenants set forth
herein, Seller will:
(A) conduct its own business in its own name and require that all
full-time employees of Seller, if any, identify themselves as such and
not as employees of any Originator (including, without limitation, by
means of providing appropriate employees with business or
identification cards identifying such employees as Seller's
employees);
(B) compensate all employees, consultants and agents directly,
from Seller's own funds, for services provided to Seller by such
employees, consultants and agents and, to the extent any employee,
consultant or agent of Seller is also an employee, consultant or agent
of an Originator or any Affiliate thereof, allocate the compensation
of such employee, consultant or agent between Seller and such
Originator or such Affiliate, as applicable, on a basis that reflects
the services rendered to Seller and such Originator or such Affiliate,
as applicable;
(C) clearly identify its offices (by signage or otherwise) as its
offices and, if such office is located in the offices of an
Originator, Seller shall lease such office at a fair market rent;
(D) have a separate telephone number, which will be answered only
in its name and separate stationery, invoices and checks in its own
name;
(E) conduct all transactions with each Originator and the Master
Servicer (including, without limitation, any delegation of its
obligations hereunder as Master Servicer) strictly on an arm's-length
basis, allocate all overhead expenses (including, without limitation,
telephone and other utility charges) for items shared between Seller
and such Originator on the basis of actual use to the extent
practicable and, to the extent such allocation is not practicable, on
a basis reasonably related to actual use;
(F) at all times have a Board of Directors consisting of at least
three members, at least one member of which is an Independent
Director;
(G) observe all corporate formalities as a distinct entity, and
ensure that all corporate actions relating to (A) the selection,
maintenance or replacement of the Independent Director, (B) the
dissolution or liquidation of Seller or (C) the initiation of,
participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving Seller, are
duly authorized by unanimous vote of its Board of Directors (including
the Independent Director);
(H) maintain Seller's books and records separate from those of
each Originator and any Affiliate thereof and otherwise readily
identifiable as its own assets rather than assets of an Originator and
any Affiliate thereof;
(I) prepare its financial statements separately from those of
each Originator and insure that any consolidated financial statements
of any Originator or any Affiliate thereof that include Seller and
that are filed with the Securities and Exchange Commission or any
other governmental agency have notes clearly stating that Seller is a
separate corporate entity and that its assets will be available first
and foremost to satisfy the claims of the creditors of Seller;
(J) except as herein specifically otherwise provided, maintain
the funds or other assets of Seller separate from, and not commingled
with, those of any Originator or any Affiliate thereof and only
maintain bank accounts or other depository accounts to which Seller
alone is the account party, into which Seller alone makes deposits and
from which Seller alone (or the Agent hereunder) has the power to make
withdrawals;
(K) pay all of Seller's operating expenses from Seller's own
assets (except for certain payments by an Originator or other Persons
pursuant to allocation arrangements that comply with the requirements
of this Section 7.1(i));
(L) operate its business and activities such that: it does not
engage in any business or activity of any kind, or enter into any
transaction or indenture, mortgage, instrument, agreement, contract,
lease or other undertaking, other than the transactions contemplated
and authorized by this Agreement and the Receivables Sale Agreement;
and does not create, incur, guarantee, assume or suffer to exist any
indebtedness or other liabilities, whether direct or contingent, other
than (1) as a result of the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course
of business, (2) the incurrence of obligations under this Agreement,
(3) the incurrence of obligations, as expressly contemplated in the
Receivables Sale Agreement, to make payment to the applicable
Originator thereunder for the purchase of Receivables from such
Originator under the Receivables Sale Agreement, and (4) the
incurrence of operating expenses in the ordinary course of business of
the type otherwise contemplated by this Agreement;
(M) maintain its corporate charter in conformity with this
Agreement, such that it does not amend, restate, supplement or
otherwise modify its Certificate of Incorporation or By-Laws in any
respect that would impair its ability to comply with the terms or
provisions of any of the Transaction Documents, including, without
limitation, Section 7.1(i) of this Agreement;
(N) maintain the effectiveness of, and continue to perform under
the Receivables Sale Agreement and the Performance Undertaking, such
that it does not amend, restate, supplement, cancel, terminate or
otherwise modify the Receivables Sale Agreement or the Performance
Undertaking, or give any consent, waiver, directive or approval
thereunder or waive any default, action, omission or breach under the
Receivables Sale Agreement or the Performance Undertaking or otherwise
grant any indulgence thereunder, without (in each case) the prior
written consent of the Agent;
(O) maintain its corporate separateness such that it does not
merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of
transactions, and except as otherwise contemplated herein) all or
substantially all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially all of the assets of,
any Person, nor at any time create, have, acquire, maintain or hold
any interest in any Subsidiary.
(P) maintain at all times the Required Capital Amount (as defined
in the Receivables Sale Agreement) and refrain from making any
dividend, distribution, redemption of capital stock or payment of any
subordinated indebtedness which would cause the Required Capital
Amount to cease to be so maintained; and
(Q) take such other actions as are necessary on its part to
ensure that the facts and assumptions set forth in the opinion issued
by ▇▇▇▇▇ ▇▇▇▇ LLP, as counsel for Seller, in connection with the
closing or initial Incremental Purchase under this Agreement and
relating to substantive consolidation issues, and in the certificates
accompanying such opinion, remain true and correct in all material
respects at all times.
(j) Collections. Such Seller Party will cause (1) all proceeds from
-----------
all Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account and (2) each Lock-Box and Collection Account to be subject at all times
to a Collection Account Agreement that is in full force and effect. In the event
any payments relating to Receivables are remitted directly to Seller or any
Affiliate of Seller, Seller will remit (or will cause all such payments to be
remitted) directly to a Collection Bank and deposited into a Collection Account
within two (2) Business Days following receipt thereof, and, at all times prior
to such remittance, Seller will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of the Agent and the
Purchasers. Seller will maintain exclusive ownership, dominion and control
(subject to the terms of this Agreement) of each Lock-Box and Collection Account
and shall not grant the right to take dominion and control of any Lock-Box or
Collection Account at a future time or upon the occurrence of a future event to
any Person, except to the Agent as contemplated by this Agreement.
(k) Taxes. Such Seller Party will file all tax returns and reports
-----
required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing, except any such taxes which are not yet
delinquent or are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. Seller will pay when due any taxes payable in
connection with the Receivables, exclusive of taxes on or measured by income or
gross receipts of Conduit, the Agent or any Financial Institution.
(l) Insurance. Seller will maintain in effect, or cause to be
---------
maintained in effect, at Seller's own expense, such casualty and liability
insurance as Seller shall deem appropriate in its good faith business judgment.
The Agent, for the benefit of the Purchasers, shall be named as an additional
insured with respect to all such liability insurance maintained by Seller.
Seller will pay or cause to be paid, the premiums therefor and deliver to the
Agent evidence satisfactory to the Agent of such insurance coverage. Copies of
each policy shall be furnished to the Agent and any Purchaser in certificated
form upon the Agent's or such Purchaser's request. The foregoing requirements
shall not be construed to negate, reduce or modify, and are in addition to,
Seller's obligations hereunder.
(m) Payment to Applicable Originator. With respect to any Receivable
---------------------------------
purchased by Seller from an Originator, such sale shall be effected under, and
in strict compliance with the terms of, the Receivables Sale Agreement,
including, without limitation, the terms relating to the amount and timing of
payments to be made to such Originator in respect of the purchase price for such
Receivable.
Section 7.2 Negative Covenants of the Seller Parties. Until the date on
------------------------------------------
which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Seller Party will not
------------------------------------
change its name, identity or corporate structure (within the meaning of Article
9 of any applicable enactment of the UCC) or relocate its chief executive office
or any office where Records are kept unless it shall have: (i) given the Agent
at least thirty (30) days' prior written notice thereof and (ii) delivered to
the Agent all financing statements, instruments and other documents requested by
the Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Except as may be
-----------------------------------------------
required by the Agent pursuant to Section 8.2(b), such Seller Party will not add
or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
provided, however, that the Master Servicer may make changes in instructions to
Obligors regarding payments if such new instructions require such Obligor to
make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy. Such
-----------------------------------------------------------
Seller Party will not, and will not permit any Originator to, make any change to
the Credit and Collection Policy that could adversely affect the collectibility
of the Receivables or decrease the credit quality of any newly created
Receivables. Except as provided in Section 8.2(d), the Master Servicer will not,
and will not permit any Originator to, extend, amend or otherwise modify the
terms of any Receivable or any Contract related thereto other than in accordance
with the Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation of law
-------------
or otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any Receivable,
Related Security or Collections, or upon or with respect to any Contract under
which any Receivable arises, or any Lock-Box or Collection Account, or assign
any right to receive income with respect thereto (other than, in each case, the
creation of the interests therein in favor of the Agent and the Purchasers
provided for herein), and Seller will defend the right, title and interest of
the Agent and the Purchasers in, to and under any of the foregoing property,
against all claims of third parties claiming through or under Seller or any
Originator.
(e) Net Receivables Balance. At no time prior to the Amortization Date
-----------------------
shall Seller permit the Net Receivables Balance to be less than an amount equal
to the sum of (i) the Aggregate Capital plus (ii) the Aggregate Reserves.
(f) Termination Date Determination. Seller will not designate the
--------------------------------
Termination Date (as defined in the Receivables Sale Agreement), or send any
written notice to any Originator in respect thereof, without the prior written
consent of the Agent, except with respect to the occurrence of such Termination
Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.
(g) Restricted Junior Payments. From and after the occurrence of any
---------------------------
Amortization Event, Seller will not make any Restricted Junior Payment if, after
giving effect thereto, Seller would fail to meet its obligations set forth in
Section 7.2(e).
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Master Servicer.
---------------------------------
(a) The servicing, administration and collection of the Receivables
shall be conducted by such Person (the "MASTER SERVICER") so designated
from time to time in accordance with this Section 8.1. Ralcorp is hereby
designated as, and hereby agrees to perform the duties and obligations of,
the Master Servicer pursuant to the terms of this Agreement. The Agent may
at any time following the occurrence and during the continuation of an
Amortization Event or Potential Amortization Event, designate as Master
Servicer any Person to succeed Ralcorp or any successor Master Servicer.
(b) Ralcorp may delegate, and Ralcorp hereby advises the Purchasers
and the Agent that it has delegated, to the other Originators, as
sub-servicers of the Master Servicer (the Originators in such capacity,
"PERMITTED SUB-SERVICERS"), certain of its duties and responsibilities as
Master Servicer hereunder in respect of the Receivables originated by such
Originator. Without the prior written consent of the Agent and the Required
Financial Institutions, Ralcorp shall not be permitted to delegate any of
its duties or responsibilities as Master Servicer to any Person other than
(i) the other Originators, and (ii) with respect to certain Charged-Off
Receivables, outside collection agencies in accordance with its customary
practices. No Permitted Sub-Servicer shall be permitted to further delegate
to any other Person any of the duties or responsibilities of the Master
Servicer delegated to it by Ralcorp. If at any time following the
occurrence of an Amortization Event the Agent shall designate as Master
Servicer any Person other than Ralcorp, all duties and responsibilities
theretofore delegated by Ralcorp to the Permitted Sub-Servicers may, at the
discretion of the Agent, be terminated forthwith on notice given by the
Agent to Ralcorp and to Seller.
