EXHIBIT 99.2
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THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of November 15, 2001
Among
MILACRON INC.
and
MILACRON COMMERCIAL CORP.
as Seller
and
VALENITE INC.
as Subservicer
D-M-E COMPANY
as Subservicer
UNILOY MILACRON INC.
as Subservicer
TALBOT HOLDINGS, LTD.
as Subservicer
and
MILACRON MARKETING COMPANY
as initial Servicer
MARKET STREET FUNDING CORPORATION
as Purchaser
and
PNC BANK, NATIONAL ASSOCIATION
as Administrator
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TABLE OF CONTENTS
ARTICLE I PURCHASES AND REINVESTMENTS.................................2
SECTION 1.01. Commitments to Purchase; Limits on Purchaser"s Obligations..2
SECTION 1.02. Purchase Procedures; Assignment of Purchaser"s Interests....2
SECTION 1.03. Reinvestments of Certain Collections; Payment of Remaining
Collections.................................................3
SECTION 1.04. Asset Interest..............................................6
ARTICLE II COMPUTATIONAL RULES.........................................7
SECTION 2.01. Selection of Asset Tranches.................................7
SECTION 2.02. Computation of Purchaser"s Total Investment and Purchaser"s
Tranche Investment..........................................7
SECTION 2.03. Computation of Concentration Limits and Unpaid Balance......8
SECTION 2.04. Computation of Earned Discount..............................8
SECTION 2.05. Estimates of Earned Discount Rate, Fees, etc................8
ARTICLE III SETTLEMENTS.................................................8
SECTION 3.01. Settlement Procedures.......................................8
SECTION 3.02. Deemed Collections; Reduction of Purchaser"s Total
Investment, Etc............................................11
SECTION 3.04. Treatment of Collections and Deemed Collections............13
ARTICLE IV FEES AND YIELD PROTECTION..................................13
SECTION 4.01. Program Fee................................................13
SECTION 4.02. Yield Protection...........................................13
SECTION 4.03. Funding Losses.............................................15
ARTICLE V CONDITIONS OF PURCHASES....................................15
SECTION 5.01. Conditions Precedent to Amendment Effective Time...........15
SECTION 5.02. Conditions Precedent to All Purchases and Reinvestments....17
ARTICLE VI REPRESENTATIONS AND WARRANTIES.............................17
SECTION 6.01. Representations and Warranties of Seller Parties...........17
ARTICLE VII GENERAL COVENANTS OF SELLER PARTIES........................21
SECTION 7.01. Affirmative Covenants of Seller Parties....................21
SECTION 7.02. Reporting Requirements of Seller Parties...................23
SECTION 7.03. Negative Covenants of Seller Parties.......................24
SECTION 7.04. Separate Corporate Existence of Seller.....................26
ARTICLE VIII ADMINISTRATION AND COLLECTION..............................27
SECTION 8.01. Designation of Servicer....................................27
SECTION 8.02. Duties of Servicer.........................................29
SECTION 8.03. Rights of the Administrator................................31
SECTION 8.04. Responsibilities of Seller Parties.........................32
SECTION 8.05. Further Action Evidencing Purchases and Reinvestments......32
SECTION 8.06. Application of Collections.................................33
SECTION 8.07. Special Deposit Accounts...................................33
ARTICLE IX SECURITY INTEREST...........................................34
SECTION 9.01. Grant of Security Interest..................................34
SECTION 9.02. Further Assurances..........................................34
SECTION 9.03. Remedies....................................................35
ARTICLE X LIQUIDATION EVENTS..........................................35
SECTION 10.01. Liquidation Events..........................................35
SECTION 10.02. Remedies....................................................37
ARTICLE XI THE ADMINISTRATOR...........................................38
SECTION 11.01. Authorization and Action....................................38
SECTION 11.02. Administrator"s Reliance, Etc...............................38
SECTION 11.03. PNC Bank and Affiliates.....................................38
ARTICLE XII ASSIGNMENT OF PURCHASER"S INTEREST..........................39
SECTION 12.01. Restrictions on Assignments.................................39
SECTION 12.02. Rights of Assignee..........................................39
SECTION 12.03. Terms and Evidence of Assignment............................39
SECTION 12.04. Rights of Liquidity Agent...................................40
ARTICLE XIII INDEMNIFICATION.............................................40
SECTION 13.01. Indemnities by Parent and Seller............................40
SECTION 13.02. Indemnities by Servicer.....................................42
ARTICLE XIV MISCELLANEOUS...............................................43
SECTION 14.01. Amendments, Etc.............................................43
SECTION 14.02. Notices, Etc................................................43
SECTION 14.03. No Waiver; Remedies.........................................43
SECTION 14.04. Binding Effect; Survival....................................43
SECTION 14.05. Costs, Expenses and Taxes...................................44
SECTION 14.06. No Proceedings..............................................44
SECTION 14.07. Confidentiality of Seller Information.......................44
SECTION 14.08. Confidentiality of Program Information......................46
SECTION 14.09. Captions and Cross References...............................48
SECTION 14.10. Integration.................................................48
SECTION 14.11. Governing Law...............................................48
SECTION 14.12. Waiver Of Jury Trial........................................48
SECTION 14.13. Consent To Jurisdiction; Waiver Of Immunities...............49
SECTION 14.14. Execution in Counterparts...................................49
SECTION 14.15. No Recourse Against Other Parties...........................49
SECTION 14.16. References..................................................49
APPENDICES
APPENDIX A Definitions
APPENDIX B Select Pool Receivables
APPENDIX C Cut-Off Days
APPENDIX D Special Concentration Limits
SCHEDULES
SCHEDULE 6.01(i) Description of Material Adverse Changes
SCHEDULE 6.01(j) Description of Litigation
SCHEDULE 6.01(n) List of Offices of Subservicers, Servicer and Seller
where Records Are Kept
SCHEDULE 6.01(o) List of Lock-Box Banks
SCHEDULE 6.01(p)-1 Forms of Contracts
SCHEDULE 6.01(p)-2 Description of Credit and Collection Policy
EXHIBITS
EXHIBIT 1.02(a) Form of Notice of Purchase
EXHIBIT 3.01(a) Form of Information Package
EXHIBIT 5.01(c) Form of Lock-Box Agreement
EXHIBIT 5.01(d) Form of Account Pledge Agreement
EXHIBIT 8.01(h) Form of Weekly Information Package
THIRD AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of November 15, 2001
THIS IS A THIRD AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT,
among:
(1) MILACRON INC. (f/k/a Cincinnati Milacron Inc.), a Delaware
corporation (together with its successors and permitted assigns, "Parent"),
(2) MILACRON COMMERCIAL CORP. (f/k/a Cincinnati Milacron Commercial
Corp.), a Delaware corporation (together with its successors and permitted
assigns, "Seller"),
(3) VALENITE INC. ("Valenite"), a Delaware corporation, in its
capacity as sub-servicer pursuant to Section 8.01(c)(ii),
(4) D-M-E Company ("D-M-E"), a Delaware corporation, in its capacity
as sub-servicer pursuant to Section 8.01(c)(iii),
(5) Uniloy Milacron Inc. ("Uniloy"), a Delaware corporation, in its
capacity as sub-servicer pursuant to Section 8.01(c)(iv),
(6) Talbot Holdings, Ltd. ("Talbot"; together with Valenite, D-M-E,
Uniloy and Talbot and their respective successors and assigns in their
capacity as sub-subservicers, each a "Subservicer"), a Delaware corporation,
in its capacity as sub-servicer pursuant to Section 8.01(c)(v),
(7) MILACRON MARKETING COMPANY (f/k/a Cincinnati Milacron Marketing
Company), an Ohio corporation (together with its successors and permitted
assigns, "Marketing Co."), as initial servicer hereunder (in such capacity,
together with any successor servicer appointed pursuant to Section 8.01,
"Servicer"; Marketing Co., in its capacity as Servicer, together with
Valenite, D-M-E, Uniloy, Talbot, Parent and Seller, each a "Seller Party" and
collectively the "Seller Parties"),
(8) MARKET STREET FUNDING CORPORATION, a Delaware corporation
("Purchaser"), and
(9) PNC BANK, NATIONAL ASSOCIATION, a national banking association
("PNC Bank"), as administrator for Purchaser (in such capacity, together with
any successors thereto in such capacity, the "Administrator").
Unless otherwise indicated, capitalized terms used in this Agreement are
defined in Appendix A.
BACKGROUND
1. Each of Seller, Marketing Co., Valenite, D-M-E, Uniloy and Talbot
is a wholly-owned direct or indirect subsidiary of Parent.
2. Parent and its subsidiaries and affiliates are engaged in the
business of manufacturing and selling various types of machine tools,
electronic control systems and other
industrial equipment and products. Marketing Co. is engaged in the business of
marketing certain products purchased by Marketing Co. from Parent and certain
other subsidiaries of Parent.
3. As of January 26, 1996, the parties hereto (other than D-M-E,
Uniloy and Talbot), entered into the Second Amended and Restated Receivables
Purchase Agreement, as amended by the First Amendment dated as of July 26,
1996, the Second Amendment dated as of January 28, 1998, the Third Amendment
dated as of September 26, 1998, the Fourth Amendment dated as of January 26,
1999, the Fifth Amendment dated as of June 25, 1999, the Sixth Amendment dated
as of June 9, 2000, the Seventh Amendment dated as of August 3, 2000, the
Eighth Amendment dated as of August 2, 2001, and the Ninth Amendment dated as
of September 27, 2001 (such Agreement as so amended is referred to herein as
the "Original Purchase Agreement").
4. The parties hereto desire to amend and restate the Original
Purchase Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, effective at and as of the Amendment Effective
Time, the Original Purchase Agreement is hereby amended and, as so amended, is
hereby restated in its entirety to read as follows:
ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.01. COMMITMENTS TO PURCHASE; LIMITS ON PURCHASER'S
OBLIGATIONS. Upon the terms and subject to the conditions of this Agreement
(including, without limitation, Article V), from time to time prior to the
Termination Date, Seller may request that Purchaser purchase from Seller
ownership interests in Pool Receivables and Related Assets, and Purchaser
shall make such purchase (each being a "Purchase"); provided that no Purchase
shall be made by Purchaser if, after giving effect thereto, either (a) the
then Purchaser's Total Investment would exceed $75,000,000 (the "Purchase
Limit"), or (b) the Asset Interest, expressed as a percentage of Net Pool
Balance, would exceed 100% (the "Allocation Limit"); and provided, further
that each Purchase made pursuant to this Section 1.01 shall have a purchase
price equal to at least $500,000 and shall be an integral multiple of
$100,000.
SECTION 1.02. PURCHASE PROCEDURES; ASSIGNMENT OF PURCHASER'S
INTERESTS.
(a) NOTICE OF PURCHASE. Each Purchase from Seller by Purchaser shall
be made on a Weekly Settlement Date upon notice from Seller to the
Administrator received by the Administrator not later than 11:00 a.m. (New
York City time) two Business Days prior to the date of such proposed Purchase.
Each such notice of a proposed Purchase shall be substantially in the form of
Exhibit 1.02(a) and shall specify the desired amount and date of such
Purchase.
(b) FUNDING OF PURCHASE. On the date of each Purchase, Purchaser
shall, upon satisfaction of the applicable conditions set forth in Article V,
make available to the Administrator at the Administrator's Office the amount
of its Purchase in same day funds, and
after receipt by the Administrator of such funds, the Administrator will make
such funds immediately available to Seller at such office.
(c) ASSIGNMENT OF ASSET INTERESTS. Seller hereby sells, assigns and
transfers to Purchaser, effective on and as of the date of each Purchase by
the Purchaser hereunder, the Asset Interest in the Pool Receivables and
Related Assets.
