Exhibit 10(n)
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AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
dated as of November 28, 2001
among
U.S. STEEL RECEIVABLES LLC,
as Seller
UNITED STATES STEEL LLC,
as initial Servicer
THE PERSONS PARTY HERETO AS CP CONDUIT PURCHASERS,
COMMITTED PURCHASERS AND FUNDING AGENTS
and
THE BANK OF NOVA SCOTIA,
as Collateral Agent
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TABLE OF CONTENTS
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Facility; Termination ............................ 2
Section 1.2. Transfers; Certificates; Eligible Receivables..... 2
Section 1.3. Purchased Interest Computation ................... 6
Section 1.4. Non-Liquidation Settlement and
Reinvestment Procedures .......................... 6
Section 1.5. Liquidation Settlement Procedures ................ 7
Section 1.6. Deemed Collections; Reduction in Net Investment .. 11
Section 1.7. Fees ............................................. 12
Section 1.8. Payments and Computations, Etc ................... 13
Section 1.9. Increased Costs .................................. 13
Section 1.10. Requirements of Law .............................. 15
Section 1.11. Inability to Determine Eurodollar Rate ........... 16
Section 1.12. Sharing of Payments, etc ......................... 17
Section 1.13. Expiration or Extension of Commitments ........... 17
Section 1.14. Addition of Purchasers ........................... 18
Section 1.15. Obligations Several .............................. 19
ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
Section 2.1. Representations and Warranties; Covenants ........ 19
Section 2.2. Termination Events ............................... 19
ARTICLE III.
INDEMNIFICATION
Section 3.1. Indemnities by the Seller ........................ 20
Section 3.2. Indemnities by the Servicer ...................... 22
Section 3.3. Defense of Claims ................................ 23
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of the Servicer ...................... 25
Section 4.2. Duties of the Servicer ........................... 26
Section 4.3. Establishment and Use of Certain Accounts ........ 28
Section 4.4. Enforcement Rights ............................... 29
Section 4.5. Responsibilities of the Seller ................... 30
Section 4.6. Servicing Fee .................................... 31
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ARTICLE V.
THE AGENTS
Section 5.1. Appointment and Authorization .................... 31
Section 5.2. Delegation of Duties ............................. 33
Section 5.3. Exculpatory Provisions ........................... 33
Section 5.4. Reliance by Agents ............................... 34
Section 5.5. Notice of Termination Events ..................... 35
Section 5.6. Non-Reliance on Collateral Agent, Funding Agents
and Other Purchasers ............................. 35
Section 5.7. Collateral Agent, Funding Agents and Purchasers .. 36
Section 5.8. Indemnification .................................. 36
Section 5.9. Successor Collateral Agent ....................... 37
ARTICLE VI.
MISCELLANEOUS
Section 6.1. Amendments, Etc................................... 37
Section 6.2. Notices, Etc ..................................... 38
Section 6.3. Assignability .................................... 38
Section 6.4. Costs, Expenses and Taxes ........................ 42
Section 6.5. No Proceedings; Limitation on Payments ........... 42
Section 6.6. GOVERNING LAW AND JURISDICTION ................... 43
Section 6.7. Execution in Counterparts ........................ 44
Section 6.8. Survival of Termination .......................... 44
Section 6.9. WAIVER OF JURY TRIAL ............................. 44
Section 6.10. Entire Agreement ................................. 44
Section 6.11. Headings ......................................... 44
Section 6.12. Purchaser's Liabilities .......................... 45
Section 6.13. Confidentiality .................................. 45
Section 6.14. Agent Conflict Waiver ............................ 45
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EXHIBIT I Definitions
EXHIBIT II Conditions of Purchases
EXHIBIT III Representations and Warranties
EXHIBIT IV Covenants
EXHIBIT V Termination Events
EXHIBIT VI Form of Assumption Agreement
EXHIBIT VII Form of Transfer Supplement
SCHEDULE I Credit and Collection Policy
SCHEDULE II Lock-Box Banks and Lock-Box Accounts
SCHEDULE III Trade Names
SCHEDULE IV Special Obligors
ANNEX A Form of Purchase Notice
ANNEX B-1 Form of Monthly Report
ANNEX B-2 Form of Weekly Report
ANNEX B-3 Form of Daily Report
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This AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this "Agreement") is dated
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as of November 28, 2001, among U.S. STEEL RECEIVABLES LLC, a Delaware limited
liability company, as Seller (the "Seller"), UNITED STATES STEEL LLC ("USS"), a
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Delaware limited liability company as initial Servicer (in such capacity,
together with its successors and permitted assigns in such capacity, the
"Servicer"), the several commercial paper conduits identified on the signature
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pages hereto and their respective permitted successors and assigns (the "CP
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Conduit Purchasers"; each, individually, a "CP Conduit Purchaser"), the several
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financial institutions identified on the signature pages hereto as "Committed
Purchasers" and their respective permitted successors and assigns (the
"Committed Purchasers"; each, individually, a "Committed Purchaser"), the agent
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banks identified for each CP Conduit Purchaser and Committed Purchaser on the
signature pages hereto and their respective permitted successors and assigns
(the "Funding Agents"), each CP Conduit Purchaser, Committed Purchaser and
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Funding Agent that becomes a party hereto from time to time pursuant to an
Assumption Agreement, Transfer Supplement or otherwise, and THE BANK OF NOVA
SCOTIA, a Canadian chartered bank acting through its New York Agency ("BNS"), as
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Collateral Agent for the CP Conduit Purchasers and Committed Purchasers (in such
capacity, together with its successors and assigns in such capacity, the
"Collateral Agent").
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The Seller may desire to convey, transfer and assign, from time to time,
undivided percentage interests in certain accounts receivable, and the CP
Conduit Purchasers may desire to, and the Committed Purchasers, if requested by
the CP Conduit Purchasers, shall, accept such conveyance, transfer and
assignment of such undivided percentage interests, subject to the terms and
conditions of this Agreement.
This Agreement amends and restates in its entirety, as of the Closing Date,
the Receivables Purchase Agreement dated as of December 7, 1999 (as amended
through the date hereof, the "Original Agreement"), among USS, as Seller and
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initial Servicer, Liberty Street Funding Corporation ("LSFC") and BNS, as agent
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for LSFC. Upon the effectiveness of this Agreement, the terms and provisions of
the Original Agreement shall, subject to this paragraph, be superseded hereby in
their entirety. Notwithstanding the amendment and restatement of the Original
Agreement by this Agreement, (i) USS shall continue to be liable to LSFC, BNS or
any other Indemnified Party or Affected Person (as such terms are defined in the
Original Agreement) with respect to all unpaid Capital, Discount (as such terms
are defined in the Original Agreement),
fees and expenses (the "Original Agreement Outstanding Amounts") under the
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Original Agreement (which shall continue to accrue thereunder until such amounts
are paid in full) and all agreements to indemnify such parties in connection
with events or conditions arising or existing prior to the effective date of
this Agreement and (ii) the security interest created under the Original
Agreement shall remain in full force and effect as security for such Original
Agreement Outstanding Amounts until such Original Agreement Outstanding Amounts
shall have been paid in full. Upon the effectiveness of this Agreement, each
reference to the Original Agreement in any other document, instrument or
agreement shall mean and be a reference to this Agreement. Nothing contained
herein, unless expressly herein stated to the contrary, is intended to amend,
modify or otherwise affect any other instrument, document or agreement executed
and or delivered in connection with the Original Agreement.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree as follows:
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Facility; Termination. (a) On the terms and conditions
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hereinafter set forth in this Agreement, the parties hereto establish a
receivables financing facility.
(b) The Seller may, upon at least 30 days' written notice to each Funding
Agent, terminate or reduce the unused portion of the Facility Limit (ratably
with respect to each such Committed Purchaser based on such Person's
Commitment); provided, that each reduction shall be in the amount of at least
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$10,000,000 with respect to each Committed Purchaser, or an integral multiple of
$1,000,000 in excess thereof, and that, unless terminated, the Facility Limit
shall in no event be reduced below $100,000,000.
Section 1.2. Transfers; Certificates; Eligible Receivables. (a) Incremental
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Transfers. Prior to the Facility Termination Date, upon the terms and subject to
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the conditions set forth herein and in the other Transaction Documents, the
Seller may, at its option from time to time, convey, transfer and assign to the
Collateral Agent for the benefit of each CP Conduit Purchaser (except during the
pendency of a CP Conduit Purchaser Termination Event with respect to such CP
Conduit Purchaser) or to the Collateral Agent for the benefit of the Committed
Purchasers with respect to such CP Conduit Purchaser (and the Collateral Agent
for the benefit of each
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CP Conduit Purchaser may, at the option of such CP Conduit Purchaser from time
to time, except during the pendency of a CP Conduit Purchaser Termination Event
relating to such CP Conduit Purchaser), and the Collateral Agent for the benefit
of the Committed Purchasers relating to such CP Conduit Purchaser shall, accept
such conveyance, transfer and assignment from the Seller, without recourse
except as provided herein), undivided percentage ownership interests in the
Receivables, together with the Related Security, Collections and proceeds with
respect thereto (each, an "Incremental Transfer") for an amount equal to the
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applicable Transfer Price from time to time prior to the Facility Termination
Date; provided that after giving effect to the issuance of Notes by the CP
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Conduit Purchasers or the obtaining of funds by the Committed Purchasers to fund
the Transfer Price of any Incremental Transfer and the payment to the Seller of
such Transfer Price, (i) the Net Investment of any such Purchaser (together with
the outstanding Net Investments of each such CP Conduit Purchaser or Committed
Purchaser relating to such Purchaser) shall not exceed the aggregate of the
Commitments of the Committed Purchasers relating to such Purchaser and (ii) the
Capital shall not exceed the Facility Limit; and provided further, that the
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conditions set forth in Exhibit II of this Agreement shall be satisfied with
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respect thereto.
The Seller may, from time to time, by notice to each Funding Agent given by
telecopy, offer to convey, transfer and assign to the Collateral Agent for the
benefit of each CP Conduit Purchaser (except during the pendency of a CP Conduit
Purchaser Termination Event with respect to such CP Conduit Purchaser) or the
Collateral Agent for the benefit of the Committed Purchasers, undivided
percentage ownership interests in the Purchased Interest at least two (2)
Business Days prior to the proposed date of any Incremental Transfer. Each such
notice shall specify (x) the desired Transfer Price (which shall be at least
$1,000,000 per CP Conduit Purchaser or integral multiples of $100,000 in excess
thereof) or, to the extent that the then available unused portion of the
Facility Limit (or the aggregate unused Commitment of the Committed Purchasers
relating to such CP Conduit Purchaser) is less than such amount, such lesser
amount equal to such available portion of the Facility Limit (or Commitment of
the related Committed Purchasers, as the case may be); and (y) the desired date
of such Incremental Transfer which shall be a Business Day. At the option of
each such CP Conduit Purchaser the Collateral Agent for the benefit of such
Conduit Purchaser shall accept or reject any such offer by prompt written notice
given to the Seller.
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Each notice of proposed Incremental Transfer shall be irrevocable and
binding on the Seller, and the Seller shall indemnify the CP Conduit Purchasers
and the Committed Purchasers against any loss or expense incurred by the CP
Conduit Purchasers and/or the Committed Purchasers, either directly or
indirectly, as a result of any failure by the Seller to complete such
Incremental Transfer, including, without limitation, any loss or expense
incurred by the CP Conduit Purchasers and/or the Committed Purchasers by reason
of the liquidation or reemployment of funds acquired by the CP Conduit
Purchasers or the Committed Purchasers (including, without limitation, funds
obtained by issuing Notes, obtaining deposits as loans from third parties and
reemployment of funds) to fund such Incremental Transfer.
(b) On the date of each purchase (but not reinvestment) of undivided
percentage ownership interests with regard to the Purchased Interest hereunder,
each Purchaser making a purchase (through the Collateral Agent) on such date
pursuant to paragraph (a) above (or its Funding Agent on such Purchaser's
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behalf) shall, upon satisfaction of the applicable conditions set forth in
Exhibit II, make available to the Seller in same day funds, at Mellon Bank,
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N.A., account number 000-0300, ABA ▇▇▇▇▇▇▇▇▇, an amount equal to such
Purchaser's ratable share (based on its Commitment and/or the Commitments of the
Committed Purchasers relating to such Purchaser) of the Transfer Price with
respect to thereto (as specified by the Seller pursuant to paragraph (a) above)
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relating to the undivided percentage ownership interest then being purchased by
such Purchaser.
(c) Effective on the date of each purchase pursuant to this Section and
each reinvestment pursuant to Section 1.4 or 1.5, as applicable, the Seller
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hereby sells and assigns to the Collateral Agent for the benefit of the
Purchasers (ratably, according to each such Purchaser's Net Investment) an
undivided percentage ownership interest in: (i) each Pool Receivable then
existing, (ii) all Related Security with respect to such Pool Receivables, and
(iii) all Collections with respect to, and other proceeds of, such Pool
Receivables and Related Security.
(d) (i) It is the express intent of the parties hereto that the transfers
of the Receivables, Related Security, Collections and other proceeds of such
Receivables by the Seller to the Collateral Agent, as contemplated by this
Agreement be, and be treated as, sales and not as secured loans secured thereby.
If, however, notwithstanding the intent of the parties, such transactions are
deemed to be loans, the Seller hereby grants to the Collateral Agent for the
benefit of the Purchasers (ratably, according to each
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such Purchaser's Net Investment) a security interest (and hereby authorizes the
filing of all applicable financing statements to perfect such security interest)
in all of the Seller's right, title and interest in and to the Pool Receivables,
Related Security and Collections now existing and hereafter created, all monies
due or to become due and all amounts received with respect thereto, and all
proceeds thereof, to secure the obligations of the Seller hereunder, and this
Agreement shall be deemed a security agreement under applicable law.
(ii) In addition to and without limiting the grant of security
interest described in clause (i), above, to secure all of the Seller's
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obligations (monetary or otherwise) under this Agreement and the other
Transaction Documents to which it is a party, whether now or hereafter
existing or arising, due or to become due, direct or indirect, absolute or
contingent, the Seller hereby grants to the Collateral Agent for the
benefit of the Purchasers (ratably, according to each such Purchaser's Net
Investment) a security interest in all of the Seller's right, title and
interest, if any, (including any undivided interest of the Seller) in, to
and under all of the following, whether now or hereafter owned, existing or
arising: (i) all Pool Receivables, (ii) all Related Security with respect
to such Pool Receivables, (iii) all Collections with respect to such Pool
Receivables, (iv) the Lock-Box Accounts, the Concentration Account and the
Collection Account, and all amounts on deposit therein, and all
certificates and instruments, if any, from time to time evidencing such
Lock-Box Accounts, the Concentration Account and the Collection Account,
and amounts on deposit therein, (v) all of the Seller's right, title and
interest in and to the Purchase and Sale Agreement and each other
Transaction Document to which it is a party, and (vi) all proceeds of, and
all amounts received or receivable under any or all of, the foregoing
(collectively, the "Pool Assets"). The Collateral Agent (for the benefit of
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the Purchasers) shall have, with respect to the Pool Assets, and in
addition to all the other rights and remedies available to the Collateral
Agent (for the benefit of the Purchasers), all the rights and remedies of a
secured party under any applicable UCC.
Section 1.3. Purchased Interest Computation. The Purchased Interest shall
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be initially computed on the date of the initial purchase hereunder. Thereafter,
until the Facility Termination Date, the Purchased Interest shall be
automatically recomputed (or deemed to be recomputed) on each Business Day other
than a Termination Day. From and after the occurrence of any Termination
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Day, the Purchased Interest shall (until the event(s) giving rise to such
Termination Day are satisfied or are waived by the Funding Agents) be deemed to
be 100%. The Purchased Interest shall become zero when the aggregate of the
Capital thereof and all accrued and unpaid Discount thereon with respect to any
Purchaser shall have been paid in full, all other amounts owed by the Seller and
the Servicer hereunder to the Purchasers, the Funding Agents, and the Collateral
Agent and any other Indemnified Party or Affected Person are paid in full, and
the Servicer shall have received the accrued Servicing Fee thereon; provided
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that nothing in this Section 1.3 shall be construed to require the Seller, the
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Servicer or any Affiliate thereof to make actual computations on a daily basis
or to deliver to the Purchasers, the Funding Agents, or the Collateral Agent a
writing setting forth any computation, recomputation or deemed recomputation
effected under this Section 1.3, except to the extent required pursuant to
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Section 2 of Exhibit II or as otherwise required pursuant to this Agreement.
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Section 1.4. Non-Liquidation Settlement and Reinvestment Procedures. On
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each day after the date of any Incremental Transfer but prior to the Facility
Termination Date, and provided that Section 1.5 shall not be applicable, the
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Servicer shall, out of the Collections represented by the Purchased Interest
received on or prior to such day and not previously set aside or paid:
(i) set aside and hold in trust in the Concentration Account for the
CP Conduit Purchasers or the Committed Purchasers, as applicable (or
deposit into the Collection Account if so required pursuant to Section 1.5
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hereof) an amount equal to all Discount, Fees and, if USS or any Affiliate
thereof is not the Servicer, the Purchasers' share of the Servicing Fee
(such share based on the Purchased Interest at such time), in each case
accrued through such day and not so previously set aside or paid;
(ii) subject to Section 1.6(b), reinvest the balance of such
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Collections in respect of the Capital of the Purchased Interest remaining
after application of Collections as provided in clause (i) above for the
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benefit of the CP Conduit Purchasers and/or the Committed Purchasers, as
applicable, in additional undivided percentage ownership interests in the
Pool Receivables, Related Security and Collections and other proceeds with
respect thereto;
(iii) if USS or any Affiliate thereof is the Servicer, pay to the
Servicer out of the amount of such Collections remaining after application
pursuant to clause (i) and (ii),
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above, an amount equal to the Purchasers' share of the Servicing Fee (such
share based on the Purchased Interest at such time), accrued through such
day and not previously set aside or paid; and
(iv) remit the balance, if any, of such Collections remaining after
the applications provided in clauses (i), (ii) and (iii), above, and
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Section 1.6(b), to the Seller for its own account. Such Collections
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remitted to the Seller shall be available for the ordinary business
purposes of the Seller or otherwise, subject to the provisions of the
Transaction Documents.
On each Settlement Date, from the amounts set aside as described in clause (i)
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of the first sentence of this Section 1.4 and Section 1.6(b), the Servicer shall
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pay to each Funding Agent, for the benefit of the Purchasers related to such
Funding Agent (ratably according to accrued Discount and Fees), an amount equal
to the accrued and unpaid Discount and Fees (as calculated by such Funding
Agent) for the immediately preceding Settlement Period.
Section 1.5. Liquidation Settlement Procedures. (a) If at any time on or
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prior to any Termination Day, the Purchased Interest is greater than 100%, then
the Seller shall immediately pay to each Funding Agent, for the benefit of the
Purchasers related to such Funding Agent (ratably, based on the Net Investment
of each such Purchaser) an amount that, when applied to reduce the Capital, will
cause the Purchased Interest to be less than or equal to 100%; it being
understood that if any such amounts are not immediately paid by the Seller, the
Servicer shall cease making any reinvestments pursuant to Section 1.4(ii) and
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shall instead cause such amounts as are necessary to so reduce the Purchased
Interest to be deposited into the Collection Account for distribution to the
applicable Purchasers on the next Settlement Date in accordance with the
provisions set forth in the last paragraph of Section 1.4 or paragraph (d)
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below, as applicable.
(b) On and after any Termination Day or the day on which an Unmatured
Termination Event occurs, the Servicer shall deposit or cause to be deposited to
the Collection Account, for the benefit of the Purchasers (and shall pay such
amounts to each applicable Funding Agent on the next Settlement Date pursuant to
paragraph (d) below), all amounts previously set aside in the Concentration
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Account pursuant to Section 1.4.
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(c) Subject to Section 1.13(a) with respect to each Non- Extending
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Committed Purchaser that is not required to transfer and
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assign its Commitment pursuant to Section 1.13(b)(ii) of this Agreement, the
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Servicer shall implement the procedures set forth in this clause (c) (a "Partial
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Liquidation"). On each Business Day prior to such Non-Extending Committed
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Purchaser's Net Investment being reduced to zero (provided that no Termination
Event and no Unmatured Termination Event has occurred and is continuing), the
Servicer shall apply funds, out of the Collections represented by the Purchased
Interest received and not previously applied, in the following manner:
(i) set aside and hold in trust in the Concentration Account (or
deposit into the Collection Account if so required by paragraph (b) above),
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for the benefit of the CP Conduit Purchasers and the Committed Purchasers
an amount equal to all Discount on all Tranches, Fees, and, if USS or any
Affiliate is not the Servicer, the Purchasers' share of the Servicing Fee
(based on the Purchased Interest at such time), in each case accrued
through such day and not so previously set aside or paid. The Servicer
shall thereafter pay to each Funding Agent on the next Settlement Date for
the Purchasers (ratably according to accrued Discount and Fees) the amount
of such accrued and unpaid Fees and Discount, and shall pay such portion of
the Servicing Fee to the Servicer pursuant to Section 1.4(iii);
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(ii) pay to each applicable Funding Agent for the account of each
Non-Extending Committed Purchaser, if any, related to such Funding Agent
(ratably based on the Net Investment of such Purchasers at such time), and,
for the account of any related CP Conduit Purchasers solely to the extent
necessary to reduce the Net Investment of any such CP Conduit Purchaser to
an amount that is equal to or lesser than the amount of any available
Commitment of any remaining Committed Purchasers related to such CP Conduit
Purchaser at such time, from such Collections remaining after application
pursuant to clause (i) above, the amount of such Non-Extending Committed
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Purchaser's Net Investment; provided that solely for purposes of
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determining such Non-Extending Committed Purchaser's ratable share of such
Collections, such Purchaser's Net Investment shall be deemed to remain
constant from the date such Purchaser becomes a Non-Extending Committed
Purchaser until the date such Non-Extending Purchaser's Net Investment has
been paid in full; it being understood that if such day is also a
Termination Day or a day on which an Unmatured Termination Event has
occurred, such Purchaser's Net Investment shall be recalculated at such
time (taking into account amounts received or as on behalf of such
Purchaser in
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respect of its Net Investment pursuant to this clause (ii)), and thereafter
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Collections shall be set aside in the Collection Account for payment to all
Purchasers (ratably according to each such Purchaser's Net Investment)
pursuant to paragraph (d) below);
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(iii) reinvest the balance of such Collections in respect of Capital
to the acquisition of additional undivided percentage interests pursuant to
Section 1.4(ii) hereof; and
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(iv) if USS or any Affiliate thereof is the Servicer, pay to the
Servicer out of such Collections remaining after application pursuant to
clause (i) through (iii) above, an amount equal to the Purchasers' share of
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the Servicing Fee (based on the Purchased Interest at such time).
(d) On and after any Termination Day and on each day thereafter, and on
each day on which an Unmatured Termination Event has occurred and is continuing,
the Servicer shall deposit or cause to be deposited into the Collection Account,
for the benefit of the Purchasers, all Collections received on such day in
respect of the Purchased Interest, to be applied by the Collateral Agent on the
next succeeding Settlement Date to the payment in full of (i) the accrued
Discount, (ii) the outstanding Net Investment of each Purchaser, and (iii) all
other amounts payable to the Purchasers and their assigns in respect of
indemnities, fees, costs and expenses hereunder and not covered in clauses (i)
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and (ii) of this paragraph (d). On each such day, the Servicer shall deposit to
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its account, from the amounts set aside for the Purchasers pursuant to the
preceding sentence which remain after payment in full of the aforementioned
amounts, the accrued Servicing Fee. If there shall be insufficient funds on
deposit in the Collection Account following deposits therein by the Servicer
pursuant to this paragraph and paragraph (b) above, for the Collateral Agent to
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distribute funds in payment in full of the aforementioned amounts, the
Collateral Agent shall distribute such funds as are in the Collection Account on
the next succeeding Settlement Date (and on each Settlement Date thereafter, if
applicable) in the following order of priority:
(i) first, in payment of the accrued Discount and all Fees;
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(ii) second, if USS or any Affiliate of USS is not then the Servicer
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(and if such amount has not already been paid by operation of the
immediately preceding sentence), to the Servicer, in payment of the accrued
and unpaid Servicing Fee;
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(iii) third, in reduction to zero of the Net Investment of each
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applicable Purchaser;
(iv) fourth, in payment of all other amounts payable to the Purchasers
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and their assigns in respect of indemnities, fees, costs and expenses
hereunder and not covered in clauses (i) through (iii) above; and
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(v) fifth, if USS or any Affiliate of USS is the Servicer (and if such
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amount has not already been paid by operation of the immediately preceding
sentence), to its account as Servicer, in payment of the accrued and unpaid
Servicing Fee.