(c) Notwithstanding the foregoing subsection (b), (i) Ralcorp shall be
and remain primarily liable to the Agent and the Purchasers for the full
and prompt performance of all duties and responsibilities of the Master
Servicer hereunder and (ii) the Agent and the Purchasers shall be entitled
to deal exclusively with Ralcorp in matters relating to the discharge by
the Master Servicer of its duties and responsibilities hereunder. The Agent
and the Purchasers shall not be required to give notice, demand or other
communication to any Person other than the Master Servicer in order for
communication to the Master Servicer and its Permitted Sub-Servicers or
other delegate with respect thereto to be accomplished. Ralcorp, at all
times that it is the Master Servicer, shall be responsible for providing
the Permitted Sub-Servicers or other delegates of the Master Servicer with
any notice given to the Master Servicer under this Agreement.
Section 8.2 Duties of Master Servicer.
-----------------------------
(a) The Master Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Receivable from
time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.
(b) The Master Servicer will instruct all Obligors to pay all
Collections directly to a Lock-Box or Collection Account; PROVIDED,
HOWEVER, that no Scheduled Originator shall be required to be so instructed
until an Amortization Event or Potential Amortization Event has occurred
and is continuing. The Master Servicer shall effect a Collection Account
Agreement substantially in the form of Exhibit VI with each bank party to a
Collection Account at any time. In the case of any remittances received in
any Lock-Box or Collection Account that shall have been identified, to the
satisfaction of the Master Servicer, to not constitute Collections or other
proceeds of the Receivables or the Related Security, the Master Servicer
shall promptly remit such items to the Person identified to it as being the
owner of such remittances. From and after the date the Agent delivers to
any Collection Bank a Collection Notice pursuant to Section 8.3, the Agent
may request that the Master Servicer, and the Master Servicer thereupon
promptly shall, instruct all Obligors with respect to the Receivables, to
remit all payments thereon to a new depositary account specified by the
Agent and, at all times thereafter, Seller and the Master Servicer shall
not deposit or otherwise credit, and shall not permit any other Person to
deposit or otherwise credit to such new depositary account any cash or
payment item other than Collections.
(c) The Master Servicer shall administer the Collections in accordance
with the procedures described herein and in Article II. The Master Servicer
shall set aside and hold in trust for the account of Seller and the
Purchasers their respective shares of the Collections in accordance with
Article II. The Master Servicer shall, upon the request of the Agent,
segregate, in a manner acceptable to the Agent, all cash, checks and other
instruments received by it from time to time constituting Collections from
the general funds of the Master Servicer or Seller prior to the remittance
thereof in accordance with Article II. If the Master Servicer shall be
required to segregate Collections pursuant to the preceding sentence, the
Master Servicer shall segregate and deposit with a bank designated by the
Agent such allocable share of Collections of Receivables set aside for the
Purchasers on the first Business Day following receipt by the Master
Servicer of such Collections, duly endorsed or with duly executed
instruments of transfer.
(d) The Master Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Master Servicer determines to
be appropriate to maximize Collections thereof; provided, however, that
such extension or adjustment shall not alter the status of such Receivable
as a Delinquent Receivable or Charged-Off Receivable or limit the rights of
the Agent or the Purchasers under this Agreement. Notwithstanding anything
to the contrary contained herein, the Agent shall have the absolute and
unlimited right to direct the Master Servicer to commence or settle any
legal action with respect to any Receivable or to foreclose upon or
repossess any Related Security.
(e) The Master Servicer shall hold in trust for Seller and the
Purchasers all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Security or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent, deliver or make available to the Agent all such
Records, at a place selected by the Agent. The Master Servicer shall, as
soon as practicable following receipt thereof turn over to Seller any cash
collections or other cash proceeds received with respect to Indebtedness
not constituting Receivables. The Master Servicer shall, from time to time
at the request of any Purchaser, furnish to the Purchasers (promptly after
any such request) a calculation of the amounts set aside for the Purchasers
pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness owed by
it to any Originator or Seller shall, except as otherwise specified by such
Obligor or otherwise required by contract or law and unless otherwise
instructed by the Agent, be applied as a Collection of any Receivable of
such Obligor (starting with the oldest such Receivable) to the extent of
any amounts then due and payable thereunder before being applied to any
other receivable or other obligation of such Obligor.
Section 8.3 Collection Notices. The Agent is authorized at any time
-------------------
after the occurrence and during the continuation of an Amortization Event, to
date and to deliver to the Collection Banks the Collection Notices. Seller
hereby transfers to the Agent for the benefit of the Purchasers, effective when
the Agent delivers such notice, the exclusive ownership and control of each
Lock-Box and the Collection Accounts. In case any authorized signatory of Seller
whose signature appears on a Collection Account Agreement shall cease to have
such authority before the delivery of such notice, such Collection Notice shall
nevertheless be valid as if such authority had remained in force. Seller hereby
authorizes the Agent, and agrees that the Agent shall be entitled after the
occurrence of an Amortization Event to (i) endorse Seller's name on checks and
other instruments representing Collections, (ii) enforce the Receivables, the
related Contracts and the Related Security and (iii) take such action as shall
be necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of the Agent
rather than Seller.
Section 8.4 Responsibilities of Seller
----------------------------
. Anything herein to the contrary notwithstanding, the exercise by the Agent and
the Purchasers of their rights hereunder shall not release the Master Servicer,
any Originator or Seller from any of their duties or obligations with respect to
any Receivables or under the related Contracts. The Purchasers shall have no
obligation or liability with respect to any Receivables or related Contracts,
nor shall any of them be obligated to perform the obligations of Seller.
Section 8.5 Reports. The Master Servicer shall prepare and forward to the
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Agent (i) on the 24th day of each month or if any such date is not a Business
Day, on the next succeeding Business Day thereafter (each such date, a "MONTHLY
REPORTING DATE")) and at such times as the Agent shall request, a Monthly Report
and (ii) at such times as the Agent shall request, a listing by Obligor of all
Receivables together with an aging of such Receivables.
Section 8.6 Servicing Fees. In consideration of Ralcorp's agreement
---------------
to act as Master Servicer hereunder, the Purchasers hereby agree that, so long
as Ralcorp shall continue to perform as Master Servicer hereunder, Seller shall
pay over to Ralcorp a fee (the "SERVICING FEE") on the first calendar day of
each month, in arrears for the immediately preceding month, equal to 1.18% per
annum of the average aggregate Outstanding Balance of all Receivables during
such period, as compensation for its servicing activities.
ARTICLE IX.
AMORTIZATION EVENTS
Section 9.1 Amortization Events . The occurrence of any one or more
--------------------
of the following events shall constitute an Amortization Event:
(a) Any Seller Party shall fail (i) to make any payment or deposit
required hereunder when due, or (ii) to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clause (i) of
this paragraph (a) and paragraph 9.1(e)) and such failure shall continue
for three (3) consecutive Business Days.
(b) Any representation, warranty, certification or statement made by
any Seller Party in this Agreement, any other Transaction Document or in
any other document delivered pursuant hereto or thereto shall prove to have
been incorrect in any material respect when made or deemed made; PROVIDED
THAT the materiality threshold in this Section 9.1(b) shall not be
applicable with respect to any representation or warranty which itself
contains a materiality threshold.
(c) (i) Failure of the Master Servicer to pay any Indebtedness when
due in excess of $25,000,000 in principal amount ("MATERIAL INDEBTEDNESS");
or the default by the Master Servicer in the performance of any term,
provision or condition contained in any agreement under which any Material
Indebtedness was created or is governed, the effect of which is to cause,
or to permit the holder or holders of such Material Indebtedness to cause,
such Material Indebtedness to become due prior to its stated maturity; or
any Material Indebtedness of the Master Servicer shall be declared to be
due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the date of maturity thereof; or
(ii) Failure of Seller to pay any Indebtedness when due in an
aggregate principal amount of $10,750 or more; or the default by
Seller in the performance of any term, provision or condition
contained in any agreement under which any Indebtedness in an
aggregate principal amount of $10,750 or more was created or is
governed, the effect of which is to cause, or to permit the holder or
holders of such Indebtedness to cause, such Indebtedness to become due
prior to its stated maturity; or any Indebtedness of Seller in an
aggregate principal amount of $10,750 or more shall be declared to be
due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the date of maturity thereof.
(d) (i) Any Seller Party or Material 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 (ii) any proceeding shall be instituted by or
against any Seller Party or any Material Originator seeking to adjudicate
it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee or other similar official
for it or any substantial part of its property or (iii) any Seller Party or
any Material Originator shall take any corporate action to authorize any of
the actions set forth in clauses (i) or (ii) above in this subsection (d).
(e) Seller shall fail to comply with the terms of Section 2.6 hereof.
(f) As at the end of any calendar month:
(i) the 3-month rolling average of the Delinquency Ratio shall
exceed 5.0%;
(ii) the 3-month rolling average of the Default Ratio shall
exceed 1.7%; or
(iii) the 3-month rolling average of the Dilution Ratio shall
exceed 6.0%;
(g) A Change of Control shall occur with respect to either Seller or
the Master Servicer.
(h) (i) One or more final judgments for the payment of money shall be
entered against Seller or (ii) one or more final judgments for the payment
of money in an amount in excess of $10,000,000, individually or in the
aggregate, shall be entered against the Master Servicer on claims not
covered by insurance or as to which the insurance carrier has denied its
responsibility, and such judgment shall continue unsatisfied and in effect
for thirty (30) consecutive days without a stay of execution.
(i) The "TERMINATION DATE" under and as defined in the Receivables
Sale Agreement shall occur under the Receivables Sale Agreement or any
Originator shall for any reason cease to transfer, or cease to have the
legal capacity to transfer, or otherwise be incapable of transferring
Receivables to Seller under the Receivables Sale Agreement.
(j) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the
legally valid, binding and enforceable obligation of Seller, or any Obligor
shall directly or indirectly contest in any manner such effectiveness,
validity, binding nature or enforceability, or the Agent for the benefit of
the Purchasers shall cease to have a valid and perfected first priority
security interest in the Receivables, the Related Security and the
Collections with respect thereto and the Collection Accounts.
(k) Performance Guarantor shall fail to perform or observe any term,
covenant or agreement required to be performed by it under the Performance
Undertaking, or the Performance Undertaking shall cease to be effective or
to be the legally valid, binding and enforceable obligation of Performance
Guarantor, or Performance Guarantor shall directly or indirectly contest in
any manner such effectiveness, validity, binding nature or enforceability.
Notwithstanding the foregoing, if any Originator who originated 10%-30% of the
total Receivables originated by all Originators during any month in the past 12
months is the subject of a Change of Control, the Agent (at its own expense) may
review the percentages set forth in Section 9.1(f) and the definition of the
Loss Reserve, the Dilution Reserve and/or the Yield Reserve and, if the Agent
reasonably deems it appropriate based on changes in the Receivables as a result
of such Change of Control, propose revisions to some or all of the foregoing.
If Seller and the Agent fail to reach agreement on such revised percentages or
reserves within 30 days after the date of such proposed revisions, a Termination
Event shall be deemed to have occurred.