SECTION 1.03. Reinvestments of Certain Collections; Payment of
REMAINING COLLECTIONS. (a) On the close of business on each day during the
period from the Amendment Effective Time to the Termination Date, Servicer
will, out of all Collections received on such day from Pool Receivables:
(i) determine the portion of such Collections attributable to
the Asset Interest by multiplying (A) the amount of such Collections
times (B) the lesser of (x) the Asset Interest and (y) 100%;
(ii) out of the portion of such Collections allocated to the
Asset Interest pursuant to clause (i), set aside and hold in trust
for Purchaser an amount equal to the sum of the estimated amount of
Earned Discount accrued in respect of each Asset Tranche (based on
rate information provided by the Administrator pursuant to Section
2.05), all other amounts due to Purchaser or the Administrator
hereunder and the Servicer's Fee (in each case, accrued through such
day) and not so previously set aside; provided that, unless the
Administrator shall have requested it in writing to do so, Servicer
shall not be required to hold Collections that have been set aside
in a separate deposit account containing only such Collections;
(iii) apply the Collections allocated to the Asset Interest
pursuant to clause (i) and not required to be set aside pursuant to
clause (ii) to the purchase from Seller of ownership interests in
Pool Receivables and Related Assets with respect to such Pool
Receivables (each such purchase being a "Reinvestment"); provided
that:
(A) if (I) the then Asset Interest would exceed the
Allocation Limit or (II) the then Purchaser's Total Investment
would exceed the Purchase Limit, then Servicer shall not
reinvest, but shall set aside and hold for the benefit of
Purchaser, a portion of such Collections which, together with
other Collections previously set aside and then so held, shall
equal the amount necessary to reduce the Purchaser's Total
Investment to the Purchase Limit and the Asset Interest to the
Allocation Limit; and
(B) if any of the conditions precedent to Reinvestment in
clause (a), (b) and (d) of Section 5.02 is not satisfied, then
Servicer shall not reinvest any of such remaining Collections;
and
(iv) pay to Seller (A) the portion of Collections not allocated
to the Asset Interest pursuant to clause (i) and (B) the Collections
applied to Reinvestment pursuant to clause (iii).
(a) UNREINVESTED COLLECTIONS. Servicer shall set aside and hold in
trust for the benefit of Purchaser all Collections which, pursuant to clause
(iii) of Section 1.03(a), may not be reinvested in the Pool Receivables and
related property and all Collections held for the Purchaser pursuant to
Section 3.02(b); provided that, unless the Administrator shall have requested
it in
writing to do so, Servicer shall not be required to hold Collections
that have been set aside in a separate deposit account containing only such
Collections. If the amount required to be set aside as aforesaid is more than
$500,000, Servicer shall either (i) deposit the funds so set aside in the
Servicer Deposit Account for application in accordance with Section 1.03(c) or
the next following sentence, or (ii) apply such funds to optional reduction of
the Purchaser's Total Investment in accordance with Section 1.03(c)(i). If,
prior to the date when such Collections are required to be paid to the
Administrator for the benefit of Purchaser pursuant to Section 1.03(c)(i), the
amount of Collections so set aside (whether or not on deposit in the Servicer
Deposit Account) exceeds the amount, if any, necessary to reduce the
Purchaser's Total Investment to the Purchase Limit and the Asset Interest to
the Allocation Limit, and the conditions precedent to Reinvestment set forth
in clauses (a), (b) and (d) of Section 5.02 are satisfied, then the Servicer
shall apply such Collections (or, if less, a portion of such Collections equal
to the amount of such excess) to the making of a Reinvestment (and may
withdraw funds from the Servicer Deposit Account for such purpose).
(b) PAYMENT OF AMOUNTS DEPOSITED INTO SERVICER DEPOSIT ACCOUNT. Upon
receipt of funds deposited into the Servicer Deposit Account pursuant to
Section 1.03(b), the Administrator shall cause such funds to be distributed on
each Weekly Settlement Date as follows:
(i) to the Administrator for the account of Purchaser for any
Asset Tranche funded by a Liquidity Purchase or Credit Draw, in an
amount not exceeding the Purchaser's Tranche Investment of such
Asset Tranche (or on such earlier date or dates (A) as the
Administrator shall require on at least two Business Days' prior
written notice to Servicer or (B) as Seller shall elect upon at
least two Business Days' prior written notice to Servicer and the
Administrator); provided, however, that (1) during the Liquidation
Period, no such payment shall be made with respect to an Asset
Tranche funded by Commercial Paper Notes until the Purchaser's
Tranche Investments of all Asset Tranches, if any, funded by
Liquidity Loans shall have been reduced to zero, (2) no such payment
shall be made with respect to an Asset Tranche funded by a Credit
Draw unless the Purchaser's Tranche Investments of all Asset
Tranches, if any, funded by Commercial Paper Notes or Liquidity
Purchases shall have been reduced to zero, and (3) each payment
pursuant to this clause (i) (other than with respect to any payment
reducing the Purchaser's Tranche Investment in an Asset Tranche to
zero) shall be in a minimum amount of $1,000,000 and in an integral
multiple of $1,000,000;
(ii) if such distribution occurs on the Termination Date, to
the Purchaser, in payment of the Purchaser's Total Investment in
full;
(iii) if such distribution occurs on a day when the Seller has
elected to reduce the Purchaser's Total Investment pursuant to
Section 3.02(b), to the Purchaser, in payment of the Purchaser's
Total Investment to the extent of such voluntary reduction, together
with any Earned Discount to accrue thereon and any costs related
thereto; and
(iv) if such funds were deposited to the Servicer Deposit
Account pursuant to the proviso to Section 1.03(a)(iii), to the
Purchaser, in payment of the Purchaser's Total Investment, to the
extent necessary to reduce the Purchaser's Total Investment to the
Purchase Limit and the Asset Interest to the Allocation Limit.
(c) Reinvestment of Funds in Servicer Deposit Account. If, after
giving effect to the payment required by Section 1.03(c)(iv), the Purchaser's
Total Investment is not greater than the Purchase Limit and the Asset Interest
is not greater than the Allocation Limit, and provided the
other conditions to Reinvestment set forth in Section 5.02 are met, then the
remaining funds, if any, on deposit in the Servicer Deposit Account shall be
released to Seller for reinvestment in Pool Receivables and Related Assets in
accordance with Section 1.03(a).
(d) Payment of Amounts Set Aside.
(i) Servicer shall pay all amounts set aside pursuant to
Section 1.03(a)(ii) in respect of Earned Discount on an Asset
Tranche funded by a Liquidity Purchase or Credit Draw to the
Administrator on the last day of the then current Yield Period for
such Asset Tranche.
(ii) Servicer shall pay all amounts of Collections set aside
pursuant to Section 1.03(a)(ii) and not applied pursuant to clause
(i) next above to the Administrator on the Monthly Settlement Date
for each Settlement Period, as provided in Section 3.01, or on such
earlier date or dates as the Administrator shall require on at least
three Business Days' written notice to Servicer.
(e) FUNDS IN SELLER DEPOSIT ACCOUNT. Upon the written request of the
Administrator given at any time when (A) based on the most recent Information
Package, Weekly Information Package or Daily Information Package, the Asset
Interest would exceed the Allocation Limit, or (B) a Liquidation Event or
Unmatured Liquidation Event (other than an Excepted Liquidation Event) shall
have occurred and be continuing, Seller shall set aside all funds that under
the Sale Agreement would be applied to repay principal of the Initial
Purchaser Notes (as defined in the Sale Agreement) owing to any Originator
and/or to make loans to any Originator evidenced by an Originator Note (as
defined in the Sale Agreement). Seller shall cause the funds so set aside to
be deposited in the Seller Deposit Account, and may make withdrawals of such
funds from the Seller Deposit Account only for the purposes of (i) at any
time, purchasing Receivables from the Originators in accordance with the Sale
Agreement; (ii) on the Monthly Settlement Date for any Settlement Period,
making payments to Servicer to the extent not paid out of funds set aside
pursuant to Section 1.03 for such purpose, and (iii) on the Monthly Settlement
Date for any Settlement Period, if, on the basis of the most recent
Information Package, Weekly Information Package or Daily Information Package,
and after giving effect to any payment made to Servicer on such date as
described in clause (ii) above, the Purchaser's Total Investment does not
exceed the Purchase Limit and the Asset Interest does not exceed the
Allocation Limit, and provided that no Liquidation Event or Unmatured
Liquidation Event (other than an Excepted Liquidation Event) shall have
occurred and be continuing, (x) repaying principal of the Initial Purchaser
Notes and/or (y) making loans to the Originators evidenced by the Originator
Notes, in each case in accordance with this Agreement and the Sale Agreement.
SECTION 1.04. ASSET INTEREST. (a) Components of Asset Interest. On
any date the Asset Interest will represent Purchaser's undivided percentage
ownership interest in all then outstanding Pool Receivables and all Related
Assets with respect to such Pool Receivables as at such date.
(b) Computation of Asset Interest. On any date, the Asset Interest
will be equal to a percentage, expressed as the following fraction:
PTI + LCR + LR + DR
-------------------
NPB
where:
PTI = the then Purchaser's Total Investment;
LCR = the then Liquidation Cost Reserve;
LR = the then Loss Reserve;
DR = the then Dilution Reserve; and
NPB = the then Net Pool Balance;
provided, however, that the Asset Interest, as computed as of the day
immediately preceding the Termination Date, will remain constant at all times
on and after the Termination Date until the Final Payout Date, unless at any
time the Administrator requests a recalculation of the Asset Interest, in
which case the Asset Interest shall remain constant following such
recalculation until the Final Payout Date, or, if earlier, until the date of
the next such recalculation.
(c) FREQUENCY OF COMPUTATION. On any Business Day following the
delivery of a Weekly Information Package, as of the Saturday preceding
delivery of such Weekly Information Package, the Servicer shall compute, as of
the related Cut-Off Date and based upon the assumptions in the next sentence,
(A) the Asset Interest, (B) the amount of the reduction or increase (if any)
in the Asset Interest since the next preceding Cut-Off Date, (C) the excess
(if any) of the Asset Interest over the Allocation Limit, and (D) the excess
(if any) of the Purchaser's Total Investment over the Purchase Limit. Such
calculation shall be based upon the assumptions that (x) the information in
the Weekly Information Package is correct, and (y) Collections set aside
pursuant to Section 1.03(b) will be paid to the Administrator on the next
following Weekly Settlement Date. In addition, without limiting Servicer's
obligations under Section 8.02(h)(i), at any time during the Liquidation
Period or when a Liquidation Event or Unmatured Liquidation Event shall have
occurred and be continuing, the Servicer shall provide a Daily Information
Package, based on the information then available to Servicer, for purposes of
computing the Asset Interest as of each day.
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.01. SELECTION OF ASSET TRANCHES. The Administrator shall,
from time to time for purposes of computing Earned Discount, divide the Asset
Interest into Asset Tranches, and the applicable Earned Discount Rate may be
different for each Asset Tranche. Purchaser's Total Investment shall be
allocated to each Asset Tranche by the Administrator to reflect the funding
sources for the Asset Interest, so that:
(a) there will be one or more Asset Tranches, selected by the
Administrator, reflecting the portion of the Asset Interest funded by
outstanding Liquidity Purchases;
(b) there will be one or more Asset Tranches, selected by the
Administrator, reflecting the portion of the Asset Interest funded by Credit
Draws; and
(c) there will be an Asset Tranche equal to the excess of
Purchaser's Total Investment over the aggregate amounts allocated at such time
pursuant to clauses (a) and (b)
above, which Asset Tranche shall reflect the portion of the Asset Interest
funded by Commercial Paper Notes.