The Collateral Agent, shall distribute such amounts held in the Collection
Account to the Funding Agents for the related Purchasers entitled thereto on the
next succeeding Settlement Date; provided that if there are insufficient funds
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in the Collection Account on any such Settlement Date to pay all of the above
amounts in full, the Collateral Agent shall pay such amounts to the applicable
Funding Agents in the order of priority set forth above, and with respect to any
such category above for which the Collateral Agent shall have insufficient funds
to pay all amounts owing on such date, ratably (based on the amounts in such
categories owing to such Persons) among all such Persons entitled to payment
thereof.
(e) Following the date on which the Net Investment of each Purchaser has
been reduced to zero and all accrued Discount, Fees, Servicing Fees and all
other amounts payable to the Purchasers, the Funding Agents, the Collateral
Agent, each Indemnified Party and Affected Person and their assigns hereunder
have been paid in full, (i) the Purchased Interest shall become zero, (ii) the
Collateral Agent, on behalf of the Purchasers, shall be considered to have
reconveyed to the Seller all of the Purchasers' right, title and interest in, to
and under the Receivables, Related Security, Collections and proceeds with
respect thereto, and (iii) the Collateral Agent, on behalf of the Purchasers,
shall execute and deliver to the Seller, at the Seller's expense, such documents
or instruments as are necessary to terminate the Purchasers' respective
interests in the Receivables, Related Security, Collections and proceeds with
respect thereto. Any such documents shall be prepared by or on behalf of the
Seller. Thereafter any remaining Collections shall be for the account of the
Seller.
Section 1.6. Deemed Collections; Reduction in Net Investment.
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(a) For the purposes of this Agreement:
(i) if on any day the Outstanding Balance of any Pool Receivable is
reduced or adjusted as a result of any defective, rejected, returned,
repossessed or foreclosed goods or services, or any revision, cancellation,
allowance, discount or other adjustment made by the Seller or any Affiliate
of the Seller, or any setoff or dispute between the Seller or any Affiliate
of the Seller and an Obligor, the Seller shall be deemed to have received
on such day a Collection of such Pool Receivable in the amount of such
reduction or adjustment; and
(ii) if on any day any of the representations or warranties in Section
1(f), (k) or (q) of Exhibit III is not true with respect to any Pool
-----------
Receivable, the Seller shall be deemed to have received on such day a
Collection of such Pool Receivable in full (Collections deemed to have been
received pursuant to clauses (i) and (ii) of this paragraph (a) are
----------- ---- -------------
hereinafter sometimes referred to as "Deemed Collections").
------------------
(b) If at any time the Seller shall wish to cause the reduction of Capital
of the Purchased Interest (but not to commence the liquidation, or reduction to
zero, of the entire Capital of the Purchased Interest), the Seller may do so as
follows:
(i) the Seller shall give each Funding Agent and the Servicer at least
two Business Days' prior written notice thereof (including the amount of
such proposed reduction and the proposed date on which such reduction will
commence);
(ii) on the proposed date of commencement of such reduction and on
each day thereafter, the Servicer shall cause Collections not to be
reinvested pursuant to Section 1.4 or 1.5, as applicable, until the amount
----------- ---
thereof not so reinvested shall equal the desired amount of reduction; and
(iii) the Servicer shall hold such Collections in trust in the
Concentration Account (or, if required pursuant to Section 1.5, transfer to
-----------
the Collection Account) for the benefit of the Purchasers, for payment to
each applicable Funding Agent ratably (according to the outstanding Net
Investment of each Purchaser relating to such Funding Agent) on the next
Settlement Date immediately following the current Settlement Period, and
the Capital (and each applicable Net Investment) of the Purchased Interest
shall be deemed reduced
11
in the amount to be paid to the Funding Agents only when in fact finally so
paid;
provided, that:
(A) the amount of any such reduction shall be not less than $5,000,000
(with respect to payments made to any Purchaser) and shall be an integral
multiple of $1,000,000, and the Net Investment of any Purchaser after
giving effect to such reduction, if not reduced to zero, shall be not less
than $5,000,000 and shall be in an integral multiple of $1,000,000; and
(B) the Seller shall choose a reduction amount, and the date of
commencement thereof, so that to the extent practicable such reduction
shall commence and conclude in the same Settlement Period.
Section 1.7. Fees. The Seller shall pay to each Funding Agent for the
----
benefit of the Purchasers in accordance with the provisions set forth in
Sections 1.4 and 1.5 certain fees in the amounts and on the dates set forth in
------------ ---
one or more letters, dated the date hereof (or dated the date any such Purchaser
becomes a party hereto pursuant to an Assumption Agreement, a Transfer
Supplement or otherwise), among the Servicer, the Seller, and each applicable
Funding Agent, respectively, (as any such letter agreement may be amended,
supplemented or otherwise modified from time to time, each, a "Fee Letter").
----------
Section 1.8. Payments and Computations, Etc. (a) All amounts to be paid or
------------------------------
deposited by the Seller or the Servicer hereunder shall be made without
reduction for offset or counterclaim and shall be paid or deposited no later
than noon (Eastern Time) on the day when due in same day funds to the account
designated to the Servicer at such time by the applicable Funding Agent. All
amounts received after noon (Eastern Time) will be deemed to have been received
on the next Business Day.
(b) The Seller or the Servicer, as the case may be, shall, to the extent
permitted by law, pay interest on any amount not paid or deposited by the Seller
or the Servicer, as the case may be, when due hereunder, at an interest rate
equal to 2% per annum above the Base Rate, payable on demand.
(c) All computations of interest under clause (b) and all computations of
----------
Discount, fees and other amounts hereunder shall be made on the basis of a year
of 360 days except with respect to
12
Discount or other amounts calculated by reference to the Base Rate that shall be
calculated on the basis of a year of 365 or 366 days, as applicable, for the
actual number of days elapsed. Whenever any payment or deposit to be made
hereunder shall be due on a day other than a Business Day, such payment or
deposit shall be made on the next Business Day and such extension of time shall
be included in the computation of such payment or deposit.
Section 1.9. Increased Costs. (a) If any Funding Agent, any Purchaser, any
---------------
Program Support Provider or any of their respective Affiliates (each an
"Affected Person") reasonably determines that the existence of or compliance
---------------
with: (i) any law or regulation or any change therein or in the interpretation
or application thereof, in each case adopted, issued or occurring after the date
hereof, or (ii) any request, guideline or directive from any central bank or
other Governmental Authority (whether or not having the force of law) issued or
occurring after the date of this Agreement, affects or would affect the amount
of capital required or expected to be maintained by such Affected Person, and
such Affected Person determines that the amount of such capital is increased by
or based upon the existence of any commitment to make purchases of (or otherwise
to maintain the investment in) Pool Receivables related to this Agreement or any
related liquidity facility, credit enhancement facility and other commitments of
the same type, then, upon written demand by such Affected Person (accompanied by
the certificate referred to in the next sentence, with a copy to the applicable
Funding Agent), the Seller shall promptly pay to the applicable Funding Agent,
for the account of such Affected Person, from time to time as specified by such
Affected Person, additional amounts sufficient to compensate such Affected
Person. A certificate describing in reasonable detail such amounts and the basis
for such Affected Person's demand for such amounts submitted to the Seller and
the applicable Funding Agent by such Affected Person shall be conclusive and
binding for all purposes, absent manifest error.
(b) If, due to either: (i) the introduction of or any change in or in the
interpretation of any law or regulation occurring after the date hereof or (ii)
compliance with any guideline or request occurring after the date hereof from
any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to any Affected Person of
agreeing to purchase or purchasing, or maintaining the ownership of, the
Purchased Interest in respect of which Discount is computed by reference to the
Eurodollar Rate, then, upon written demand by such Affected Person (accompanied
by the certificate referred to in the next sentence, with a copy to the
applicable
13
Funding Agent) and, the Seller shall promptly pay to such Affected Person, from
time to time as specified by such Affected Person, additional amounts sufficient
to compensate such Affected Person for such increased costs. A certificate
describing in reasonable detail, such amounts and the basis for such Affected
Person's demand for such amounts submitted to the Seller and the applicable
Funding Agent by such Affected Person shall be conclusive and binding for all
purposes, absent manifest error.
(c) In determining the additional amounts necessary to compensate an
Affected Person pursuant to clause (a) or (b) above, such Affected Person may
---------- ---
use any reasonable method of averaging and attribution that it (in its sole and
absolute discretion) shall deem applicable.
(d) Each Affected Person will promptly notify the Seller of any event of
which it has knowledge that will entitle such Affected Person to compensation
pursuant to this Section 1.9 and will use all reasonable efforts to take such
-----------
action as it deems appropriate to avoid the need for, or reduce the amount of,
such compensation that would not be otherwise disadvantageous to such Affected
Person. For purposes of this Section 1.9, an Affected Person shall be deemed to
-----------
have promptly notified the Seller of an event if such notice is given to the
Seller within 6 months of the date such Affected Person obtains knowledge of
such event.
Section 1.10. Requirements of Law. If any Affected Person reasonably
-------------------
determines that the existence of or compliance with: (a) any law or regulation
or any change therein or in the interpretation or application thereof, in each
case adopted, issued or occurring after the date hereof, or (b) any request,
guideline or directive from any central bank or other Governmental Authority
(whether or not having the force of law) issued or occurring after the date of
this Agreement:
(i) subjects such Affected Person to any tax of any kind whatsoever
with respect to this Agreement, any increase in the Purchased Interest or
in the amount of Capital relating thereto, or does or shall change the
basis of taxation of payments to such Affected Person on account of
Collections, Discount or any other amounts payable hereunder (excluding
taxes imposed on the overall pre-tax net income of such Affected Person,
franchise taxes imposed on such Affected Person, by the jurisdiction under
the laws of which such Affected Person is organized or a political
subdivision thereof),
14
(ii) imposes, modifies or holds applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, purchases, advances
or loans by, or other credit extended by, or any other acquisition of funds
by, any office of such Affected Person that are not otherwise included in
the determination of the Eurodollar Rate or the Base Rate hereunder, or
(iii) imposes on such Affected Person any other condition,
and the result of any of the foregoing is: (A) to increase the cost to such
Affected Person of acting as Collateral Agent or Funding Agent, or of agreeing
to purchase or purchasing or maintaining the ownership of undivided percentage
ownership interests with regard to the Purchased Interest (or interests therein)
or any Portion of Capital, or (B) to reduce any amount receivable hereunder
(whether directly or indirectly), then, in any such case, upon written demand by
such Affected Person (accompanied by the certificate referred to below, with a
copy to the applicable Funding Agent), the Seller shall promptly pay to such
Affected Person additional amounts necessary to compensate such Affected Person
for such additional cost or reduced amount receivable. All such amounts shall be
payable as incurred. A certificate from such Affected Person to the Seller
describing in reasonable detail the amount and basis for the amount of such
additional costs or reduced amount receivable shall be conclusive and binding
for all purposes, absent manifest error. Each Affected Person will promptly
notify the Seller of any event of which it has knowledge that will entitle such
Affected Person to compensation pursuant to this Section 1.10 and will use all
------------
reasonable efforts to take such action as it deems appropriate to avoid the need
for, or reduce the amount of, such compensation that would not be otherwise
disadvantageous to such Affected Person. For purposes of this Section 1.10, an
------------
Affected Person shall be deemed to have promptly notified the Seller of an event
if such notice is given to the Seller within 6 months of the date such Affected
Person obtains knowledge of such event.
Section 1.11. Inability to Determine Eurodollar Rate. If any Funding Agent
--------------------------------------
shall have determined before the first day of any Settlement Period (which
determination shall be conclusive and binding upon the parties hereto), by
reason of circumstances affecting the interbank Eurodollar market, either that:
(a) dollar deposits in the relevant amounts and for the relevant Settlement
Period are not available, (b) adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Settlement
15
Period or (c) the Eurodollar Rate determined pursuant hereto does not accurately
reflect the cost to the applicable Affected Person (as conclusively determined
by such Funding Agent) of maintaining any Portion of Capital during such
Settlement Period, such Funding Agent shall promptly give telephonic notice of
such determination, confirmed in writing, to the Seller before the first day of
such Settlement Period. Upon delivery of such notice: (i) no Portion of Capital
shall be funded thereafter at the Alternate Rate determined by reference to the
Eurodollar Rate unless and until such Funding Agent shall have given notice to
the Seller that the circumstances giving rise to such determination no longer
exist, and (ii) with respect to any outstanding Portions of Capital then funded
at the Alternate Rate determined by reference to the Eurodollar Rate, such
Alternate Rate shall, on the immediately succeeding Settlement Date,
automatically be converted to the Alternate Rate determined by reference to the
Base Rate at the respective last days of the then-current Settlement Periods
relating to such Portions of Capital.
Section 1.12. Sharing of Payments, etc. If any CP Conduit Purchaser or any
------------------------
Committed Purchaser (for purpose of this Section 1.12 only, a "Recipient") shall
------------ ---------
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of setoff, or otherwise) on account of any interest in the Purchased
Interest owned by it in excess of its ratable share thereof, such Recipient
shall forthwith purchase from the CP Conduit Purchasers and/or the Committed
Purchasers entitled to a share of such amount participations in the percentage
interests owned by such Persons as shall be necessary to cause such Recipient to
share the excess payment ratably with each such other Person entitled thereto;
provided, however, that if all or any portion of such excess payment is
-------- -------
thereafter recovered from such Recipient, such purchase from each such other
Person shall be rescinded and each such other Person shall repay to the
Recipient the purchase price paid by such Recipient for such participation to
the extent of such recovery, together with an amount equal to such other
Person's ratable share (according to the proportion of (a) the amount of such
other Person's required payment to (b) the total amount so recovered from the
Recipient) of any interest or other amount paid or payable by the Recipient in
respect of the total amount so recovered.
Section 1.13. Expiration or Extension of Commitments. (a) the Seller may
--------------------------------------
request the extension of any Committed Purchaser's Commitment Expiry Date for an
additional three hundred and sixty four (364) days from time to time by
providing the applicable Funding Agent with a written request for such extension
no fewer than forty-five (45) days, but no more than sixty (60) days prior
16
to such Committed Purchaser's Commitment Expiry Date then in effect. The related
Funding Agent shall provide written notice to each other Funding Agent and the
Seller on or prior to the thirtieth (30th) day (the "Consent Date") following
------------
the applicable Funding Agent's actual receipt of such written request for
extension of its desire to extend (any such Committed Purchaser an "Extending
---------
Committed Purchaser") or not to so extend (any such Committed Purchaser a
-------------------
"Non-Extending Committed Purchaser") such date.
---------------------------------
(b) If Committed Purchasers holding less than 100% of the aggregate
Commitment of all Commitments consent to such extension, then the Seller may
elect by written notice to the Funding Agents to either:
(i) continue this receivables financing facility for such additional
period with an aggregate Commitment equal to the then effective aggregate
Commitment less the Commitment of the Non-Extending Committed Purchaser(s);
or
(ii) require any such Non-Extending Committed Purchaser(s) and the
related CP Conduit Purchaser(s) to execute a Transfer Supplement in
accordance with Section 5.3 with respect to all of such Non-Extending
-----------
Committed Purchaser(s)' Commitment and their other interests, rights and
obligations under this Agreement to a Purchaser who consents thereto (in
its sole discretion at such time) and shall assume such obligations upon
its consent to assume such obligations; provided that (x) no such
--------
assignment shall conflict with any law, (y) such assignment shall be at the
Seller's cost and expense, and (z) the purchase price to be paid to such
Non- Extending Committed Purchaser shall be an amount equal to the Net
Investment and accrued and unpaid Discount and Fees attributable to such
Non-Extending Committed Purchaser and/or CP Conduit Purchaser.
Notwithstanding anything in this Agreement to the contrary, such a transfer
of a Non-Extending Committed Purchaser's interest and the related CP
Conduit Purchaser's interest pursuant to a Transfer Supplement shall be
subject to the consent of the Funding Agents (not to be unreasonably
withheld).
Section 1.14. Addition of Purchasers. The Seller may, with the written
----------------------
consent of the Funding Agents (not to be unreasonably withheld), add additional
Persons as Purchasers (either to an existing group of related Purchasers or by
creating a new group of related Purchasers and a Funding Agent) or cause an
existing Purchaser to increase its Commitment in connection with a
17
corresponding increase in the Facility Limit; provided, however, that the
-------- -------
Commitment of any Purchaser may only be increased with the consent of such
Purchaser. Each new Purchaser (or group of related Purchasers) and each
Purchaser increasing its Commitment shall become a party hereto or increase its
Commitment, as the case may be, by executing and delivering to each Funding
Agent and the Seller an Assumption Agreement (each, an "Assumption Agreement")
--------------------
in the form of Exhibit VI hereto (which Assumption Agreement shall, in the case
----------
of any new Purchaser or Purchasers be executed by each Person (including the
related Funding Agent) in such new Purchaser's group of related Purchasers).
Section 1.15. Obligations Several. Each Committed Purchaser's obligation
-------------------
hereunder shall be several, such that the failure of any Committed Purchaser to
make a payment in connection with any purchase hereunder shall not relieve any
other Committed Purchaser of its obligation hereunder to make payment for any
purchase. Further, if any Committed Purchaser fails to satisfy its obligation to
make a purchase as required hereunder, upon receipt of notice of such failure
from the relevant Funding Agent, subject to the limitations set forth herein,
the non-defaulting Committed Purchasers in such defaulting Committed Purchaser's
group of related Purchasers shall purchase the defaulting Committed Purchaser's
portion of the related purchase pro rata in proportion to their relative
--- ----
Commitments (determined without regard to the Commitment of the defaulting
Committed Purchaser; it being understood that a defaulting Committed Purchaser's
-- ----- ----------
Commitment of any purchase shall be first put to the Committed Purchasers
related to such defaulting Purchaser and thereafter if there are no other
Committed Purchasers in such related group or if such other Committed Purchasers
are also defaulting Committed Purchasers, then such defaulting Committed
Purchaser's portion of such purchase shall be put to each other group of
Purchasers ratably and applied in accordance with this Section 1.15).
-------------
Notwithstanding anything in this Section 1.15 to the contrary, no Committed
------------
Purchaser shall be required to make a purchase pursuant to this paragraph for an
amount which would cause the aggregate Net Investment of such Committed
Purchaser (after giving effect to such purchase) to exceed its Commitment.
18
ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
19
Section 2.1. Representations and Warranties; Covenants. Each of the Seller
-----------------------------------------
and the Servicer hereby makes the representations and warranties, and hereby
agrees to perform and observe the covenants, applicable to it set forth in
Exhibits III and IV.
------------ --
Section 2.2. Termination Events. If any of the Termination
-----------------
Events set forth in Exhibit V shall occur, either Funding Agent
---------
may, by written notice to the Seller, declare the Facility
Termination Date to have occurred (in which case the Facility
Termination Date shall be deemed to have occurred); provided, that
--------
(i) if the Purchased Interest shall, at any time, exceed 100% and
such condition continues unremedied and, solely to the extent that
the Rating Agency Condition shall have been satisfied with respect
thereto, unwaived for a period of 5 Business Days, the Facility
Termination Date shall automatically occur, and (ii) automatically
upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice) described in paragraph (f)
of Exhibit V, the Facility Termination Date shall occur. Upon any
---------
such declaration, occurrence or deemed occurrence of the Facility
Termination Date, the Collateral Agent, the Funding Agents 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 after default under the New York UCC and under other
applicable law, which rights and remedies shall be cumulative.
ARTICLE III.
INDEMNIFICATION
Section 3.1. Indemnities by the Seller. Without duplicating any amounts
-------------------------
otherwise payable by the Seller pursuant to Sections 1.9 and 1.10 of this
---------------------
Agreement, and without limiting any other rights that the Collateral Agent, the
Funding Agents, the Purchasers, any Program Support Provider or any of their
respective Affiliates, employees, officers, directors, agents, counsel,
successors, transferees or assigns (each, an "Indemnified Party") may have
-----------------
hereunder or under applicable law, the Seller hereby agrees to indemnify each
Indemnified Party from and against any and all claims, damages, expenses, costs,
losses and liabilities (including Attorney Costs) (all of the foregoing being
collectively referred to as "Indemnified Amounts") arising out of or resulting
-------------------
from this Agreement (whether directly or indirectly), the use of proceeds of
purchases or reinvestments, the ownership of the Purchased Interest, or any
interest therein, or in respect of any Receivable, Related Security or Contract,
excluding, however: (a) Indemnified Amounts to the extent resulting from gross
negligence
20
or willful misconduct on the part of such Indemnified Party or its officers,
directors, agents (including any successor Servicer appointed by the Funding
Agents pursuant to Section 4.1(a)) or counsel, (b) recourse (except as otherwise
-----------
specifically provided in this Agreement) for uncollectible Receivables, or (c)
any overall net income taxes or franchise taxes imposed on such Indemnified
Party by the jurisdiction under the laws of which such Indemnified Party is
organized or any political subdivision thereof. Subject to the exclusions set
forth in the preceding sentence, but without otherwise limiting or being limited
by the foregoing, the Seller shall pay on demand to each Indemnified Party any
and all amounts necessary to indemnify such Indemnified Party from and against
any and all Indemnified Amounts relating to or resulting from any of the
following:
(i) the failure of any Receivable included in the calculation of the
Net Receivables Pool Balance as an Eligible Receivable to be an Eligible
Receivable, the failure of any information contained in a Monthly Report, a
Weekly Report or a Daily Report to be true and correct, or the failure of
any other information provided to the Collateral Agent, any Purchaser or
any Funding Agent with respect to Receivables or this Agreement to be true
and correct,
(ii) the failure of any representation, warranty or statement made or
deemed made by the Seller (or any of its officers) under or in connection
with this Agreement to have been true and correct as of the date made or
deemed made in all respects,
(iii) the failure by the Seller to comply with any applicable law,
rule or regulation with respect to any Pool Receivable or the related
Contract, or the failure of any Pool Receivable or the related Contract to
conform to any such applicable law, rule or regulation,
(iv) the failure to vest in the Collateral Agent (for the benefit of
the Purchaser) a valid and enforceable: (A) perfected undivided percentage
ownership interest, to the extent of the Purchased Interest, in the
Receivables in, or purporting to be in, the Receivables Pool and the other
Pool Assets, or (B) first priority perfected security interest in the Pool
Assets, in each case, free and clear of any Adverse Claim,
(v) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents
21
under the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivables in, or purporting to be in, the Receivables Pool
and the other Pool Assets, whether at the time of any purchase or
reinvestment or at any subsequent time,
(vi) any dispute, claim, offset or defense of an Obligor (other than
discharge in bankruptcy of such Obligor) to the payment of any Receivable
in, or purporting to be in, the Receivables Pool (including 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 goods or
services related to such Receivable or the furnishing or failure to furnish
such goods or services or relating to collection activities with respect to
such Receivable (if such collection activities were performed by the Seller
or by any agent or independent contractor retained by the Seller),
(vii) any failure of the Seller to perform its duties or obligations
in accordance with the provisions hereof or under the Contracts,
(viii) any products liability or other claim, investigation,
litigation or proceeding arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract,
(ix) the commingling of Collections at any time with other funds,
(x) the use of proceeds of purchases or reinvestments by the Seller,
or
(xi) any reduction in Capital (or any applicable Net Investment) as a
result of the distribution of Collections pursuant to Section 1.4, 1.5 or
----------- ---
1.6, if all or a portion of such distributions shall thereafter be
---
rescinded or otherwise must be returned for any reason.