Section 9.2 Remedies. Upon the occurrence and during the continuation
--------
of an Amortization Event, the Agent may, or upon the direction of the Required
Financial Institutions shall, take any of the following actions: (i) replace the
Person then acting as Master Servicer, (ii) declare the Amortization Date to
have occurred, whereupon the Amortization Date shall forthwith occur, without
demand, protest or further notice of any kind, all of which are hereby expressly
waived by each Seller Party; provided, however, that upon the occurrence of an
Amortization Event described in Section 9.1(d)(ii), or of an actual or deemed
entry of an order for relief with respect to any Seller Party under the Federal
Bankruptcy Code, the Amortization Date shall automatically occur, without
demand, protest or any notice of any kind, all of which are hereby expressly
waived by each Seller Party, (iii) to the fullest extent permitted by applicable
law, declare that the Default Fee shall accrue with respect to any of the
Aggregate Unpaids outstanding at such time, (iv) deliver the Collection Notices
to the Collection Banks, and (v) notify Obligors of the Purchasers' interest in
the Receivables. The aforementioned rights and remedies shall be without
limitation, and shall be in addition to all other rights and remedies of the
Agent and the Purchasers otherwise available under any other provision of this
Agreement, by operation of law, at equity or otherwise, all of which are hereby
expressly preserved, including, without limitation, all rights and remedies
provided under the UCC, all of which rights shall be cumulative.
ARTICLE X.
INDEMNIFICATION
Section 10.1 Indemnities by The Seller Parties. Without limiting any other
---------------------------------
rights that the Agent or any Purchaser may have hereunder or under applicable
law, (A) Seller hereby agrees to indemnify (and pay upon demand to) the Agent
and each Purchaser and their respective assigns, officers, directors, agents and
employees (each an "INDEMNIFIED PARTY") from and against any and all damages
(excluding consequential and special damages), losses, claims, taxes,
liabilities, costs, expenses and for all other amounts payable, including
reasonable attorneys' fees (which attorneys may be employees of the Agent or
such Purchaser) and disbursements (all of the foregoing being collectively
referred to as "INDEMNIFIED AMOUNTS") awarded against or incurred by any of them
arising out of or as a result of this Agreement or the acquisition, either
directly or indirectly, by a Purchaser of an interest in the Receivables, and
(B) the Master Servicer hereby agrees to indemnify (and pay upon demand to) each
Indemnified Party for Indemnified Amounts awarded against or reasonably incurred
by any of them arising out of the Master Servicer's activities as Master
Servicer hereunder excluding, however, in all of the foregoing instances under
the preceding clauses (A) and (B):
(a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from
gross negligence or willful misconduct on the part of the Indemnified Party
seeking indemnification;
(b) Indemnified Amounts to the extent the same includes losses in
respect of Receivables that are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor; or
(c) taxes imposed by the jurisdiction in which such Indemnified
Party's principal executive office is located, on or measured by the
overall net income of such Indemnified Party to the extent that the
computation of such taxes is consistent with the characterization for
income tax purposes of the acquisition by the Purchasers of Purchaser
Interests as a loan or loans by the Purchasers to Seller secured by the
Receivables, the Related Security, the Collection Accounts and the
Collections;
PROVIDED, HOWEVER, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, Seller shall indemnify the Agent and the
Purchasers for Indemnified Amounts (including, without limitation, losses in
respect of uncollectible receivables, regardless of whether reimbursement
therefor would constitute recourse to Seller or the Master Servicer) relating to
or resulting from:
(i) any representation or warranty made by any Seller Party or
any Originator (or any officers of any such Person) under or in
connection with this Agreement, any other Transaction Document or any
other information or report delivered by any such Person pursuant
hereto or thereto, which shall have been false or incorrect when made
or deemed made;
(ii) the failure by Seller, the Master Servicer or any Originator
to comply with any applicable law, rule or regulation with respect to
any Receivable or Contract related thereto, or the nonconformity of
any Receivable or Contract included therein with any such applicable
law, rule or regulation or any failure of any Originator to keep or
perform any of its obligations, express or implied, with respect to
any Contract;
(iii) any failure of Seller, the Master Servicer or any
Originator to perform its duties, covenants or other obligations in
accordance with the provisions of this Agreement or any other
Transaction Document;
(iv) any products liability, personal injury or damage suit, or
other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any
Receivable;
(v) any dispute, claim, offset or defense (other than discharge
in
bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale
of the merchandise or service related to such Receivable or the
furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time
with other funds;
(vii) any investigation, litigation or proceeding related to or
arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, the use of the proceeds of an
Incremental Purchase or a Reinvestment, the ownership of the Purchaser
Interests or any other investigation, litigation or proceeding
relating to Seller, the Master Servicer or any Originator in which any
Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being immune
from civil and commercial law and suit on the grounds of sovereignty
or otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event described in Section 9.1(d);
(x) any failure of Seller to acquire and maintain legal and
equitable title to, and ownership of, any Receivable and the Related
Security and Collections with respect thereto from the applicable
Originator, free and clear of any Adverse Claim (other than as created
hereunder); or any failure of Seller to give reasonably equivalent
value to such Originator under the Receivables Sale Agreement in
consideration of the transfer by such Originator of any Receivable, or
any attempt by any Person to void such transfer under statutory
provisions or common law or equitable action;
(xi) any failure to vest and maintain vested in the Agent for the
benefit of the Purchasers, or to transfer to the Agent for the benefit
of the Purchasers, legal and equitable title to, and ownership of, a
first priority perfected undivided percentage ownership interest (to
the extent of the Purchaser Interests contemplated hereunder) or
security interest in the Receivables, the Related Security and the
Collections, free and clear of any Adverse Claim (except as created by
the Transaction Documents);
(xii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivable, the Related Security and Collections with
respect thereto, and the proceeds of any thereof, whether at the time
of any Incremental Purchase or Reinvestment or at any subsequent time;
(xiii) any action or omission by any Seller Party which reduces
or impairs the rights of the Agent or the Purchasers with respect to
any Receivable or the value of any such Receivable;
(xiv) any attempt by any Person to void any Incremental Purchase
or Reinvestment hereunder under statutory provisions or common law or
equitable action; and
(xv) the failure of any Receivable included in the calculation of
the Net Receivables Balance as an Eligible Receivable to be an
Eligible Receivable at the time so included.
Section 10.2 Increased Cost and Reduced Return. If after the date hereof,
---------------------------------
any Funding Source shall be charged any fee, expense or increased cost on
account of the adoption of any applicable law, rule or regulation (including any
applicable law, rule or regulation regarding capital adequacy) or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency (a "REGULATORY CHANGE"): (i) that subjects any
Funding Source to any charge or withholding on or with respect to any Funding
Agreement or a Funding Source's obligations under a Funding Agreement, or on or
with respect to the Receivables, or changes the basis of taxation of payments to
any Funding Source of any amounts payable under any Funding Agreement (except
for changes in the rate of tax on the overall net income of a Funding Source or
taxes excluded by Section 10.1) or (ii) that imposes, modifies or deems
applicable any reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of a Funding
Source, or credit extended by a Funding Source pursuant to a Funding Agreement
or (iii) that imposes any other condition the result of which is to increase the
cost to a Funding Source of performing its obligations under a Funding
Agreement, or to reduce the rate of return on a Funding Source's capital as a
consequence of its obligations under a Funding Agreement, or to reduce the
amount of any sum received or receivable by a Funding Source under a Funding
Agreement or to require any payment calculated by reference to the amount of
interests or loans held or interest received by it, then, upon demand by the
Agent, Seller shall pay to the Agent, for the benefit of the relevant Funding
Source, such amounts charged to such Funding Source or such amounts to otherwise
compensate such Funding Source for such increased cost or such reduction.
Section 10.3 Other Costs and Expenses. Subject to any limitations which
--------------------------
may be agreed between Seller and the Agent in writing, Seller shall pay to the
Agent and Conduit on demand all costs and out-of-pocket expenses in connection
with the preparation, execution, delivery and administration of this Agreement,
the transactions contemplated hereby and the other documents to be delivered
hereunder, including without limitation, the cost of Conduit's auditors auditing
the books, records and procedures of Seller, reasonable fees and out-of-pocket
expenses of legal counsel for Conduit and the Agent (which such counsel may be
employees of Conduit or the Agent) with respect thereto and with respect to
advising Conduit and the Agent as to their respective rights and remedies under
this Agreement. Seller shall pay to the Agent on demand any and all costs and
expenses of the Agent and the Purchasers, if any, including reasonable counsel
fees and expenses in connection with the enforcement of this Agreement and the
other documents delivered hereunder and in connection with any restructuring or
workout of this Agreement or such documents, or the administration of this
Agreement following an Amortization Event.
ARTICLE XI.
THE AGENT
Section 11.1 Authorization and Action. Each Purchaser hereby designates
--------------------------
and appoints Bank One to act as its agent hereunder and under each other
Transaction Document, and authorizes the Agent to take such actions as agent on
its behalf and to exercise such powers as are delegated to the Agent by the
terms of this Agreement and the other Transaction Documents together with such
powers as are reasonably incidental thereto. The Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in any other
Transaction Document, or any fiduciary relationship with any Purchaser, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.
Each Purchaser hereby authorizes the Agent to execute each of the UCC financing
statements and Collection Account Agreements on behalf of such Purchaser (the
terms of which shall be binding on such Purchaser).
Section 11.2 Delegation of Duties. The Agent may execute any of its
----------------------
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to rely on advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its
-----------------------
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of any Seller Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith. The Agent shall
not be under any obligation to any Purchaser to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect the properties, books or records of the Seller Parties. The Agent shall
not be deemed to have knowledge of any Amortization Event or Potential
Amortization Event unless the Agent has received notice from Seller or a
Purchaser.
Section 11.4 Reliance by Agent. The Agent shall in all cases be entitled
------------------
to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Seller), independent
accountants and other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence of Conduit or the Required Financial Institutions or all
of the Purchasers, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Purchasers, provided that unless and
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Conduit or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
Section 11.5 Non-Reliance on Agent and Other Purchasers. Each Purchaser
--------------------------------------------
expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Seller
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Purchaser represents and warrants to the Agent that it has and will,
independently and without reliance upon the Agent or any other Purchaser and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of Seller and
made its own decision to enter into this Agreement, the other Transaction
Documents and all other documents related hereto or thereto.
Section 11.6 Reimbursement and Indemnification. The Financial Institutions
---------------------------------
agree to reimburse and indemnify the Agent and its officers, directors,
employees, representatives and agents ratably according to their Pro Rata
Shares, to the extent not paid or reimbursed by the Seller Parties (i) for any
amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Seller Parties hereunder and (ii) for any other expenses
incurred by the Agent, in its capacity as Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.
Section 11.7 Agent in its Individual Capacity. The Agent and its
------------------------------------
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with Seller or any Affiliate of Seller as though the Agent were
not the Agent hereunder. With respect to the acquisition of Purchaser Interests
pursuant to this Agreement, the Agent shall have the same rights and powers
under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent, and the terms "FINANCIAL
INSTITUTION," "PURCHASER," "FINANCIAL INSTITUTIONS" and "PURCHASERS" shall
include the Agent in its individual capacity.
Section 11.8 Successor Agent. The Agent may, upon five days' notice to
---------------
Seller and the Purchasers, and the Agent will, upon the direction of all of the
Purchasers (other than the Agent, in its individual capacity) resign as Agent.