SECTION 2.02. COMPUTATION OF PURCHASER'S TOTAL INVESTMENT AND
PURCHASER'S TRANCHE INVESTMENT. In making any determination of Purchaser's
Total Investment and any Purchaser's Tranche Investment, the following rules
shall apply:
(a) Purchaser's Total Investment shall not be considered reduced by
any allocation, setting aside or distribution of any portion of Collections
unless such Collections shall have been actually delivered to the
Administrator pursuant hereto;
(b) Purchaser's Total Investment shall not be considered reduced by
any distribution of any portion of Collections if at any time such
distribution is rescinded or must otherwise be returned for any reason; and
(c) if there is any reduction in Purchaser's Total Investment, there
shall be a corresponding reduction in a Purchaser's Tranche Investment with
respect to one or more Asset Tranches selected by the Administrator in its
discretion.
SECTION 2.03. COMPUTATION OF CONCENTRATION LIMITS AND UNPAID
BALANCE. The Concentration Limits and the aggregate Unpaid Balance of Pool
Receivables of any Obligor and its Affiliated Obligors (if any) shall be
calculated as if such Obligor and its Affiliated Obligors were one Obligor.
SECTION 2.04. COMPUTATION OF EARNED DISCOUNT. In making any
determination of Earned Discount, the following rules shall apply:
(a) the Administrator shall determine the Earned Discount accruing
with respect to each Asset Tranche, and each Yield Period therefor (or, in the
case of the Asset Tranche funded by Commercial Paper Notes, each Settlement
Period), in accordance with the definition of Earned Discount;
(b) no provision of this Agreement shall require the payment or
permit the collection of Earned Discount in excess of the maximum permitted by
applicable law; and
(c) Earned Discount for any Asset Tranche shall not be considered
paid by any distribution if at any time such distribution is rescinded or must
otherwise be returned for any reason.
SECTION 2.05. ESTIMATES OF EARNED DISCOUNT RATE, FEES, ETC. For
purposes of determining the amounts required to be set aside by Servicer
pursuant to Section 1.03, the Administrator shall notify Servicer from time to
time of the Purchaser's Tranche Investment of each Asset Tranche, the Earned
Discount Rate applicable to each Asset Tranche and the rates at which fees and
other amounts are accruing hereunder. It is understood and agreed that (i) the
Earned Discount Rate for any Asset Tranche may change from one applicable
Yield Period or Settlement Period to the next, and the Alternate Base Rate or
CP Rate used to calculate the Earned Discount Rate may change from time to
time during an applicable Yield Period or Settlement Period, (ii) certain rate
information provided by the Administrator to Servicer shall be based upon the
Administrator's good faith estimate, (iii) the amount of Earned Discount
actually accrued with respect to an Asset Tranche during any Yield Period (or,
in the case of the Asset Tranche funded by Commercial Paper Notes, any
Settlement Period) may exceed, or be less
than, the amount set aside with respect thereto by Servicer, and (iv) the
amount of fees or other payables accrued hereunder with respect to any
Settlement Period may exceed, or be less than, the amount set aside with
respect thereto by Servicer. Failure to set aside any amount so accrued shall
not relieve Servicer of its obligation to remit Collections to the
Administrator with respect to such accrued amount, as and to the extent
provided in Section 3.01.
ARTICLE III
SETTLEMENTS
SECTION 3.01. SETTLEMENT PROCEDURES.
The parties hereto will take the following actions with respect to
each Settlement Period:
(a) INFORMATION PACKAGE. On the Reporting Date for each Settlement
Period, Servicer shall deliver to the Administrator a report containing the
information described in Exhibit 3.01(a) (each, an "Information Package").
(b) EARNED DISCOUNT; OTHER AMOUNTS DUE. On the first Business Day
following the Reporting Date for each Settlement Period, the Administrator
shall notify Servicer of (i) the amount of Earned Discount accrued in respect
of the Asset Tranche funded by Commercial Paper Notes during such Settlement
Period, and (ii) all fees and other amounts accrued and payable by Seller
under this Agreement (other than amounts described in clause (c) below).
Servicer shall pay to the Administrator the amount of such Earned Discount,
fees and other amounts (to the extent of Collections attributable to the Asset
Interest during such Settlement Period and not previously paid to the
Administrator or reinvested pursuant to Section 1.03) on the Monthly
Settlement Date for such Settlement Period. Such payment shall be made (A) out
of amounts set aside pursuant to Section 1.03 for such payment, (B) in the
case of amounts other than Earned Discount, to the extent that amounts were
not set aside pursuant to Section 1.03 for such payment, out of funds paid by
Seller to Servicer (which amounts Seller hereby agrees to pay to Servicer),
and (C) in the case of Earned Discount, to the extent that funds were not set
aside pursuant to Section 1.03 for such payment (because the actual Earned
Discount for such Settlement Period was greater than the estimated Earned
Discount used in calculating the Asset Interest during such Settlement
Period), out of funds paid by Seller to Servicer (which amounts Seller hereby
agrees to pay to Servicer), up to the aggregate amount of Collections applied
to Reinvestment under Section 1.03(a) or (b) during such Settlement Period.
(c) ORDER OF APPLICATION. Upon receipt by the Administrator of funds
distributed pursuant to this Section 3.01 on the Monthly Settlement Date with
respect to any Settlement Period, the Administrator shall apply thereto the
items specified in the sub-clauses below, in the order of priority of such
sub-clauses;
(i) to Earned Discount accrued in respect of the Asset
Interest;
(ii) to accrued and unpaid Servicer's Fee (if Servicer is not
Seller or its Affiliate);
(iii) to other accrued and unpaid amounts owing to Purchaser
and the Administrator hereunder; and
(iv) to accrued and unpaid Servicer's Fee (if Servicer is
Seller or its Affiliate).
(d) NON-DISTRIBUTION OF SERVICER'S FEE. Prior to the occurrence of a
Liquidation Event or Unmatured Liquidation Event (but excluding any Excepted
Liquidation Event), the amounts (if any) set aside pursuant to Section 1.03 in
respect of Servicer's Fee may be retained by Servicer; provided, however, that
if the Servicer is not Marketing Co. or an affiliate thereof, the Servicing
Fee shall be paid to the Servicer in accordance with Section 3.01(c).
(e) DELAYED PAYMENT. If on any day described in this Section 3.01,
because Collections during the relevant Settlement Period or Yield Period were
less than the aggregate amounts payable, Servicer shall not make any payment
otherwise required, the next available Collections in respect of the Asset
Interest shall be applied to such payment, and no Reinvestment shall be
permitted hereunder until such amount payable has been paid in full.
SECTION 3.02. DEEMED COLLECTIONS; REDUCTION OF PURCHASER'S TOTAL
INVESTMENT, ETC.
(a) Deemed Collections. If on any day
(i) the Unpaid Balance of any Pool Receivable is
(A) reduced as a result of any defective, rejected or
returned merchandise or services, any cash discount, or any
adjustment by any Originator, any Seller Party or any Affiliate
of any thereof,
(B) reduced or cancelled as a result of a setoff in
respect of any claim by the Obligor thereof against any
Originator, any Seller Party or any Affiliate of any thereof
(whether such claim arises out of the same or a related or an
unrelated transaction), or
(C) reduced on account of the obligation of any Originator
or any Seller Party to pay to the related Obligor any rebate or
refund, or
(D) less than the amount included in calculating the Net
Pool Balance for purposes of any Information Package, Weekly
Information Package or Daily Information Package (for any
reason other than such Receivable becoming a Defaulted
Receivable), or
(ii) any of the representations or warranties of Seller set
forth in Section 6.01(l) or (p) were not true when made with respect
to any Pool Receivable, or any of the representations or warranties
of Seller set forth in Section 6.01(l) are no longer true with
respect to any Pool Receivable,
then, on such day, Seller shall be deemed to have received a Collection of such
Pool Receivable
(I) in the case of clause (i) above, in the amount of such
reduction or cancellation or the difference between the actual
Unpaid Balance and the amount included in calculating such Net
Pool Balance, as applicable; and
(II) in the case of clause (ii) above, in the amount of
the Unpaid Balance of such Pool Receivable.
Collections deemed received by Seller under this Section 3.02(a) are herein
referred to as "Deemed Collections".
(b) SELLER'S OPTIONAL REDUCTION OF PURCHASER'S TOTAL INVESTMENT. In
addition to and not in limitation of the provisions of Section 1.03(c)(i)
permitting certain prepayments at the option of Seller, Seller may on any
Weekly Settlement Date elect to reduce the Purchaser's Total Investment as
follows:
(i) Seller shall give the Administrator at least two Business
Days' prior written notice of such reduction (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
(which must be a Weekly Settlement Date) and on each day thereafter,
Servicer shall refrain from reinvesting Collections pursuant to
Section 1.03 until the amount thereof not so reinvested shall equal
the desired amount of reduction, and
(iii) Servicer shall hold such Collections in trust for
Purchaser, pending payment to the Administrator, as provided in
Section 1.03;
provided that the amount of any such reduction shall be not less than $100,000
or an integral multiple thereof, and the Purchaser's Total Investment after
giving effect to such reduction shall be not less than $25,000,000 (unless
Purchaser's Total Investment shall thereby be reduced to zero).
SECTION 3.03. PAYMENTS AND COMPUTATIONS, ETC.
(a) PAYMENTS. All amounts to be paid or deposited by Seller or
Servicer to the Administrator or any other Person hereunder (other than
amounts payable under Section 4.02) shall be paid or deposited in accordance
with the terms hereof no later than 10:00 a.m. (New York City time) on the day
when due in lawful money of the United States of America in same day funds to
the Administrator at PNC Bank, National Association, Pittsburgh, Pennsylvania
(account no. 1002422076), or to such other account at the bank named therein
as the Administrator may designate by written notice to the Person making such
payment.
(b) LATE PAYMENTS. Seller or Servicer, as applicable, shall, to the
extent permitted by law, pay to Purchaser interest on all amounts not paid or
deposited when due hereunder at 1% per annum above the Alternate Base Rate,
payable on demand, provided, however, that such interest rate shall not at any
time exceed the maximum rate permitted by applicable law.
(c) METHOD OF COMPUTATION. All computations of interest, Earned
Discount, Liquidation Discount, any fees payable under Section 4.01 and any
other fees payable by Seller to Purchaser or the Administrator in connection
with Purchases hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day)
elapsed.
SECTION 3.04. TREATMENT OF COLLECTIONS AND DEEMED COLLECTIONS.
Seller shall forthwith deliver to Servicer all Deemed Collections, and
Servicer shall hold or distribute such Deemed Collections as Earned Discount,
accrued Servicer's Fee, repayment of Purchaser's Total Investment, and to
other accrued amounts owing hereunder to the same extent as if such Deemed
Collections had actually been received on the date of such delivery to
Servicer. If Collections are then being paid to the Administrator or its
designee, or lock boxes or accounts directly or indirectly owned or controlled
by the Administrator, Servicer shall forthwith cause such Deemed Collections
to be paid to the Administrator or its designee or to such lock boxes or
accounts, as
applicable, or as the Administrator shall request. So long as Seller shall
hold any Collections (including Deemed Collections) required to be paid to
Servicer or the Administrator, it shall hold such Collections in trust and
shall clearly ▇▇▇▇ its records to reflect such trust; provided that unless the
Administrator shall have requested it in writing to do so, Seller shall not be
required to hold such Collections in a separate deposit account containing
only such Collections.
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. PROGRAM FEE. From the Amendment Effective Time until
the date, following the Termination Date, on which Purchaser's Total
Investment shall be reduced to zero, Seller shall pay to Purchaser a program
fee ("Program Fee") from time to time in amounts and payable on such dates as
are set forth in a separate letter dated as of the date hereof between Seller
and the Administrator.
SECTION 4.02. YIELD PROTECTION.