Section 3.2. Indemnities by the Servicer. Without limiting any other rights
---------------------------
that the Collateral Agent, the Funding Agents, the Purchasers or any other
Indemnified Party may have hereunder or under applicable law, the Servicer
hereby agrees to indemnify each Indemnified Party from and against any and all
Indemnified Amounts arising out of or resulting from (whether directly or
indirectly):
22
(a) the failure of any information contained in a Monthly Report, a Weekly
Report or a Daily Report to be true and correct, or the failure of any other
information provided to the Collateral Agent, any Funding Agent or any Purchaser
by, or on behalf of, the Servicer to be true and correct, (b) the failure of any
representation, warranty or statement made or deemed made by the Servicer (or
any of its officers) under or in connection with this Agreement to have been
true and correct in all respects as of the date made or deemed made, (c) the
failure by the Servicer to comply with any applicable law, rule or regulation
with respect to any Pool Receivable or the related Contract, (d) any dispute,
claim, offset or defense of the Obligor to the payment of any Receivable in, or
purporting to be in, the Receivables Pool resulting from or related to the
collection activities with respect to such Receivable, or (e) any failure of the
Servicer to perform its duties or obligations in accordance with the provisions
hereof.
Section 3.3. Defense of Claims. (a) Promptly after the receipt by an
-----------------
Indemnified Party or Parties of a notice of the commencement of any action,
suit, proceeding, investigation or claim against such Indemnified Party or
Parties as to which it proposes to demand indemnification from the Seller or
Servicer (either or both such parties, as applicable, the "Indemnifying Party"
------------------
or "Parties") pursuant to Section 3.1 or 3.2, as applicable, such Indemnified
------- ----------- ---
Party or Parties shall notify the Indemnifying Party or Parties in writing of
the commencement thereof; but the failure so to notify the Indemnifying Party or
Parties will not relieve such Indemnifying Party or Parties from any liability
which such Indemnifying Party or Parties may have to such Indemnified Party or
Parties pursuant to Section 3.1 or 3.2, as applicable, unless and to the extent
----------- ---
that such failure results in a material impairment of the Indemnifying Party or
Parties ability to defend such action, suit, proceeding, investigation or claim
in accordance with the terms of this Section 3.3. After such notice, if (i) an
-----------
Indemnifying Party or Parties shall acknowledge (without prejudice to any
exclusion of Indemnified Amounts as a result of an Indemnified Party's gross
negligence or willful misconduct pursuant to Section 3.1 or 3.2) in writing to
----------- ---
such Indemnified Party or Parties that such Indemnifying Party or Parties shall
be obligated to indemnify such Indemnified Party or Parties for any Indemnified
Amounts described in Section 3.1 or 3.2, as applicable, with respect to such
----------- ---
action, suit, proceeding, investigation or claim, (ii) the defendants in, or
targets of, any such action, suit, proceeding, investigation or claim include
both the Indemnifying Party or Parties and any such Indemnified Party or
Parties, and (iii) no Termination Event or Unmatured Termination Event shall
have occurred and be continuing, the Indemnifying Party or Parties,
23
to the extent that it or they shall wish, jointly with such Indemnified Party or
Parties, shall be entitled to participate therein in defense of such action,
suit, proceeding or investigation, and the Indemnifying Party or Parties and
such Indemnified Party or Parties shall cooperate in the defense thereof and
shall retain counsel reasonably satisfactory to the Indemnifying Party or
Parties and such Indemnified Party or Parties to undertake the joint defense of
such Indemnifying Party or Parties and such Indemnified Party or Parties at such
Indemnifying Party's or Parties' cost, risk and expense. If (i) in the
reasonable opinion of such Indemnified Party or Parties, the engagement of such
counsel would present a conflict of interest that would prevent such counsel
from effectively undertaking such joint defense, (ii) such Indemnified Party or
Parties reasonably conclude that there may be legal defenses available to it or
them that are different from or in addition to those available to such
Indemnifying Party or Parties, (iii) such Indemnifying Party or Parties fail to
employ counsel reasonably satisfactory to such Indemnified Party or Parties in a
timely manner, or (iv) if a Termination Event or Unmatured Termination Event
shall have occurred and be continuing, then such Indemnified Party or Parties
may employ separate counsel to represent or defend it or them in any such
action, suit, proceeding or investigation and such Indemnifying Party or Parties
shall pay all fees, expenses and disbursements of such counsel; provided,
--------
however, that in no event shall such Indemnifying Party or Parties be liable for
-------
the fees, expenses and disbursements of more than one counsel representing all
Indemnified Parties that are related to the same Funding Agent and that are
parties to the same action, suit, proceeding, investigation or claim.
(b) No Indemnifying Party shall (i) without the prior written consent of
the relevant Indemnified Party or Parties (which consent shall not be
unreasonably withheld or delayed) settle or compromise or consent to the entry
of any judgment with respect to any pending action, suit, proceeding,
investigation or claim in respect to which indemnification or contribution may
be sought hereunder (whether or not the relevant Indemnified Party or Parties
are actual or potential parties to such claim) unless such settlement,
compromise or consent includes an unconditional release of each relevant
Indemnified Party from all liability arising out of such action, suit,
proceeding, investigation or claim or (ii) be liable for any settlement of any
such action affected without its written consent (which consent shall not be
unreasonably withheld or delayed), but if settled with its written consent or if
there be a final judgment in favor of the plaintiff in any action, the
Indemnifying Parties agree to indemnify and hold harmless any
24
Indemnified Party from and against any indemnified amounts (subject to the terms
of Sections 3.1 and 3.2) relating thereto.
------------ ---
In the event of any dispute between any Indemnified Party or Parties, on
the one hand, and any Indemnifying Party, on the other hand, as to whether such
Indemnifying Party or Indemnified Party is acting reasonably in objecting to any
proposed settlement, compromise or consent, such dispute shall be resolved
through binding arbitration in New York, New York in accordance with the
commercial arbitration rules of the American Arbitration Association. There
shall be a single arbitrator to be selected by mutual agreement of such
Indemnified Party or Parties and such Indemnifying Party or Parties (or if such
parties cannot agree on an arbitrator, by an arbitrator selected by a federal or
state court located in the City of New York). Any such arbitration must be
commenced not later than 30 days after the date such dispute arose.
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of the Servicer. (a) The servicing, administering
--------------------------
and collection of the Pool Receivables shall be conducted by the Person so
designated from time to time as the Servicer in accordance with this Section
-------
4.1. Until the Funding Agents give notice to USS (in accordance with this
---
Section 4.1) of the designation of a new Servicer, USS is hereby designated as,
-----------
and hereby agrees to perform the duties and obligations of, the Servicer
pursuant to the terms hereof. Upon the occurrence and during the continuation of
a Termination Event, the Funding Agents may designate as Servicer any Person
(including itself) to succeed USS or any successor Servicer, on the condition in
each case that any such Person so designated shall agree to perform the duties
and obligations of the Servicer pursuant to the terms hereof.
(b) Upon the designation of a successor Servicer as set forth in clause
------
(a), USS agrees it will terminate its activities as Servicer hereunder in a
--
manner that the Funding Agents reasonably determine will facilitate the
transition of the performance of such activities to the new Servicer, and USS
shall cooperate with and assist such new Servicer. Such cooperation shall
include access to and transfer of related records and use by the new Servicer of
all licenses, hardware or software necessary or desirable to collect the Pool
Receivables and the Related Security.
25
(c) USS acknowledges that, in making their decision to execute and deliver
this Agreement, the Collateral Agent, each Funding Agent and each Purchaser have
relied on USS's agreement to act as Servicer hereunder. Accordingly, USS agrees
that it will not voluntarily resign as Servicer.
(d) The Servicer may with the prior written consent of the Funding Agents,
delegate its duties and obligations hereunder to any subservicer (each a
"Sub-Servicer"); provided, that, in each such delegation: (i) such Sub-Servicer
------------ --------
shall agree in writing to perform the duties and obligations of the Servicer
pursuant to the terms hereof, (ii) the Servicer shall remain primarily liable
for the performance of the duties and obligations so delegated, (iii) the
Seller, the Collateral Agent, each Funding Agent and each Purchaser shall have
the right to look solely to the Servicer for performance, and (iv) the terms of
any agreement with any Sub- Servicer shall provide that the Funding Agents may
terminate such agreement upon the termination of the Servicer hereunder by
giving notice of its desire to terminate such agreement to the Servicer (and the
Servicer shall provide appropriate notice to each such Sub-Servicer).
Section 4.2. Duties of the Servicer. (a) The Servicer shall take or cause
----------------------
to be taken all such action as may be necessary or advisable to administer and
collect each Pool Receivable from time to time, all in accordance with this
Agreement and all applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Credit and Collection Policy. The
Servicer shall set aside, for the accounts of the Seller and the Purchasers, the
amount of the Collections to which each is entitled in accordance with Article
-------
I. The Servicer may, in accordance with the Credit and Collection Policy, extend
-
the maturity of any Pool Receivable (but not beyond 60 days and not more than
once with respect to any such Pool Receivable) and extend the maturity or adjust
the Outstanding Balance of any Defaulted Receivable as the Servicer may
determine to be appropriate to maximize Collections thereof; provided, however,
-------- -------
that: (i) such extension or adjustment shall not alter the status of such Pool
Receivable as a Delinquent Receivable or a Defaulted Receivable or limit the
rights of the Purchasers, the Collateral Agent or the Funding Agents under this
Agreement and (ii) if a Termination Event has occurred and USS or an Affiliate
thereof is serving as the Servicer, USS or such Affiliate may make such
extension or adjustment only upon the prior written approval of the Funding
Agents. The Seller shall deliver to the Servicer and the Servicer shall hold for
the benefit of the Seller and the Collateral Agent (individually and for the
benefit of the Purchasers and the Funding Agents), in accordance with their
26
respective interests, all records and documents (including computer tapes or
disks) with respect to each Pool Receivable. Notwithstanding anything to the
contrary contained herein, the Funding Agents may direct the Servicer (whether
the Servicer is USS or any other Person) to commence or settle any legal action
to enforce collection of any Pool Receivable or to foreclose upon or repossess
any Related Security; provided, however, that no such direction may be given
-------- -------
unless either: (A) a Termination Event has occurred or (B) any Funding Agent
believes in good faith that the failure to commence, settle or effect such legal
action, foreclosure or repossession could adversely affect Receivables
constituting a material portion of the Pool Receivables.
(b) The Servicer shall, as soon as practicable following actual receipt of
collected funds, turn over the collections of any indebtedness that is not a
Pool Receivable to the Person to whom such indebtedness is owed, less, if USS or
an Affiliate thereof is not the Servicer, all reasonable and appropriate
out-of-pocket costs and expenses of such Servicer of servicing, collecting and
administering such collections. The Servicer, if other than USS or an Affiliate
thereof, shall, as soon as practicable upon demand, deliver to the Seller all
records in its possession that evidence or relate to any indebtedness that is
not a Pool Receivable, and copies of records in its possession that evidence or
relate to any indebtedness that is a Pool Receivable.
(c) The Servicer's obligations hereunder shall terminate on the later of:
(i) the Facility Termination Date and (ii) the date on which all amounts
required to be paid to the Purchasers, the Funding Agents, the Collateral Agent,
and any other Indemnified Party or Affected Person hereunder shall have been
paid in full.
After such termination, if USS or an Affiliate thereof was not the Servicer
on the date of such termination, the Servicer shall promptly deliver to the
Seller all books, records and related materials that the Seller previously
provided to the Servicer, or that have been obtained by the Servicer, in
connection with this Agreement.
Section 4.3. Establishment and Use of Certain Accounts. (a) Within 15
-----------------------------------------
Business Days from the Closing Date, the Seller shall execute and deliver to the
relevant Lock-Box Banks and the Funding Agents the Lock-Box Letters with respect
to the Lock-Box Accounts listed on Schedule II. The Lock-Box Accounts shall be
----------
the only accounts used to receive Collections with respect to the Pool
Receivables from the related Obligors. The Servicer shall on each day on which
Collections of Pool Receivables are received in the
27
Lock-Box Accounts cause such Collections to be transferred from the Lock-Box
Accounts into the Concentration Account.
(b) Within 15 Business Days from the Closing Date, the Seller shall have
entered into a Concentration Account Agreement with the Concentration Account
Bank and deliver an original counterpart thereof to the Funding Agents. Any
amount in the Concentration Account may be invested by the Seller (or Servicer
on the Seller's behalf) in Permitted Investments; provided, however, that such
-------- -------
investments shall mature not later than the Settlement Date immediately
succeeding such Permitted Investments and any such Permitted Investments shall
be credited to a securities account (as defined in the applicable UCC) over
which the Collateral Agent for the benefit of the Purchasers shall have a first
priority perfected Security interest. All income or other gain from investment
of monies deposited in the Concentration Account shall be deposited in the
Concentration Account immediately upon receipt thereof, and any loss resulting
from Permitted Investments shall be charged to the Concentration Account.
(c) The Collateral Agent has established the Collection Account which shall
be used to accept the transfer of Collections of Pool Receivables from the
Concentration Account pursuant to Article I and for such other purposes
---------
described in the Transaction Documents and the Collateral Agent with the consent
or at the direction of the Funding Agents shall have the exclusive right to
withdraw funds therefrom. On the date of the initial purchase hereunder, the
Seller (or the Servicer on its behalf) shall deposit into the Collection
Account, for the benefit of the Purchasers, an amount equal to $2,500,000; it
being understood that on each Settlement Date (until the day following the
Facility Termination Date when all amounts payable by the Seller or Servicer
hereunder have been paid in full), the Seller shall deposit into the Collection
Account, the amount, if any, necessary to cause the amount on deposit therein
(after giving effect to the transfers contemplated pursuant to Article I on such
---------
date) equal to, at least, $2,500,000.
So long as no Termination Event shall have occurred and be continuing, all
or any portion of the amounts on deposit in the Collection Account shall be
invested by the Collateral Agent at the Servicer's written direction in one or
more Permitted Investments. All income or other gain from investment of monies
deposited in the Collection Account shall be deposited in the Collection Account
immediately upon receipt thereof, and any loss resulting from Permitted
Investments shall be charged to the Collection Account. The maximum permissible
maturity of any Permitted Investment shall
28
be not later than the Settlement Date immediately succeeding such
Permitted Investment.
(d) Upon the occurrence and during the continuation of a Termination Event,
the Collateral Agent with the consent or at the direction of the Funding Agents
may at any time thereafter give notice to each Lock-Box Bank, the Concentration
Account Bank and the Collection Account Bank that the Collateral Agent is
exercising its rights under the Lock-Box Letters, the Concentration Account
Agreement and the Collection Account Agreement, as applicable, to do any or all
of the following: (i) to have the exclusive ownership and control of the
Accounts transferred to the Collateral Agent and to exercise exclusive dominion
and control over the funds deposited therein, (ii) to have the proceeds that are
sent to the respective Accounts redirected pursuant to the Collateral Agent's
instructions, and (iii) to take any or all other actions permitted under the
applicable Lock-Box Letter, the Concentration Account Agreement and the
Collection Account Agreement, as applicable. The Seller hereby agrees that if
the Collateral Agent at any time takes any action set forth in the preceding
sentence, the Collateral Agent shall have exclusive control of the proceeds
(including Collections) of all Pool Receivables and the Seller hereby further
agrees to take any other action that the Collateral Agent or any Funding Agent
may reasonably request to transfer such control. Any proceeds of Pool
Receivables received by the Seller or the Servicer thereafter shall be sent
immediately to the Collateral Agent.
Section 4.4. Enforcement Rights. (a) At any time following the occurrence
------------------
and during the continuation of a Termination Event:
(i) the Funding Agents may direct the Obligors that payment of all
amounts payable under any Pool Receivable is to be made directly to the
Collateral Agent or its designee,
(ii) the Funding Agents may give notice of the Purchaser's interest in
Pool Receivables to each Obligor, which notice shall direct that payments
be made directly to the Collateral Agent or its designee, and
(iii) the Collateral Agent may request the Servicer to, and upon such
request the Servicer shall: (A) assemble all of the records necessary or
desirable to collect the Pool Receivables and the Related Security, and
transfer or license to a successor Servicer the use of all software
necessary or desirable to collect the Pool Receivables and the Related
Security, and make the same available to the Collateral Agent or its
designees at a place selected by the Collateral Agent
29
and (B) segregate all cash, checks and other instruments received by it
from time to time constituting Collections in a manner acceptable to the
Funding Agents and, promptly upon receipt, remit all such cash, checks and
instruments, duly endorsed or with duly executed instruments of transfer,
to the Collateral Agent or its designee.
(b) The Seller hereby authorizes the Collateral Agent, and irrevocably
appoints the Collateral Agent as its attorney-in-fact with full power of
substitution and with full authority in the place and stead of the Seller, which
appointment is coupled with an interest, to take any and all steps in the name
of the Seller and on behalf of the Seller necessary or desirable, in the
determination of the Collateral Agent, with the consent or at the direction of
the Funding Agents, after the occurrence and during the continuation of a
Termination Event, to collect any and all amounts or portions thereof due under
any and all Pool Assets, including endorsing the name of the Seller on checks
and other instruments representing Collections and enforcing such Pool Assets.
Notwithstanding anything to the contrary contained in this subsection, none of
the powers conferred upon such attorney-in-fact pursuant to the preceding
sentence shall subject such attorney-in-fact to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall they confer any
obligations upon such attorney-in-fact in any manner whatsoever.
Section 4.5. Responsibilities of the Seller. (a) Anything herein to the
------------------------------
contrary notwithstanding, the Seller shall pay when due any taxes, including any
sales taxes payable in connection with the Pool Receivables and their creation
and satisfaction. None of the Collateral Agent, Funding Agents or any Purchaser
shall have any obligation or liability with respect to any Pool Asset, nor shall
any of them be obligated to perform any of the obligations of the Seller or
Servicer.
(b) USS hereby agrees that if at any time it shall cease to be the Servicer
hereunder, it shall act (if the then-current Servicer so requests) as the
data-processing agent of the Servicer and, in such capacity, USS shall conduct
the data-processing functions of the administration of the Receivables and the
Collections thereon in substantially the same way that USS conducted such
data-processing functions while it acted as the Servicer.
Section 4.6. Servicing Fee. (a) Subject to clause (b), the Servicer shall
------------- ---------
be paid a fee (the "Servicing Fee") equal to 1.0% per annum of the daily average
------------- --- -----
Outstanding Balance of the Pool
30
Receivables. The Purchasers' share of such fee shall be paid through the
distributions contemplated by Sections 1.4 and 1.5, and the Seller's share of
------------ ---
such fee shall be paid by the Seller.
(b) If the Servicer ceases to be USS or an Affiliate thereof, the successor
Servicer shall be paid a fee in the amount specified by such successor Servicer
not to exceed 110% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer. The Purchasers' share of such fee shall be paid through the
distributions contemplated by Sections 1.4 and 1.5,and the Seller's share of
------------ ---
such fee shall be paid by the Seller.
ARTICLE V.
THE AGENTS
Section 5.1. Appointment and Authorization. (a) Each Purchaser and Funding
-----------------------------
Agent (including each Purchaser and Funding Agent that may from time to time
become a party hereto) hereby irrevocably designates and appoints BNS as the
"Collateral Agent" hereunder and authorizes the Collateral Agent to take such
actions and to exercise such powers as are delegated to the Collateral Agent
hereby and to exercise such other powers as are reasonably incidental thereto,
including the execution and delivery on the date hereof by the Collateral Agent
(on behalf of such Purchaser and/or Funding Agent) of the Intercreditor
Agreement, and taking all such action by it thereunder for the benefit of the
Purchasers and Funding Agents pursuant to the terms thereof. The Collateral
Agent shall hold, in its name, for the benefit of each Purchaser, ratably, the
Purchased Interest. The Collateral Agent shall not have any duties other than
those expressly set forth herein or any fiduciary relationship with any
Purchaser or Funding Agent, and no implied obligations or liabilities shall be
read into this Agreement, any other Transaction Document or the Intercreditor
Agreement, or otherwise exist, against the Collateral Agent. The Collateral
Agent does not assume, nor shall it be deemed to have assumed, any obligation
to, or relationship of trust or agency with, the Seller or Servicer.
Notwithstanding any provision of this Agreement, the Intercreditor Agreement or
any other Transaction Document to the contrary, in no event shall the Collateral
Agent ever be required to take any action which exposes the Collateral Agent to
personal liability or which is contrary to the provision of any Transaction
Document, the Intercreditor Agreement or applicable law.
31
(b) Each Purchaser hereby irrevocably designates and appoints the
respective institution identified as the Funding Agent for such Purchaser on the
signature pages hereto or in any agreement pursuant to which such Purchaser
becomes a party hereto, and each authorizes such Funding Agent to take such
action on its behalf under the provisions of this Agreement and to exercise such
powers and perform such duties as are expressly delegated to such Funding Agent
by the terms of this Agreement, if any, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Funding Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser or other Funding Agent or the Collateral Agent,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of such Funding Agent shall be read into this Agreement
or otherwise exist against such Funding Agent.
(c) Except as otherwise specifically provided in this Agreement, the
provisions of this Article V are solely for the benefit of the Funding Agents,
---------
the Collateral Agent and the Purchasers, and none of the Seller or Servicer
shall have any rights as a third-party beneficiary or otherwise under any of the
provisions of this Article V, except that this Article V shall not affect any
--------- ---------
obligations which any Funding Agent, the Collateral Agent or any Purchaser may
have to the Seller or the Servicer under the other provisions of this Agreement.
Furthermore, no Purchaser shall have any rights as a third-party beneficiary or
otherwise under any of the provisions hereof in respect of a Funding Agent which
is not the Funding Agent for such Purchaser.
(d) In performing its functions and duties hereunder, the Collateral Agent
shall act solely as the agent of the Purchasers and the Collateral Agent and
does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Seller or Servicer or any of
their successors and assigns. In performing its functions and duties hereunder,
each Funding Agent shall act solely as the agent of its respective Purchasers
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Seller, the Servicer, any other
Purchaser, any other Funding Agent or the Collateral Agent, or any of their
respective successors and assigns.
Section 5.2. Delegation of Duties. The Collateral Agent may, with the
--------------------
consent of the Funding Agents, execute any of its duties through agents or
attorneys-in-fact and shall be entitled to
32
advice of counsel concerning all matters pertaining to such duties. The
Collateral Agent shall not be responsible to the Funding Agents or any Purchaser
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
Section 5.3. Exculpatory Provisions. None of the Funding Agents, the
----------------------
Collateral Agent or any of their directors, officers, agents or employees shall
be liable for any action taken or omitted (i) with the consent or at the
direction of the Purchasers (or in the case of any Funding Agent, the Purchasers
relating to such Funding Agent) that have a majority of the aggregate Commitment
of the Purchasers or the Funding Agents or (ii) in the absence of such Person's
gross negligence or willful misconduct. The Collateral Agent shall not be
responsible to any Purchaser or Funding Agent for (i) any recitals,
representations, warranties or other statements made by the Seller, Servicer,
any Originator or any of their Affiliates, (ii) the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Transaction
Document or the Intercreditor Agreement, (iii) any failure of the Seller, the
Servicer, any Originator or any of their Affiliates to perform any obligation it
may have under any Transaction Document to which it is a party, (iv) the
satisfaction of any condition specified in Exhibit II or (v) the failure of any
----------
party to the Intercreditor Agreement (other than the Collateral Agent acting in
such capacity) to perform any obligation it may have thereunder. The Collateral
Agent shall not have any obligation to any Purchaser or Funding Agent to
ascertain or inquire about the observance or performance of any agreement
contained in any Transaction Document or to inspect the properties, books or
records of the Seller, Servicer, any Originator or any of their Affiliates.
Section 5.4. Reliance by Agents. (a) Each Funding Agent and the Collateral
------------------
Agent shall in all cases be entitled to rely, and shall be fully protected in
relying, upon any document or other writing or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
and upon advice and statements of legal counsel (including counsel to the
Seller), independent accountants and other experts selected by the Collateral
Agent or any such Funding Agent. Each Funding Agent and the Collateral Agent
shall in all cases be fully justified in failing or refusing to take any action
under any Transaction Document unless it shall first receive such advice or
concurrence of the Purchasers (or in the case of any Funding Agent, the
Purchasers relating to such Funding Agent) that have a majority of the aggregate
Commitment of all such Purchasers, and assurance of its indemnification, as it
deems appropriate.
33
(b) With regard to the Purchasers and the Funding Agents, the Collateral
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the Purchasers or
the Funding Agents, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all Purchasers, the Collateral Agent and
Funding Agents.
(c) Related Purchasers within any group of Purchasers that have a common
Funding Agent and that have a majority of the Commitment of all such related
Purchasers shall be entitled to request or direct the related Funding Agent to
take action, or refrain from taking action, under this Agreement on behalf of
such Purchasers. With regard to the Purchasers and the Funding Agents, such
Funding Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement in accordance with a request of such majority
Purchasers, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of such Funding Agent's related Purchasers.