If the Agent shall resign, then the Required Financial Institutions during such
five-day period shall appoint from among the Purchasers a successor agent. If
for any reason no successor Agent is appointed by the Required Financial
Institutions during such five-day period, then effective upon the termination of
such five day period, the Purchasers shall perform all of the duties of the
Agent hereunder and under the other Transaction Documents and Seller and the
Master Servicer (as applicable) shall make all payments in respect of the
Aggregate Unpaids directly to the applicable Purchasers and for all purposes
shall deal directly with the Purchasers. After the effectiveness of any retiring
Agent's resignation hereunder as Agent, the retiring Agent shall be discharged
from its duties and obligations hereunder and under the other Transaction
Documents and the provisions of this Article XI and Article X shall continue in
effect for its benefit with respect to any actions taken or omitted to be taken
by it while it was Agent under this Agreement and under the other Transaction
Documents.
ARTICLE XII.
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments.
-----------
(a) Seller and each Financial Institution hereby agree and
consent to the complete or partial assignment by Conduit of all or any
portion of its rights under, interest in, title to and obligations
under this Agreement to the Financial Institutions pursuant to Section
13.1 or to any other Person, and upon such assignment, Conduit shall
be released from its obligations so assigned. Further, Seller and each
Financial Institution hereby agree that any assignee of Conduit of
this Agreement or all or any of the Purchaser Interests of Conduit
shall have all of the rights and benefits under this Agreement as if
the term "CONDUIT" explicitly referred to such party, and no such
assignment shall in any way impair the rights and benefits of Conduit
hereunder. Neither Seller nor the Master Servicer shall have the right
to assign its rights or obligations under this Agreement.
(b) Any Financial Institution may at any time and from time to
time assign to one or more Persons ("PURCHASING FINANCIAL
INSTITUTIONS") all or any part of its rights and obligations under
this Agreement pursuant to an assignment agreement, substantially in
the form set forth in Exhibit VII hereto (the "ASSIGNMENT AGREEMENT")
executed by such Purchasing Financial Institution and such selling
Financial Institution. The consent of Conduit shall be required prior
to the effectiveness of any such assignment. Except for an assignment
pursuant to Section 12.1(c), unless an Amortization Event shall have
occurred and be continuing, the consent of Seller (which consent shall
not be unreasonably withheld or delayed) shall also be required prior
to the effectiveness of any such assignment. Each assignee of a
Financial Institution must (i) have a short-term debt rating of A-1 or
better by Standard & Poor's Ratings Group and P-1 by ▇▇▇▇▇'▇ Investor
Service, Inc. and (ii) agree to deliver to the Agent, promptly
following any request therefor by the Agent or Conduit, an
enforceability opinion in form and substance satisfactory to the Agent
and Conduit. Upon delivery of the executed Assignment Agreement to the
Agent, such selling Financial Institution shall be released from its
obligations hereunder to the extent of such assignment. Thereafter the
Purchasing Financial Institution shall for all purposes be a Financial
Institution party to this Agreement and shall have all the rights and
obligations of a Financial Institution under this Agreement to the
same extent as if it were an original party hereto and no further
consent or action by Seller, the Purchasers or the Agent shall be
required.
(c) Each of the Financial Institutions agrees that in the event
that it shall cease to have a short-term debt rating of A-1 or better
by Standard & Poor's Ratings Group and P-1 by ▇▇▇▇▇'▇ Investor
Service, Inc. (an "AFFECTED FINANCIAL INSTITUTION"), such Affected
Financial Institution shall be obliged, at the request of Conduit or
the Agent, to assign all of its rights and obligations hereunder to
(x) another Financial Institution or (y) another funding entity
nominated by the Agent and acceptable to Conduit, and willing to
participate in this Agreement through the Liquidity Termination Date
in the place of such Affected Financial Institution; provided that the
Affected Financial Institution receives payment in full, pursuant to
an Assignment Agreement, of an amount equal to such Financial
Institution's Pro Rata Share of the Aggregate Capital and Yield owing
to the Financial Institutions and all accrued but unpaid fees and
other costs and expenses payable in respect of its Pro Rata Share of
the Purchaser Interests of the Financial Institutions.
Section 12.2 Participations. Any Financial Institution may, in the ordinary
--------------
course of its business at any time sell to one or more Persons (each a
"PARTICIPANT") participating interests in its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, its obligation to pay Conduit its
Acquisition Amounts or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution's rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Conduit and the Agent shall continue to deal
solely and directly with such Financial Institution in connection with such
Financial Institution's rights and obligations under this Agreement. Each
Financial Institution agrees that any agreement between such Financial
Institution and any such Participant in respect of such participating interest
shall not restrict such Financial Institution's right to agree to any amendment,
supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in Section 14.1(b)(i).
ARTICLE XIII.
LIQUIDITY FACILITY
Section 13.1 Transfer to Financial Institutions. Each Financial
-------------------------------------
Institution hereby agrees, subject to Section 13.4, that immediately upon
written notice from Conduit delivered on or prior to the Liquidity Termination
Date, it shall acquire by assignment from Conduit, without recourse or warranty,
its Pro Rata Share of one or more of the Purchaser Interests of Conduit as
specified by Conduit. Each such assignment by Conduit shall be made pro rata
among all of the Financial Institutions, except for pro rata assignments to one
or more Terminating Financial Institutions pursuant to Section 13.6. Each such
Financial Institution shall, no later than 1:00 p.m. (Chicago time) on the date
of such assignment, pay in immediately available funds (unless another form of
payment is otherwise agreed between Conduit and any Financial Institution) to
the Agent at an account designated by the Agent, for the benefit of Conduit, its
Acquisition Amount. Unless a Financial Institution has notified the Agent that
it does not intend to pay its Acquisition Amount, the Agent may assume that such
payment has been made and may, but shall not be obligated to, make the amount of
such payment available to Conduit in reliance upon such assumption. Conduit
hereby sells and assigns to the Agent for the ratable benefit of the Financial
Institutions, and the Agent hereby purchases and assumes from Conduit, effective
upon the receipt by Conduit of the Conduit Transfer Price, the Purchaser
Interests of Conduit which are the subject of any transfer pursuant to this
Article XIII.
Section 13.2 Transfer Price Reduction Yield. If the Adjusted Liquidity
---------------------------------
Price is included in the calculation of the Conduit Transfer Price for any
Purchaser Interest, each Financial Institution agrees that the Agent shall pay
to Conduit the Reduction Percentage of any Yield received by the Agent with
respect to such Purchaser Interest.
Section 13.3 Payments to Conduit. In consideration for the reduction of
---------------------
the Conduit Transfer Prices by the Conduit Transfer Price Reductions, effective
only at such time as the aggregate amount of the Capital of the Purchaser
Interests of the Financial Institutions equals the Conduit Residual, each
Financial Institution hereby agrees that the Agent shall not distribute to the
Financial Institutions and shall immediately remit to Conduit any Yield,
Collections or other payments received by it to be applied pursuant to the terms
hereof or otherwise to reduce the Capital of the Purchaser Interests of the
Financial Institutions.
Section 13.4 Limitation on Commitment to Purchase from Conduit.
-------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have any obligation to purchase any Purchaser Interest from
Conduit, pursuant to Section 13.1 or otherwise, if:
(i) Conduit shall have voluntarily commenced any proceeding or
filed any petition under any bankruptcy, insolvency or similar law
seeking the dissolution, liquidation or reorganization of Conduit or
taken any corporate action for the purpose of effectuating any of the
foregoing; or
(ii) involuntary proceedings or an involuntary petition shall
have been commenced or filed against Conduit by any Person under any
bankruptcy, insolvency or similar law seeking the dissolution,
liquidation or reorganization of Conduit and such proceeding or
petition shall have not been dismissed.
Section 13.5 Defaulting Financial Institutions. If one or more Financial
----------------------------------
Institutions defaults in its obligation to pay its Acquisition Amount pursuant
to Section 13.1 (each such Financial Institution shall be called a "DEFAULTING
FINANCIAL INSTITUTION" and the aggregate amount of such defaulted obligations
being herein called the "CONDUIT TRANSFER PRICE DEFICIT"), then upon notice from
the Agent, each Financial Institution other than the Defaulting Financial
Institutions (a "NON-DEFAULTING FINANCIAL INSTITUTION") shall promptly pay to
the Agent, in immediately available funds, an amount equal to the lesser of (x)
such Non-Defaulting Financial Institution's proportionate share (based upon the
relative Commitments of the Non-Defaulting Financial Institutions) of the
Conduit Transfer Price Deficit and (y) the unused portion of such Non-Defaulting
Financial Institution's Commitment. A Defaulting Financial Institution shall,
forthwith upon demand, pay to the Agent for the account of the Non-Defaulting
Financial Institutions all amounts paid by each Non-Defaulting Financial
Institution on behalf of such Defaulting Financial Institution, together with
interest thereon, for each day from the date a payment was made by a
Non-Defaulting Financial Institution until the date such Non-Defaulting
Financial Institution has been paid such amounts in full, at a rate per annum
equal to the Federal Funds Effective Rate plus two percent (2%). In addition,
without prejudice to any other rights that Conduit may have under applicable
law, each Defaulting Financial Institution shall pay to Conduit, forthwith upon
demand, the difference between such Defaulting Financial Institution's unpaid
Acquisition Amount and the amount paid with respect thereto by the
Non-Defaulting Financial Institutions, together with interest thereon, for each
day from the date of the Agent's request for such Defaulting Financial
Institution's Acquisition Amount pursuant to Section 13.1 until the date the
requisite amount is paid to Conduit in full, at a rate per annum equal to the
Federal Funds Effective Rate plus two percent (2%).
Section 13.6 Terminating Financial Institutions.
------------------------------------
(a) Each Financial Institution hereby agrees to deliver written notice
to the Agent not more than 30 Business Days and not less than 5 Business
Days prior to the Liquidity Termination Date indicating whether such
Financial Institution intends to renew its Commitment hereunder. If any
Financial Institution fails to deliver such notice on or prior to the date
that is 5 Business Days prior to the Liquidity Termination Date, such
Financial Institution will be deemed to have declined to renew its
Commitment (each Financial Institution which has declined or has been
deemed to have declined to renew its Commitment hereunder, a "NON-RENEWING
FINANCIAL INSTITUTION"). The Agent shall promptly notify Conduit of each
Non-Renewing Financial Institution and Conduit, in its sole discretion, may
(A) to the extent of Commitment Availability, declare that such
Non-Renewing Financial Institution's Commitment shall, to such extent,
automatically terminate on a date specified by Conduit on or before the
Liquidity Termination Date or (B) upon one (1) Business Days' notice to
such Non-Renewing Financial Institution assign to such Non-Renewing
Financial Institution on a date specified by Conduit its Pro Rata Share of
the aggregate Purchaser Interests then held by Conduit, subject to, and in
accordance with, Section 13.1. In addition, Conduit may, in its sole
discretion, at any time (x) to the extent of Commitment Availability,
declare that any Affected Financial Institution's Commitment shall
automatically terminate on a date specified by Conduit or (y) assign to any
Affected Financial Institution on a date specified by Conduit its Pro Rata
Share of the aggregate Purchaser Interests then held by Conduit, subject
to, and in accordance with, Section 13.1 (each Affected Financial
Institution or each Non-Renewing Financial Institution is hereinafter
referred to as a "TERMINATING FINANCIAL INSTITUTION"). The parties hereto
expressly acknowledge that any declaration of the termination of any
Commitment, any assignment pursuant to this Section 13.6 and the order of
priority of any such termination or assignment among Terminating Financial
Institutions shall be made by Conduit in its sole and absolute discretion.