(a) If (i) Regulation D or (ii) any Regulatory Change occurring after
the date hereof:
(A) shall subject an Affected Party to any tax, duty or other
charge with respect to any Asset Interest owned by or funded by it,
or any obligations or right to make Purchases or Reinvestments or to
provide funding therefor, or shall change the basis of taxation of
payments to the Affected Party of any Purchaser's Total Investments
or Earned Discount owned by, owed to or funded in whole or in part
by it or any other amounts due under this Agreement in respect of
the Asset Interest owned by or funded by it or its obligations or
rights, if any, to make Purchases or Reinvestments or to provide
funding therefor (except for changes in the rate of tax on or
determined by reference to the overall net income of such Affected
Party imposed by the United States of America, by the jurisdiction
in which such Affected Party's principal executive office is located
and, if such Affected Party's principal executive office is not in
the United States of America, by the jurisdiction where such
Affected Party's principal office in the United States is located);
or
(B) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Federal
Reserve Board, but excluding any reserve included in the
determination of Earned Discount), special deposit or similar
requirement against assets of any Affected Party, deposits or
obligations with or for the account of any Affected Party or with or
for the account of any affiliate (or entity deemed by the Federal
Reserve Board to be an affiliate) of any Affected Party, or credit
extended by any Affected Party; or
(C) shall change the amount of capital maintained or required
or requested or directed to be maintained by any Affected Party; or
(D) shall impose any other condition affecting any Asset
Interest owned or funded in whole or in part by any Affected Party,
or its obligations or rights, if any, to make Purchases or
Reinvestments or to provide funding therefor; or
(E) shall change the rate for, or the manner in which the
Federal Deposit Insurance Corporation (or a successor thereto)
assesses, deposit insurance premiums or similar charges;
and the result of any of the foregoing is or would be
(x) to increase the cost to (or in the case of Regulation D referred
to above, to impose a cost on) (I) an Affected Party funding or making or
maintaining any Purchases or Reinvestments, any purchases, reinvestments,
or loans or other extensions of credit under the Liquidity Agreement, or
any Credit Draw, or any commitment of such Affected Party with respect to
any of the foregoing, or (II) the Administrator for continuing its or
Seller's relationship with Purchaser,
(y) to reduce the amount of any sum received or receivable by an
Affected Party under this Agreement, or under the Liquidity Agreement or
the Credit Agreement with respect thereto, or
(z) in the sole determination of such Affected Party, to reduce the
rate of return on the capital of an Affected Party as a consequence of
its obligations hereunder or arising in connection herewith to a level
below that which such Affected Party could otherwise have achieved,
then, within thirty days after demand by such Affected Party (which demand
shall be accompanied by a statement setting forth the basis of such demand and
a calculation of the amounts claimed by the Affected Party), Seller shall pay
directly to such Affected Party such additional amount or amounts as will
compensate such Affected Party for such additional or increased cost or such
reduction.
(b) Each Affected Party will promptly notify Seller and the
Administrator of any event of which it has knowledge (including any future
event that, in the judgment of such Affected Party, is reasonably certain to
occur) which will entitle such Affected Party to compensation pursuant to this
Section 4.02; provided, however, no failure to give or delay in giving such
notification shall adversely affect the rights of any Affected Party to such
compensation.
(c) In determining any amount provided for or referred to in this
Section 4.02, an Affected Party may use any reasonable averaging and
attribution methods (consistent with its ordinary business practices) that it
(in its sole discretion) shall deem applicable. Any Affected Party when making
a claim under this Section 4.02 shall submit to Seller a statement as to such
increased cost or reduced return (including calculation thereof in reasonable
detail), which statement shall, in the absence of demonstrable error, be
conclusive and binding upon Seller.
SECTION 4.03. FUNDING LOSSES. In the event that any Liquidity Bank
shall incur any loss or expense (including any loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired
by such Liquidity Bank to make any Liquidity Purchase or maintain any
Liquidity Purchase) as a result of (i) any settlement with respect to
Purchaser's Tranche Investment of any Asset Tranche funded by a Liquidity
Purchase being made on any day other than the scheduled last day of an
applicable Yield Period with respect thereto, or (ii) any Purchase not being
made in accordance with a request therefor under Section 1.02, then, upon
written notice from the Administrator to Seller and Servicer, Seller shall pay
to Servicer, and Servicer shall pay to the Administrator for the account of
such Liquidity Bank, the amount
of such loss or expense. Such written notice (which shall include calculations
in reasonable detail) shall, in the absence of manifest error, be conclusive
and binding upon the Seller and Servicer.
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.01. CONDITIONS PRECEDENT TO AMENDMENT EFFECTIVE TIME. At
the time when the Administrator shall have received counterparts of this
Agreement duly executed by Parent, Seller, each Subservicer, Servicer,
Purchaser and the Administrator, and, in addition, each of the following
conditions in this Section 5.01 shall have been satisfied, then the Amendment
Effective Time shall be deemed to have occurred, the terms and conditions of
the Original Purchase Agreement shall be amended, superseded and restated in
their entirety by the terms and conditions of this Agreement and this
Agreement shall take effect. This Agreement shall not constitute a novation
and the execution and delivery by the parties hereto of this Agreement is in
substitution for, but not in satisfaction of, obligations of the parties
hereto incurred under or evidenced by the Original Purchase Agreement.
The Administrator shall give notice to the parties hereto that the
Amendment Effective Time has occurred. The occurrence of the Amendment
Effective Time is subject to the conditions precedent that the Administrator
shall have received each of the following, on or before the date hereof, each
(unless otherwise indicated) dated such date or another recent date acceptable
to the Administrator and in form and substance satisfactory to the
Administrator and its counsel:
(a) A copy of the Fifth Amendment to the Sale Agreement;
(b) A certificate of the Secretary or Assistant Secretary of each
Seller Party certifying the names and true signatures of the officers
authorized on its behalf to sign this Agreement and the other Transaction
Documents to be delivered by it hereunder (on which certificate the
Administrator and Purchaser may conclusively rely until such time as the
Administrator shall receive from such Seller Party a revised certificate
meeting the requirements of this subsection (b));
(c) Duly executed copies of Lock-Box Agreements with each of the
Lock-Box Banks to the extent not previously delivered;
(d) A duly executed copy of the Account Pledge Agreement,
substantially in the form of Exhibit 5.01(d) (or in such other form as the
Administrator may reasonably request), to the extent not previously delivered;
and
(e) Such other agreements, instruments, certificates, opinions and
other documents as the Administrator may reasonably request.
SECTION 5.02. CONDITIONS PRECEDENT TO ALL PURCHASES AND
REINVESTMENTS. Each Purchase (including the first Purchase after the Amendment
Effective Time) and each Reinvestment hereunder shall be subject to the
further conditions precedent that on the date of such Purchase or Reinvestment
the following statements shall be true (and Seller, by accepting the amount of
such Purchase or by receiving the proceeds of such Reinvestment, and each
other Seller Party, upon such acceptance or receipt by Seller, shall be deemed
to have certified that):
(a) the representations and warranties contained in Section 6.01 are
correct in all material respects on and as of such day as though made on and
as of such day and shall be deemed to have been made on such day,
(b) no event has occurred and is continuing, or would result from
such Purchase or Reinvestment, that constitutes a Liquidation Event or
Unmatured Liquidation Event,
(c) after giving effect to each proposed Purchase or Reinvestment,
Purchaser's Total Investment will not exceed the Purchase Limit and the Asset
Interest will not exceed the Allocation Limit,
(d) the Termination Date shall not have occurred, and
(e) in the case of a Purchase, the Administrator shall have timely
received an appropriate notice of the proposed Purchase in accordance with
Section 1.02(a);
provided, however, the absence of the occurrence and continuance of an
Unmatured Liquidation Event shall not be a condition precedent to any
Reinvestment or any Purchase on any day which does not cause the Purchaser's
Total Investment, after giving effect to such Reinvestment or Purchase, to
exceed the Purchaser's Total Investment as of the opening of business on such
day.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES.
SELLER PARTIES JOINTLY AND SEVERALLY REPRESENT AND WARRANT AS FOLLOWS:
(a) ORGANIZATION AND GOOD STANDING; OWNERSHIP. Each Seller Party has
been duly organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware (in the case of each of Parent,
Seller, Valenite, D-M-E, Uniloy and Talbot) or Ohio (in the case of Marketing
Co.)(or, in the case of Parent, such other jurisdiction as may be permitted
under the last sentence of Section 7.03(g)), with power and authority to own
its properties and to conduct its business as such properties are presently
owned and such business is presently conducted. Seller had at all relevant
times, and now has, all necessary power, authority, and legal right to acquire
and own the Pool Receivables. Parent owns directly or indirectly all the
issued and outstanding capital stock (including all warrants, options,
conversion rights, and other rights to purchase or convert into such stock) of
each Originator, and Marketing Co. owns directly all the issued and
outstanding capital stock of Seller, in each case, free and clear of all Liens
other than Permitted Pledges.
(b) DUE QUALIFICATION. Each Seller Party is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership
or lease of property or the conduct of its business requires such
qualification, licenses or approvals.
(c) POWER AND AUTHORITY; DUE AUTHORIZATION. Each Seller Party (i)
has all necessary power, authority and legal right (A) to execute and deliver
this Agreement and the other Transaction Documents to which it is a party, (B)
to carry out the terms of the Transaction Documents to which it is a party,
(C) in the case of Servicer and each Subservicer, to service the Receivables
and the Related Assets in accordance with this Agreement and the Sale
Agreement, and
(D) in the case of Seller, sell and assign the Asset Interest on the terms and
conditions herein provided, and (ii) has duly authorized by all necessary
corporate action the execution, delivery and performance of this Agreement and
the other Transaction Documents and, in the case of Seller, the sales and
assignments described in clause (i)(D) above.
(d) VALID SALE; BINDING OBLIGATIONS. (i) This Agreement constitutes
a valid sale, transfer, and assignment of the Asset Interest to Purchaser,
enforceable against creditors of, and purchasers from, Seller, and (ii) this
Agreement constitutes, and each other Transaction Document to be signed by any
Seller Party when duly executed and delivered will constitute, a legal, valid
and binding obligation of such Seller Party, enforceable in accordance with
its terms, except in the case of clauses (i) and (ii) above, as enforceability
may be limited by bankruptcy, insolvency, reorganization, or other similar
laws from time to time in effect affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(e) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and the other Transaction Documents and the fulfillment of
the terms hereof will not (i) conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, the articles or certificate of incorporation or
by-laws of any Seller Party, or any indenture, loan agreement, receivables
purchase agreement, mortgage, deed of trust, or other agreement or instrument
to which any Seller Party is a party or by which it or any of its properties
is bound, (ii) result in the creation or imposition of any Lien upon any of
Seller Party's properties pursuant to the terms of any such indenture, loan
agreement, receivables purchase agreement, mortgage, deed of trust, or other
agreement or instrument, other than this Agreement and the other Transaction
Documents, or (iii) violate any law or any order, rule, or regulation
applicable to any Seller Party of any court or of any federal or state
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over such Seller Party or any of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending, or to any Seller Party's knowledge threatened, before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or any other
Transaction Document, (ii) seeking to prevent the sale and assignment of the
Receivables under the Sale Agreement or of the Asset Interest under this
Agreement or the consummation of any of the other transactions contemplated by
this Agreement or any other Transaction Document, (iii) seeking any
determination or ruling that might have a Material Adverse Effect or (iv)
seeking to adversely affect the federal income tax attributes of the Purchases
or Reinvestments hereunder.
(g) BULK SALES ACT. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.
(h) GOVERNMENT APPROVALS. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
each Seller Party of this Agreement and each other Transaction Document to
which it is a party, except for (i) the filing of the UCC financing statements
referred to in Article V, and (ii) the filing of any UCC continuation
statements and amendments from time to time required in relation to any UCC
financing statements filed in connection with this Agreement, as provided in
Section 8.05, all of which, at the time required in Article V or Section 8.05,
as applicable, shall have been duly made and shall be in full force and
effect.