(d) Unless otherwise advised in writing by a Funding Agent or by any
Purchaser on whose behalf such Funding Agent is purportedly acting, each party
to this Agreement may assume that (i) such Funding Agent is acting for the
benefit of each of the Purchasers for which such Funding Agent is identified
herein (or in any Assumption Agreement or Transfer Supplement) as being the
Funding Agent, as well as for the benefit of each assignee or other transferee
from any such Person, and (ii) each action taken by such Funding Agent has been
duly authorized and approved by all necessary action on the part of the
Purchasers on whose behalf it is purportedly acting. Each Funding Agent and its
Purchaser(s) shall agree amongst themselves as to the circumstances and
procedures for removal, resignation and replacement of such Funding Agent.
Section 5.5. Notice of Termination Events. Neither any Funding Agent nor
----------------------------
the Collateral Agent shall be deemed to have knowledge or notice of the
occurrence of any Termination Event or Unmatured Termination Event unless such
Person has received notice from any Purchaser, Funding Agent, the Servicer or
the Seller stating that a Termination Event or Unmatured Termination Event has
occurred hereunder and describing such Termination Event or Unmatured
Termination Event. If the Collateral Agent receives such a notice, it shall
promptly give notice thereof to each Funding Agent whereupon each such Funding
Agent shall promptly give notice thereof to its Purchasers. If a Funding Agent
receives such a notice (other than from the Collateral Agent), it shall promptly
34
give notice thereof to the Collateral Agent. The Collateral Agent shall take
such action concerning a Termination Event or Unmatured Termination Event as may
be directed by the Funding Agents unless such action otherwise requires the
consent of all Purchasers), but until the Collateral Agent receives such
directions, the Collateral Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, as the Collateral Agent deems
advisable and in the best interests of the Purchasers and Funding Agents.
Section 5.6. Non-Reliance on Collateral Agent, Funding Agents and Other
----------------------------------------------------------
Purchasers. Each Purchaser expressly acknowledges that none of the Collateral
----------
Agent, the Funding Agents nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Collateral Agent, or any Funding
Agent hereafter taken, including any review of the affairs of the Seller,
Servicer or any Originator, shall be deemed to constitute any representation or
warranty by the Collateral Agent or such Funding Agent, as applicable. Each
Purchaser represents and warrants to the Collateral Agent and the Funding Agents
that, independently and without reliance upon the Collateral Agent, Funding
Agents or any other Purchaser and based on such documents and information as it
has deemed appropriate, it has made and will continue to make its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of the Seller, Servicer or
the Originators, and the Receivables and its own decision to enter into this
Agreement and to take, or omit, action under any Transaction Document. Except
for items specifically required to be delivered hereunder, the Collateral Agent
shall not have any duty or responsibility to provide any Funding Agent with any
information concerning the Seller, Servicer or the Originators or any of their
Affiliates that comes into the possession of the Collateral Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
Section 5.7. Collateral Agent, Funding Agents and Purchasers. Each of the
-----------------------------------------------
Purchasers, the Collateral Agent, the Funding Agents and their Affiliates may
extend credit to, accept deposits from and generally engage in any kind of
banking, trust, debt, entity or other business with the Seller, USS, Servicer or
any Originator or any of their Affiliates. With respect to the acquisition of
the Eligible Receivables pursuant to this Agreement, each of the Funding Agents
and the Collateral Agent shall have the same rights and powers under this
Agreement as any Purchaser and may exercise the same as though it were not such
an agent, and the
35
terms "Purchaser" and "Purchasers" shall include each of the Funding Agents and
the Collateral Agent in their individual capacities.
Section 5.8. Indemnification. Each Committed Purchaser shall indemnify and
---------------
hold harmless the Collateral Agent (but solely in its capacity as Collateral
Agent) and its officers, directors, employees, representatives and agents (to
the extent not reimbursed by the Seller or Servicer and without limiting the
obligation of the Seller or Servicer to do so), ratably in accordance with their
respective Commitments from and against any and all liabilities, obligations,
losses, damages, penalties, judgments, settlements, costs, expenses and
disbursements of any kind whatsoever (including in connection with any
investigative or threatened proceeding, whether or not the Collateral Agent or
such Person shall be designated a party thereto) that may at any time be imposed
on, incurred by or asserted against the Collateral Agent or such Person as a
result of, or related to, any of the transactions contemplated by the
Transaction Documents or the execution, delivery or performance of the
Transaction Documents or any other document furnished in connection therewith
(but excluding any such liabilities, obligations, losses, damages, penalties,
judgments, settlements, costs, expenses or disbursements resulting solely from
the gross negligence or willful misconduct of the Collateral Agent or such
Person as finally determined by a court of competent jurisdiction); provided,
--------
that in the case of each Purchaser that is a commercial paper conduit, such
indemnity shall be provided solely to the extent of amounts received by such
Purchaser under this Agreement which exceed the amounts required to repay such
Purchaser's outstanding Notes. Notwithstanding anything in this Section 5.8 to
-----------
the contrary, each of the Collateral Agent, each Funding Agent and each
Purchaser hereby covenants and agrees that it shall not institute against, or
join any other Person in instituting against, any CP Conduit Purchaser any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other proceedings under any federal or state bankruptcy or similar law, for one
year and a day after the latest maturing Note issued by such CP Conduit
Purchaser is paid in full.
Section 5.9. Successor Collateral Agent. The Collateral Agent may, upon at
--------------------------
least thirty (30) days notice to the Seller and each Purchaser and Funding
Agent, resign as Collateral Agent. Such resignation shall not become effective
until a successor Collateral Agent is appointed by the Funding Agents (and,
unless such appointment is to an existing Funding Agent or Purchaser, such
successor Collateral Agent has been consented to by the Seller, such consent not
to be unreasonably withheld) and has accepted such
36
appointment. Upon such acceptance of its appointment as Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent shall
succeed to and become vested with all the rights and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations under the Transaction Documents. After any retiring
Collateral Agent's resignation hereunder, the provisions of Sections 3.1 and 3.2
------------ ---
and this Article V shall inure to its benefit as to any actions taken or omitted
---------
to be taken by it while it was the Collateral Agent.
ARTICLE VI.
MISCELLANEOUS
Section 6.1. Amendments, Etc. No amendment or waiver of any provision of
---------------
this Agreement or any other Transaction Document, or consent to any departure by
the Seller or the Servicer therefrom, shall be effective unless in a writing
signed by each Funding Agent, and, in the case of any amendment, by the other
parties thereto; and then such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that, if required pursuant to the terms of any CP Conduit
-------- -------
Purchaser's securitization program, no such material amendment shall be
effective until both ▇▇▇▇▇'▇ and Standard & Poor's have notified the applicable
Funding Agent in writing that such action will not result in a reduction or
withdrawal of the rating of any Notes of such CP Conduit Purchaser. No failure
on the part of the Purchasers or the Funding Agents to exercise, and no delay in
exercising any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The Collateral Agent shall
provide each Rating Agency with a copy of each amendment to or waiver or consent
under this Agreement promptly following the effective date thereof.
Section 6.2. Notices, Etc. All notices and other communications provided
------------
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by express
mail or courier or by certified mail, postage-prepaid, or by facsimile, to the
intended party at the address or facsimile number of such party set forth under
its name on the signature pages hereof or at such other address or facsimile
number as shall be designated by such party in a written notice to the other
parties hereto. All such notices and communications shall be effective, (i) if
personally
37
delivered or sent by express mail or courier or if sent by certified mail, when
received, and (ii) if transmitted by facsimile, when sent, receipt confirmed by
telephone or electronic means.
Section 6.3. Assignability. (a) This Agreement shall be binding on the
-------------
parties hereto and their respective successors and assigns; provided, however,
-------- -------
that neither the Seller nor the Servicer may assign any of its rights or
delegate any of its duties hereunder or under any of the other Transaction
Documents to which it is a party without the prior written consent of the
Funding Agents. Each CP Conduit Purchaser may assign, participate, grant
security interests in or otherwise transfer all or any portion of the Purchased
Interest held by it to any bank or other financial institution providing
liquidity support to such CP Conduit Purchaser in connection with its commercial
paper program (each, a "Liquidity Bank") or any other Program Support Provider
--------------
with respect to such CP Conduit Purchaser without prior notice to or consent
from the Seller, the Servicer, any Originator, any other party or any other
condition or restriction of any kind.
(b) Conduit Assignees. Each CP Conduit Purchaser may, from time to time
-----------------
with prior or concurrent notice to the Seller, the Funding Agent for such CP
Conduit Purchaser and the Collateral Agent, assign all or any portion of such CP
Conduit Purchaser's interest in the Purchased Interest (and its related
Committed Purchasers) and its rights and obligations under this Agreement and
any other Transaction Document to which it is a party to a Conduit Assignee with
respect to such CP Conduit Purchaser. Upon such assignment by a CP Conduit
Purchaser to a Conduit Assignee, (A) the related administrative or managing
agent for such Conduit Assignee will act as the Funding Agent for such Conduit
Assignee hereunder, (B) such Conduit Assignee and its liquidity support
provider(s) and credit support provider(s) and other related parties shall have
the benefit of all the rights and protections provided to such CP Conduit
Purchaser and its related Committed Purchasers herein and in the other
Transaction Documents (including, without limitation, any limitation on recourse
against such Conduit Assignee), (C) such Conduit Assignee shall assume all of
such CP Conduit Purchaser's obligations hereunder or under any other Transaction
Document (whenever created, whether before or after such assignment) with
respect to the assigned portion of the CP Conduit Purchaser's interest in the
Purchased Interest and such CP Conduit Purchaser shall be released from all such
obligations, (D) all distributions to such CP Conduit Purchaser hereunder with
respect to the assigned portion of the CP Conduit Purchaser's interest shall be
made to such Conduit Assignee, (E) the definition of the term "CP Rate"
38
shall be determined on the basis of the interest rate or discount applicable to
commercial paper issued by such Conduit Assignee (rather than such CP Conduit
Purchaser), (F) the defined terms and other terms and provisions of this
Agreement and other Transaction Documents shall be interpreted in accordance
with the foregoing, and (G) if requested by any Funding Agent or administrative
or managing agent with respect to the Conduit Assignee, the parties will execute
and deliver such further agreements and documents (including amendments to this
Agreement) and take such other actions as the Funding Agents or such
administrative agent may reasonably request to evidence and give effect to the
foregoing.
(c) Participations. Any Committed Purchaser may, with the consent of the
--------------
Funding Agents and in the ordinary course of its business and its accordance
with applicable law, at any time sell to one or more Persons (each, a
"Participant") participating interests in its rights and obligations hereunder
-----------
and under the Transaction Documents. Notwithstanding any such sale by a
Committed Purchaser of participating interests to a Participant, such Committed
Purchaser's rights and obligations under this Agreement shall remain unchanged,
such Committed Purchaser shall remain solely responsible for the performance
hereof, and each CP Conduit Purchaser, the Collateral Agent and the Funding
Agents shall continue to deal solely and directly with such Committed Purchaser
in connection with such Committed Purchaser's rights and obligations under this
Agreement and the other Transaction Documents. Each Committed Purchaser agrees
that any agreement between such Committed Purchaser and any such Participant in
respect of such participating interest shall not restrict such Committed
Purchaser's right to agree to any amendment, supplement, waiver or modification
to this Agreement.
(d) Assignments.
-----------
(i) Any Committed Purchaser may at any time and from time to time, upon the
prior written consent of the related CP Conduit Purchaser and the Funding
Agents, and, if the Purchaser is not an Affiliate of or otherwise related to the
selling Committed Purchaser and is not an existing Committed Purchaser, the
prior written consent of the Seller (which consent shall not be unreasonably
withheld), assign to one or more accredited investors or other Persons all or
any part of its rights and obligations under this Agreement and the other
Transaction Documents pursuant to a supplement to this Agreement, substantially
in the form of Exhibit VII hereto (each, a "Transfer Supplement"), executed by
----------- -------------------
the Purchaser, such selling Committed Purchaser, the related CP Conduit
Purchaser and, if applicable, the Seller; and provided, however,
-------- -------
39
that (A) any such assignment cannot be for an amount less than the lesser of (1)
$10,000,000 and (2) such selling Committed Purchaser's Commitment and (B) each
Purchaser must be a financial institution with a short-term rating by the Rating
Agencies at least equal to the rating by each such Rating Agency on the Notes of
the related CP Conduit Purchaser.
(ii) Each of the Committed Purchasers agrees that if it ceases to have
short-term debt ratings at least equal to the ratings then assigned to the Notes
of the related CP Conduit Purchaser by the Rating Agencies, or, if such
Committed Purchaser does not have short-term debt which is rated by the Rating
Agencies, in the event that the parent corporation of such Committed Purchaser
has rated short-term debt, such parent corporation ceases to have short-term
debt ratings at least equal to the ratings then assigned to the Notes of the
related CP Conduit Purchaser by the Rating Agencies (each, an "Affected
--------
Committed Purchaser"), such Affected Committed Purchaser shall be obliged, at
-------------------
the request of the related CP Conduit Purchaser and the related Funding Agent,
to assign all of its rights and obligations hereunder to (x) one or more other
Committed Purchasers selected by such CP Conduit Purchaser and the related
Funding Agent which are willing to accept such assignment, or (y) another
financial institution having short-term debt ratings at least equal to the
ratings then assigned to the Notes of the related CP Conduit Purchaser by the
Rating Agencies nominated by the related Funding Agent and consented to by such
CP Conduit Purchaser (which consent shall not be unreasonably withheld) and the
Collateral Agent, and willing to participate in this facility through the then
current scheduled Facility Termination Date in the place of such Affected
Committed Purchaser; provided that (i) the Affected Committed Purchaser receives
--------
payment in full of all outstanding Net Investment and accrued Discount, if any,
of such Person and any other amounts due and owning to such Affected Committed
Purchaser under this Agreement and the other Transaction Documents and (ii) such
nominated financial institution, if not an existing Committed Purchaser,
satisfies all the requirements of this Agreement.
(iii) Upon (A) execution of a Transfer Supplement, (B) delivery of an
executed copy thereof to the related CP Conduit Purchaser, the Collateral Agent
and the Seller, (C) payment, if applicable, by the Purchaser to such selling
Committed Purchaser of an amount equal to the purchase price agreed between such
selling Committed Purchaser and the Purchaser and (D) if required by the
documents governing any applicable CP Conduit Purchaser's commercial paper
program, receipt by such CP Conduit Purchaser of confirmation from each Rating
Agency that such action will not
40
cause the downgrade or withdrawal of the then current rating on such CP Conduit
Purchaser's Notes, such selling Committed Purchaser shall be released from its
obligations hereunder to the extent of such assignment and the Purchasers shall,
for all purposes, be a Committed Purchaser party to this Agreement and shall
have all the rights and obligations of a Committed Purchaser under this
Agreement to the same extent as if it were an original party hereto, and no
further consent or action by the CP Conduit Purchasers, the Committed Purchasers
or the Funding Agents shall be required. The amount of the assigned portion of
the selling Committed Purchaser's share of the related Net Investment allocable
to the Purchaser shall be equal to the transferred percentage (as set forth in
the Transfer Supplement) of such selling Committed Purchaser's share of the
related Net Investment which is transferred thereunder regardless of the
purchase price paid therefor. Such Transfer Supplement shall be deemed to amend
this Agreement to the extent, and only to the extent, necessary to reflect the
addition of the Purchaser as a Committed Purchaser and the resulting adjustment
of the selling Committed Purchaser's Commitment arising from the purchase by the
Purchaser of all or a portion of the selling Committed Purchaser's rights,
obligations and interest hereunder.
(e) Without limiting any other rights that may be available under
applicable law, the rights of the Purchasers hereunder may be enforced through
such Purchaser or by its agents.
Section 6.4. Costs, Expenses and Taxes. (a) In addition to the rights of
-------------------------
indemnification granted under Section 3.1, the Seller agrees to pay on demand
-----------
all reasonable costs and expenses in connection with the preparation, execution,
delivery and administration (including the internal audits by any Funding Agent
or their agents pursuant to Exhibit IV hereto) of this Agreement, the other
----------
Transaction Documents and the other documents and agreements to be delivered
hereunder (and all reasonable costs and expenses in connection with any
amendment, waiver or modification of any thereof), including: (i) Attorney Costs
for the Collateral Agent, each Funding Agent, each Purchaser and their
respective Affiliates and agents with respect thereto and with respect to
advising each such Person and its respective Affiliates and agents as to their
rights and remedies under this Agreement and the other Transaction Documents,
and (ii) all reasonable costs and expenses (including Attorney Costs), if any,
of the Collateral Agent, each Funding Agent, each Purchaser and their respective
Affiliates and agents in connection with the enforcement of this Agreement and
the other Transaction Documents.
41
(b) In addition, the Seller shall pay on demand any and all stamp and other
taxes and fees payable in connection with the execution, delivery, filing and
recording of this Agreement or the other documents or agreements to be delivered
hereunder, if any, and agrees to save each Indemnified Party harmless from and
against any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.
Section 6.5. No Proceedings; Limitation on Payments. (a) Each of the
--------------------------------------
Seller, the Servicer, the Collateral Agent, each Funding Agent, each assignee of
the Purchased Interest or any interest therein, hereby covenants and agrees that
it will not institute against, or join any other Person in instituting against,
any CP Conduit Purchaser any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, for one year and one day after the latest maturing
Note issued by such CP Conduit Purchaser is paid in full. The provision of this
Section 6.5 shall survive any termination of this Agreement.
-----------
(b) Notwithstanding any provisions contained in this Agreement to the
contrary, no CP Conduit Purchaser shall, or shall be obligated to, pay any
amount, if any, payable by it pursuant to this Agreement or any other
Transaction Document unless (i) such CP Conduit Purchaser has received funds
which may be used to make such payment and which funds are not required to repay
Notes when due and (ii) after giving effect to such payment, either (x) such CP
Conduit Purchaser could issue Notes to refinance all outstanding Notes (assuming
such outstanding Notes matured at such time) in accordance with the program
documents governing such CP Conduit Purchaser's securitization program or (y)
all Notes of such CP Conduit Purchaser are paid in full. Any amount which such
CP Conduit Purchaser does not pay pursuant to the operation of the preceding
sentence shall not constitute a claim (as defined in Section 101 of the
Bankruptcy Code) against or company obligation of such CP Conduit Purchaser for
any such insufficiency unless and until such CP Conduit Purchaser satisfies the
provisions of clauses (i) and (ii) above.
---------- ----
Section 6.6. GOVERNING LAW AND JURISDICTION. (a) THIS AGREEMENT SHALL BE
------------------------------
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF A SECURITY INTEREST OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK.
42
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE
BROUGHT IN THE COURTS OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES
HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO
THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH
OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
Section 6.7. Execution in Counterparts. This Agreement may be executed in
-------------------------
any number of 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.
Section 6.8. Survival of Termination. The provisions of Sections 1.8,
----------------------- ------------
1.9, 3.1, 3.2, 6.4, 6.5, 6.6, 6.9, 6.12 and 6.13
--- --- --- --- --- --- --- ---- ----
shall survive any termination of this Agreement.
Section 6.9. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES THEIR
--------------------
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY
OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES
THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES
THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY
PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section 6.10. Entire Agreement. This Agreement and the other Transaction
---------------
Documents embody the entire agreement and understanding between the parties
hereto, and supersede all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof.
43
Section 6.11. Headings. The captions and headings of this Agreement and any
--------
Exhibit, Schedule or Annex hereto are for convenience of reference only and
shall not affect the interpretation hereof or thereof.
Section 6.12. Purchaser's Liabilities. The obligations of each Purchaser
-----------------------
and each Funding Agent under the Transaction Documents are solely the
obligations of such Person. No recourse shall be had for any obligation or claim
arising out of or based upon any Transaction Document against any stockholder,
employee, officer, director or incorporator of such Person; provided, however,
-------- -------
that this Section 6.12 shall not relieve any such Person of any liability it
------------
might otherwise have for its own gross negligence or willful misconduct.
Section 6.13. Confidentiality. Unless otherwise required by applicable law,
---------------
each of the Seller and Servicer agrees to maintain the confidentiality of this
Agreement and the other Transaction Documents (and all drafts hereof and
thereof) in communications with third parties and otherwise; provided that this
--------
Agreement may be disclosed to: (a) third parties to the extent such disclosure
is made pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to each Funding Agent, (b) the Seller's legal counsel
and auditors if they agree to hold it confidential and (c) in filings made under
securities laws. Unless otherwise required by applicable law, each of the
Collateral Agent, each Purchaser, and each Funding Agent agrees to maintain the
confidentiality of all information regarding the Seller, USS and its
Subsidiaries; provided that such information may be disclosed to: (i) third
--------
parties to the extent such disclosure is made pursuant to a written agreement of
confidentiality in form and substance reasonably satisfactory to USS, (ii) legal
counsel and auditors of the Collateral Agent, each Purchaser, and each Funding
Agent if they agree to hold it confidential, (iii) the rating agencies rating
the Notes of each CP Conduit Purchaser to the extent such information relates to
the Receivables Pool or the transactions contemplated by this Agreement, or if
not so related, upon obtaining the prior consent of USS (such consent not to be
unreasonably withheld), (iv) any Program Support Provider or potential Program
Support Provider to the extent such information relates to the Receivables Pool
or the transactions contemplated by this Agreement, or if not so related, upon
obtaining the prior written consent of USS (such consent not to be unreasonably
withheld), (v) any placement agent placing the Notes of any CP Conduit
Purchaser, and (vi) any regulatory authorities having jurisdiction over the
Collateral Agent, the Funding Agents, the Purchasers, any Program Support
Provider or any Liquidity Bank.
44
Section 6.14. Agent Conflict Waiver. Each of the Collateral Agent and the
---------------------
Funding Agents, respectively, acts in various capacities with respect to the
maintenance and administration of the commercial paper program of its related CP
Conduit Purchaser (including, administrative agent for such CP Conduit
Purchaser, as issuing and paying agent, as provider of other backup facilities,
and may provide other services or facilities from time to time, the "Agent
-----
Roles"). Each of the parties hereto hereby acknowledges and consents to any and
-----
all Agent Roles, waives any objections it may have to any actual or potential
conflict of interest caused by any such Funding Agent acting as the Funding
Agent for its related CP Conduit Purchaser or as a related Committed Purchaser
or as a liquidity or credit support provider under such Conduit Purchaser's
commercial paper program and acting as or maintaining any of the Agent Roles,
and agrees that in connection with any Agent Role, such Funding Agent may take,
or refrain from taking, any action which it in its discretion deems appropriate.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
45
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
written.
UNITED STATES STEEL LLC, UNITED STATES STEEL LLC,
as initial Servicer as initial Servicer
By:/s/ ▇. ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇.▇. ▇▇▇▇▇▇▇
----------------- --------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇ Name: ▇.▇. ▇▇▇▇▇▇▇
Title: Vice President --------------------
Accounting & Finance Title:Assistant Treasurer
--------------------
Address:
United States Steel LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Assistant Treasurer -
Cash & Banking
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
U.S. STEEL RECEIVABLES LLC,
as Seller
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
--------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇
--------------------
Title:Vice President
--------------------
Address:
U.S. Steel Receivables LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Assistant Treasurer -
Cash & Banking
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
THE PURCHASER GROUPS:
LIBERTY STREET FUNDING CORP.,
as a CP Conduit Purchaser
By:
--------------------
Name:
--------------------
Title:
--------------------
Address:
Liberty Street Funding Corp.
c/o Global Securitization Services,
LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇.▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
THE BANK OF NOVA SCOTIA
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE BANK OF NOVA SCOTIA,
as a Committed Purchaser
for Liberty Street Funding Corp.
By: /s/ J. ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Name: J. ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Title: MANAGING DIRECTOR
--------------------
Address:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: $200,000,000
S-2
THE PURCHASER GROUPS:
LIBERTY STREET FUNDING CORP.,
as a CP Conduit Purchaser
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Title: President
--------------------
Address:
Liberty Street Funding Corp.
c/o Global Securitization Services,
LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
THE BANK OF NOVA SCOTIA
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE BANK OF NOVA SCOTIA,
as a Committed Purchaser
for Liberty Street Funding Corp.