(b) Upon any assignment to a Terminating Financial Institution as
provided in this Section 13.6, any remaining Commitment of such Terminating
Financial Institution shall automatically terminate. Upon reduction to zero
of the Capital of all of the Purchaser Interests of a Terminating Financial
Institution (after application of Collections thereto pursuant to Sections
2.2 and 2.3) all rights and obligations of such Terminating Financial
Institution hereunder shall be terminated and such Terminating Financial
Institution shall no longer be a "FINANCIAL INSTITUTION" hereunder;
provided, however, that the provisions of Article X shall continue in
effect for its benefit with respect to Purchaser Interests held by such
Terminating Financial Institution prior to its termination as a Financial
Institution.
ARTICLE XIV.
MISCELLANEOUS
Section 14.1 Waivers and Amendments.
------------------------
(a) No failure or delay on the part of the Agent or any Purchaser in
exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law. Any
waiver of any provision of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented, modified
or waived except in writing in accordance with the provisions of this Section
14.1(b). Conduit, Seller and the Agent, at the direction of the Required
Financial Institutions, may enter into written modifications or waivers of any
provisions of this Agreement, provided, however, that no such modification or
waiver shall:
(i) without the consent of each affected Purchaser, (A) extend the
Liquidity Termination Date or the date of any payment or deposit of
Collections by Seller or the Master Servicer, (B) reduce the rate or extend
the time of payment of Yield or any CP Costs (or any component of Yield or
CP Costs), (C) reduce any fee payable to the Agent for the benefit of the
Purchasers, (D) except pursuant to Article XII hereof, change the amount of
the Capital of any Purchaser, any Financial Institution's Pro Rata Share
(except pursuant to Sections 13.1 or 13.5) or any Financial Institution's
Commitment, (E) amend, modify or waive any provision of the definition of
Required Financial Institutions or this Section 14.1(b), (F) consent to or
permit the assignment or transfer by Seller of any of its rights and
obligations under this Agreement, (G) change the definition of "ELIGIBLE
RECEIVABLE," "LOSS RESERVE," "DILUTION RESERVE" or "NET RECEIVABLES
BALANCE" or (H) amend or modify any defined term (or any defined term used
directly or indirectly in such defined term) used in clauses (A) through
(G) above in a manner that would circumvent the intention of the
restrictions set forth in such clauses; or
(ii) without the written consent of the then Agent, amend, modify or
waive any provision of this Agreement if the effect thereof is to affect
the rights or duties of such Agent.
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Seller, the Agent may amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and Conduit may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII,
Section 14.13 or any other provision of this Agreement without the consent of
Seller, provided that such amendment has no negative impact upon Seller. Any
modification or waiver made in accordance with this Section 14.1 shall apply to
each of the Purchasers equally and shall be binding upon Seller, the Purchasers
and the Agent.
Section 14.2 Notices. Except as provided in this Section 14.2, all
-------
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other means, when received at the address specified in this
Section 14.2. Seller hereby authorizes the Agent to effect purchases and Tranche
Period and Discount Rate selections in accordance with telephonic notices made
by any Person whom the Agent in good faith believes to be acting on behalf of
Seller. Seller agrees to deliver promptly to the Agent a written confirmation of
each telephonic notice signed by an authorized officer of Seller; provided,
however, the absence of such confirmation shall not affect the validity of such
notice. If the written confirmation differs from the action taken by the Agent,
the records of the Agent shall govern absent manifest error.
Section 14.3 Ratable Payments. If any Purchaser, whether by setoff or
-----------------
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.2 or 10.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 14.4 Protection of Ownership Interests of the Purchasers.
---------------------------------------------------------
(a) Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents, and take all
actions, that may be necessary or desirable, or that the Agent may request,
to perfect, protect or more fully evidence the Purchaser Interests, or to
enable the Agent or the Purchasers to exercise and enforce their rights and
remedies hereunder. At any time after the occurrence of an Amortization
Event, the Agent may, or the Agent may direct Seller or the Master Servicer
to, notify the Obligors of Receivables, at Seller's expense, of the
ownership or security interests of the Purchasers under this Agreement and
may also direct that payments of all amounts due or that become due under
any or all Receivables be made directly to the Agent or its designee.
Seller or the Master Servicer (as applicable) shall, at any Purchaser's
request, withhold the identity of such Purchaser in any such notification.
(b) If any Seller Party fails to perform any of its obligations
hereunder, the Agent or any Purchaser may (but shall not be required to)
perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be
payable by Seller as provided in Section 10.3. Each Seller Party
irrevocably authorizes the Agent at any time and from time to time in the
sole discretion of the Agent, and appoints the Agent as its
attorney-in-fact, to act on behalf of such Seller Party (i) to execute on
behalf of Seller as debtor (to the extent that execution is required) and
to file financing statements (with or, to the extent permitted by
applicable law, without, Seller's signature) necessary or desirable in the
Agent's sole discretion to perfect and to maintain the perfection and
priority of the interest of the Purchasers in the Receivables and (ii) to
file a carbon, photographic or other reproduction of this Agreement or any
financing statement with respect to the Receivables as a financing
statement in such offices as the Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and
priority of the interests of the Purchasers in the Receivables. This
appointment is coupled with an interest and is irrevocable.
Section 14.5 Confidentiality.
---------------
(a) Each Seller Party and each Purchaser shall maintain and shall
cause each of its employees and officers to maintain the confidentiality of
this Agreement and the other confidential or proprietary information with
respect to the Agent and Conduit and their respective businesses obtained
by it or them in connection with the structuring, negotiating and execution
of the transactions contemplated herein, except that such Seller Party and
such Purchaser and its officers and employees may disclose such information
to such Seller Party's and such Purchaser's external accountants and
attorneys and as required by any applicable law or order of any judicial or
administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each Seller Party
hereby consents to the disclosure of any nonpublic information with respect
to it (i) to the Agent, the Financial Institutions or Conduit by each
other, (ii) by the Agent or the Purchasers to any prospective or actual
assignee or participant of any of them and (iii) by the Agent to any rating
agency, Commercial Paper dealer or provider of a surety, guaranty or credit
or liquidity enhancement to Conduit or any entity organized for the purpose
of purchasing, or making loans secured by, financial assets for which Bank
One acts as the administrative agent and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing. In
addition, the Purchasers and the Agent may disclose any such nonpublic
information pursuant to any law, rule, regulation, direction, request or
order of any judicial, administrative or regulatory authority or
proceedings (whether or not having the force or effect of law).
Section 14.6 Bankruptcy Petition. Each of Seller, the Master Servicer, the
--------------------
Agent and the Financial Institutions hereby covenants and agrees that, prior to
the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of Conduit, it will not institute against, or
join any other Person in instituting against, Conduit any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
Section 14.7 Limitation of Liability. Except with respect to any claim
-------------------------
arising out of the willful misconduct or gross negligence of Conduit, the Agent
or any Financial Institution, no claim may be made by any Seller Party or any
other Person against Conduit, the Agent or any Financial Institution or their
respective Affiliates, directors, officers, employees, attorneys or agents for
any special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and each Seller Party hereby waives,
releases, and agrees not to ▇▇▇ upon any claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.
Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
---------------
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF ILLINOIS.
Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY IRREVOCABLY
-----------------------
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH
PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST ANY
SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE
AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT
EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY
IN A COURT IN CHICAGO, ILLINOIS.
Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
-----------------------
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of Terms.
----------------------------------------------------
(a) This Agreement and each other Transaction Document contain the
final and complete integration of all prior expressions by the parties
hereto with respect to the subject matter hereof and shall constitute the
entire agreement among the parties hereto with respect to the subject
matter hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns
(including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance
with its terms and shall remain in full force and effect until terminated
in accordance with its terms; provided, however, that the rights and
remedies with respect to (i) any breach of any representation and warranty
made by any Seller Party pursuant to Article V, (ii) the indemnification
and payment provisions of Article X, and Sections 14.5 and 14.6 shall be
continuing and shall survive any termination of this Agreement.
Section 14.12 Counterparts; Severability; Section References. This
-------------------------------------------------
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "ARTICLE," "SECTION," "SCHEDULE" or "EXHIBIT" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
Section 14.13 Bank One Roles. Each of the Financial Institutions
----------------
acknowledges that Bank One acts, or may in the future act, (i) as administrative
agent for Conduit or any Financial Institution, (ii) as issuing and paying agent
for the Commercial Paper, (iii) to provide credit or liquidity enhancement for
the timely payment for the Commercial Paper and (iv) to provide other services
from time to time for Conduit or any Financial Institution (collectively, the
"BANK ONE ROLES"). Without limiting the generality of this Section 14.13, each
Financial Institution hereby acknowledges and consents to any and all Bank One
Roles and agrees that in connection with any Bank One Role, Bank One may take,
or refrain from taking, any action that it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Conduit, and the giving of notice to the Agent of a mandatory purchase
pursuant to Section 13.1.
Section 14.14 Characterization.
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(a) It is the intention of the parties hereto that each purchase
hereunder shall constitute and be treated as an absolute and irrevocable
sale, which purchase shall provide the applicable Purchaser with the full
benefits of ownership of the applicable Purchaser Interest. Except as
specifically provided in this Agreement, each sale of a Purchaser Interest
hereunder is made without recourse to Seller; PROVIDED, HOWEVER, that (i)
Seller shall be liable to each Purchaser and the Agent for all
representations, warranties, covenants and indemnities made by Seller
pursuant to the terms of this Agreement, and (ii) such sale does not
constitute and is not intended to result in an assumption by any Purchaser
or the Agent or any assignee thereof of any obligation of Seller or any
Originator or any other Person arising in connection with the Receivables,
the Related Security, or the related Contracts, or any other obligations of
Seller or any Originator.
(b) In addition to any ownership interest which the Agent may from
time to time acquire pursuant hereto, Seller hereby grants to the Agent for
the ratable benefit of the Purchasers a valid and perfected security
interest in all of Seller's right, title and interest in, to and under all
Receivables now existing or hereafter arising, the Collections, each
Lock-Box, each Collection Account, all Related Security, all other rights
and payments relating to such Receivables, and all proceeds of any thereof
prior to all other liens on and security interests therein to secure the
prompt and complete payment of the Aggregate Unpaids. The Agent and the
Purchasers shall have, in addition to the rights and remedies that they may
have under this Agreement, all other rights and remedies provided to a
secured creditor under the UCC and other applicable law, which rights and
remedies shall be cumulative.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
RALCORP RECEIVABLES CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: President
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ADDRESS:
Ralcorp Receivables Corporation
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▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇, Assistant Treasurer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
RALCORP HOLDINGS, INC., as Master Servicer
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Treasurer
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ADDRESS:
Ralcorp Holdings, Inc.