(i) FINANCIAL CONDITION. (x) The consolidated balance sheets of
Parent and its consolidated subsidiaries as at December 31, 2000, and the
related statements of income and shareholders' equity of Parent and its
consolidated subsidiaries for the fiscal year then ended, certified by Ernst &
Young, independent certified public accountants, copies of which have been
furnished to the Administrator, fairly present the consolidated financial
condition, business, business prospects and operations of Parent and its
consolidated subsidiaries as at such date and the consolidated results of the
operations of Parent and its consolidated subsidiaries for the period ended on
such date, all in accordance with GAAP consistently applied, and (y) since
December 31, 2000, there has been no material adverse change in any such
condition, business, business prospects or operations except as described in
Schedule 6.01(i).
(j) LITIGATION. No injunction, decree or other decision has been
issued or made by any court, governmental agency or instrumentality thereof
that prevents, and to the knowledge of any Seller Party, no threat by any
person has been made to attempt to obtain any such decision that would
prevent, any Seller Party from conducting a material part of its business
operations, except as described in Schedule 6.01(j).
(k) MARGIN REGULATIONS. The use of all funds obtained by any Seller
Party under this Agreement or any other Transaction Document will not conflict
with or contravene any of Regulations T, U and X promulgated by the Board of
Governors of the Federal Reserve System from time to time.
(l) QUALITY OF TITLE. (i) Each Pool Receivable, together with the
related Contract and all purchase orders and other agreements related to such
Pool Receivable, is owned by Seller free and clear of any Lien (other than any
Lien arising solely as the result of any action taken by Purchaser (or any
assignee thereof) or by the Administrator); (ii) when Purchaser makes a
Purchase or Reinvestment, it shall have acquired and shall at all times
thereafter continuously maintain a valid and perfected first priority
undivided percentage ownership interest to the extent of the Asset Interest in
each Pool Receivable, each related Contract, the Related Security and
Collections with respect thereto, free and clear of any Lien (other than any
Lien arising as the result of any action taken by an Affected Party); and
(iii) no financing statement or other instrument similar in effect covering
any Pool Receivable, any interest therein, the related Contracts, the Related
Security or Collections with respect thereto is on file in any recording
office except such as may be filed (1) in favor of an Originator or Seller in
accordance with the Contracts, (2) in favor of Seller in connection with the
Sale Agreement, (3) in favor of Purchaser or the Administrator in accordance
with this Agreement or in connection with any Lien arising solely as the
result of any action taken by Purchaser (or any assignee thereof) or by the
Administrator, or (4) in favor of the Liquidity Agent.
(m) ACCURATE REPORTS. No Information Package, Weekly Information
Package, Daily Information Package (if prepared by any Seller Party or its
Affiliate, or to the extent information therein was supplied by any Seller
Party or its Affiliate) or other information, exhibit, financial statement,
document, book, record or report furnished or to be furnished, in each case in
writing, by or on behalf of any Seller Party or its Affiliates to the
Administrator or Purchaser in connection with this Agreement was or will be
inaccurate in any material respect as of the date it was or will be dated or
(except as otherwise disclosed to the Administrator and Purchaser at such
time) as of the date so furnished, or contained or (in the case of information
or other materials to be furnished in the future) will contain any material
misstatement of fact or omitted or (in the case of information or other
materials to be furnished in the future) will omit to state a material fact or
any fact necessary to make the statements contained therein not materially
misleading.
(n) OFFICES. The principal places of business and chief executive
offices of each Subservicer, Servicer and Seller are located at the respective
addresses set forth under its name on the signature pages hereof, and the
offices where each Subservicer, Servicer and Seller keep all their books,
records and documents evidencing Pool Receivables, the related Contracts and
all purchase orders and other agreements related to such Pool Receivables are
located at the addresses specified in Schedule 6.01(n) (or at such other
locations, notified to the Administrator in accordance with Section 7.01(f),
in jurisdictions where all action required by Section 8.05 has been taken and
completed).
(o) LOCK-BOX ACCOUNTS. The names and addresses of all the Lock-Box
Banks, together with the account numbers of the lock-box accounts of each
Originator or Seller at such Lock-Box Banks, are specified in Schedule 6.01(o)
(or have been notified to and approved by the Administrator in accordance with
Section 7.03(d)).
(p) ELIGIBLE RECEIVABLES. Each Receivable included in the Net Pool
Balance as an Eligible Receivable on the date of any Purchase or Reinvestment
shall be an Eligible Receivable on such date.
(q) SERVICING PROGRAMS. No license or approval is required for the
Administrator's use of any program used by Servicer in the servicing of the
Receivables, other than those which have been obtained and are in full force
and effect.
(r) NO DISCLOSURE REQUIRED. Under applicable laws and regulations in
effect on the date hereof, as of the date hereof no Seller Party is required
to file a copy of this Agreement with the Securities and Exchange Commission
or any other governmental authority.
(s) NATURE OF RECEIVABLES. Each Receivable constitutes an "account"
as such term is defined in the UCC.
ARTICLE VII
GENERAL COVENANTS OF SELLER PARTIES
SECTION 7.01. AFFIRMATIVE COVENANTS OF SELLER PARTIES. From the date
hereof until the Final Payout Date, each Seller Party will, and (except in the
case of Section 7.01(l)) Parent will cause each other Seller Party to, unless
the Administrator shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material respects with
all applicable laws, rules, regulations and orders with respect to the Pool
Receivables and related Contracts except where the failure to so comply would
not individually or in the aggregate have a reasonable possibility of having a
Material Adverse Effect.
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified in good standing as a
foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification
might reasonably be expected to have a Material Adverse Effect.
(c) AUDITS. (i) At any time and from time to time upon reasonable
notice during regular business hours, permit the Administrator or any of its
agents or representatives, (A) to
examine and make copies of and abstracts from all books, records and documents
(including, without limitation, computer tapes and disks) in the possession or
under the control of such Seller Party relating to Pool Receivables,
including, without limitation, the related Contracts and purchase orders and
other agreements, (B) to review the corporate separateness, bankruptcy
remoteness and the compliance of each Seller Party with any applicable laws,
rules, regulations or orders, and (C) to visit the offices and properties of
any Seller Party for the purpose of examining such materials described in
clause (i)(A) and(i)(B) next above, and to discuss matters relating to Pool
Receivables or any Seller Party's performance hereunder with any of the
officers of any Seller Party having knowledge of such matters, with employees
of any Seller Party designated by any such officer or, with the consent of any
such officer (which consent need not be in writing and will not be
unreasonably withheld) with any other employees of any Seller Party having
knowledge of such matters; provided that no Seller Party or Originator shall
be obligated to pay the expenses of any such examination or review occurring
more frequently than semi-annually or, with respect to the review discussed in
clause (i)(B) above, more frequently than annually, unless a Liquidation Event
or Unmatured Liquidation Event exists; (ii) permit the Administrator or any of
its agents or representatives, upon the reasonable prior request of the
Administrator to meet with the independent auditors of the Seller Parties, to
review such auditors' work papers (including, without limitation, work papers
relating to any audit report or audit opinion described in Section 7.02(h))
and otherwise to review with such auditors the books and records of the Seller
Parties with respect to the Pool Receivables and Related Assets; and (iii)
without limiting the provisions of clause (i) next above, from time to time
(A) upon reasonable notice during regular business hours, not more than four
times in any calendar year and at the expense of the Administrator, or (B) on
request of the Administrator at any time when a Liquidation Event or Unmatured
Liquidation Event (other than an Excepted Liquidation Event) shall have
occurred and be continuing, at the expense of such Seller Party, permit
certified public accountants or other auditors acceptable to the Administrator
to conduct a review of any Seller Party's books and records with respect to
the Pool Receivables and Related Assets.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. In the case of
Servicer, maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records evidencing Pool
Receivables in the event of the destruction of the originals thereof), and
keep and maintain, all documents, books, records and other information
reasonably necessary or advisable for the collection of all Pool Receivables
(including, without limitation, records adequate to permit the daily
identification of outstanding Unpaid Balances by Obligor and related debit and
credit details of the Pool Receivables).
(e) PERFORMANCE AND COMPLIANCE WITH RECEIVABLES AND CONTRACTS. At
its expense, timely and fully perform and comply with all material provisions,
covenants and other promises, if any, required to be observed by it under the
Contracts related to the Pool Receivables and all purchase orders and other
agreements related to such Pool Receivables.
(f) LOCATION OF RECORDS. In the case of each Subservicer, Servicer
and Seller, keep its chief place of business and chief executive office, and
the offices where it keeps its records concerning the Pool Receivables, all
related Contracts and all purchase orders and other agreements related to such
Pool Receivables (and all original documents relating thereto), at the
address(es) of each Subservicer, Servicer and Seller referred to in Section
6.01(n) or, upon 30 days' prior written notice to the Administrator, at such
other locations in jurisdictions where all action required by Section 8.05
shall have been taken and completed.
(g) CREDIT AND COLLECTION POLICIES. Comply in all material respects
with the Credit and Collection Policy in regard to each Pool Receivable and
the related Contract.
(h) COLLECTIONS. In the case of Servicer, instruct all Obligors to
cause all Collections of Pool Receivables to be deposited directly with a
Lock-Box Bank, and in the case of each other Seller Party, not give any
contrary or conflicting instructions, and, upon the request of Servicer or the
Administrator, confirm such instructions by Servicer or take such other action
as may be reasonably required to give effect to such instructions.
(i) SALE AGREEMENT. In the case of Seller, Servicer and each
Subservicer, perform and comply in all material respects with all of its
covenants and agreements set forth in the Sale Agreement, and in the case of
Parent, cause Seller, Servicer and each Originator to perform and comply in
all material respects with such covenants and agreements.
(j) NET WORTH. In the case of Seller, maintain a net worth of at
least $6,000,000.
SECTION 7.02. REPORTING REQUIREMENTS OF SELLER PARTIES. From the
date hereof until the Final Payout Date unless the Administrator and shall
otherwise consent in writing, Seller Parties will, and Parent will cause each
other Seller Party to, furnish to the Administrator:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and in any
event within 90 days after the end of each fiscal year of such Seller Party:
(i) in the case of Parent, a copy of Parent's Annual Report, on
Form 10-K, as filed with the Securities and Exchange Commission (or
if Parent is no longer required to file such Form 10-K, Parent shall
furnish such financial reports containing information typically
found on Form 10-K) and as reported on by nationally recognized
independent certified public accountants, together with a
certificate from the Chief Executive Officer, President, Chief
Financial or Accounting Officer, Treasurer or any other officer of
Parent acceptable to the Administrator;
(ii) in the case of each of Servicer and Seller, copies of the
unaudited annual financial statements of Servicer and its
Subsidiaries (prepared on a consolidated basis and on a
consolidating basis), and of Seller, in each case prepared in
conformity with GAAP, duly certified by the chief financial officer
of such Seller Party;
(b) QUARTERLY FINANCIAL STATEMENTS. In the case of Seller, as soon
as available and in any event within 60 days after the end of each quarter of
each fiscal year of Seller, copies of the quarterly financial statements of
Seller, prepared in conformity with GAAP, duly certified by the chief
financial officer of Seller;
(c) REPORTS TO HOLDERS AND EXCHANGES. In addition to the reports
required by subsections (a), (b) and (c) next above, in the case of Parent,
promptly upon the Administrator's request, copies of any reports specified in
such request which Parent sends to any of its securityholders, and any reports
or registration statements that Parent files with the Securities and Exchange
Commission or any national securities exchange other than registration
statements relating to employee benefit plans and to registrations of
securities for selling security holders;
(d) ERISA. Promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any Reportable Event defined in
Article IV of ERISA which any Seller Party files under ERISA with the Internal
Revenue Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or which such Seller Party receives from the Pension
Benefit Guaranty Corporation;
(e) LIQUIDATION EVENTS, ETC. As soon as possible and in any event
within five days after obtaining knowledge of the occurrence of each
Liquidation Event and each Unmatured Liquidation Event (other than an Excepted
Liquidation Event) or any "Purchase Termination Event" or "Unmatured Purchase
Termination Event" under the Sale Agreement, a written statement of the chief
financial officer or chief accounting officer of Parent setting forth details
of such event and the action that Parent proposes to take or cause any other
Seller Party or Originator to take with respect thereto;
(f) LITIGATION. As soon as possible and in any event within three
Business Days of any Seller Party's knowledge thereof, notice of (i) any
litigation, investigation or proceeding which may exist at any time which
could reasonably be expected to have a Material Adverse Effect and (ii) any
development in previously disclosed litigation which development could
reasonably be expected to have a Material Adverse Effect;
(g) [RESERVED];
(h) CHANGE IN CREDIT AND COLLECTION POLICY. Prior to its effective
date, notice of (i) any material change in the character of any Seller Party's
business, and (ii) any change in the Credit and Collection Policy;
(i) FUNDAMENTAL CHANGES. At least ten Business Days prior to any
transaction described in clause (iii) or the last sentence of Section 7.03(g),
written notice thereof; and
(j) OTHER. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the condition or
operations, financial or otherwise, of any Seller Party as the Administrator
may from time to time reasonably request in order to protect the interests of
the Administrator or Purchaser under or as contemplated by this Agreement.