By:
--------------------
Name:
--------------------
Title:
--------------------
Address:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: $200,000,000
▇-▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
as Funding Agent for Liberty
Street Funding Corp. and
The Bank of Nova Scotia
as Purchasers
By: /s/ J. ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Name: J. ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
Title: MANAGING DIRECTOR
--------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
JPMORGAN CHASE BANK, as attorney-in-fact
for DELAWARE FUNDING CORPORATION, as a CP
Conduit Purchaser
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
Title: Managing Director
--------------------
Address:
JPMorgan Chase Bank
Asset Finance Group
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JPMorgan Chase Bank
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S-4
JPMORGAN CHASE BANK
as Committed Purchaser for
DELAWARE FUNDING CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Managing Director
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Address:
JPMorgan Chase Bank
Asset Finance Group
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With a copy to:
JPMorgan Chase Bank
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Commitment:$200,000,000
S-5
JPMORGAN CHASE BANK
as Funding Agent for
Delaware Funding Corporation and
JPMorgan Chase Bank as Purchasers
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Managing Director
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Address:
JPMorgan Chase Bank
Asset Finance Group
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
JPMorgan Chase Bank
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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THE BANK OF NOVA SCOTIA,
as Collateral Agent
By: /s/ J. ▇▇▇▇ ▇▇▇▇▇▇▇
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Name: J. ▇▇▇▇ ▇▇▇▇▇▇▇
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Title: MANAGING DIRECTOR
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Address:
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Attention: ▇▇▇▇▇▇ ▇▇▇▇
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S-7
EXHIBIT I
DEFINITIONS
As used in the Agreement (including its Exhibits, Schedules and Annexes),
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).
Unless otherwise indicated, all Section, Annex, Exhibit and Schedule references
in the Exhibits, Annexes and Schedules are to Sections of and Annexes, Exhibits
and Schedules to the Agreement.
"Accounts" means, the Lock-Box Account(s), the Concentration Account and/or
--------
the Collection Account, as applicable.
"Adverse Claim" means a lien, security interest or other charge or
-------------
encumbrance, or any other type of preferential arrangement; it being understood
that any of the foregoing in favor of the Seller or the Collateral Agent (for
the benefit of the Purchasers) shall not constitute an Adverse Claim.
"Affected Person" has the meaning set forth in Section 1.9 of the
--------------- -----------
Agreement.
"Affiliate" means, as to any Person: (a) any Person that, directly or
---------
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a), except that, with respect to any CP Conduit
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Purchaser, Affiliate shall mean the holder(s) of its capital stock. For purposes
of this definition, control of a Person shall mean the power, direct or
indirect: (x) to vote 25% or more of the securities having ordinary voting power
for the election of directors of such Person, or (y) to direct or cause the
direction of the management and policies of such Person, in either case whether
by ownership of securities, contract, proxy or otherwise.
"Agreement" has the meaning set forth in the preamble.
---------
"Alternate Rate" for any Settlement Period for any Net Investment (or
--------------
portion thereof) funded by any Purchaser other than through the issuance of
Notes, means an interest rate per annum equal to: (a) 2.0% per annum above the
Eurodollar Rate for such Settlement Period, or, in the sole discretion of the
applicable Funding Agent (b) the Base Rate for such Settlement Period; provided,
--------
however, that the "Alternate Rate" for any day while a Termination Event exists
-------
shall be an interest rate equal to 3.00%
I-1
per annum above the Eurodollar Rate (or if for any reason, the Eurodollar Rate
is unavailable at such time, the Base Rate) in effect on such day.
"Assumption Agreement" has the meaning set forth in Section 1.14 of the
-------------------- ------------
Agreement.
"Attorney Costs" means and includes all reasonable fees and disbursements
---------------
of any external counsel, which fees, disbursements and costs shall be set forth
in reasonably detailed statements.
"Bankruptcy Code" means the United States Bankruptcy Reform Act of 1978 (11
---------------
U.S.C.Section.101, et seq.), as amended from time to time or any successor
statute.
"Base Rate" means, with respect to any Purchaser, for any day, a
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fluctuating interest rate per annum as shall be in effect from time to time,
which rate shall be at all times equal to the higher of:
(a) the rate of interest in effect for such day as publicly announced
from time to time by the applicable Funding Agent as its "reference rate".
Such "reference rate" is set by the applicable Funding Agent based upon
various factors, including the applicable Funding Agent's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above or
below such announced rate, and
(b) 0.50% per annum above the latest Federal Funds Rate.
"Benefit Plan" means any employee benefit pension plan as defined in
------------
Section 3(2) of ERISA in respect of which the Seller, any Originator or any
ERISA Affiliate is, or at any time during the immediately preceding six years
was, an "employer" as defined in Section 3(5) of ERISA.
"Business Day" means any day (other than a Saturday or Sunday) on which:
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(a) banks are not authorized or required to close in New York, New York and (b)
if this definition of "Business Day" is utilized in connection with the
Eurodollar Rate, dealings are carried out in the London interbank market.
"Capital" means, at any time, the sum of the aggregate outstanding amount
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of the Net Investment of each Purchaser at such time.
I-2
"Change in Control" means that USS ceases to own, directly or indirectly,
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100% of the capital stock of the Seller free and clear of all Adverse Claims.
"Closing Date" means November 28, 2001.
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"Collateral Agent" has the meaning set forth in the preamble to the
----------------
Agreement.
"Collection Account" means that certain bank account numbered 2520-18
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maintained at The Bank of Nova Scotia which is (i) identified as the "USS
---
Collection Account," (ii) pledged, on a first-priority basis, to the Collateral
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Agent pursuant to Section 1.2(d), and (iii) is governed by a Collection Account
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Agreement.
"Collection Account Agreement" means a letter agreement among the Seller,
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the Funding Agents and the Collection Account Bank, as the same may be amended,
supplemented, amended and restated, or otherwise modified from time to time in
accordance with the Agreement.
"Collection Account Bank" means the bank maintaining the Collection
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Account.
"Collections" means, with respect to any Pool Receivable: (a) all funds
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that are received by the Seller, the Servicer or any Originator in payment of
any amounts owed in respect of such Receivable (including purchase price,
finance charges, interest and all other charges), or applied to amounts owed in
respect of such Receivable (including insurance payments and net proceeds of the
sale or other disposition of repossessed goods or other collateral or property
of the related Obligor or any other Person directly or indirectly liable for the
payment of such Pool Receivable and available to be applied thereon), (b) all
Deemed Collections and (c) all other proceeds of such Pool Receivable.
"Commitment" means, with respect to any Committed Purchaser, at any time,
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the amount set forth as such Committed Purchaser's maximum purchase Commitment
below its signature to the Agreement or in any Assumption Agreement or Transfer
Supplement pursuant to which it becomes a party to the Agreement as a Committed
Purchaser, as such amount may be increased or reduced from time to time pursuant
to the Agreement and the other Transaction Documents.
"Commitment Expiry Date" initially means, for any Committed Purchaser,
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November 27, 2002, as such date may be extended from
I-3
time to time in the sole discretion of such Purchaser pursuant to Section 1.13
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of the Agreement.
"Committed Purchasers" has the meaning set forth in the preamble to the
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Agreement.
"Company Notes" has the meaning set forth in the Purchase and Sale
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Agreement.
"Concentration Account" means that certain bank account numbered 069-3695,
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maintained at Mellon Bank, N.A. which is (i) pledged on a first priority basis,
to the Collateral Agent pursuant to Section 1.2(d), and (ii) governed by the
Concentration Account Agreement.
"Concentration Account Agreement" means the blocked account agreement among
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the Seller, the Funding Agents and the Concentration Account Bank, as the same
may be amended, supplemented, amended and restated, or otherwise modified from
time to time in accordance with the Agreement.
"Concentration Account Bank" means the bank maintaining the Concentration
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Account.
"Concentration Percentage" means: (a) for any Group A Obligor, 12%, (b) for
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any Group B Obligor, 6%, (c) for any Group C Obligor, 3%, (d) for any Group D
Obligor, 3% and (e) if such Obligor is a Special Obligor, such percentage as has
been so designated in writing by the Funding Agents to the Seller as the
"Concentration Percentage" for such Obligor; provided, however, that the Funding
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Agents may, if the Rating Agency Condition is satisfied, approve higher
Concentration Percentages for selected Obligors.
"Concentration Reserve" means, at any time the aggregate Capital at such
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time multiplied by (a) the Concentration Reserve Percentage divided by (b) 1,
minus the Concentration Reserve Percentage at such time.
"Concentration Reserve Percentage" means, at any time, the largest of: (a)
--------------------------------
the sum of four largest Group D Obligor Percentages, (b) the sum of the two
largest Group C Obligor Percentages and (c) the largest Group B Obligor
Percentage.
"Conduit Assignee" shall mean, with respect to any CP Conduit Purchaser,
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any commercial paper conduit that issues commercial paper rated at least A-1 by
Standard & Poor's and P-1 by Moody's administered by the Funding Agent with
respect to such CP Conduit
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Purchaser and designated by such Funding Agent to accept an assignment from such
CP Conduit Purchaser of such CP Conduit Purchaser's rights and obligations
pursuant to Section 5.3 of the Agreement.
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"Contract" means, with respect to any Receivable, any and all contracts,
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instruments, agreements, leases, invoices, notes or other writings pursuant to
which such Receivable arises or that evidence such Receivable or under which an
Obligor becomes or is obligated to make payment in respect of such Receivable.
"CP Rate" means, for any CP Conduit Purchaser and for any Settlement Period
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for any Portion of Capital (a) the per annum rate equivalent to the weighted
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average cost (as determined by the applicable Funding Agent and which shall
include commissions of placement agents and dealers, incremental carrying costs
incurred with respect to Notes of such Person maturing on dates other than those
on which corresponding funds are received by such CP Conduit Purchaser, other
borrowings by such CP Conduit Purchaser (other than under any Program Support
Agreement) and any other costs associated with the issuance of Notes) of or
related to the issuance of Notes that are allocated, in whole or in part, by the
applicable Funding Agent to fund or maintain such Portion of Capital (and which
may be also allocated in part to the funding of other assets of such CP Conduit
Purchaser); provided, however, that if any component of such rate is a discount
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rate, in calculating the "CP Rate" for such Portion of Capital for such
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Settlement Period, the applicable Funding Agent shall for such component use the
rate resulting from converting such discount rate to an interest bearing
equivalent rate per annum; provided, further, that notwithstanding anything in
--- ----- -------- -------
the Agreement or the other Transaction Documents to the contrary, the Seller
agrees that any amounts payable to the Purchasers in respect of Discount for any
Settlement Period with respect to any Portion of Capital funded by such
Purchaser at the CP Rate shall include an amount equal to the portion of the
face amount of the outstanding Notes issued to fund or maintain such Portion of
Capital that corresponds to the portion of the proceeds of such Notes that was
used to pay the interest component of maturing Notes issued to fund or maintain
such Portion of Capital, to the extent that such Purchaser had not received
payments of interest in respect of such interest component prior to the maturity
date of such maturing Notes (for purposes of the foregoing, the "interest
component" of Notes equals the excess of the face amount thereof over the net
proceeds received by such Purchaser from the issuance of Notes, except that if
such Notes are issued on an interest-bearing basis its "interest component" will
equal the amount of interest accruing on such Notes through
I-5
maturity) or (b) or any other rate designated as the "CP Rate" for such CP
Conduit Purchaser in an Assumption Agreement or Transfer Supplement pursuant to
which such Person becomes a party as a CP Conduit Purchaser to the Agreement, or
any other writing or agreement provided by such CP Conduit Purchaser to the
Seller, the Servicer and Funding Agents from time to time.
"CP Conduit Purchaser" has the meaning set forth in the preamble to the
--------------------
Agreement.
"CP Conduit Purchaser Termination Event" means, with respect to any CP
--------------------------------------
Conduit Purchaser, any of such CP Conduit Purchaser's Program Support Providers
(or the entity administering or servicing such CP Conduit Purchaser's commercial
paper program) shall have given it notice that an event of default has occurred
and is continuing under their respective commercial paper program agreements
with such CP Conduit Purchaser and/or that such event of default requires such
CP Conduit Purchaser to stop issuing Notes (or otherwise obtaining funds from
any such source) to fund or maintain its interest in the Purchased Interest.
"Credit and Collection Policy" means, as the context may require, those
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receivables credit and collection policies and practices of the Seller or any
Originator in effect on the Closing Date and described in Schedule I to the
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Agreement, as modified in compliance with the Agreement.
"Daily Report" has the meaning set forth in Section 2(j)(vii) of Exhibit IV
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to the Agreement.
"Days' Sales Outstanding" means, for any calendar month, an amount computed
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as of the last day of such month equal to: (a) the Outstanding Balance of all
Pool Receivables as of the last day of such month, divided by (b) (i) the
aggregate amount of new Receivables generated by the Originators during the
three calendar months ended on or before the last day of such month, divided by
(ii) 90.
"Debt" means, without duplication: (a) indebtedness for borrowed money, (b)
----
obligations evidenced by bonds, debentures, notes or other similar instruments,
(c) obligations to pay the deferred purchase price of property or services, (d)
obligations as lessee under leases that shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, and (e) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor
I-6
against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (a) through (d).
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"Deemed Collections" has the meaning set forth in Section 1.6 of the
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Agreement.
"Default Ratio" means the ratio (expressed as a percentage and rounded to
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the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the
last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance (excluding credit balances) of all Pool Receivables that became
Defaulted Receivables during such month, by (b) the aggregate amount of
Receivables generated by the Originators during the calendar month that is three
calendar months prior to such calendar month.
"Defaulted Receivable" means a Receivable:
--------------------
(a) as to which any payment, or part thereof, remains unpaid for more
than 60 days from the original due date for such payment, or
(b) without duplication (i) as to which an Event of Bankruptcy shall
have occurred with respect to the Obligor thereof or any other Person
obligated thereon or owning any Related Security with respect thereto, or
(ii) which has been, or, consistent with the Credit and Collection Policy
would be, written off the Seller's books as uncollectible.
"Delinquency Ratio" means the ratio (expressed as a percentage and rounded
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to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of
the last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that were Delinquent Receivables on such day by
(b) the Net Receivables Pool Balance on such day.
"Delinquent Receivable" means a Receivable (other than a Defaulted
---------------------
Receivable) as to which any payment, or part thereof, remains unpaid for more
than 30 days from the original due date for such payment.
"Dilution Horizon" means, for any calendar month, the ratio (expressed as a
----------------
percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded
upward) computed as of the last day of each calendar month by dividing: (a) the
aggregate amount of Receivables generated by the Originators during the last
calendar month by (b) the Net Receivable Pool Balance on such day.
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"Dilution Ratio" means the ratio (expressed as a percentage and rounded to
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the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as of
the last day of each calendar month by dividing: (a) the aggregate amount of
payments made or owed by the Seller pursuant to Section 1.6(a)(i) of the
-----------------
Agreement during such calendar month by (b) the aggregate amount of Receivables
generated by the Originators during the immediately preceding calendar month.
"Dilution Reserve" means, on any date, an amount equal to (a) the Capital
----------------
at the close of business of the Servicer on such date multiplied by (b)(i) the
Dilution Reserve Percentage on such date divided by (ii) 1.0 minus the Dilution
Reserve Percentage on such date.
"Dilution Reserve Percentage" means on any date, the greater of: (a) 3% and
---------------------------
(b) the product of (i) the Dilution Horizon multiplied by (ii) the sum of (x)
the Reserve Adjustment Factor times the average of the Dilution Ratios for the
twelve most recent calendar months and (y) the Spike Factor.
"Discount" means:
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(a) for the Portion of Capital for any Settlement Period to the extent
the applicable Purchaser will be funding such Portion of Capital during
such Settlement Period through the issuance of Notes:
CPR x C x ED/360
(b) for the Portion of Capital for any Settlement Period to the extent
the Issuer will not be funding such Portion of Capital during such
Settlement Period through the issuance of Notes:
AR x C x ED/Year + TF
where:
AR = the applicable Alternate Rate for the Portion of Capital for
such Settlement Period,
C = the relevant Portion of Capital during such Settlement Period,
CPR = the applicable CP Rate for the Portion of Capital,
I-8
ED = the actual number of days during such Settlement Period,
Year = if such Portion of Capital is funded based upon: (i) the
Eurodollar Rate, 360 days, and (ii) the Base Rate, 365 or 366
days, as applicable, and
TF = the Termination Fee, if any, for the Portion of Capital for
such Settlement Period;
provided, however, that during the occurrence and continuance of a Termination
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Event, the CP Rate shall not available and Discount for the Portion of Capital
shall be determined for each day in a Settlement Period using a rate equal to
2.00% per annum above the Eurodollar Rate (or, if for any reason, the Eurodollar
Rate is not then available, the Base Rate) in effect on such day; provided,
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further, that no provision of the Agreement shall require the payment or permit
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the collection of Discount in excess of the maximum permitted by applicable law;
and provided further, that Discount for the Portion of Capital shall not be
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considered paid by any distribution to the extent that at any time all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason.
"Eligible Receivable" means, at any time, a Pool Receivable:
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(a) the Obligor of which is (i) a United States resident,(ii) not a
government or a governmental subdivision, affiliate or agency,(iii) not
subject to any action of the type described in paragraph (f) of Exhibit V
---------
to the Agreement and (iv) not an Affiliate of the Seller or any Originator
or any Affiliate of the Seller or any Originator (other than a Joint
Venture Obligor),
(b) that is denominated and payable only in U.S. dollars in the United
States,
(c) that does not have a stated maturity which is more than 30 days
after the original invoice date of such Receivable; provided, however, that
-------- -------
up to 15% of the aggregate Outstanding Balance of all Pool Receivables may
consist of otherwise Eligible Receivables that have a stated maturity of
greater than 30 days (but not more than 60 days) after the original invoice
date,
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(d) that arises under a duly authorized Contract for the sale and
delivery of goods and services in the ordinary course of an Originator's
business,
(e) that arises under a duly authorized Contract that is in full force
and effect and that is a legal, valid and binding obligation of the related
Obligor, enforceable against such Obligor in accordance with its terms,
(f) that conforms in all material respects with all applicable laws,
rulings and regulations in effect,
(g) that is not the subject of any asserted dispute, offset, hold back
defense, Adverse Claim or other claim,
(h) that satisfies all applicable requirements of the Credit and
Collection Policy,
(i) that has not been modified, waived or restructured since its
creation, except as permitted pursuant to Section 4.2 of the Agreement,
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(j) in which the Seller owns good and marketable title, free and clear
of any Adverse Claims, and that is freely assignable by the Seller
(including without any consent of the related Obligor),
(k) for which the Collateral Agent (for the benefit of the Purchasers)
shall have a valid and enforceable undivided percentage ownership or
security interest, to the extent of the Purchased Interest, and a valid and
enforceable first priority perfected security interest therein and in the
Related Security and Collections with respect thereto, in each case free
and clear of any Adverse Claim,
(l) that constitutes an account as defined in the UCC, and that is not
evidenced by instruments or chattel paper,
(m) that is not a Defaulted Receivable,
(n) for which none of the Seller, the Servicer or any Originator
thereof has established any offset arrangements with the related Obligor,
(o) for which Defaulted Receivables of the related Obligor do not
exceed 25% of the Outstanding Balance of all such Obligor's Receivables,
and
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(p) that represents amounts earned and payable by the Obligor that are
not subject to the performance of additional services by the Seller, the
Servicer or any Originator.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"ERISA Affiliate" means: (a) any corporation that is a member of the same
---------------
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Seller, any Originator or the Servicer, (b) a
trade or business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Internal Revenue Code) with the Seller, any
Originator or Servicer, or (c) a member of the same affiliated service group
(within the meaning of Section 414(m) of the Internal Revenue Code) as the
Seller, Servicer, any Originator or any corporation described in clause (a) or
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any trade or business described in clause (b).
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"Eurodollar Rate" means, for any Purchaser and for any Settlement Period,
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(a) an interest rate per annum (rounded upward to the nearest 1/16th of 1%)
determined pursuant to the following formula:
LIBOR
-----------------------------------------
100% - Eurodollar Rate Reserve Percentage
where "Eurodollar Rate Reserve Percentage" means, for any Settlement Period, the
----------------------------------
maximum reserve percentage (expressed as a decimal, rounded upward to the
nearest 1/100th of 1%) in effect on the date LIBOR for such Settlement Period is
determined under regulations issued from time to time by the Federal Reserve
Board for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
"Eurocurrency" funding (currently referred to as "Eurocurrency liabilities")
having a term comparable to such Settlement Period, or (b) any other rate
designated as the "Eurodollar Rate" for such Purchaser in an Assumption
Agreement or Transfer Supplement pursuant to which such Person becomes a party
to the Agreement as a Purchaser, or any other writing or agreement provided by
such Purchaser to the Seller, the Servicer and the Funding Agents from time to
time.
I-11
"Event of Bankruptcy" means (a) any case, action or proceeding before any
-------------------
court or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors or (b) any general assignment for the benefit of creditors of a Person,
composition, marshaling of assets for creditors of a Person, or other similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each of cases (a) and (b) undertaken under U.S. Federal, state
or foreign law, including the U.S. Bankruptcy Code.
"Excess Concentration" means the sum of the amounts by which the
--------------------
Outstanding Balance of Eligible Receivables of each Obligor then in the
Receivables Pool exceeds an amount equal to: (a) the Concentration Percentage,
for such Obligor, multiplied by (b) the Outstanding Balance of all Eligible
Receivables then in the Receivables Pool.
"Excluded Obligor" means any of: (a) USS--POSCO Industries, (b) Metro
----------------
Metals Corporation, (c) TPSS Acquisition Corporation, (d) Clairton 1314B
Partnership, L.P. or (e) any other Person, if such Person is approved in writing
as an "Excluded Obligor" by the Funding Agents.
"Facility Limit" means at any time, the aggregate of the Commitments of
--------------
each Committed Purchaser at such time (which shall initially be $400,000,000),
as such amount may be reduced pursuant to the Agreement. References to the
unused portion of the Facility Limit shall mean, at any time, the Facility Limit
minus the then outstanding Capital.
"Facility Termination Date" means the earliest to occur of: (a) November
-------------------------
28, 2006, (b) with respect to any Committed Purchaser (and the CP Conduit
Purchasers related thereto), the then scheduled Commitment Expiry Date with
respect to such Purchaser,(c) the date determined pursuant to Section 2.2 of the
-----------
Agreement, (d) the date the Facility Limit reduces to zero pursuant to Section
-------
1.1(b) of the Agreement and (e) with respect to any CP Conduit Purchaser and the
------
related Committed Purchasers, the date that the commitments of all of such
Purchaser's Liquidity Banks terminate under the applicable Liquidity Agreement
(which date shall initially be November 27, 2002).
"Federal Funds Rate" means, with respect to any Purchaser, for any day, the
------------------
per annum rate set forth in the weekly statistical release designated as
H.15(519), or any successor publication, published by the Federal Reserve Board
(including any such
I-12
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)." If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective Rate." If
----------------------------
on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day will be
the arithmetic mean as determined by the applicable Funding Agent of the rates
for the last transaction in overnight Federal funds arranged before 9:00 a.m.
(New York time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the applicable Funding Agent.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
---------------------
System, or any entity succeeding to any of its principal functions.
"Fee Letter" has the meaning set forth in Section 1.7 of the Agreement.
---------- -----------
"Fees" means the fees payable by the Seller pursuant to each Fee Letter.
----
"GAAP" means the generally accepted United States accounting principles
----
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors and successors from time to time.
"Governmental Authority" means any nation or government, any state or other
----------------------
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any court, and any Person owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Group A Obligor" means any Obligor with a short-term rating of at least:
---------------
(a) "A-1" by Standard & Poor's, or if such Obligor does not have a short-term
rating from Standard & Poor's, a rating of "A+" or better by Standard & Poor's
on its long-term senior unsecured and uncredit-enhanced debt securities, and (b)
---
"P-1" by Moody's, or if such Obligor does not have a short-term rating from
▇-▇▇
▇▇▇▇▇'▇, "▇▇" or better by Moody's on its long-term senior unsecured and
uncredit-enhanced debt securities.
"Group B Obligor" means an Obligor, not a Group A Obligor, with a
---------------
short-term rating of at least: (a) "A-2" by Standard & Poor's, or if such
Obligor does not have a short-term rating from Standard & Poor's, a rating of
"BBB+" to "A" by Standard & Poor's on its long-term senior unsecured and
uncredit-enhanced debt securities, and (b) "P-2" by Moody's, or if such Obligor
---
does not have a short-term rating from Moody's, "Baa1" to "A2" by Moody's on its
long-term senior unsecured and uncredit-enhanced debt securities.