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▇▇▇▇▇ ▇▇▇▇
▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Treasurer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
FALCON ASSET SECURITIZATION CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Authorized Signatory: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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ADDRESS:
Falcon Asset Securitization Corporation
c/o Bank One, NA (Main Office Chicago), as Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANK ONE, NA (MAIN OFFICE CHICAGO), as a Financial Institution and as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title:
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ADDRESS:
Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0596, 1-21
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT I
DEFINITIONS
AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
MEANINGS (SUCH MEANINGS TO BE EQUALLY APPLICABLE TO BOTH THE SINGULAR AND PLURAL
FORMS OF THE TERMS DEFINED):
"ACCRUAL PERIOD" means each calendar month, provided that the initial
Accrual Period hereunder means the period from (and including) the date of the
initial purchase hereunder to (and including) the last day of the calendar month
thereafter.
"ACCRUED SALES DISCOUNT" means, on any date of determination, the amount of
expected credit memoranda and other Dilutions accrued by the Originators in
respect of the Receivables in their "sales discount accrual account" in
accordance with their customary accounting practices.
"ACQUISITION AMOUNT" means, on the date of any purchase from Conduit of one
or more Purchaser Interests pursuant to Section 13.1, with respect to each
Financial Institution, the lesser of (i) such Financial Institution's Pro Rata
Share of the sum of (A) the lesser of (1) the Adjusted Liquidity Price of each
such Purchaser Interest and (2) the Capital of each such Purchaser Interest and
(B) all accrued and unpaid CP Costs for each such Purchaser Interest and (ii)
such Financial Institution's unused Commitment.
"ADJUSTED LIQUIDITY PRICE" means an amount equal to:
-- -- -- --
| | NDR | |
RI | (i) DC + (ii) | ---------------- | |
| | 1+ (0.50 x LR) | |
-- -- -- --
WHERE:
RI = the undivided percentage interest evidenced by such Purchaser
Interest.
DC = the Deemed Collections.
NDR = the Outstanding Balance of all Receivables as to which any payment,
or part thereof, has not remained unpaid for 91 days or more from the original
due date for such payment.
LR = the percentage specified in clause (i) of the definition of "Loss
Percentage."
Each of the foregoing shall be determined from the most recent Monthly Report
received from the Master Servicer.
"ADVERSE CLAIM" means a lien, security interest, charge or encumbrance, or
other right or claim in, of or on any Person's assets or properties in favor of
any other Person.
"AFFECTED FINANCIAL INSTITUTION" has the meaning specified in Section
12.1(c).
"AFFILIATE" has the meaning specified in the Receivables Sale Agreement.
"AGENT" has the meaning specified in the preamble to this Agreement.
"AGGREGATE CAPITAL" means, on any date of determination, the aggregate
amount of Capital of all Purchaser Interests outstanding on such date.
"AGGREGATE REDUCTION" has the meaning specified in Section 1.3.
"AGGREGATE RESERVES" means, on any date of determination, the sum of the
Loss Reserve, the Yield Reserve and the Dilution Reserve.
"AGGREGATE UNPAIDS" means, at any time, an amount equal to the sum of all
accrued and unpaid fees under the Fee Letter, CP Costs, Yield Aggregate Capital
and all other unpaid Obligations (whether due or accrued) at such time.
"AGREEMENT" means this Receivables Purchase Agreement, as it may be amended
or modified and in effect from time to time.
"AMORTIZATION DATE" means the earliest to occur of (i) the day on which any
of the conditions precedent set forth in Section 6.2 are not satisfied, (ii) the
Business Day immediately prior to the occurrence of an Amortization Event set
forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written
notice from the Agent following the occurrence of any other Amortization Event,
and (iv) the date which is 30 days after the Agent's receipt of written notice
from Seller that it wishes to terminate the facility evidenced by this
Agreement.
"AMORTIZATION EVENT" has the meaning specified in Article IX.
"ASSIGNMENT AGREEMENT" has the meaning specified in Section 12.1(b).
"AUTHORIZED OFFICER" means, with respect to any Person, any of the
president, chief financial officer, treasurer or controller of such Person,
acting singly.
"BANK ONE" means Bank One, NA (Main Office Chicago) in its individual
capacity and its successors.
"BASE RATE" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"BROKEN FUNDING COSTS" means for any Purchaser Interest which: (i) has its
Capital reduced without compliance by Seller with the notice requirements
hereunder or (ii) does not become subject to an Aggregate Reduction following
the delivery of any Reduction Notice or (iii) is assigned under Article XIII or
terminated prior to the date on which it was originally scheduled to end; an
amount equal to the excess, if any, of (A) the CP Costs or Yield (as applicable)
that would have accrued during the remainder of the Tranche Periods or the
tranche periods for Commercial Paper determined by the Agent to relate to such
Purchaser Interest (as applicable) subsequent to the date of such reduction,
assignment or termination (or in respect of clause (ii) above, the date such
Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of
the Capital of such Purchaser Interest if such reduction, assignment or
termination had not occurred or such Reduction Notice had not been delivered,
over (B) the sum of (x) to the extent all or a portion of such Capital is
allocated to another Purchaser Interest, the amount of CP Costs or Yield
actually accrued during the remainder of such period on such Capital for the new
Purchaser Interest, and (y) to the extent such Capital is not allocated to
another Purchaser Interest, the income, if any, actually received during the
remainder of such period by the holder of such Purchaser Interest from investing
the portion of such Capital not so allocated. In the event that the amount
referred to in clause (B) exceeds the amount referred to in clause (A), the
relevant Purchaser or Purchasers agree to pay to Seller the amount of such
excess. All Broken Funding Costs shall be due and payable hereunder upon demand.
"BUSINESS DAY" means any day on which banks are not authorized or required
to close in New York, New York or Chicago, Illinois and The Depository Trust
Company of New York is open for business, and, if the applicable Business Day
relates to any computation or payment to be made with respect to the LIBO Rate,
any day on which dealings in dollar deposits are carried on in the London
interbank market.
"CAPITAL" of any Purchaser Interest means, at any time, (A) the Purchase
Price of such Purchaser Interest, minus (B) the sum of the aggregate amount of
Collections and other payments received by the Agent which in each case are
applied to reduce such Capital in accordance with the terms and conditions of
this Agreement; provided that such Capital shall be restored (in accordance with
Section 2.5) in the amount of any Collections or other payments so received and
applied if at any time the distribution of such Collections or payments are
rescinded, returned or refunded for any reason.
"CHANGE OF CONTROL" has the meaning specified in the Receivables Sale
Agreement.
"CHARGED-OFF RECEIVABLE" means a Receivable: (i) as to which the Obligor
thereof has taken any action, or suffered any event to occur, of the type
described in Section 9.1(d) (as if references to Seller Party therein refer to
such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off Seller's books as uncollectible, or (iv) which has been
identified by Seller as uncollectible.
"COLLECTION ACCOUNT" means each concentration account, depositary account,
lock-box account or similar account in which any Collections are collected or
deposited and which is listed on Exhibit IV.
"COLLECTION ACCOUNT AGREEMENT" means an agreement substantially in the form
of Exhibit VI among Originator, Seller, the Agent and a Collection Bank.
"COLLECTION BANK" means, at any time, any of the banks holding one or more
Collection Accounts.
"COLLECTION NOTICE" means a notice, in substantially the form of Annex A to
Exhibit VI, from the Agent to a Collection Bank.
"COLLECTIONS" has the meaning specified in the Receivables Sale Agreement.
"COMMERCIAL PAPER" means promissory notes of Conduit issued by Conduit in
the commercial paper market.
"COMMITMENT" means, for each Financial Institution, the commitment of such
Financial Institution to purchase Purchaser Interests from (i) Seller and (ii)
Conduit, in an amount not to exceed (i) in the aggregate, the amount set forth
opposite such Financial Institution's name on Schedule A to this Agreement, as
such amount may be modified in accordance with the terms hereof (including,
without limitation, any termination of Commitments pursuant to Section 13.6
hereof) and (ii) with respect to any individual purchase hereunder, its Pro Rata
Share of the Purchase Price therefor.
"COMMITMENT AVAILABILITY" means at any time the positive difference (if
any) between (a) an amount equal to the aggregate amount of the Commitments at
such time minus (b) the Aggregate Capital at such time.
"CONCENTRATION LIMIT" means, at any time, for any Obligor, 3.33% of the
aggregate Outstanding Balance of all Eligible Receivables, or such higher amount
(a "SPECIAL CONCENTRATION LIMIT") for such Obligor designated by the Agent;
PROVIDED THAT in the case of an Obligor and any Affiliate of such Obligor (other
than Royal Ahold and its Affiliates), the Concentration Limit shall be
calculated as if such Obligor and such Affiliate are one Obligor; and provided,
further, that Conduit or the Required Financial Institutions may, upon not less
than three Business Days' notice to Seller, cancel any Special Concentration
Limit. As of the date hereof, until notice from the Agent to the contrary in
accordance with the preceding sentence, the following Special Concentration
Limits shall be in effect:
OBLIGOR PERCENTAGE OF ELIGIBLE RECEIVABLES
------- -------------------------------------
Walmart and Affiliates 11.0%
Albertsons and its Affiliates 7.5%
Each of CVS, Super Value, Kroger and
Walgreens and its Affiliates 5.0%
"CONDUIT" has the meaning specified in the preamble to this Agreement.
"CONDUIT RESIDUAL" means the sum of the Conduit Transfer Price Reductions.
"CONDUIT TRANSFER PRICE" means, with respect to the assignment by Conduit
of one or more Purchaser Interests to the Agent for the benefit of one or more
of the Financial Institutions pursuant to Section 13.1, the sum of (i) the
lesser of (a) the Capital of each such Purchaser Interest and (b) the Adjusted
Liquidity Price of each such Purchaser Interest and (ii) all accrued and unpaid
CP Costs for each such Purchaser Interest.
"CONDUIT TRANSFER PRICE DEFICIT" has the meaning specified in Section 13.5.
"CONDUIT TRANSFER PRICE REDUCTION" means in connection with the assignment
of a Purchaser Interest by Conduit to the Agent for the benefit of the Financial
Institutions, the positive difference (if any) between (i) the Capital of such
Purchaser Interest and (ii) the Adjusted Liquidity Price for such Purchaser
Interest.
"CONTINGENT OBLIGATION" has the meaning specified in the Receivables Sale
Agreement.
"CONTRACT" has the meaning specified in the Receivables Sale Agreement.
"CP COSTS" means, for each day, the sum of (i) discount or yield accrued on
Pooled Commercial Paper on such day, plus (ii) any and all accrued commissions
in respect of placement agents and Commercial Paper dealers, and issuing and
paying agent fees incurred, in respect of such Pooled Commercial Paper for such
day, plus (iii) other costs associated with funding small or odd-lot amounts
with respect to all receivable purchase facilities which are funded by Pooled
Commercial Paper for such day, minus (iv) any accrual of income net of expenses
received on such day from investment of collections received under all
receivable purchase facilities funded substantially with Pooled Commercial
Paper, minus (v) any payment received on such day net of expenses in respect of
Broken Funding Costs related to the prepayment of any Purchaser Interest of
Conduit pursuant to the terms of any receivable purchase facilities funded
substantially with Pooled Commercial Paper. In addition to the foregoing costs,
if Seller shall request any Incremental Purchase during any period of time
determined by the Agent in its sole discretion to result in incrementally higher
CP Costs applicable to such Incremental Purchase, the Capital associated with
any such Incremental Purchase shall, during such period, be deemed to be funded
by Conduit in a special pool (which may include capital associated with other
receivable purchase facilities) for purposes of determining such additional CP
Costs applicable only to such special pool and charged each day during such
period against such Capital.