SECTION 7.03. NEGATIVE COVENANTS OF SELLER PARTIES. From the date
hereof until the Final Payout Date, no Seller Party will, and Parent will not
permit any other Seller Party to, without the prior written consent of the
Administrator:
(a) SALES, LIENS, ETC. (i) Except as otherwise provided herein and
in the other Transaction Documents, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Lien upon
or with respect to, any Pool Receivable or related Contract or Related
Security, or any interest therein, or any lock-box account to which any
Collections of any Pool Receivable are sent, or any right to receive income or
proceeds from or in respect of any of the foregoing, and (ii) in the case of
Servicer and each Subservicer, not assert any interest in the Receivables,
except (in the case of Servicer) as Servicer, or (in the case of any
Subservicer) as sub-servicer pursuant to Section 8.01(c).
(b) EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
permitted in Section 8.02(c), extend, amend or otherwise modify the terms of
any Select Pool Receivable, or amend, modify or waive any material term or
condition of any Contract related thereto.
(c) CHANGE IN BUSINESS OR CREDIT AND COLLECTION POLICY. Make or
permit to be made any change in the character of its business or in any Credit
and Collection Policy, which change would, in either case, impair the
collectibility of any Pool Receivable or otherwise adversely affect the
interests or remedies of Purchaser under this Agreement or any other
Transaction Document.
(d) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Add or terminate any
bank as a Lock-Box Bank from those listed in Schedule 6.01(o) or make any
change in its instructions to Obligors regarding payments to be made to any
Originator, Seller or Servicer or payments to be made to any Lock-Box Bank
(except for a change in instructions solely for the purpose of directing
Obligors to make such payments to another existing Lock-Box Bank), unless (i)
the Administrator shall have approved such addition, termination or change and
(ii) the Administrator shall have received duly executed copies of Lock-Box
Agreements with each new Lock-Box Bank.
(e) DEPOSITS TO LOCK-BOX ACCOUNTS. Deposit or otherwise credit, or
cause or permit to be so deposited or credited, to any lock-box account or
other account covered by any Lock-Box Agreement, or any other account
maintained by Seller or Servicer for the purpose of receiving Collections on
Pool Receivables, any cash or cash proceeds other than Collections of Pool
Receivables.
(f) CHANGES TO OTHER DOCUMENTS. Enter into any amendment or
modification of or supplement to the Sale Agreement.
(g) FUNDAMENTAL CHANGES. In the case of any Seller Party (other than
the Parent), wind up, liquidate or dissolve its affairs or enter into any
transaction or series of related transactions of merger or consolidation or
convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) its property or assets in one transaction or a
series of related transactions in an aggregate amount equal to or greater than
10% of the total consolidated assets of Parent (whether now owned or hereafter
acquired), or in any amount in the case of Seller, except that (i) any
Subsidiary of Parent may merge into Parent; provided that Parent shall at all
times be the continuing corporation; (ii) any Subsidiary of Parent, other than
Seller, may merge into or consolidate with another wholly-owned Subsidiary of
Parent; (iii) Parent may merge or consolidate with any Person other than
Seller; provided that (A) Parent shall at all times be the continuing or
surviving corporation and (B) no Liquidation Event or Unmatured Liquidation
Event (other than an Excepted Liquidation Event) shall have occurred and be
continuing or shall occur as a result of such merger or consolidation; (iv)
Seller Parties may enter into and perform the transactions contemplated by
this Agreement; and (v) Parent may sell promissory notes evidencing the
obligations of purchasers of inventory consisting of equipment of Parent
originally representing the portion of the purchase price of such inventory
not paid to Parent in cash at the time of purchase, provided that at no time
shall the purchasers of such promissory notes have recourse to Parent in
respect of amounts outstanding thereon in an amount in excess of $15,000,000
in the aggregate. Nothing set forth in this Section 7.03(g) shall prohibit
Parent from reincorporating itself under the laws of another state (by way of
merger, dissolution or otherwise), provided that (i) no Liquidation Event or
Unmatured Liquidation Event (other than an Excepted Liquidation Event) shall
have occurred and be continuing or shall occur as a result of such
reincorporation, and (ii) such reincorporation would not reasonably be
expected to have a Material Adverse Effect.
(h) RESTRICTED PAYMENTS BY SELLER. (i) In the case of Seller,
purchase or redeem any shares of the capital stock of Seller, (A) declare or
pay any dividends thereon (other than stock dividends), make any distribution
to stockholders or set aside any funds for any such purpose, or (B) pay any
principal amount of any Initial Purchaser Note (as defined in the Sale
Agreement), except that Seller may (I) pay all or a portion of such principal
amount on the Monthly Settlement Date for any Settlement Period, after making
any payment required to be made by Seller to Servicer on such Monthly
Settlement Date as described in Section 1.03(e)(ii) and (II)
after the payment of the outstanding principal amount and interest on the
Initial Purchaser Note, may declare and pay dividends on its capital stock
(including without limitation dividends to Parent), in each case if after
giving effect to such payment no Unmatured Liquidation Event or Liquidation
Event shall have occurred, or (ii) in the case of each other Seller Party,
permit Seller to do any of the foregoing.
(i) SELLER INDEBTEDNESS. In the case of Seller, incur or permit to
exist any indebtedness or liability on account of deposits or advances or for
borrowed money or for the deferred purchase price of any property or services,
except (A) indebtedness of Seller to the Originators incurred in accordance
with the Sale Agreement, (B) current accounts payable arising under the
Transaction Documents and not overdue and (C) other current accounts payable
arising in the ordinary course of business and not overdue, in an aggregate
amount at any time outstanding not to exceed $1000.
(j) NEGATIVE PLEDGES. Enter into or assume any agreement (other than
this Agreement and the other Transaction Documents) prohibiting the creation
or assumption of any Lien upon any Receivables or Related Assets, whether now
owned or hereafter acquired, except as contemplated by the Transaction
Documents, or otherwise prohibiting or restricting any transaction
contemplated hereby or by the other Transaction Documents.
SECTION 7.04. SEPARATE CORPORATE EXISTENCE OF SELLER. Each Seller
Party hereby acknowledges that Purchaser and the Administrator are entering
into the transactions contemplated hereby in reliance upon Seller's identity
as a legal entity separate from Servicer, each Subservicer, Parent and their
other Affiliates. Therefore, each Seller Party will, and, in the case of each
of Parent, Servicer and each Subservicer, will cause its Subsidiaries to, take
such actions as shall be required in order that:
(i) Seller's operating expenses will not be paid by any other
Seller Party or other Affiliate of Seller;
(ii) Seller will have its own separate mailing address and
stationery;
(iii) The books and records of Seller will be maintained
separately from those of Servicer, each Subservicer and any other
Affiliate of Seller;
(iv) Any financial statements of any Seller Party or Affiliate
thereof which are consolidated to include Seller will contain
detailed notes clearly stating that (A) all of Seller's assets are
owned by Seller, and (B) Seller is a separate corporate entity with
its own separate creditors that will be entitled to be satisfied out
of Seller's assets prior to any value in Seller becoming available
to Seller's equity holders;
(v) Seller's assets will be maintained in a manner that
facilitates their identification and segregation from those of
Servicer, each Subservicer and the other Affiliates;
(vi) Each Affiliate of Seller will strictly observe corporate
formalities in its dealings with Seller, and funds or other assets
of Seller will not be commingled with those of any of its
Affiliates;
(vii) No Affiliate of Seller will maintain joint bank accounts
with Seller or other depository accounts with Seller to which any
such Affiliate (other than in its capacity as the Servicer hereunder
or under the Sale Agreement) has independent access;
(viii) No Affiliate of Seller shall, directly or indirectly,
name Seller or enter into any agreement to name Seller as a direct
or contingent beneficiary or loss payee on any insurance policy
covering the property of any Affiliate of Seller;
(ix) No Affiliate of Seller will at any time pool any of its
funds with any funds of Seller;
(x) Each Affiliate of Seller will maintain arm's-length
relationships with Seller, and each Affiliate of Seller that renders
or otherwise furnishes services or merchandise to Seller will be
compensated by Seller at market rates for such services or
merchandise; and
(xi) No Affiliate of Seller will be, nor will it hold itself
out to be, responsible for the debts of Seller or the decisions or
actions in respect of the daily business and affairs of Seller.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. DESIGNATION OF SERVICER.
(a) MARKETING CO. AS INITIAL SERVICER. The servicing, administering
and collection of the Pool Receivables shall be conducted by the Person
designated as Servicer hereunder from time to time in accordance with this
Section 8.01. Until the Administrator gives to Marketing Co. a Successor
Notice, (as defined in Section 8.01(b)), Marketing Co. is hereby designated
as, and hereby agrees to perform the duties and obligations of, Servicer
pursuant to the terms hereof.
(b) SUCCESSOR NOTICE; SERVICER TRANSFER EVENTS. Upon Marketing Co.'s
receipt of a notice from the Administrator of the Administrator's designation
of a new Servicer (a "Successor Notice"), Marketing Co. agrees that it will
terminate its activities as Servicer hereunder in a manner that the
Administrator believes will facilitate the transition of the performance of
such activities to the new Servicer, and the Administrator (or its designee)
shall assume each and all of Marketing Co.'s obligations to service and
administer such Receivables, on the terms and subject to the conditions herein
set forth, and Marketing Co. shall use its best efforts to assist the
Administrator (or its designee) in assuming such obligations. The
Administrator agrees not to give Marketing Co. a Successor Notice until after
the occurrence of any Liquidation Event (other than an Excepted Liquidation
Event) or any event which, in the reasonable opinion of the Administrator,
could reasonably be expected to have a material adverse effect on Marketing
Co.'s ability to perform its obligations as Servicer hereunder (any such
Liquidation Event or other event being herein called a "Servicer Transfer
Event"), in which case such Successor Notice may be given at any time in the
Administrator's discretion. If Marketing Co. disputes the occurrence of a
Servicer Transfer Event, Marketing Co. may take appropriate action to resolve
such dispute; provided that Marketing Co. must terminate its activities
hereunder as Servicer and allow the newly designated Servicer to perform such
activities on the date provided by the Administrator as described above,
notwithstanding the commencement or continuation of any proceeding to resolve
the aforementioned dispute.