"Group B Obligor Percentage" means, at any time, for each Group B Obligor,
--------------------------
the percentage equivalent of: (a) the aggregate Outstanding Balance of the
Eligible Receivables of such Group B Obligor less any Excess Concentrations of
such Obligor, divided by (b) the aggregate Outstanding Balance of all Eligible
Receivables at such time. "Group C Obligor" means an Obligor, not a Group A
Obligor or Group B Obligor, with a short-term rating of at least: (a) "A-3" by
Standard & Poor's, or if such Obligor does not have a short-term rating from
Standard & Poor's, a rating of "BBB-" to "BBB" by Standard & Poor's on its
long-term senior unsecured and uncreditenhanced debt securities, and (b) "P-3"
---
by Moody's, or if such Obligor does not have a short-term rating from Moody's,
"Baa3" to "Baa2" by Moody's on its long-term senior unsecured and
uncreditenhanced debt securities."
"Group C Obligor Percentage" means, at any time, for each Group C Obligor,
--------------------------
the percentage equivalent of: (a) the aggregate Outstanding Balance of the
Eligible Receivables of such Group C Obligor less any Excess Concentrations of
such Obligor, divided by (b) the aggregate Outstanding Balance of all Eligible
Receivables at such time.
"Group D Obligor" means any Obligor that is not a Group A Obligor, Group B
---------------
Obligor or Group C Obligor.
"Group D Obligor Percentage" means, at any time, for each Group D Obligor:
--------------------------
(a) the aggregate Outstanding Balance of the Eligible Receivables of such Group
D Obligor less any Excess Concentrations of such Obligor, divided by (b) the
aggregate Outstanding Balance of all Eligible Receivables at such time.
I-14
"Incremental Transfer" has the meaning set forth in Section 1.2 of the
-------------------- -----------
Agreement.
"Indemnified Amounts" has the meaning set forth in Section 3.1 of the
------------------- -----------
Agreement.
"Indemnified Party" has the meaning set forth in Section 3.1 of the
----------------- -----------
Agreement.
"Intercreditor Agreement" means that certain Intercreditor Agreement dated
-----------------------
as of the date hereof, among The Bank of Nova Scotia, as Receivables Collateral
Agent and as a Funding Agent, JPMorgan Chase Bank, as Lender Agent and as a
Funding Agent, U.S. Steel Receivables LLC and United States Steel LLC, as the
same may be amended, supplemented or otherwise modified from time to time.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
---------------------
from time to time, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to sections of the Internal Revenue Code also refer to any successor
sections.
"Joint Venture Obligor" means: Pro-Tec Coating Company and each other
---------------------
Person notified from time to time by the Seller to the Funding Agents, if such
Person is approved in writing as "Joint Venture Obligors" by the Funding Agents
and the Rating Agency Condition is satisfied with respect thereto.
"Joint Venture Obligor Percentage" means, at any time, the lesser of (a) 5%
--------------------------------
and (b) the then-current percentage (as selected by the Seller as of the first
day of each calendar month, but not to exceed 5%) of Receivables included in the
aggregate Outstanding Balance of all Eligible Receivables at such time, the
Obligor of which is Pro-Tec Coating Company.
"LIBOR" means, with respect to any Purchaser, the rate of interest per
-----
annum determined by the applicable Funding Agent to be the arithmetic mean
(rounded upward to the nearest 1/16th of 1%) of the rates of interest per annum
determined by the applicable Funding Agent as the rate of interest at which
dollar deposits in the approximate amount of the Portion of Capital to be funded
at the Eurodollar Rate during such Settlement Period would be offered by major
banks in the London interbank market to such Funding Agent at its request at or
about 11:00 a.m. (London time) on the second Business Day before the
commencement of such Settlement Period.
I-15
"Liquidity Agreement" means, with respect to each CP Conduit Purchaser, an
-------------------
agreement pursuant to which certain Liquidity Banks agree to provide liquidity
support to such CP Conduit Purchaser in connection with the Notes issued to fund
or maintain its Net Investment hereunder, as the same may be amended,
supplemented or otherwise modified from time to time.
"Liquidity Bank" has the meaning set forth in Section 5.3(b) of the
-------------- --------------
Agreement.
"Lock-Box Account" means an account maintained at a bank or other financial
----------------
institution for the purpose of receiving Collections.
"Lock-Box Bank" means any of the banks or other financial institutions
-------------
holding one or more Lock-Box Accounts.
"Lock-Box Letter" means a letter, in form and substance reasonably
---------------
acceptable to the Funding Agents, which provides the relevant Lock-Box Bank with
notice of the Purchasers' interest in the amounts on deposit in the related
Lock-Box Account and acknowledges control of such account by the Collateral
Agent.
"Loss Reserve" means, on any date, an amount equal to (a) the Capital at
------------
the close of business of the Servicer on such date multiplied by (b)(i) the Loss
Reserve Percentage on such date divided by (ii) 1 minus the Loss Reserve
Percentage on such date.
"Loss Reserve Percentage" means, on any date, the greater of: (a) the sum
-----------------------
of 12% and the Joint Venture Obligor Percentage at such time, and (b) (i) the
product of (x) the Reserve Adjustment Factor times the highest average of the
Default Ratios for any three consecutive calendar months during the twelve most
recent calendar months multiplied by (y) the aggregate amount of Receivables
generated by the Originators during (A) if, pursuant to Section 2(j) of Exhibit
------------ -------
IV to the Agreement, the Servicer is only required to provide a Monthly Report,
--
the four most recent calendar months, (B) if, pursuant to Section 2(j) of
------------
Exhibit IV to the Agreement, the Servicer is required to provide a Weekly
----------
Report, the sum of the three most recent calendar months, plus 0.25, times the
fourth most recent calendar month and (C) if, pursuant to Section 2(j) of
------------
Exhibit IV to the Agreement, the Servicer is required to provide a Daily Report,
----------
the three most recent calendar months, multiplied by (z) the Payment Terms
Factor at such time divided by (ii) the Net Receivables Pool Balance on such
date.
I-16
"Material Adverse Effect" means, relative to any Person with respect to any
-----------------------
event or circumstance, a material adverse effect on:
(a) the ability of any such Person to perform its obligations under
the Agreement or any other Transaction Document to which it is a party,
(b) the validity or enforceability of any other Transaction Document,
or the validity, enforceability or collectability of a material portion of
the Pool Receivables, or
(c) the status, perfection, enforceability or priority of the
Collateral Agent's or the Seller's interest in the Pool Assets.
"Monthly Report" means a report, in substantially the form of Annex B to
--------------
the Agreement, furnished to each Funding Agent pursuant to the Agreement.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"Net Investment" means, for each Purchaser, the amount paid to the Seller
--------------
in respect of the Purchased Interest by such Purchaser pursuant to the
Agreement, or such amount divided or combined in order to determine the Discount
applicable to any Portion of Capital, in each case reduced from time to time by
Collections distributed and applied on account of such Net Investment pursuant
to Section 1.4, 1.5 or 1.6 of the Agreement; provided, that if such Net
----------- --- --- --------
Investment shall have been reduced by any distribution, and thereafter all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason, such Net Investment shall be increased by the amount of such rescinded
or returned distribution as though it had not been made.
"Net Receivables Pool Balance" means, at any time: (a) the Outstanding
----------------------------
Balance of Eligible Receivables then in the Receivables Pool, minus (b) the
Excess Concentration.
"Notes" means short-term promissory notes issued, or to be issued, by any
-----
CP Conduit Purchaser to fund its investments in accounts receivable or other
financial assets.
"Obligor" means, with respect to any Receivable, the Person obligated to
-------
make payments pursuant to the Contract relating to such Receivable.
I-17
"Originators" has the meaning set forth in the Purchase and Sale Agreement.
-----------
"Outstanding Balance" of any Receivable at any time means the then
-------------------
outstanding principal balance thereof.
"Payment Terms Factor" means, at any time (as calculated by the Servicer on
--------------------
the last day of each calendar quarter) (a) the sum of (i) the weighted average
payment terms (stated as the number of days from the respective original invoice
dates therefor, for which payment, (as established by the terms of the relevant
Contracts) of the outstanding Receivables at the time of such calculation, must
be made), plus (ii) 60, divided by (b) 90; it being understood that for all
purposes of the Agreement (including the calculation of the Loss Reserve
Percentage) the "Payment Terms Factor" shall in no event be less than 1.0. The
Payment Terms Factor shall remain constant from each quarterly date on which
such factor is calculated until the next such quarterly calculation date.
"Permitted Investments" shall mean:
---------------------
(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from Standard & Poor's and Moody's; and
(c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, BNS or any domestic office of any commercial bank organized under
the laws of the United States of America or any State thereof that has a
combined capital and surplus and undivided profits of not less than
$250,000,000.
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
I-18
"Pool Assets" has the meaning set forth in Section 1.2(d) of the Agreement.
----------- --------------
"Pool Receivable" means a Receivable in the Receivables Pool.
---------------
"Portion of Capital" means, with respect to any Purchaser, any separate
------------------
portion of such Purchaser's Net Investment being funded or maintained by such
Purchaser (or its successors or permitted assigns) by reference to a particular
interest rate basis.
"Program Support Agreement" means and includes, with respect to any
-------------------------
Purchaser, each Liquidity Agreement and any other agreement entered into by any
Program Support Provider providing for: (a) the issuance of one or more letters
of credit for the account of such Purchaser, (b) the issuance of one or more
surety bonds for which such Purchaser is obligated to reimburse the applicable
Program Support Provider for any drawings thereunder, (c) the sale by such
Purchaser to any Program Support Provider of the Purchased Interest (or portions
thereof) and/or (d) the making of loans and/or other extensions of credit to
such Purchaser in connection with such Purchaser's receivables-securitization
program contemplated in the Agreement, together with any letter of credit,
surety bond or other instrument issued thereunder (but excluding any
discretionary advance facility provided by the applicable Funding Agent).
"Program Support Provider" means and includes any Liquidity Bank and any
------------------------
other Person (other than any customer of the applicable CP Conduit Purchaser)
now or hereafter extending credit or having a commitment to extend credit to or
for the account of, or to make purchases from, the Issuer pursuant to any
Program Support Agreement.
"Purchase and Sale Agreement" means, that certain Purchase and Sale
---------------------------
Agreement dated as of November 28, 2001, among the Seller, USS, as initial
Servicer and each of the Originators from time to time party hereto, as such
agreement may be amended, supplemented or otherwise modified from time to time.
"Purchased Interest" means, at any time, the undivided percentage ownership
------------------
interest of the Purchasers in: (a) each and every Pool Receivable now existing
or hereafter arising, (b) all Related Security with respect to such Pool
Receivables and (c) all
I-19
Collections with respect to, and other proceeds of, such Pool Receivables and
Related Security. Such undivided percentage interest shall be computed as:
Capital + Total Reserves
----------------------------
Net Receivables Pool Balance
The Purchased Interest shall be determined from time to time pursuant to Section
-------
1.3 of the Agreement.
---
"Purchaser" means, whether singly or in the aggregate, the CP Conduit
---------
Purchasers and the Committed Purchasers.
"Rating Agency Condition" means, with respect to any event or occurrence,
-----------------------
receipt by the applicable CP Conduit Purchaser (if required by the documents
governing its commercial paper program) of written confirmation from Standard &
Poor's and Moody's that such event or occurrence shall not cause the rating on
the then outstanding Notes to be downgraded or withdrawn.
"Receivable" means any indebtedness and other obligations owed to the
----------
Seller or any Originator by, or any right of the Seller or any Originator to
payment from or on behalf of, an Obligor (other than an Excluded Obligor)
whether constituting an account, chattel paper, instrument or general intangible
arising in connection with the sale of goods or the rendering of services by any
Originator or the Seller and includes the obligation to pay any finance charges,
fees and other charges with respect thereto; provided, however, that the term
-------- -------
"Receivable" shall not include any such indebtedness or right to payment arising
in connection with the sale of goods by the Seller or any such Originator that
are shipped by or on behalf of such Originator to or at the direction of the
related Obligor to an ultimate destination that is not a State within the United
States. Indebtedness and other obligations arising from any one transaction,
including indebtedness and other obligations represented by an individual
invoice or agreement, shall constitute a Receivable separate from a Receivable
consisting of the indebtedness and other obligations arising from any other
transaction.
"Receivables Pool" means, at any time, all of the then outstanding
----------------
Receivables purchased by the Seller or contributed to the Seller pursuant to the
Purchase and Sale Agreement.
I-20
"Related Security" means, with respect to any Receivable:
----------------
(a) all of the Seller's and the applicable Originator's interest in
any goods (including returned goods), and documentation of title evidencing
the shipment or storage of any goods (including returned goods), relating
to any sale giving rise to such Receivable,
(b) all instruments and chattel paper that may evidence such
Receivable,
(c) all other security interests or liens and property subject thereto
from time to time purporting to secure payment of such Receivable, whether
pursuant to the Contract related to such Receivable or otherwise, together
with all UCC financing statements or similar filings relating thereto,
(d) all of the Seller's and the applicable Originator's rights,
interests and claims under the Contracts and all guaranties, indemnities,
insurance and other agreements (including the related Contract) or
arrangements of whatever character from time to time supporting or securing
payment of such Receivable or otherwise relating to such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
and
(e) all of the Seller's rights, interests and claims under the
Purchase and Sale Agreement.
"Reserve Adjustment Factor" means (i) if the long-term senior unsecured and
-------------------------
uncredit-enhanced debt rating of USS is equal to at least BB- by Standard &
Poor's and Ba3 by Moody's, 2 and (ii) if the long-term senior unsecured and
uncredit-enhanced debt rating of USS is lower than BB- by Standard & Poor's or
Ba3 by Moody's, 2.5.
"Seller" has the meaning set forth in the preamble to the Agreement.
------
"Servicer" has the meaning set forth in the preamble to the Agreement.
--------
"Servicing Fee" shall mean the fee referred to in Section 4.6 of the
------------- -----------
Agreement.
"Servicing Fee Amount" at any time means the sum of (a) the then accrued
--------------------
and unpaid Servicing Fee plus (b) the product of (i) the Outstanding Balance of
Pool Receivables at such time, times
-----
I-21
(ii) the product of (x) the Servicing Fee Rate multiplied by (y) a fraction, the
numerator of which is 1.5 times the Days' Sales Outstanding (calculated on the
last day of the most recent preceding calendar month) and the denominator of
which is 360.
"Servicing Fee Rate" shall mean the per annum rate payable pursuant to
------------------
Section 4.6 to any Servicer that becomes a successor Servicer hereunder.
-----------
"Settlement Date" means (a) prior to the Facility Termination Date, the
---------------
last day of each calendar month (or if such day is not a Business Day, then the
next following Business Day) and (b) on and after the Facility Termination Date,
each day selected from time to time by the Funding Agents (it being understood
that the Funding Agents may select such Settlement Date to occur as frequently
as daily), or, in the absence of any such selection, the day which would be the
Settlement Date pursuant to clause (a) of this definition.
----------
"Settlement Period" for each Portion of Capital means: (a) before the
-----------------
Facility Termination Date: (i) initially the period commencing on (and
including) the date of a purchase pursuant to Section 1.2 of the Agreement and
-----------
ending on (but not including) the next Settlement Date, and (ii) thereafter,
each period commencing on such Settlement Date and ending on (but not including)
the next Settlement Date, and (b) on and after the Facility Termination Date,
such period (including a period of one day) as shall be selected from time to
time by the Funding Agents or, in the absence of any such selection, each period
of 30 days from the last day of the preceding Settlement Period.
"Special Obligor" means an Obligor, so designated in writing by the Funding
---------------
Agents and set forth on Schedule IV to the Agreement, and with respect to which
-----------
each of Moody's and Standard & Poor's shall have provided a notice in writing to
each Funding Agent (if required by the documents governing the commercial paper
program of such Funding Agent's related CP Conduit Purchaser) to the effect that
the inclusion of such Obligor as a Special Obligor with the proposed
Concentration Percentage will not result in the downgrading or withdrawal of
such rating agencies' current rating of such related CP Conduit Purchaser's
Notes; it being understood that (i) if the short-term debt rating any such
Special Obligor by either Moody's or Standard & Poor's shall cease to be at
least equal to the rating assigned by such rating agency to such related CP
Conduit Purchaser's Notes, such Obligor shall cease to be a Special Obligor
under the Agreement, (ii) the Seller may request from time to time that the
Funding Agents designate additional
I-22
Obligors as Special Obligors and (iii) if, at any time, the long-term debt
rating of General Motors Corporation falls below BBB+ by Standard & Poor's or A3
by Moody's, General Motors Corporation shall cease to be a Special Obligor under
the Agreement.
"Spike Factor" means on any date, the product of (i) the positive
------------
difference, if any, between: (a) the highest Dilution Ratio for any calendar
month during the twelve most recent calendar months and (b) the arithmetic
average of the Dilution Ratios for such twelve months, times (ii) (a) the
-----
highest Dilution Ratio for any calendar month during the twelve most recent
calendar months, divided by (b) the arithmetic average of the Dilution Ratios
------- --
for such twelve months.
"Standard & Poor's" means Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
-----------------
Companies, Inc.
"Subsidiary" means, as to any Person, a corporation, partnership, limited
----------
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.
"Termination Day" means: (a) each day on which the conditions set forth in
---------------
Section 2 of Exhibit II to the Agreement are not satisfied or (b) each day that
----------
occurs on or after the Facility Termination Date.
"Termination Event" has the meaning specified in Exhibit V to the
----------------- ---------
Agreement.
"Termination Fee" means, for any Settlement Period during which a
---------------
Termination Day occurs, the amount, if any, by which: (a) the additional
Discount (calculated without taking into account any Termination Fee or any
shortened duration of such Settlement Period pursuant to the definition thereof)
that would have accrued during such Settlement Period on the reductions of the
Net Investment of any Purchaser relating to such Settlement Period had such
reductions not been made, exceeds (b) the income, if any, received by the
applicable Purchaser from investing the proceeds of such reductions of Capital,
as determined by the applicable Funding
I-23
Agent, which determination shall be binding and conclusive for all purposes,
absent manifest error.
"Total Reserve Factor" means (i) if the long-term senior unsecured and
--------------------
uncredit-enhanced debt rating of USS is equal to at least B+ by Standard &
Poor's and B1 by Moody's, 1, (ii) if the long-term senior unsecured and
---
uncredit-enhanced debt rating of USS is lower than B+ (but not lower than B) by
Standard & Poor's or B1 (but not lower than B2) by Moody's, 1.5, and (ii) if the
--
long-term senior unsecured and uncredit-enhanced debt rating of USS is lower
than B by Standard & Poor's or B2 by Moody's, 2.
--
"Total Reserves" means, at any time, an amount equal to the product of (a)
--------------
the Total Reserve Factor at such time, times (b) the sum of (i) the Yield
-----
Reserve, plus (ii) the Servicing Fee Amount, plus (iii) the greater of (x) the
sum of the Loss Reserve plus Dilution Reserve and (y) the Concentration Reserve.
"Transaction Documents" means the Agreement, the Lock-Box Letter(s), the
---------------------
Concentration Account Agreement and the Collection Account Agreement, each Fee
Letter, the Purchase and Sale Agreement, any applicable Company Notes and all
other certificates, instruments, UCC financing statements, reports, notices,
agreements and documents executed or delivered under or in connection with the
Agreement, in each case as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the Agreement.
"Transfer" means any Incremental Transfer or reinvestment under the terms
--------
of the Agreement.
"Transfer Price" the amount requested from the Purchasers by the Seller in
--------------
connection with any Incremental Transfer.
"Transfer Supplement" has the meaning set forth in Section 6.3(d) of the
------------------- --------------
Agreement.
"UCC" means the Uniform Commercial Code as from time to time in effect in
---
the applicable jurisdiction.
"Unmatured Termination Event" means an event that, with the giving of
---------------------------
notice or lapse of time, or both, would constitute a Termination Event.
"USS Credit Agreement" means that certain Credit Agreement (as amended
--------------------
through the date hereof and as amended, supplemented or otherwise modified from
time to time), among USS, as borrower
I-24
JPMorgan Chase Bank, as administrative agent and collateral agent and the
various other agents and the lenders (including certain of the Purchasers and/or
their Affiliates) from time to time party thereto.
"USS Security Agreement" means the Security Agreement (as amended through
----------------------
the date hereof and as amended, supplemented or otherwise modified from time to
time), between USS and JPMorgan Chase Bank, as collateral agent, executed in
connection with the USS Credit Agreement.
"USX Corporation" means USX Corporation, a Delaware corporation.
---------------
"Weekly Report" has the meaning set forth in Section 2(j)(vii) of Exhibit
------------- -------
IV to the Agreement.
--
"Yield Reserve" means, at any time:
-------------
( BR x 1.5 (DSO) x Capital)
-- ---
360
where:
BR = the Base Rate in effect at such time, and
DSO = Days' Sales Outstanding.
Other Terms. All accounting terms not specifically defined herein shall be
-----------
construed in accordance with GAAP. All terms used in Article 9 of the UCC in the
State of New York, and not specifically defined herein, are used herein as
defined in such Article 9. Unless the context otherwise requires, "or" means
"and/or," and "including" (and with correlative meaning "include" and
"includes") means including without limiting the generality of any description
preceding such term.
I-25
EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The Initial Purchase under
----------------------------------------
this Agreement is subject to the following conditions precedent that the Funding
Agents shall have received on or before the date of such purchase, each in form
and substance (including the date thereof) satisfactory to the Funding Agents:
(a) A counterpart of the Agreement, the other Transaction Documents and the
Intercreditor Agreement duly executed by the parties thereto.
(b) Certified copies of: (i) the resolutions of the Board of Directors of
each of the Seller and Servicer authorizing the execution, delivery and
performance by it, of the Agreement and the other Transaction Documents to which
it is a party; (ii) all documents evidencing other necessary action and
governmental approvals, if any, with respect to the Agreement and the other
Transaction Documents and (iii) the organizational documents of such Person.
(c) A certificate of the Secretary or Assistant Secretary of each of the
Seller and Servicer certifying the names and true signatures of its officers who
are authorized to sign the Agreement and the other Transaction Documents. Until
the Funding Agents receive a subsequent incumbency certificate from such Person,
the Funding Agents shall be entitled to rely on the last such certificate
delivered.
(d) Copies of proper financing statements, duly filed on or before the date
of such initial purchase under the UCC of all jurisdictions that either Funding
Agent may deem necessary or desirable in order to perfect the interests of the
Collateral Agent contemplated by the Agreement.
(e) Copies of proper financing statements, if any, necessary to release all
security interests and other rights of any Person in the Receivables, Contracts
or Related Security previously granted by the Seller or any Originator.
(f) Completed UCC search reports, dated on or shortly before the date of
the initial purchase hereunder, listing the financing statements filed in all
applicable jurisdictions referred to in subsection (e) above that name the
--------------
Seller or any Originator as debtor, together with copies of such other financing
statements,
II-1
and similar search reports with respect to judgment liens, federal tax liens and
liens of the Pension Benefit Guaranty Corporation in such jurisdictions, as any
Funding Agent may reasonably request, showing no Adverse Claims on any Pool
Assets (other than Adverse Claims created and existing, until the sale or
contribution of Receivables and Related Rights to the Seller in accordance with
the Purchase and Sale Agreement, pursuant to the USS Security Agreement).
(g) copies of the executed (i) Lock-Box Letter(s), (ii) the Concentration
Account Agreement with the Concentration Account Bank and (iii) Collection
Account Agreement with the Collection Account Bank.
(h) Opinions, in form and substance reasonably satisfactory to the Funding
Agents, of (i) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, as counsel to the
Seller, the Servicer and the Originators with respect to various UCC,
enforceability and bankruptcy matters, (ii)in-house counsel to the Seller, the
Servicer and the Originators as to various company matters with respect to each
such Person and (iii) ▇▇▇▇▇ & Associates, as special counsel to the Seller, the
Servicer and the Originators with respect to various UCC perfection matters
under Pennsylvania law.
(i) Satisfactory results of a review and audit (performed by
representatives of the Funding Agents) of the Servicer's collection, operating
and reporting systems, the Credit and Collection Policy of the Servicer,
historical receivables data and accounts, including satisfactory results of a
review of the Servicer's operating location(s) and satisfactory review and
approval of the Eligible Receivables in existence on the date of the initial
purchase under the Agreement.