"CREDIT AND COLLECTION POLICY" has the meaning specified in the Receivables
Sale Agreement.
"DEEMED COLLECTIONS" means the aggregate of all amounts Seller shall have
been deemed to have received as a Collection of a Receivable. Seller shall be
deemed to have received a Collection in full of a Receivable if at any time (i)
the Outstanding Balance of any such Receivable is either (x) reduced as a result
of any defective or rejected goods or services, any discount or any adjustment
or otherwise by Seller (other than cash Collections on account of the
Receivables) or (y) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction) or (ii) any of the representations or
warranties in Article V are no longer true with respect to any Receivable.
"DEFAULT FEE" means with respect to any amount due and payable by Seller in
respect of any Aggregate Unpaids, an amount equal to the greater of (i) $1000
and (ii) interest on any such unpaid Aggregate Unpaids at a rate per annum equal
to 2% above the Base Rate.
"DEFAULT RATIO" means, as at the last day of any calendar month, the
percentage equal to (a) the sum of (i) all Receivables greater than 90 days but
less than 121 days past due, plus (ii) the aggregate actual amount of write-offs
during the calendar month then most recently ended, divided by (b) gross sales
of the Originators during the third calendar month prior to the date of
determination.
"DEFAULTING FINANCIAL INSTITUTION" has the meaning specified in Section
13.5.
"DELINQUENCY RATIO" means, at any time, a percentage equal to (i) the
aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables at such time divided by (ii) the aggregate Outstanding Balance of
all Receivables at such time.
"DELINQUENT RECEIVABLE" means a Receivable as to which any payment, or part
thereof, remains unpaid for 61 days or more from the original due date for such
payment.
"DESIGNATED OBLIGOR" means an Obligor that the Agent has notified the
Seller is unacceptable.
"DILUTION HORIZON RATIO" means, on any date of determination, an amount
calculated by dividing (a) cumulative sales generated by the Originators during
the most recent 20 days by (b) the aggregate Outstanding Balance of all Eligible
Receivables as of the last day of the month then most recently ended.
"DILUTION PERCENTAGE" means, on any date of determination, a percentage
equal to:
{ [ (2 x ED) + (DS - ED) ] x DS/ED } x DHR
WHERE:
ED = Expected Dilution as of such date;
DS = the Dilution Spike on such date; and
DHR = the Dilution Horizon Ratio.
"DILUTION RATIO" means, on any date of determination, a percentage equal to
the ratio of Dilutions occurring during the month then most recently ended,
divided by gross sales for the Originators for such month.
"DILUTION RESERVE" means, on any date of determination, an amount equal to
the product of the Dilution Percentage multiplied by the Net Receivables
Balance.
"DILUTION SPIKE" means, on any date of determination, the highest Dilution
Ratio during the 12 months then most recently ended.
"DILUTIONS" means, at any time, the aggregate amount of reductions or
cancellations described in clause (i) of the definition of "DEEMED COLLECTIONS"
other than reductions arising from contractually agreed upon sales discounts.
"DISCOUNT RATE" means, the LIBO Rate or the Base Rate, as applicable, with
respect to each Purchaser Interest of the Financial Institutions.
"ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a resident of the
United States or Canada or, if a corporation or other business
organization, is organized under the laws of the United States or Canada or
any political subdivision of either of the foregoing and has its chief
executive office in the United States or Canada; (b) is not an Affiliate of
any of the parties hereto; and (c) is not a Designated Obligor,
(ii) the Obligor of which is not the Obligor of any Charged-Off
Receivable,
(iii) the Obligor of which is not a Top 20 Obligor of Receivables of
which more than 25% are Delinquent Receivables,
(iv) which is not a Charged-Off Receivable, a Defaulted Receivable or
a Delinquent Receivable,
(v) which by its terms is due and payable within 31 days (or, in the
case of food service Receivables and beverage Receivables, 45 days) of the
original billing date therefor and has not had its payment terms extended,
(vi) which is an "account" within the meaning of Article 9 of the UCC
of all applicable jurisdictions,
(vii) which is denominated and payable only in United States dollars
in the United States,
(viii) which arises under a Contract in substantially the form of one
of the form contracts set forth or described on Exhibit IX hereto or
otherwise approved by the Agent in writing, which, together with such
Receivable, is in full force and effect and constitutes the duly
authorized, legally valid and binding obligation of the related Obligor
enforceable against such Obligor in accordance with its terms,
(ix) which arises under a Contract which (A) does not require the
Obligor under such Contract to consent to the transfer, sale or assignment
of the rights and duties of Originator or any of its assignees under such
Contract and (B) does not contain a confidentiality provision that purports
to restrict the ability of any Purchaser to exercise its rights under this
Agreement, including, without limitation, its right to review the Contract,
(x) which arises under a Contract that contains an obligation to pay a
specified sum of money, contingent only upon the sale of goods or the
provision of services by Originator,
(xi) which, together with the Contract related thereto, does not
contravene any law, rule or regulation applicable thereto,
(xii) which satisfies all applicable requirements of the Credit and
Collection Policy,
(xiii) which was generated in the ordinary course of an Originator's
business,
(xiv) Government Receivables to the extent the total amount of
Government Receivables for any month is no greater than 2% of all
Receivables for a month,
(xv) which arises solely from the sale of goods or the provision of
services to the related Obligor by an Originator, and not by any other
Person (in whole or in part),
(xvi) which is not subject to any right of rescission, set-off,
counterclaim, any other defense (including defenses arising out of
violations of usury laws) of the applicable Obligor against the applicable
Originator or any other Adverse Claim, and the Obligor thereon holds no
right as against Originator to cause Originator to repurchase the goods or
merchandise the sale of which shall have given rise to such Receivable
(except with respect to sale discounts effected pursuant to the Contract,
or defective goods returned in accordance with the terms of the Contract),
(xvii) as to which Originator has satisfied and fully performed all
obligations on its part with respect to such Receivable required to be
fulfilled by it, and no further action is required to be performed by any
Person with respect thereto other than payment thereon by the applicable
Obligor,
(xviii) which is not proceeds of inventory which was pledged by the
applicable Originator, and
(xix) all right, title and interest to and in which has been validly
transferred by Originator directly to Seller under and in accordance with
the Receivables Sale Agreement, and Seller has good and marketable title
thereto free and clear of any Adverse Claim
"EXPECTED DILUTION" means, on any date of determination, the average of the
Dilution Ratios for the twelve months then most recently ended.
"FACILITY ACCOUNT" means Seller's Account No. ▇▇▇▇▇▇▇ at Bank One.
"FACILITY TERMINATION DATE" means the earliest of (i) September 22, 2004,
(ii) the Liquidity Termination Date and (iii) the Amortization Date.
"FEDERAL BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy," as amended and any successor statute thereto.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.
"FEE LETTER" means that certain letter agreement dated as of the date
hereof among Seller, Originator and the Agent, as it may be amended or modified
and in effect from time to time.
"FINANCE CHARGES" has the meaning specified in the Receivables Sale
Agreement.
"FINANCIAL INSTITUTIONS" has the meaning specified in the preamble in this
Agreement.
"FUNDING AGREEMENT" means this Agreement and any agreement or instrument
executed by any Funding Source with or for the benefit of Conduit.
"FUNDING SOURCE" means (i) any Financial Institution or (ii) any insurance
company, bank or other funding entity providing liquidity, credit enhancement or
back-up purchase support or facilities to Conduit.
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement.
"GOVERNMENT RECEIVABLE" means any Receivable as to which the Obligor is a
government or a governmental subdivision or agency.
"INCREMENTAL PURCHASE" means a purchase of one or more Purchaser Interests
which increases the total outstanding Aggregate Capital hereunder.
"INDEBTEDNESS" has the meaning specified in the Receivables Sale Agreement.
"INDEPENDENT DIRECTOR" shall mean a member of the Board of Directors of
Seller who is not at such time, and has not been at any time during the
preceding five (5) years, (A) a director, officer, employee or affiliate of
Seller, Originator, or any of their respective Subsidiaries or Affiliates, or
(B) the beneficial owner (at the time of such individual's appointment as an
Independent Director or at any time thereafter while serving as an Independent
Director) of any of the outstanding common shares of Seller, Originator, or any
of their respective Subsidiaries or Affiliates, having general voting rights;
"LIBO RATE" means the rate per annum equal to the sum of (i) (a) determined
on the basis of the offered rate for deposits in U.S. dollars of amounts equal
or comparable to the principal amount of the related Liquidity Funding offered
for a term comparable to such Interest Period, which rates appear on a Bloomberg
L.P. terminal, displayed under the address "US0001M Q" effective as
of 11:00 a.m. (London time) two Business Days prior to the first day of such
Tranche Period, and having a maturity equal to such Tranche Period, provided
that, (i) if such Bloomberg L.P. address is not available to the Agent for any
reason, the applicable LIBO Rate for the relevant Tranche Period shall instead
be the applicable British Bankers' Association Interest Settlement Rate for
deposits in U.S. dollars as reported by any other generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Tranche Period, and having a maturity equal to such
Tranche Period, and (ii) if no such British Bankers' Association Interest
Settlement Rate is available to the Agent, the applicable LIBO Rate for the
relevant Tranche Period shall instead be the rate determined by the Agent to be
the rate at which Bank One offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Tranche Period,
in the approximate amount to be funded at the LIBO Rate and having a maturity
equal to such Tranche Period, divided by (b) one minus the maximum aggregate
reserve requirement (including all basic, supplemental, marginal or other
reserves) which is imposed against the Agent in respect of Eurocurrency
liabilities, as defined in Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time (expressed as a decimal),
applicable to such Tranche Period plus (ii) 1.50% per annum. The LIBO Rate shall
be rounded, if necessary, to the next higher 1/16 of 1%.
"LIQUIDITY TERMINATION DATE" means September 24, 2002.
"LOCK-BOX" means each locked postal box with respect to which a bank who
has executed a Collection Account Agreement has been granted exclusive access
for the purpose of retrieving and processing payments made on the Receivables
and which is listed on Exhibit IV.
"LOSS HORIZON RATIO" means, on any date of determination, the percentage
equal to (i) gross sales of the Originators in the three calendar months then
most recently ended, divided by (ii) the aggregate outstanding balance of all
Eligible Receivables as of the last day of the calendar month then most recently
ended.
"LOSS PERCENTAGE" means, at any time, the greater of (i) 10.0% and (ii) two
times the product of the Loss Ratio times the Loss Horizon Ratio on any day
during the calendar month then most recently ended.
"LOSS RATIO" means, on any date of determination, the highest three-month
rolling average Default Ratio during the 12 months then most recently ended.
"LOSS RESERVE" means, on any date of determination, an amount equal to the
Loss Percentage multiplied by the Net Receivables Balance as of the close of
business of the Master Servicer on such date.