(c) SUBCONTRACTS. (i) Servicer may, with the prior consent of the
Administrator, subcontract with any other Person for servicing, administering
or collecting the Pool Receivables, provided that Servicer shall remain liable
for the performance of the duties and obligations of Servicer pursuant to the
terms hereof.
(ii) Servicer hereby appoints Valenite as sub-servicer to
perform servicing, administering, collecting and related functions
with respect to that portion of the Pool Receivables sold or
contributed to Seller by Valenite in accordance with the Sale
Agreement (the "Valenite Pool Receivables"), and Valenite hereby
accepts such appointment. In its capacity as such sub-servicer,
Valenite shall have all such rights and obligations with respect to
the Valenite Pool Receivables as Servicer shall have with respect to
all Pool Receivables, and the provisions of this Agreement and the
Sale Agreement relating to the Servicer's rights and obligations
with respect to all Pool Receivables as between the Servicer and the
other parties hereto shall apply mutatis mutandis to Valenite as
such sub-servicer with respect to the Valenite Pool Receivables;
provided that any Successor Notice to Marketing Co. shall
automatically terminate Valenite's appointment as such sub-servicer
unless such Successor Notice explicitly states otherwise.
(iii) Servicer hereby appoints D-M-E as sub-servicer to perform
servicing, administering, collecting and related functions with
respect to that portion of the Pool Receivables sold or contributed
to Seller by D-M-E in accordance with the Sale Agreement (the "D-M-E
Pool Receivables"), and D-M-E hereby accepts such appointment. In
its capacity as such sub-servicer, D-M-E shall have all such rights
and obligations with respect to the D-M-E Pool Receivables as
Servicer shall have with respect to all Pool Receivables, and the
provisions of this Agreement and the Sale Agreement relating to the
Servicer's rights and obligations with respect to all Pool
Receivables as between the Servicer and the other parties hereto
shall apply mutatis mutandis to D-M-E as such sub-servicer with
respect to the D-M-E Pool Receivables; provided that any Successor
Notice to Marketing Co. shall automatically terminate D-M-E's
appointment as such sub-servicer unless such Successor Notice
explicitly states otherwise.
(iv) Servicer hereby appoints Uniloy as sub-servicer to perform
servicing, administering, collecting and related functions with
respect to that portion of the Pool Receivables sold or contributed
to Seller by Uniloy in accordance with the Sale Agreement (the
"Uniloy Pool Receivables"), and Uniloy hereby accepts such
appointment. In its capacity as such sub-servicer, Uniloy shall have
all such rights and obligations with respect to the Uniloy Pool
Receivables as Servicer shall have with respect to all Pool
Receivables, and the provisions of this Agreement and the Sale
Agreement relating to the Servicer's rights and obligations with
respect to all Pool Receivables as between the Servicer and the
other parties hereto shall apply mutatis mutandis to Uniloy as such
sub-servicer with respect to the Uniloy Pool Receivables; provided
that any Successor Notice to Marketing Co. shall automatically
terminate Uniloy's appointment as such sub-servicer unless such
Successor Notice explicitly states otherwise.
(v) Servicer hereby appoints Talbot as sub-servicer to perform
servicing, administering, collecting and related functions with
respect to that portion of the Pool Receivables sold or contributed
to Seller by Talbot in accordance with the Sale Agreement (the
"Talbot Pool Receivables"), and Talbot hereby accepts such
appointment. In its capacity as such sub-servicer, Talbot shall have
all such rights and obligations with respect to the Talbot Pool
Receivables as Servicer shall have with respect to all Pool
Receivables, and the provisions of this Agreement and the Sale
Agreement relating to the Servicer's rights and obligations with
respect to all Pool Receivables as between the Servicer and the
other parties hereto shall apply mutatis mutandis to Talbot as such
sub-servicer with respect to the Talbot Pool Receivables; provided
that any Successor Notice to Marketing Co. shall automatically
terminate Talbot's appointment as such sub-servicer unless such
Successor Notice explicitly states otherwise.
SECTION 8.02. DUTIES OF SERVICER.
(a) APPOINTMENT; DUTIES IN GENERAL. Each of Seller, Purchaser and
the Administrator hereby appoints as its agent Servicer, as from time to time
designated pursuant to Section 8.01, to enforce its rights and interests in
and under the Pool Receivables, the Related Security and the related
Contracts. Servicer shall take or cause to be taken all such actions as may be
necessary or advisable to collect each Pool Receivable from time to time, all
in accordance with applicable laws, rules and regulations, with reasonable
care and diligence, and in accordance with the Credit and Collection Policy.
(b) ALLOCATION OF COLLECTIONS; SEGREGATION. Servicer shall set aside
for the account of Seller and Purchaser their respective allocable shares of
the Collections of Pool Receivables in accordance with Section 1.03 but shall
not be required (unless otherwise requested by the Administrator) to segregate
the funds constituting such portions of such Collections prior to the
remittance thereof in accordance with said Sections. If instructed by the
Administrator, Servicer shall segregate and deposit in the Servicer Deposit
Account Purchaser's share (determined in accordance with Section 1.03) of
Collections of Pool Receivables, set aside for Purchaser on the first Business
Day following receipt by Servicer of such Collections in immediately available
funds.
(c) MODIFICATION OF RECEIVABLES. So long as no Liquidation Event
(other than an Excepted Liquidation Event) and no Unmatured Liquidation Event
of the type described in clause (e) of Section 10.01 shall have occurred and
be continuing, Marketing Co., while it is Servicer, may, in accordance with
the Credit and Collection Policy, (i) adjust the original maturity of any
Receivable, not more than once, to reflect the actual terms of the Contract
under which such Receivable arose, (ii) extend the maturity or adjust the
Unpaid Balance of any Defaulted Receivable as Marketing Co. may determine to
be appropriate to maximize Collections thereof, and (iii) adjust the Unpaid
Balance of any Receivable to reflect the reductions or cancellations described
in the first sentence of Section 3.02(a).
(d) DOCUMENTS AND RECORDS. Each Seller Party shall deliver to
Servicer, and Servicer shall hold in trust for Seller and Purchaser in
accordance with their respective interests, all documents, instruments and
records (including, without limitation, computer tapes or disks) that evidence
or relate to Pool Receivables.
(e) CERTAIN DUTIES TO SELLER. Servicer shall, as soon as practicable
following receipt (and, if neither Seller nor any of its Affiliates is
Servicer, in no event later than one Business Day following receipt), turn
over to Seller (i) that portion of Collections of Pool Receivables
representing its undivided percentage interest therein, less, in the event
that neither Marketing Co. nor any other Seller Party or Affiliate thereof is
Servicer, all reasonable and appropriate out-of-pocket costs and expenses of
Servicer of servicing, collecting and administering the Pool
Receivables to the extent not covered by the Servicer's Fee received by it,
and (ii) the Collections of any Receivable which is not a Pool Receivable.
Servicer, if other than Marketing Co. or any other Seller Party or Affiliate
thereof, shall, as soon as practicable upon demand, deliver to Seller all
documents, instruments and records in its possession that evidence or relate
to Receivables of Seller other than Pool Receivables, and copies of documents,
instruments and records in its possession that evidence or relate to Pool
Receivables.
(f) TERMINATION. Servicer's authorization under this Agreement shall
terminate upon the Final Payout Date.
(g) POWER OF ATTORNEY. Seller hereby grants to Servicer an
irrevocable power of attorney, with full power of substitution, coupled with
an interest, to take in the name of Seller all steps which are necessary or
advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind held or transmitted by Seller or transmitted or received by
Purchaser (whether or not from Seller) in connection with any Receivable.
(h) CERTAIN REPORTS. In addition to the other reports and
information required by Sections 1.03, 1.04 and 3.01, Servicer shall prepare
and deliver to the Administrator:
(i) (a) on or before each Wednesday of each week (or, if such
day is not a Business Day, on the following Business Day), a Weekly
Information Package (provided that Servicer may, upon 30 days' prior
written notice to Administrator, elect once per calendar year not to
deliver a Weekly Information Package for a specified week, in which
case the most recent Weekly Information Package delivered by
Servicer prior to such specified date shall be remain effective
until delivery of the next Weekly Information Package); and (b)
during the Liquidation Period or when (x) a Liquidation Event or
Unmatured Liquidation Event shall exist or (y) a default under the
Revolving Credit Agreement resulting from the breach of Section 5.6,
5.11, 5.15, 6.4 or 6.13 (or any other financial covenant) shall
exist, a Daily Information Package on each Business Day;
(ii) within two Business Days after request by the
Administrator, a computer file containing all the information
required to be included in an Information Package, Weekly
Information Package or Daily Information Package and then available
to Servicer, as of the date set forth in such request; and
(iii) concurrently with the delivery of such Information
Package, Weekly Information Package or Daily Information Package
(and to the extent not included in the Information Package, Weekly
Information Package or Daily Information Package), a list of the
Obligors any Receivables of which are included in the Net Pool
Balance under clause (a) or (c) of the definition of "Obligor
Concentration Limit", setting forth the ratings currently assigned
to the long-term debt of such Obligors by ▇▇▇▇▇'▇ Investors Service
and Standard & Poor's Corporation.
SECTION 8.03. RIGHTS OF THE ADMINISTRATOR.
(a) NOTICE TO OBLIGORS. At any time when a Liquidation Event (other
than an Excepted Liquidation Event) has occurred and is continuing, the
Administrator may notify the Obligors of Pool Receivables, or any of them, of
the ownership of the Asset Interest by Purchaser.
(b) NOTICE TO LOCK-BOX BANKS. At any time following the earliest to
occur of (i) the occurrence of a Liquidation Event (other than an Excepted
Liquidation Event), (ii) the commencement of the Liquidation Period (other
than solely as the result of an Excepted Liquidation Event or the scheduled
expiration of Purchaser's commitment hereunder), and (iii) the warranty in
Section 6.01(i)(y) shall no longer be true, the Administrator is hereby
authorized to give notice to the Lock-Box Banks, as provided in the Lock-Box
Agreements, of the transfer to the Administrator of dominion and control over
the lock-boxes and related accounts to which the Obligors of Pool Receivables
make payments. Seller and Servicer hereby transfer to the Administrator,
effective when the Administrator shall give notice to the Lock-Box Banks as
provided in the Lock-Box Agreements, the exclusive dominion and control over
such lock-boxes and accounts, and shall take any further action that the
Administrator may reasonably request to effect such transfer. In no event
shall the rights of the Administrator as set forth in this Section 8.03
constitute or be deemed to constitute a waiver of any rights that the Seller
may have in amounts on deposit in the accounts relating to the lock-boxes
maintained with such Lock-Box Banks after giving effect to the rights and
interests of the Secured Parties under this Agreement and the other
Transaction Documents.
(c) RIGHTS ON SERVICER TRANSFER EVENT. At any time following the
designation of a Servicer other than Marketing Co. pursuant to Section 8.01:
(i) The Administrator may direct the Obligors of Pool
Receivables, or any of them, to pay all amounts payable under any
Pool Receivable directly to the Administrator or its designee.
(ii) Any Seller Party shall, at the Administrator's request and
at such Seller Party's expense, give notice of Purchaser's ownership
and security interests in the Pool Receivables to each said Obligor
and direct that payments be made directly to the Administrator or
its designee.
(iii) Each Seller Party shall, at the Administrator's request,
(A) assemble all of the documents, instruments and other records
(including, without limitation, computer programs, tapes and disks)
which evidence the Pool Receivables, and the related Contracts and
Related Security, or which are otherwise necessary or desirable to
collect such Pool Receivables, and make the same available to the
successor Servicer at a place selected by the Administrator, and (B)
segregate all cash, checks and other instruments received by it from
time to time constituting Collections of Pool Receivables in a
manner acceptable to the Administrator and promptly upon receipt,
remit all such cash, checks and instruments, duly endorsed or with
duly executed instruments of transfer, to the successor Servicer.