(j) A pro forma Monthly Report representing the performance of the
Receivables Pool for the calendar month before closing.
(k) Evidence of payment by the Seller of all accrued and unpaid fees
(including those contemplated by each Fee Letter), costs and expenses to the
extent then due and payable on the date thereof, including any such costs, fees
and expenses arising under or referenced in Section 6.4 of the Agreement and
-----------
each Fee Letter.
(l) Each Fee Letter duly executed by the Seller and Servicer.
(m) Good standing certificates with respect to the Seller, the Servicer and
the Originators issued by the Secretary of State (or
II-2
similar official) of the state of each such Person's organization and principle
place of business.
(n) To the extent required by each CP Conduit Purchaser's commercial paper
program, letters from each of the rating agencies then rating the Notes of such
CP Conduit Purchaser confirming the rating of its Notes after giving effect to
the transaction contemplated by the Agreement.
(o) A file (computer generated or otherwise) containing all information
with respect to the Receivables as the Funding Agents may reasonably request.
2. Conditions Precedent to All Purchases and Reinvestments. Each purchase
-------------------------------------------------------
(except as to clause (a), including the initial purchase) and each reinvestment
----------
shall be subject to the further conditions precedent that:
(a) in the case of each purchase, the Servicer shall have delivered to the
Funding Agents on or before such purchase, in form and substance satisfactory to
the Funding Agents, a completed pro forma Monthly Report (and/or a pro forma
Weekly Report or Daily Report, if applicable) to reflect the level of Capital
and related reserves after such subsequent purchase; and
(b) on the date of such purchase or reinvestment the following statements
shall be true (and acceptance of the proceeds of such purchase or reinvestment
shall be deemed a representation and warranty by the Seller that such statements
are then true):
(i) the representations and warranties contained in Exhibit III to the
-----------
Agreement are true and correct in all material respects on and as of the
date of such purchase or reinvestment as though made on and as of such
date; and
(ii) no event has occurred and is continuing, or would result from
such purchase or reinvestment, that constitutes a Termination Event or an
Unmatured Termination Event.
II-3
EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. Representations and Warranties of the Seller. The Seller represents and
--------------------------------------------
warrants as follows:
(a) Company Existence and Power. The Seller is a limited liability company
---------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all necessary powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as currently conducted in each applicable jurisdiction.
(b) Company and Governmental Authorization: Contravention. The execution,
-----------------------------------------------------
delivery and performance by the Seller of the Agreement and the other
Transaction Documents to which it is a party (i) are within the Seller's company
powers, (ii) have been duly authorized by all necessary action, (iii) require no
action or authorization by or in respect of, or filing with, any governmental
body, agency or official (other than the Uniform Commercial Code filings
referred to in Exhibit II to the Agreement, all of which have been filed on or
----------
before the first purchase hereunder) and (iv) do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the restated
certificate of incorporation or by-laws of the Seller or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the Seller
or result in the creation or imposition of any Adverse Claim on any asset of the
Seller or any of its Subsidiaries. The Agreement and the other Transaction
Documents to which it is a party have been duly executed and delivered by the
Seller.
(c) Enforceability. This Agreement and the other Transaction Documents to
--------------
which it is a party are legal, valid and binding obligations of the Seller,
enforceable against the Seller in accordance with their respective terms, except
to the extent that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and to the extent that general equitable principles may limit
the right to obtain the remedy of specific performance of the obligations
hereunder and thereunder.
(d) Litigation. Except as set forth in USX Corporation's most recently
----------
distributed Form 10-K or 10-Q, there is no action, suit, arbitration or other
proceeding, inquiry or investigation, at law or in equity, or before or by any
court, public board or body,
III-1
arbitrator or arbitrate body pending against the Seller or of which the Seller
has otherwise received official notice or which to the knowledge of the Seller
is threatened against the Seller, wherein there is a reasonable possibility of
an unfavorable decision, ruling or finding that would reasonably be expected to
have a Material Adverse Effect, and since the dates of the respective
descriptions of proceedings contained in the reports identified above, there has
been no change in the status of such proceedings that would reasonably be
expected to have a Material Adverse Effect.
(e) No proceeds of any purchase or reinvestment will be used by the Seller
to acquire any equity security of a class that is registered pursuant to Section
12 of the Securities Exchange Act of 1934.
(f) The Seller is the legal and beneficial owner of the Pool Receivables
and Related Security, free and clear of any Adverse Claim, other than Adverse
Claims created and existing, until the sale or contribution of Receivables and
Related Rights to the Seller in accordance with the Purchase and Sale Agreement,
pursuant to the USS Security Agreement. Upon each purchase or reinvestment, the
Collateral Agent (for the benefit of the Purchasers) shall acquire a valid and
enforceable perfected undivided percentage ownership or security interest, to
the extent of the Purchased Interest, in each Pool Receivable then existing or
thereafter arising and in the Related Security, Collections and other proceeds
with respect thereto, free and clear of any Adverse Claim. The Agreement creates
a security interest in favor of the Collateral Agent (for the benefit of the
Purchasers) in the Pool Assets, and the Collateral Agent (for the benefit of the
Purchasers) has a first priority perfected security interest in the Pool Assets,
free and clear of any Adverse Claims. No effective financing statement or other
instrument similar in effect covering any Pool Asset is on file in any recording
office, except (x) those filed in favor of the Collateral Agent (for the benefit
of the Purchasers) relating to the Agreement and (y) those financing statements
filed pursuant to the USS Security Agreement, covering the Pool Assets prior to
the time of the sale or contribution thereof to the Seller pursuant to the
Purchase and Sale Agreement.
(g) Each Monthly Report (and/or Weekly Report or Daily Report, as
applicable) (if prepared by the Seller or one of its Affiliates, or to the
extent that information contained therein is supplied by the Seller or an
Affiliate), information, exhibit, financial statement, document, book, record or
report furnished or to be furnished at any time by or on behalf of the Seller to
the Funding
III-2
Agents or any Purchaser in connection with the Agreement or any other
Transaction Document to which it is a party is or will be complete and accurate
in all material respects as of its date or as of the date so furnished.
(h) The Seller's location (as such term is used in the UCC) and the office
where it keeps its records concerning the Receivables are located at the address
referred to in Section 1(b) of Exhibit IV to the Agreement.
----------
(i) The names and addresses of all the Lock-Box Banks, together with the
account numbers of the Lock-Box Accounts at such Lock-Box Banks, are specified
in Schedule II to the Agreement (or at such other Lock-Box Banks and/or with
-----------
such other Lock-Box Accounts as have been notified to the Funding Agents in
accordance with the Agreement) and all Lock-Box Banks have received a Lock-Box
Letter.
(j) No proceeds of any purchase or reinvestment will be used for any
purpose that violates any applicable law, rule or regulation, including
Regulations T, U or X of the Federal Reserve Board.
(k) Each Pool Receivable included as an Eligible Receivable in the
calculation of the Net Receivables Pool Balance is an Eligible Receivable.
(l) No event has occurred and is continuing, or would result from a
purchase in respect of, or reinvestment in respect of, the Purchased Interest or
from the application of the proceeds therefrom, that constitutes a Termination
Event or an Unmatured Termination Event.
(m) The Seller has complied in all material respects with the Credit and
Collection Policy of each Originator with regard to each Receivable originated
by such Originator.
(n) The Seller has complied in all material respects with all of the terms,
covenants and agreements contained in the Agreement and the other Transaction
Documents that are applicable to it.
(o) The Seller's complete company name is set forth in the preamble to the
Agreement, and it does not use and has not during the last five years used any
other company name, trade name, doing business name or fictitious name, except
as set forth on Schedule III to the Agreement and except for names first used
------------
after the date of the Agreement and set forth in a notice delivered to the
Funding
III-3
Agents pursuant to Section 1(k)(iii) of Exhibit IV to the Agreement.
----------
(p) The Seller is not an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended. In addition, the Seller is not a "holding company," a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
(q) Each Pool Receivable of an Obligor, that is not a resident of the
United States, is not (and shall not at any time be) subject to any currency
controls imposed by any Governmental Authority under the laws of which such
Obligor is organized or a political subdivision thereof, which currency controls
restrict the ability of such Obligor to pay its obligations in connection with
such Pool Receivable.
2. Representations and Warranties of the Servicer. The Servicer represents
----------------------------------------------
and warrants as follows:
(a) Company Existence and Power. The Servicer is a limited liability
---------------------------
company duly organized, validly existing and in good standing under the laws of
the State of Delaware and has all necessary powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as currently conducted in each applicable jurisdiction, except where
the failure to do so would not reasonably be expected to result in a Material
Adverse Effect.
(b) Company and Governmental Authorization: Contravention. The execution,
-----------------------------------------------------
delivery and performance by the Servicer of this Agreement and the other
Transaction Documents to which it is a party (i) are within the Servicer's
company powers, (ii) have been duly authorized by all necessary action, (iii)
require no action or authorization by or in respect of, or filing with, any
governmental body, agency or official and (iv) do not contravene, or constitute
a default under, any provision of applicable law or regulation or of the
restated certificate of incorporation or by-laws of the Servicer or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Servicer or result in the creation or imposition of any Adverse Claim on any
asset of the Servicer or any of its Subsidiaries. The Agreement and the other
Transaction Documents to which it is a party have been duly executed and
delivered by the Servicer.
III-4
(c) Enforceability. This Agreement and the other Transaction Documents to
--------------
which it is a party are legal, valid and binding obligations of the Servicer,
enforceable against the Servicer in accordance with their respective terms,
except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and to the extent that general equitable principles
may limit the right to obtain the remedy of specific performance of the
obligations hereunder and thereunder.
(d) Financial Information.
---------------------
(i) The consolidated balance sheet of USX Corporation and its
Subsidiaries as of December 31, 2000 and the related consolidated
statements of changes in financial position, income and cash flows for the
fiscal year then ended, reported on by PricewaterhouseCoopers and included
in USX Corporation's Annual Report on Form 10-K for the year ended December
31, 2000 (the "2000 Form 10-K"), as filed with the Securities and Exchange
--------------
Commission, copies of which have been delivered to the Funding Agents,
fairly present, in conformity with GAAP, the consolidated financial
position of the Servicer and its Subsidiaries as of such date and its
consolidated results of operations and changes in financial position for
such fiscal year.
(ii) The unaudited consolidated balance sheet of USX Corporation and
its Subsidiaries as of June 30, 2001 and the related unaudited consolidated
statements of changes in financial position, income and cash flows for the
three months then ended, set forth in USX Corporation's quarterly report on
Form 10-Q for the fiscal quarter ended June 30, 2001 (the "Second Quarter
--------------
2001 10-Q"), as filed with the Securities and Exchange Commission, copies
---------
of which have been delivered to the Funding Agents, fairly present, in
conformity with GAAP, the consolidated financial position of USX
Corporation and its Subsidiaries as of such date and its consolidated
results of operations and changes in financial position for such three
month period (subject to normal year-end adjustments).
(iii) Since December 31, 2000, there has been no change in the
consolidated financial position or operations of the Servicer and its
Subsidiaries, considered as a whole, which would reasonably be expected to
have a Material Adverse Effect.
III-5
(e) Litigation. Except as set forth in USX Corporation's most recently
----------
distributed Form 10-K or 10-Q, there is no action, suit, arbitration or other
proceeding, inquiry or investigation, at law or in equity, or before or by any
court, public board or body, arbitrator or arbitrate body pending against the
Servicer or of which the Servicer has otherwise received official notice or
which to the knowledge of the Servicer is threatened against the Servicer,
wherein there is a reasonable possibility of an unfavorable decision, ruling or
finding that would reasonably be expected to have a Material Adverse Effect, and
since the dates of the respective descriptions of proceedings contained in the
reports identified above, there has been no change in the status of such
proceedings that would reasonably be expected to have a Material Adverse Effect.
(f) Each Monthly Report (and/or Weekly Report or Daily Report, as
applicable)(if prepared by the Servicer or one of its Affiliates, or to the
extent that information contained therein is supplied by the Servicer or an
Affiliate), information, exhibit, financial statement, document, book, record or
report furnished or to be furnished at any time by or on behalf of the Servicer
to the Funding Agents or any Purchaser in connection with the Agreement or any
other Transaction Document to which it is a party is or will be complete and
accurate in all material respects as of its date or as of the date so furnished.
(g) Each Pool Receivable included as an Eligible Receivable in the
calculation of the Net Receivables Pool Balance is an Eligible Receivable.
(h) No event has occurred and is continuing, or would result from a
purchase in respect of, or reinvestment in respect of, the Purchased Interest or
from the application of the proceeds therefrom, that constitutes a Termination
Event or an Unmatured Termination Event.
(i) The Servicer has complied in all material respects with the Credit and
Collection Policy of each Originator with regard to each Receivable originated
by such Originator.
(j) The Servicer has complied in all material respects with all of the
terms, covenants and agreements contained in the Agreement and the other
Transaction Documents that are applicable to it.
(k) The Servicer is not an "investment company" or a company "controlled"
by an "investment company" within the meaning of the
III-6
Investment Company Act of 1940, as amended. In addition, the Servicer is not a
"holding company," a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
III-7
EXHIBIT IV COVENANTS
1. Covenants of the Seller. Until the latest of the Facility Termination
-----------------------
Date, the date on which no Capital or Net Investment of or Discount in respect
of the Purchased Interest shall be outstanding or the date all other amounts
owed by the Seller under the Agreement to the Collateral Agent, the Funding
Agents, the Purchasers and any other Indemnified Party or Affected Person shall
be paid in full:
(a) Compliance with Laws, Etc. The Seller shall comply in all material
-------------------------
respects with all applicable laws, rules, regulations and orders, and preserve
and maintain its existence, rights, franchises, qualifications and privileges,
except to the extent that the failure to do so would not be reasonably expected
to have a Material Adverse Effect.
(b) Offices, Records and Books of Account, Etc. The Seller: (i) shall keep
------------------------------------------
its location (as such terms or similar terms are used in the UCC) and the office
where it keeps its records concerning the Receivables at the address of the
Seller set forth under its name on the signature page to the Agreement or, upon
thirty days prior written notice to the Funding Agents, at any other locations
in jurisdictions where all actions reasonably requested by the Funding Agents to
protect and perfect the interest of the Collateral Agent in the Receivables and
related items (including the Pool Assets) have been taken and completed and (ii)
shall provide the Funding Agents with at least 30 days' written notice before
making any change in the Seller's name or making any other change in the
Seller's identity or organizational status that could render any UCC financing
statement filed in connection with the Agreement "seriously misleading" as such
term (or similar term) is used in the UCC; each notice to the Funding Agents
pursuant to this sentence shall set forth the applicable change and the
effective date thereof. The Seller will also maintain and implement
administrative and operating procedures (including an ability to recreate
records evidencing Receivables and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain all documents,
books, records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of all Receivables (including records
adequate to permit the daily identification of each Receivable and all
Collections of and adjustments to each existing Receivable).
IV-1
(c) Performance and Compliance with Contracts and Credit and Collection
-------------------------------------------------------------------
Policy. The Seller shall comply in all material respects with the applicable
------
Credit and Collection Policies with regard to each Receivable and the related
Contract.
(d) Ownership Interest, Etc. The Seller shall, at its expense, take all
-----------------------
action necessary or desirable to establish and maintain a valid and enforceable
undivided percentage ownership or security interest, to the extent of the
Purchased Interest, in the Pool Receivables, the Related Security and
Collections with respect thereto, and a first priority perfected security
interest in the Pool Assets, in each case free and clear of any Adverse Claim,
in favor of the Collateral Agent (for the benefit of the Purchasers), including
taking such action to perfect, protect or more fully evidence the interest of
the Collateral Agent (for the benefit of the Purchasers) as either Funding Agent
may reasonably request.
(e) Sales, Liens, Etc. The Seller shall not sell, assign (by operation of
-----------------
law or otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to, any or all of its right, title or
interest in, to or under any Pool Assets (including the Seller's undivided
interest in any Receivable, Related Security or Collections, or upon or with
respect to any account to which any Collections of any Receivables are sent), or
assign any right to receive income in respect of any items contemplated by this
paragraph.
(f) Extension or Amendment of Receivables. Except as provided in the
-------------------------------------
Agreement, the Seller shall not extend the maturity or adjust the Outstanding
Balance or otherwise modify the terms of any Pool Receivable, or amend, modify
or waive any term or condition of any related Contract.
(g) Change in Credit and Collection Policy. The Seller shall not make any
--------------------------------------
material change in the character of its business or in the Credit and Collection
Policy, or any change in the Credit and Collection Policy that would materially
and adversely affect the collectability of the Receivables Pool or the
enforceability of any related Contract or the ability of the Seller to perform
its obligations under any related Contract or under the Agreement.
(h) Audits. The Seller shall from time to time during regular business
------
hours but no more frequently than annually unless a Termination Event or
Unmatured Termination Event has occurred and is continuing, as reasonably
requested in advance (unless a Termination Event or Unmatured Termination Event
exists) by any Funding Agent permit such Funding Agent, or its agents or
IV-2
representatives: (i) to examine and make copies of and abstracts from all books,
records and documents (including computer tapes and disks) in the possession or
under the control of the Seller relating to Receivables and the Related
Security, including the related Contracts, and (ii) to visit the offices and
properties of the Seller for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to Receivables and the
----------
Related Security or the Seller's or performance under the Transaction Documents
or under the Contracts with any of the officers, employees, agents or
contractors of the Seller having knowledge of such matters.
(i) Change in Lock-Box Banks, Lock-Box Accounts and Payment Instructions to
-----------------------------------------------------------------------
Obligors. The Seller shall not add or terminate any bank as a Lock-Box Bank or
--------
any account as a Lock-Box Account from those listed in Schedule II to the
-----------
Agreement, or make any change in its instructions to Obligors regarding payments
to be made to the Seller or any Lock-Box Account (or related post office box),
unless the Funding Agents shall have consented thereto in writing and the
Funding Agents shall have received copies of all agreements and documents
(including Lock-Box Letters) that they may request in connection therewith.
(j) Deposits to Lock-Box Accounts, the Concentration Account and the
----------------------------------------------------------------
Collection Account. The Seller (or the Servicer on its behalf) shall: (i)
------------------
instruct all Obligors to make payments of all Receivables to one or more
Lock-Box Accounts or to post office boxes to which only Lock-Box Banks have
access (and shall instruct the Lock-Box Banks to cause all items and amounts
relating to such Receivables received in such post office boxes to be removed
and deposited into a Lock-Box Account on a daily basis), and (ii) deposit, or
cause to be deposited, any Collections received by it into the Concentration
Account not later than one Business Day after receipt thereof. Each Lock-Box
Account shall be subject to a Lock-Box Letter and each of the Concentration
Account and the Collection Account shall at all times be subject to a
Concentration Account Agreement and a Collection Account Agreement,
respectively. The Seller will not deposit or otherwise credit, or cause or
permit to be so deposited or credited, to any Lock-Box Account, the
Concentration Account or the Collection Account cash or cash proceeds other than
Collections.
(k) Reporting Requirements. The Seller shall provide the following to each
----------------------
Funding Agent:
(i) as soon as available and in any event within 120 days after the
end of each fiscal year of the Seller, (a) a copy of
IV-3
the annual report for such year for the Seller containing unaudited financial
statements for such year certified as to accuracy by the chief financial officer
or treasurer of the Seller; and (b) a letter from a financial officer, treasurer
or accounting officer of the Seller certifying to the best knowledge of such
officer, that neither a Termination Event nor an Unmatured Termination Event has
occurred and is continuing at such time;
(ii) as soon as possible and in any event within five Business Days after
the Seller becomes aware of the occurrence of each Termination Event or
Unmatured Termination Event, a statement of a financial officer of the Seller
setting forth details of such Termination Event or Unmatured Termination Event
and the action that the Seller has taken and proposes to take with respect
thereto;
(iii) at least thirty days before any change in the Seller's name or any
other change requiring the amendment of UCC financing statements, a notice
setting forth such changes and the effective date thereof;
(iv) promptly after the filing or receiving thereof, copies of all reports
and notices that the Seller or any Affiliate files under ERISA with the Internal
Revenue Service, the Pension Benefit Guaranty Corporation or the U.S. Department
of Labor or that the Seller or any Affiliate receives from any of the foregoing
or from any multiemployer plan (within the meaning of Section 4001(a)(3) of
ERISA) to which the Seller or any of its Affiliates is or was, within the
preceding five years, a contributing employer, in each case in respect of the
assessment of withdrawal liability or an event or condition that could, in the
aggregate, result in the imposition of liability on the Seller and/or any such
Affiliate;
(v) promptly after the Seller obtains knowledge thereof, notice of any: (A)
material litigation, investigation or proceeding that may exist at any time
between the Seller and any Person or (B) material litigation or proceeding
relating to any Transaction Document; and
(vi) such other information respecting the Receivables or the condition or
operations, financial or otherwise, of the Seller or any of its Affiliates as
any Funding Agent may from time to time reasonably request.
IV-4
(l) Certain Agreements. Without the prior written consent of the Funding
------------------
Agents, the Seller will not (and will not permit any Originator to) amend,
modify, waive, revoke or terminate any Transaction Document (including the
Purchase and Sale Agreement) to which it is a party or any provision of Seller's
certificate of incorporation or by-laws.
(m) Reserved.
--------
(n) Other Business. The Seller will not: (i) engage in any business other
--------------
than the transactions contemplated by the Transaction Documents; (ii) create,
incur or permit to exist any indebtedness of any kind (or cause or permit to be
issued for its account any letters of credit or bankers' acceptances) other than
pursuant to the Agreement or any applicable Company Notes; or (iii) form any
Subsidiary or make any investments in any other Person; provided, however, that
-------- -------
the Seller shall be permitted to incur minimal obligations to the extent
necessary for the day-to-day operations of the Seller (such as expenses for
stationery, audits, maintenance of legal status, etc.).
(o) Use of Seller's Share of Collections. The Seller shall apply its share
------------------------------------
of Collections to make payments in the following order of priority: (i) the
payment of its expenses (including all obligations payable to the Purchasers,
the Funding Agents and the Collateral Agent under the Agreement and under the
Fee Letters); (ii) the payment of accrued and unpaid interest on any applicable
Company Notes; and (iii) other legal and valid purposes.
(p) Tangible Net Worth. The Seller will not permit its tangible net worth,
------------------
at any time, to be less than $10,000,000.
2. Covenants of the Servicer. Until the latest of the Facility Termination
-------------------------
Date, the date on which no Capital or Net Investment of or Discount in respect
of the Purchased Interest shall be outstanding or the date all other amounts
owed by the Servicer under the Agreement to the Collateral Agent, the Funding
Agents, the Purchasers and any other Indemnified Party or Affected Person shall
be paid in full:
(a) Compliance with Laws, Etc. The Servicer shall comply in all material
-------------------------
respects with all applicable laws, rules, regulations and orders, and preserve
and maintain its existence, rights, franchises, qualifications and privileges,
except to the extent that the failure to do so would not be reasonably expected
to have a Material Adverse Effect.
IV-5
(b) Offices, Records and Books of Account, Etc. The Servicer: (i) shall
------------------------------------------
keep the office where it keeps its records concerning the Receivables at the
address of the Servicer set forth under its name on the signature page to the
Agreement or, upon thirty days prior written notice to the Funding Agents, at
any other locations in jurisdictions where all actions reasonably requested by
the Funding Agents to protect and perfect the interest of the Collateral Agent
in the Receivables and related items (including the Pool Assets) have been taken
and completed and (ii) shall provide the Funding Agents with at least 30 days'
written notice before making any change in the Servicer's name or making any
other change in the Servicer's identity or organizational status; each notice to
the Funding Agents pursuant to this sentence shall set forth the applicable
change and the effective date thereof. The Servicer will also maintain and
implement administrative and operating procedures (including an ability to
recreate records evidencing Receivables and related Contracts in the event of
the destruction of the originals thereof), and keep and maintain all documents,
books, records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of all Receivables (including records
adequate to permit the daily identification of each Receivable and all
Collections of and adjustments to each existing Receivable).
(c) Performance and Compliance with Contracts and Credit and Collection
-------------------------------------------------------------------
Policy. The Servicer shall comply in all material respects with the applicable
------
Credit and Collection Policies with regard to each Receivable and the related
Contract.