"MASTER SERVICER" means at any time the Person (which may be the Agent)
then authorized pursuant to Article VIII to service, administer and collect
Receivables.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
financial condition or operations of the Seller Parties taken as a whole, (ii)
the ability of Seller or of Ralcorp, individually, as Performance Guarantor or
as Master Servicer, to perform its obligations under the Transaction Documents
to which it is a party, (iii) the legality, validity or enforceability of this
Agreement or any other Transaction Document, (iv) the Agent's interest, on
behalf of the Purchasers, in the Receivables generally or in any significant
portion of the Receivables, the Related Security or the Collections with respect
thereto, or (v) the collectibility of the Receivables generally or of any
material portion of the Receivables.
"MATERIAL ORIGINATOR" means, on any date of determination, any Originator
who originated more than 30% of the total Receivables originated during the
month then most recently ended.
"MONTHLY REPORT" means a report, in substantially the form of Exhibit X
hereto (appropriately completed), furnished by the Master Servicer to the Agent
pursuant to Section 8.5.
"MONTHLY REPORTING DATE" has the meaning specified in Section 8.5.
"NET RECEIVABLES BALANCE" means, at any time, the aggregate Outstanding
Balance of all Eligible Receivables at such time reduced by (i) the aggregate
amount by which the Outstanding Balance of all Eligible Receivables of each
Obligor and its Affiliates exceeds the Concentration Limit for such Obligor,
(ii) the aggregate amount of Unallocated Cash, and (iii) the aggregate amount of
Accrued Sales Discount.
"NON-DEFAULTING FINANCIAL INSTITUTION" has the meaning specified in Section
13.5.
"NON-RENEWING FINANCIAL INSTITUTION" has the meaning specified in Section
13.6(a).
"OBLIGATIONS" has the meaning specified in Section 2.1.
"OBLIGOR" means a Person obligated to make payments pursuant to a Contract.
"ORIGINATOR(S)" has the meaning specified in.
"OUTSTANDING BALANCE" of any Receivable at any time means the then
outstanding principal balance thereof.
"PARTICIPANT" has the meaning specified in Section 12.2.
"PERFORMANCE GUARANTOR" means Ralcorp.
"PERFORMANCE UNDERTAKING" means that certain Performance Undertaking, dated
as of Ralcorp, by Performance Guarantor in favor of Seller, substantially in the
form of Exhibit XI, as the same may be amended, restated or otherwise modified
from time to time.
"PERMITTED SUB-SERVICERS" has the meaning specified in Section 8.1(b).
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"POOLED COMMERCIAL PAPER" means Commercial Paper notes of Conduit subject
to any particular pooling arrangement by Conduit, but excluding Commercial Paper
issued by Conduit for a tenor and in an amount specifically requested by any
Person in connection with any agreement effected by Conduit.
"POTENTIAL AMORTIZATION EVENT" means an event which, with the passage of
time or the giving of notice, or both, would constitute an Amortization Event.
"PRO RATA SHARE" means, for each Financial Institution, a percentage equal
to (i) the Commitment of such Financial Institution, divided by (ii) the
aggregate amount of all Commitments of all Financial Institutions hereunder,
adjusted as necessary to give effect to the application of the terms of Sections
13.5 or 13.6.
"PROPOSED REDUCTION DATE" has the meaning specified in Section 1.3.
"PURCHASE LIMIT" means $61,000,000 from March 1 through and including
December 31, and $66,000,000 from January 1 through and including February 28
(or, when applicable, February 29).
"PURCHASE NOTICE" has the meaning specified in Section 1.2.
"PURCHASE PRICE" means, with respect to any Incremental Purchase of a
Purchaser Interest, the amount paid to Seller for such Purchaser Interest which
shall not exceed the least of (i) the amount requested by Seller in the
applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the
applicable purchase date and (iii) the excess, if any, of the Net Receivables
Balance (less the Aggregate Reserves) on the applicable purchase date over the
aggregate outstanding amount of Aggregate Capital determined as of the date of
the most recent Monthly Report, taking into account such proposed Incremental
Purchase.
"PURCHASERS" means Conduit and each Financial Institution.
"PURCHASER INTEREST" means, at any time, an undivided percentage ownership
interest (computed as set forth below) associated with a designated amount of
Capital, selected pursuant to the terms and conditions hereof in (i) each
Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Security with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:
C
----------
NRB - AR
WHERE:
C = the Capital of such Purchaser Interest.
AR = the Aggregate Reserves.
NRB = the Net Receivables Balance.
Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
business day immediately preceding the Amortization Date shall remain constant
at all times thereafter.
"PURCHASING FINANCIAL INSTITUTION" has the meaning specified in Section
12.1(b).
"RECEIVABLE" means all "Receivables" under and as defined in the
Receivables Sale Agreement. Indebtedness and other rights and obligations
arising from any one transaction, including, without limitation, indebtedness
and other rights and obligations represented by an individual invoice, shall
constitute a Receivable separate from a Receivable consisting of the
indebtedness and other rights and obligations arising from any other
transaction; provided further, that any indebtedness, rights or obligations
referred to in the immediately preceding sentence shall be a Receivable
regardless of whether the account debtor or Seller treats such indebtedness,
rights or obligations as a separate payment obligation.
"RECEIVABLES SALE AGREEMENT" means that certain Receivables Sale Agreement,
dated as of September 25, 2001, between Originators and Seller, as the same may
be amended, restated or otherwise modified from time to time.
"RECORDS" means, with respect to any Receivable, all Contracts and other
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, punch cards, data processing software and
related property and rights) relating to such Receivable, any Related Security
therefor and the related Obligor.
"REDUCTION NOTICE" has the meaning specified in Section 1.3.
"REDUCTION PERCENTAGE" means, for any Purchaser Interest acquired by the
Financial Institutions from Conduit for less than the Capital of such Purchaser
Interest, a percentage equal to a fraction the numerator of which is the Conduit
Transfer Price Reduction for such Purchaser Interest and the denominator of
which is the Capital of such Purchaser Interest.
"REGULATORY CHANGE" has the meaning specified in Section 10.2(a).
"REINVESTMENT" has the meaning specified in Section 2.2.
"RELATED SECURITY" means, with respect to any Receivable, all of Seller's
now owned and existing or hereafter arising or acquired right, title and
interest in and to (i) all "Related Security" under and as defined in the
Receivables Sale Agreement, (ii) the Performance Undertaking, (iii) the
Receivables Sale Agreement, and (iv) all proceeds of any of the foregoing.
"REQUIRED FINANCIAL INSTITUTIONS" means, at any time, Financial
Institutions with Commitments in excess of 66-2/3% of the Purchase Limit.
"REQUIRED NOTICE PERIOD" means two (2) Business Days.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of capital stock of
Seller now or hereafter outstanding, except a dividend payable solely in shares
of that class of stock or in any junior class of stock of Seller, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of capital
stock of Seller now or hereafter outstanding, (iii) any payment or prepayment of
principal of, premium, if any, or interest, fees or other charges on or with
respect to, and any redemption, purchase, retirement, defeasance, sinking fund
or similar payment and any claim for rescission with respect to the Subordinated
Loans (as defined in the Receivables Sale Agreement), (iv) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
capital stock of Seller now or hereafter outstanding, and (v) any payment of
management fees by Seller (except for reasonable management fees to the
Originator or its Affiliates in reimbursement of actual management services
performed).
"SCHEDULED ORIGINATOR" means an Obligor listed on Exhibit XII hereto.
"SELLER" has the meaning specified in the preamble to this Agreement.
"SELLER PARTIES" has the meaning specified in the preamble to this
Agreement.
"SERVICING FEE" has the meaning specified in Section 8.6.
"SETTLEMENT DATE" means (A) the 2nd Business Day after each Monthly
Reporting Date, and (B) the last day of the relevant Tranche Period in respect
of each Purchaser Interest of the Financial Institutions.
"SETTLEMENT PERIOD" means (A) in respect of each Purchaser Interest of
Conduit, the immediately preceding Accrual Period, and (B) in respect of each
Purchaser Interest of the Financial Institutions, the entire Tranche Period of
such Purchaser Interest.
"SUBSIDIARY" has the meaning specified in the Receivables Sale Agreement.
"TERMINATION DATE" has the meaning specified in Section 2.2.
"TERMINATION PERCENTAGE" has the meaning specified in Section 2.2.
"TERMINATING FINANCIAL INSTITUTION" has the meaning specified in Section
13.6(a).
"TERMINATING TRANCHE" has the meaning specified in Section 4.3(b).
"TOP 20 OBLIGOR" means, for any month of determination, an Obligor whose
Receivables had one of the 20 highest aggregate Outstanding Balances as of the
last day of the month then most recently ended.
"TRANCHE PERIOD" means, with respect to any Purchaser Interest held by a
Financial Institution:
(a) if Yield for such Purchaser Interest is calculated on the basis of the
LIBO Rate, a period of one, two, three or six months selected by Seller with the
approval of the Agent (which consent shall not be unreasonably withheld)
pursuant to this Agreement, or such other period as may be mutually agreeable to
the Agent and Seller, commencing on a Business Day selected by Seller or the
Agent pursuant to this Agreement. Such Tranche Period shall end on the day in
the applicable succeeding calendar month which corresponds numerically to the
beginning day of such Tranche Period, provided, however, that if there is no
such numerically corresponding day in such succeeding month, such Tranche Period
shall end on the last Business Day of such succeeding month; or
(b) if Yield for such Purchaser Interest is calculated on the basis of the
Base Rate, a period designated by Seller commencing on a Business Day selected
by Seller, PROVIDED THAT no such period shall exceed one month. If any Tranche
Period would end on a day which is not a Business Day, such Tranche Period shall
end on the next succeeding Business Day, provided, however, that in the case of
Tranche Periods corresponding to the LIBO Rate, if such next succeeding Business
Day falls in a new month, such Tranche Period shall end on the immediately
preceding Business Day. In the case of any Tranche Period for any Purchaser
Interest which commences before the Amortization Date and would otherwise end on
a date occurring after the Amortization Date, such Tranche Period shall end on
the Amortization Date. The duration of each Tranche Period which commences after
the Amortization Date shall be of such duration as selected by the Agent.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, each Purchase
Notice, the Receivables Sale Agreement, each Collection Account Agreement, the
Performance Undertaking, the Fee Letter, the Subordinated Note (as defined in
the Receivables Sale Agreement) and all other instruments, documents and
agreements executed and delivered in connection herewith.
"UCC" means the Uniform Commercial Code as from time to time in effect in
the specified jurisdiction.
"UNALLOCATED CASH" means, on any date of determination, Collections
received by the Servicer (or a Permitted Sub-Servicer) which have not yet been
posted to the invoice evidencing a particular Receivable.
"YIELD" means for each respective Tranche Period relating to Purchaser
Interests of the Financial Institutions, an amount equal to the product of the
applicable Discount Rate for each Purchaser Interest multiplied by the Capital
of such Purchaser Interest for each day elapsed during such Tranche Period,
annualized on a 360 day basis.
"YIELD RESERVE" means, on any date, an amount equal to 2.0% multiplied by
the Net Receivables Balance as of the close of business of the Master Servicer
on such date.
ALL ACCOUNTING TERMS NOT SPECIFICALLY DEFINED HEREIN SHALL BE CONSTRUED IN
ACCORDANCE WITH GAAP. ALL TERMS USED IN ARTICLE 9 OF THE UCC IN THE STATE OF
ILLINOIS, AND NOT SPECIFICALLY DEFINED HEREIN, ARE USED HEREIN AS DEFINED IN
SUCH ARTICLE 9.