(d) Ownership Interest, Etc. The Servicer shall, at its expense, take all
-----------------------
action necessary or desirable to establish and maintain a valid and enforceable
undivided percentage ownership or security interest, to the extent of the
Purchased Interest, in the Pool Receivables, the Related Security and
Collections with respect thereto, and a first priority perfected security
interest in the Pool Assets, in each case free and clear of any Adverse Claim,
in favor of the Collateral Agent for the benefit of the Purchasers, including
taking such action to perfect, protect or more fully evidence the interest of
the Collateral Agent for the benefit of the Purchasers as either Funding Agent,
may reasonably request.
(e) Extension or Amendment of Receivables. Except as provided in the
-------------------------------------
Agreement, the Servicer shall not extend the maturity or adjust the Outstanding
Balance or otherwise modify the terms of any Pool Receivable, or amend, modify
or waive any term or condition of any related Contract.
IV-6
(f) Change in Credit and Collection Policy. The Servicer shall not make any
--------------------------------------
material change in the character of its business or in the Credit and Collection
Policy, or any change in the Credit and Collection Policy that would materially
and adversely affect the collectability of the Receivables Pool or the
enforceability of any related Contract or the ability of the Servicer to perform
its obligations under any related Contract or under the Agreement.
(g) Audits. The Servicer shall from time to time during regular business
------
hours but no more frequently than annually unless a Termination Event or
Unmatured Termination Event has occurred and is continuing, as reasonably
requested in advance (unless a Termination Event or Unmatured Termination Event
exists) by the any Funding Agent permit such Funding Agent, or its agents or
representatives: (i) to examine and make copies of and abstracts from all books,
records and documents (including computer tapes and disks) in the possession or
under the control of the Servicer relating to Receivables and the Related
Security, including the related Contracts, and (ii) to visit the offices and
properties of the Servicer for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to Receivables and the
----------
Related Security or the Servicer's or performance under the Transaction
Documents or under the Contracts with any of the officers, employees, agents or
contractors of the Servicer having knowledge of such matters.
(h) Change in Lock-Box Banks, Lock-Box Accounts and Payment Instructions to
-----------------------------------------------------------------------
Obligors. The Servicer shall not add or terminate any bank as a Lock-Box Bank or
--------
any account as a Lock-Box Account from those listed in Schedule II to the
-----------
Agreement, or make any change in its instructions to Obligors regarding payments
to be made to the Servicer or any Lock-Box Account (or related post office box),
unless the Funding Agents shall have consented thereto in writing and the
Funding Agents shall have received copies of all agreements and documents
(including Lock-Box Letters) that they may request in connection therewith.
(i) Deposits to Lock-Box Accounts, the Concentration Account and the
----------------------------------------------------------------
Collection Account. The Servicer shall: (i) instruct all Obligors to make
------------------
payments of all Receivables to one or more Lock-Box Accounts or to post office
boxes to which only Lock-Box Banks have access (and shall instruct the Lock-Box
Banks to cause all items and amounts relating to such Receivables received in
such post office boxes to be removed and deposited into a Lock-Box Account on a
daily basis), and (ii) deposit, or cause to be deposited, any Collections
received by it into the Concentration Account not later than one Business Day
after receipt thereof. Each
IV-7
Lock-Box Account shall be subject to a Lock-Box Letter and each of the
Concentration Account and the Collection Account shall at all times be subject
to a Concentration Account Agreement and a Collection Account Agreement,
respectively. USS will not deposit or otherwise credit, or cause or permit to be
so deposited or credited, to any Lock-Box Account, the Concentration Account or
the Collection Account cash or cash proceeds other than Collections.
(j) Reporting Requirements. The Servicer shall provide the following to
----------------------
each Funding Agent:
(i) as soon as available and in any event within 120 days after the
end of each fiscal year of the Servicer, (a) a consolidated balance sheet
of USS and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income and changes in financial position
for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on and certified by
PricewaterhouseCoopers or other independent public accountants of
nationally recognized standing; and (b) a letter from a financial officer,
treasurer or accounting officer of USS certifying to the best knowledge of
such officer, that neither a Termination Event nor an Unmatured Termination
Event has occurred and is continuing at such time;
(ii) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of USS, a
consolidated balance sheet of USS and its Subsidiaries as of the end of
such quarter and the related consolidated statements of income and changes
in financial position for such quarter and for the portion of USS's fiscal
year ended at the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding quarter and the
corresponding portion of USS's previous fiscal year;
(iii) as soon as available and in any event not later than 5 Business
Days after the last day of each calendar month a Monthly Report as of the
last day of such calendar month in the form attached hereto as Annex B-1
or, following the occurrence of a Termination Event, within five Business
Days of a request by any Funding Agent, a Monthly Report for such periods
as is specified by such Funding Agent (including on a semi-monthly, weekly
or daily basis);
(iv) as soon as possible and in any event within five Business Days
after the Servicer becomes aware of the
IV-8
occurrence of each Termination Event or Unmatured Termination Event, a statement
of a financial officer of the Servicer setting forth details of such Termination
Event or Unmatured Termination Event and the action that the Servicer has taken
and proposes to take with respect thereto;
(v) at least thirty days before any change in Servicer's name, a
notice setting forth such changes and the effective date thereof;
(vi) as soon as available and in any event within 90 days after the
end of each fiscal year of the Servicer, the Servicer shall, at the
Servicer's expense, cause a firm of independent public accountants (who may
be the independent public accountants who verify the Servicer's annual
audited financial statements), reasonably acceptable to the Funding Agents,
to furnish a report to the Funding Agents, to the effect that such firm has
(i) compared the information (required to be entered by the Seller) in two
randomly sampled Monthly Reports (as selected by the independent public
accountants) delivered during such fiscal year then ended with the
information contained in the Servicer's records and computer systems and
(ii) conducted a "negative confirmation" of a sample of Receivables in one
month during such fiscal year and verified that the Servicer's records and
computer systems used in servicing the Receivables contained correct
information with regard to due dates and outstanding invoice balances,
except in each case for such exceptions as such firm shall believe to be
immaterial (which exceptions need not be enumerated);
(vii) if USS's senior unsecured debt rating is at BB+ or below by
Standard & Poor's or at Ba1 or below by Moody's, a report (each, a "Weekly
------
Report") in the form attached hereto as Annex B-2 on each Thursday (or if
------
such day is not a Business Day the next succeeding Business Day) for each
calendar week commencing on (and including) the immediately preceding
Thursday and ending on (and including) the immediately preceding Wednesday;
(viii) if USS's senior unsecured debt rating is downgraded to either
B+ or below by Standard & Poor's or B1 or below by Moody's, a report (each,
a "Daily Report") in the form attached hereto as Annex B-3 on each Business
------------
Day during each calendar week, for the Business Day (or period) since the
last such report; and
IV-9
(ix) such other information respecting the Receivables or the
condition or operations, financial or otherwise, of the Servicer or any of
its Affiliates as any Funding Agent may from time to time reasonably
request.
(k) Waivers and Amendments to USS Credit Agreement. For so long as USS is
----------------------------------------------
the Servicer, if each Funding Agent (as an agent or lender thereunder) agrees to
any amendment, supplement or other modification or waiver of or to the USS
Credit Agreement in order to cure a default or event of default under the USS
Credit Agreement in consideration for any additional fees, charges or increased
rates of interest thereunder, then the Servicer and the Seller each hereby
agrees that comparable fees, charges and increased rates of interest shall be
paid to the Purchasers and Funding Agents hereunder in connection with each
Transfer or otherwise.
3. Separate Existence. Each of the Seller and USS hereby acknowledges that
------------------
the Purchasers and the Funding Agents are entering into the transactions
contemplated by the Agreement and the other Transaction Documents in reliance
upon the Seller's identity as a legal entity separate from USS and its
Affiliates. Therefore, from and after the date hereof, each of the Seller and
USS shall take all steps specifically required by the Agreement or reasonably
requested by any Funding Agent to continue the Seller's identity as a separate
legal entity and to make it apparent to third persons that the Seller is an
entity with assets and liabilities distinct from those of USS and any other
Person, and is not a division of USS, its Affiliates or any other Person.
Without limiting the generality of the foregoing and in addition to and
consistent with the other covenants set forth herein, each of the Seller and USS
shall take such actions as shall be required in order that:
(a) The Seller will be a limited purpose limited liability company whose
primary activities are restricted in its certificate of incorporation to: (i)
purchasing or otherwise acquiring from the Originators, owning, holding,
granting security interests or selling interests in Pool Assets, (ii) entering
into agreements for the selling and servicing of the Receivables Pool, and (iii)
conducting such other activities as it deems necessary or appropriate to carry
out its primary activities;
(b) The Seller shall not engage in any business or activity, or incur any
indebtedness or liability, other than as expressly permitted by the Transaction
Documents;
IV-10
(c) Not less than one member of the Seller's Board of Directors (the
"Independent Director") shall be an individual who is not a direct, indirect or
--------------------
beneficial stockholder, officer, director, employee, affiliate, associate or
supplier of USS or any of its Affiliates. The certificate of incorporation of
the Seller shall provide that: (i) the Seller's Board of Directors shall not
approve, or take any other action to cause the filing of, a voluntary bankruptcy
petition with respect to the Seller unless the Independent Director shall
approve the taking of such action in writing before the taking of such action,
and (ii) such provision cannot be amended without the prior written consent of
the Independent Director;
(d) The Independent Director shall not at any time serve as a trustee in
bankruptcy for the Seller, USS or any Affiliate thereof;
(e) Any employee, consultant or agent of the Seller will be compensated
from the Seller's funds for services provided to the Seller. The Seller will not
engage any agents other than its attorneys, auditors and other professionals,
and a servicer and any other agent contemplated by the Transaction Documents for
the Receivables Pool, which servicer will be fully compensated for its services
by payment of the Servicing Fee, and a manager, which manager will be fully
compensated from the Seller's funds;
(f) The Seller will contract with the Servicer to perform for the Seller
all operations required on a daily basis to service the Receivables Pool. The
Seller will pay the Servicer the Servicing Fee pursuant to the Agreement. The
Seller will not incur any material indirect or overhead expenses for items
shared with USS (or any other Affiliate thereof) that are not reflected in the
Servicing Fee. To the extent, if any, that the Seller (or any Affiliate thereof)
shares items of expenses not reflected in the Servicing Fee or the manager's
fee, such as legal, auditing and other professional services, such expenses will
be allocated to the extent practical on the basis of actual use or the value of
services rendered, and otherwise on a basis reasonably related to the actual use
or the value of services rendered; it being understood that USS shall pay all
expenses relating to the preparation, negotiation, execution and delivery of the
Transaction Documents, including legal, agency and other fees;
(g) The Seller's operating expenses will not be paid by USS or any other
Affiliate thereof;
IV-11
(h) All of the Seller's business correspondence and other communications
shall be conducted in the Seller's own name and on its own separate stationery;
(i) The Seller's books and records will be maintained separately from those
of USS and any other Affiliate thereof;
(j) All financial statements of USS or any Affiliate thereof that are
consolidated to include Seller will contain detailed notes clearly stating that:
(i) a special purpose corporation exists as a Subsidiary of USS, and (ii) the
Originators have sold receivables and other related assets to such special
purpose Subsidiary that, in turn, has sold undivided interests therein to
certain financial institutions and other entities;
(k) The Seller's assets will be maintained in a manner that facilitates
their identification and segregation from those of USS or any Affiliate thereof;
(l) The Seller will observe all company formalities in its dealings with
USS or any Affiliate thereof, and funds or other assets of the Seller will not
be commingled with those of USS or any Affiliate thereof except as permitted by
the Agreement in connection with servicing the Pool Receivables. The Seller
shall not maintain joint bank accounts or other depository accounts to which USS
or any Affiliate thereof (other than USS in its capacity as initial Servicer)
has independent access. The Seller is not named, and has not entered into any
agreement to be named, directly or indirectly, as a direct or contingent
beneficiary or loss payee on any insurance policy with respect to any loss
relating to the property of USS or any Subsidiary or other Affiliate of USS. The
Seller will pay to the appropriate Affiliate the marginal increase or, in the
absence of such increase, the market amount of its portion of the premium
payable with respect to any insurance policy that covers the Seller and such
Affiliate;
(m) The Seller will maintain arm's-length relationships with USS (and any
Affiliate thereof). Any Person that renders or otherwise furnishes services to
the Seller will be compensated by the Seller at market rates for such services
it renders or otherwise furnishes to the Seller. Neither the Seller nor USS will
be or will hold itself out to be responsible for the debts of the other or the
decisions or actions respecting the daily business and affairs of the other. The
Seller and USS will promptly correct any known misrepresentation with respect to
the foregoing, and they will not operate or purport to operate as an integrated
single
IV-12
economic unit with respect to each other or in their dealing with any other
entity; and
(n) USS shall not pay the salaries of Seller's employees, if any.
IV-13
EXHIBIT V
TERMINATION EVENTS
Each of the following shall be a "Termination Event":
-----------------
(a)(i) the Seller or the Servicer shall fail to make when due any payment
or deposit to be made by it under the Agreement and such failure shall continue
unremedied for one Business Day or (ii) the Seller, the Servicer or any
Originator shall fail to perform or observe any other term, covenant or
agreement under the Agreement or any other Transaction Document and such failure
shall continue for 30 days after notice thereof from any Purchaser or Funding
Agent;
(b) The Servicer (or any Affiliate thereof) shall fail to transfer to any
successor Servicer when required any rights pursuant to the Agreement that the
Servicer (or such Affiliate) then has as Servicer;
(c) any representation or warranty made or deemed made by the Seller, the
Servicer or any Originator (or any of their respective officers) under or in
connection with the Agreement or any other Transaction Document, or any
information or report delivered by the Seller, the Servicer or any Originator
pursuant to the Agreement or any other Transaction Document, shall prove to have
been incorrect or untrue in any material respect when made or deemed made or
delivered;
(d) (i) the Seller or the Servicer shall fail to deliver the Monthly Report
pursuant to the Agreement, and such failure shall remain unremedied for 3
Business Days after notice thereof from any Purchaser or Funding Agent or (ii)
the Servicer shall fail to deliver any Weekly Report or Daily Report when due
pursuant to the Agreement;
(e) the Agreement or any purchase or reinvestment pursuant to the Agreement
shall for any reason: (i) cease to create, or the Purchased Interest shall for
any reason cease to be, a valid and enforceable perfected undivided percentage
ownership or security interest to the extent of the Purchased Interest in the
Pool Receivables, the Related Security and Collections with respect thereto,
free and clear of any Adverse Claim, or (ii) cease to create, or the interest of
the Collateral Agent for the benefit of the Purchasers with respect to such Pool
Assets shall cease to be, a valid and enforceable first priority perfected
security interest, free and clear of any Adverse Claim;
V-1
(f) the Seller, USS or any Originator shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Seller, USS or any
Originator seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it),
either such proceeding shall remain undismissed or unstayed for a period of 60
days, or any of the actions sought in such proceeding (including the entry of an
order for relief against, or the appointment of a receiver, trustee, custodian
or other similar official for, it or for any substantial part of its property)
shall occur; or the Seller shall take any action to authorize any of the actions
set forth above in this paragraph;
(g) (i) the (A) Default Ratio shall exceed 4.0%, (B) the Dilution Ratio
shall exceed 5.0%, or (C) the Delinquency Ratio shall exceed 6.0% or (ii) the
average for three consecutive calendar months of: (A) the Default Ratio shall
exceed 3.0%, (B) the Dilution Ratio shall exceed 4.0%, or (C) the Delinquency
Ratio shall exceed 5.0%;
(h) the Purchased Interest shall exceed 100% and such condition shall
continue unremedied for 1 (one) Business Day following the date that the Seller
(or the Servicer on its behalf) is required to deliver any applicable Monthly
Report, Weekly Report or Daily Report, as the case may be;
(i) either: (i) the Internal Revenue Service shall file a notice of lien
asserting a claim or claims of $100,000 or more in the aggregate (or any lesser
amount, if in the opinion of any Funding Agent such claim or claims could be
reasonably expected to materially and adversely affect the Collateral Agent's
interest in the Pool Receivables or any other Pool Assets) pursuant to the
Internal Revenue Code with regard to any of the assets of the Seller or any
Originator, or (ii) the Pension Benefit Guaranty Corporation shall file a notice
of lien asserting a claim pursuant to ERISA with regard to any assets of the
Seller or any Originator;
(j) a Change in Control shall occur;
V-2
(k) (i) USS or any of its Subsidiaries (other than the Seller) shall fail
to pay any principal of or premium or interest on any of its Debt that is
outstanding in a principal amount of at least $20,000,000 in the aggregate when
the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement, mortgage,
indenture or instrument relating to such Debt (and, solely to the extent that
each Committed Purchaser or any Affiliate of such Committed Purchaser is an
agent or lender under such agreement or other documents, such failure shall have
not been waived in accordance with the terms of such agreement or other
document); or (ii) or any breach or default with respect to any financial
covenant shall occur under the USS Credit Agreement and shall continue after the
applicable grace period, if any, specified therein (and, solely to the extent
that each Committed Purchaser or any Affiliate of such Committed Purchaser is an
agent or lender thereunder, such failure shall have not been waived in
accordance with the terms thereof); and
(l) any other event or circumstance shall occur (i) which could reasonably
be expected to have a Material Adverse Effect on the collectability of the Pool
Receivables or (ii) which could reasonably be expected to have a Material
Adverse Effect on the Seller's or the Servicer's ability to collect the
Receivables or otherwise perform their respective obligations under the
Agreement and the other Transaction Documents to which each is a party.
V-3
EXHIBIT VI
FORM OF ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT (this "Agreement"), dated as of [ ,
--------- ------ --
], is among U.S. STEEL RECEIVABLES LLC (the "Seller"), [ ], as
---- --------
purchaser (the "[ ] CP Conduit Purchaser"), [ ], as the related
----- --------
committed purchaser (the "[ ] Committed Purchaser" and together with the
------
Conduit Purchaser, the "[ ] Purchasers"), and [ ], as agent for the
----- --------
Purchasers (the "[ ] Funding Agent" and together with the Purchasers, the
------
"[ ] Purchaser Group").
-------
BACKGROUND
The Seller and various others are parties to a certain Amended and Restated
Receivables Purchase Agreement dated as of November , 2001 (as amended through
--
the date hereof, the "Receivables Purchase Agreement"). Capitalized terms used
and not otherwise defined herein have the respective meaning assigned to such
terms in the Receivables Purchase Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. This letter constitutes an Assumption Agreement pursuant to
Section 1.14 of the Receivables Purchase Agreement. The Seller desires [the
------------
[ ] Purchasers] [the [ ] Committed Purchaser] to [become Purchasers
----- ------
under] [increase its existing Commitment under] the Receivables Purchase
Agreement and upon the terms and subject to the conditions set forth in the
Receivables Purchase Agreement, the [ ] Purchasers agree to [become
--------
Purchasers thereunder] [increase its Commitment in an amount equal to the amount
set forth as the "Commitment" under the signature of such [ ] Committed
------
Purchaser hereto].
Seller hereby represents and warrants to the [ ] Purchasers as of
--------
the date hereof, as follows:
(i) the representations and warranties of the Seller contained in Exhibit
-------
III of the Receivables Purchase Agreement are correct on and as of such dates as
---
though made on and as of such dates and shall be deemed to have been made on
such dates;
(ii) no Termination Event or Unmatured Termination Event has occurred and
is continuing, or would result from such transfer; and
VI-1
(iii) the Facility Termination Date shall not have occurred.
SECTION 2. Upon execution and delivery of this Agreement by the Seller and
each member of the [ ] Purchaser Group, satisfaction of the other
------
conditions to assignment specified in Section 1.14 of the Receivables Purchase
------------
Agreement (including the consent of the Funding Agents) and receipt by the
Funding Agents of counterparts of this Agreement (whether by facsimile or
otherwise) executed by each of the parties hereto, [the [ ] Purchasers shall
-----
become a party to, and have the rights and obligations of Purchasers under, the
Receivables Purchase Agreement] [the [ ] Committed Purchaser shall increase
------
its Commitment in the amount set forth as the "Commitment" under the signature
of the [ ] Committed Purchaser, hereto].
------
SECTION 3. Each party hereto hereby covenants and agrees that it will not
institute against, or join any other Person in instituting against, any CP
Conduit Purchaser, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, for one year and one day after the latest maturing
Notes issued by such CP Conduit Purchaser is paid in full. The covenant
contained in this paragraph shall survive any termination of the Receivables
Purchase Agreement.
SECTION 4. THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK. This Agreement may not be amended, supplemented or waived
except pursuant to a writing signed by the party to be charged. This Agreement
may be executed in counterparts, and by the different parties on different
counterparts, each of which shall constitute an original, but all together shall
constitute one and the same agreement.
(continued on following page)
VI-2
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the date first above written.
[ ], as a Conduit Purchaser
-----------
By:
------------------------------------
Name Printed:
--------------------------
Title:
---------------------------------
[Address]
[ ], as a Committed Purchaser
-----------
By:
------------------------------------
Name Printed:
--------------------------
Title:
---------------------------------
[Address]
[Commitment]
[ ], as Funding Agent
-------------
for [ ]
---------
By:
------------------------------------
Name Printed:
--------------------------
Title:
---------------------------------
[Address]
VI-3
U.S. STEEL RECEIVABLES LLC, as Seller
By:
----------------------------
Name Printed:
--------------------
Title:
---------------------------
Consented and Agreed:
[THE FUNDING AGENTS]
VI-4
EXHIBIT VII
FORM OF TRANSFER SUPPLEMENT
with respect to
U.S. Steel Receivables LLC
Amended and Restated Receivables Purchase Agreement
Dated as of [ , 20 ]
------- -- --
Section 1.
---------
Commitment assigned: $
---------
Assignor's remaining Commitment: $
---------
Net Investment allocable to Commitment assigned: $
---------
Assignor's remaining Net Investment: $
---------
Discount (if any) allocable to
Net Investment assigned: $
---------
Discount(if any) allocable to Assignor's
remaining Net Investment: $
---------
Section 2.
---------
Effective Date of this Transfer Supplement: [ ]
----------
Upon execution and delivery of this Transfer Supplement by transferee and
transferor and the satisfaction of the other conditions to assignment specified
in Section 6.3(d) of the Amended and Receivables Purchase Agreement, from and
-------------
after the effective date specified above, the transferee shall become a party
to, and have the rights and obligations of a Committed Purchaser under, the
Amended and Restated Receivables Purchase Agreement dated as of November ,
--
2001 (as amended through the date hereof, the Receivables Purchase Agreement),
among U.S. Steel Receivables LLC, as Seller, United States Steel LLC, as initial
Servicer, The Bank of Nova Scotia, as Collateral Agent, and various other
parties.
VII-1
ASSIGNOR: [ ], as a Committed
---------
Purchaser
By:
------------------------
Name:
----------------------
Title:
---------------------
ASSIGNEE: [ ], as a Committed
---------
Purchaser
By:
---------------------
Name:
-------------------
Title:
------------------
[Address]
Accepted as of date first above
written:
[ ], as Funding Agent for
-----------
the [ ] Purchaser Group
------
By:
-------------------------
Name:
--------------------
Title:
-------------------
VII-2
SCHEDULE I
CREDIT AND COLLECTION POLICY
Schedule I-1
SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
Lock-Box Bank Lock-Box Accounts
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1. ▇▇▇▇▇▇ Trust and Savings Bank ▇▇▇-▇▇▇-▇
2. National City Bank of Cleveland 20-00-07-1
3. Chase Manhattan Bank 174-3566
4. Bank One, N.A. 05607-13
5. Bank of America, N.A. 375-025-7715
Schedule II-1
SCHEDULE III
TRADE NAMES
1. UNITED STATES STEEL LLC
2. United States Steel Corporation
3. U.S. Steel
4. U.S. Steel Group
5. USS
Schedule III-1
SCHEDULE IV
SPECIAL OBLIGORS
Special Obligor Concentration Percentage
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1. General Motors Corporation 10%
2. Pro-Tec Coating Company 5%
Schedule IV-1
ANNEX A
FORM OF PURCHASE NOTICE
Annex ▇-▇
▇▇▇▇▇ ▇-▇/▇-▇/▇-▇
to Receivables Purchase Agreement
FORM OF MONTHLY REPORT/WEEKLY REPORT/DAILY REPORT
Annex B-1