(iv) Each Seller Party and Purchaser hereby authorizes the
Administrator, and grants to the Administrator an irrevocable power
of attorney (which shall terminate on the Final Payout Date), to
take any and all steps in such Seller Party's name and on behalf of
Seller Parties and Purchaser which are necessary or desirable, in
the determination of the Administrator, to collect all amounts due
under any and all Pool Receivables, including, without limitation,
endorsing any Seller Party's name on checks and other instruments
representing Collections and enforcing such Pool Receivables and the
related Contracts; provided that the Administrator shall not
exercise its rights under such power of attorney unless a Servicer
Transfer Event shall have occurred and be continuing.
SECTION 8.04. RESPONSIBILITIES OF SELLER PARTIES. ANYTHING HEREIN TO
THE CONTRARY NOTWITHSTANDING:
(a) CONTRACTS. Each Seller Party shall, and Parent shall cause each
other Seller Party and each Originator to, perform all of its obligations (if
any) under the Contracts related to the Pool Receivables and under the related
purchase orders and other agreements to the same extent as if the Asset
Interest had not been sold hereunder, and the exercise by the Administrator or
its designee of its rights hereunder shall not relieve any Seller Party or any
Originator from such obligations.
(b) LIMITATION OF LIABILITY. The Administrator and Purchaser shall
not have any obligation or liability with respect to any Pool Receivables,
Contracts related thereto or any other related purchase orders or other
agreements, nor shall any of them be obligated to perform any of the
obligations of any Seller Party or any Originator thereunder.
SECTION 8.05. FURTHER ACTION EVIDENCING PURCHASES AND REINVESTMENTS.
(a) FURTHER ASSURANCES. Each Seller Party agrees that from time to
time, at its expense, it will, and Parent will cause each other Seller Party
and each Originator to, promptly execute and deliver all further instruments
and documents, and take all further action that the Administrator or its
designee may reasonably request in order to perfect, protect or more fully
evidence the Purchases hereunder and the resulting Asset Interest, or to
enable Purchaser or the Administrator or its designee to exercise or enforce
any of their respective rights hereunder or under any Transaction Document in
respect thereof. Without limiting the generality of the foregoing, each Seller
Party will, and Parent will cause each other Seller Party and each Originator
to, upon the request of the Administrator or its designee:
(i) execute and file such financing or continuation statements,
or amendments thereto or assignments thereof, and such other
instruments or notices, as may be necessary or appropriate;
(ii) ▇▇▇▇ conspicuously each Contract evidencing each Pool
Receivable with a legend, acceptable to the Administrator,
evidencing that the Asset Interest has been sold in accordance with
this Agreement; and
(iii) ▇▇▇▇ its master data processing records evidencing such
Pool Receivables and related Contracts with such legend.
(b) ADDITIONAL FINANCING STATEMENTS; PERFORMANCE BY ADMINISTRATOR.
Each Seller Party hereby authorizes the Administrator or its designee to file
one or more financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Pool Receivables and the
Related Assets now existing or hereafter arising in the name of any Seller
Party. If any Seller Party fails to perform any of its agreements or
obligations under this Agreement, the Administrator or its designee may (but
shall not be required to) itself perform, or cause performance of, such
agreement or obligation, and the reasonable expenses of the Administrator or
its designee incurred in connection therewith shall be payable by the Seller
Parties as provided in Section 14.05.
(c) CONTINUATION STATEMENTS; OPINION. Without limiting the
generality of subsection (a), Seller will, not earlier than six (6) months and
not later than three (3) months prior to the
fifth anniversary of the date of filing of any financing statement filed
pursuant to this Agreement or in connection with any Purchase hereunder, if
the Final Payout Date shall not have occurred:
(i) execute and deliver and file or cause to be filed an
appropriate continuation statement with respect to such financing
statement; and
(ii) deliver or cause to be delivered to the Administrator an
opinion of the counsel for Seller Parties and Originators (or other
counsel for Seller Parties and Originators reasonably satisfactory
to the Administrator), in form and substance reasonably satisfactory
to the Administrator, including an opinion to the effect that the
Asset Interest hereunder continues to be a valid and perfected
ownership or security interest, subject to no other Liens of record
except as provided herein or otherwise permitted hereunder.
SECTION 8.06. APPLICATION OF COLLECTIONS. Any payment by an Obligor
in respect of any indebtedness owed by it to any Originator or Seller shall,
except as otherwise specified by such Obligor or required by the underlying
Contract or law, be applied, first, as a Collection of any Pool Receivable or
Receivables then outstanding of such Obligor in the order of the age of such
Pool Receivables, starting with the oldest of such Pool Receivables and,
second, to any other indebtedness of such Obligor.
SECTION 8.07. SPECIAL DEPOSIT ACCOUNTS. (a) Servicer Deposit
Account. At all times prior to the Final Payout Date Servicer shall cause to
be maintained, a segregated trust account at PNC Bank, National Association
(or such other bank as may be acceptable to the Administrator and the
short-term securities of which shall be rated at least P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. and A-1 by Standard & Poor's Ratings Services) in the
name of Marketing Co., as trustee for the Administrator (the "Servicer Deposit
Account"). The Servicer Deposit Account shall be used for the deposit of funds
set aside pursuant to Section 1.03, to the extent required by such Section,
and no other funds. No deposit of funds in the Servicer Deposit Account shall
be deemed to reduce the Purchaser's Total Investment, unless and until such
funds are actually paid to the Administrator in accordance with Section 1.03
or 3.01. Funds on deposit in the Servicer Deposit Account shall be invested
only in overnight deposits, and the income from such investments shall be
added to the balance in such account. On the date which is 91 days after the
Final Payout Date, any remaining balance in the Servicer Deposit Account shall
be released to Seller.
(b) SELLER DEPOSIT ACCOUNT. At all times prior to the Final Payout
Date Seller shall cause to be maintained, a segregated trust account at
PNC-Ohio (or such other bank as may be acceptable to the Administrator and the
short-term securities of which shall be rated at least P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. and A-1 by Standard & Poor's Ratings Services) in the
name of Seller (the "Seller Deposit Account"). The Seller Deposit Account, all
funds deposited therein from time to time, all investments of such funds and
all proceeds of any thereof shall be pledged to Administrator pursuant to the
Account Pledge Agreement. The Seller Deposit Account shall be used for the
deposit of funds set aside pursuant to Section 1.03(e), to the extent required
by such Section. No deposit of funds in the Seller Deposit Account shall be
deemed to reduce the Purchaser's Total Investment, unless and until such funds
are actually paid to Servicer and by Servicer to the Administrator in
accordance with Section 1.03 or 3.01. Funds on deposit in the Seller Deposit
Account shall be invested only in accordance with the Account Pledge
Agreement, and the income from such investments shall be added to the balance
in such account, provided that the balance in such account shall be released
to Seller on each Monthly Settlement Date in accordance with the Account
Pledge Agreement on the conditions set forth therein. On
the Final Payout Date, any remaining balance in the Seller Deposit Account
shall be released to Seller.
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. GRANT OF SECURITY INTEREST. To secure all obligations
of Seller and Servicer arising in connection with this Agreement and each
other Transaction Document, whether now or hereafter existing, due or to
become due, direct or indirect, or absolute or contingent, including, without
limitation, all Indemnified Amounts, payments on account of Collections
received or deemed to be received and fees, in each case pro rata according to
the respective amounts thereof, Seller hereby assigns and pledges to
Purchaser, for the benefit of the Secured Parties, and hereby grants to
Purchaser, for the benefit of the Secured Parties, a security interest in, all
of Seller's right, title and interest now or hereafter existing in, to and
under (a) all the Pool Receivables and Related Assets (including specifically
any undivided interest therein retained by Seller hereunder), (b) the
Originator Notes, and (c) all proceeds of any of the foregoing.
SECTION 9.02. FURTHER ASSURANCES. The provisions of Section 8.05
shall apply to the security interest granted under Section 9.01 as well as to
the Purchases, Reinvestments and all the Asset Interests hereunder.
SECTION 9.03. REMEDIES. Upon the occurrence of a Liquidation Event
(other than an Excepted Liquidation Event), Purchaser shall have, with respect
to the collateral granted pursuant to Section 9.01, and in addition to all
other rights and remedies available to Purchaser or the Administrator under
this Agreement and the other Transaction Documents or other applicable law,
all the rights and remedies of a secured party upon default under the UCC.
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.01. LIQUIDATION EVENTS. THE FOLLOWING EVENTS SHALL BE
"LIQUIDATION EVENTS" HEREUNDER:
(a) Servicer (if any Seller Party or Affiliate thereof is Servicer)
or Seller (in the case of clause (iii) below) (i) shall fail to perform or
observe any term, covenant or agreement that is an obligation of Servicer
hereunder (other than as referred to in clause (ii) or (iii) below) and such
failure shall remain unremedied for ten Business Days, (ii) shall fail to
deliver (x) any Weekly Information Package (except as permitted by Section
8.02(h)(i)(a)) and such failure shall remain unremedied for one day; (y) (if
required) any Daily Information Package, and such failure shall remain
unremedied for one day; or (z) any Information Package, or other report,
statement or written information required to be delivered by Servicer
hereunder and such failure shall remain unremedied for three Business Days, or
(iii) shall fail to make any payment or deposit to be made by it hereunder
when due and such failure shall remain unremedied for two Business Days; or
(b) Any representation or warranty made or deemed to be made by any
Seller Party (or any of its officers) under or in connection with this
Agreement or any Information Package, Weekly Information Package or (if
required) Daily Information Package or other information or
report delivered pursuant hereto shall prove to have been false or incorrect
in any material respect when made and such condition (other than a breach of
the representation set forth in Section 6.01(l) as it pertains to each Pool
Receivable being free and clear of certain Liens (except for Liens which are
not material individually or in the aggregate and are terminated within ten
days after any Seller Party obtains knowledge of the existence thereof)) shall
continue unremedied for a period of ten Business Days after (i) written notice
thereof by the Administrator or (ii) Seller has actual knowledge thereof; or
(c) (i) Any Seller Party shall fail to perform or observe any
provision of Section 7.01(j) or 7.03 (other than clauses (c) and (f) of
Section 7.03) on its part to be performed or observed, or (ii) any Seller
Party or any Originator shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement or any of the other
Transaction Documents on its part to be performed or observed and, in the case
of this clause (ii), any such failure shall remain unremedied for ten Business
Days after (A) written notice thereof shall have been given by the
Administrator to any Seller Party or such Originator or (B) any Seller Party
or such Originator has actual knowledge thereof; or
(d) (i) A default shall have occurred and be continuing under (A)
the Revolving Credit Agreement or (B) any other instrument or agreement
evidencing, securing or providing for the issuance of indebtedness for
borrowed money in excess of $5,000,000 of, or guaranteed by, any Seller Party
or any Affiliate thereof, and the effect of such default is to accelerate, or
to cause the holders of such indebtedness (or a trustee or agent on behalf of
such holders) to accelerate, the maturity of such indebtedness; (ii) a
"Purchase Termination Event" shall have occurred and be continuing under the
Sale Agreement; or (iii) any default under any other agreement or instrument
relating to the purchase of receivables of any Seller Party or any Originator,
or any other event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of
such default is to terminate, or to cause any party to such agreement or
instrument to terminate, the commitment of any party to such agreement or
instrument to purchase receivables or the right of such Seller Party or such
Originator to reinvest in receivables the principal amount paid by any party
to such agreement or instrument for its interest in receivables; or
(e) An Event of Bankruptcy shall have occurred and remain continuing
with respect to (i) Servicer, (ii) any Seller Party, (iii) any Affiliate of
any Seller Party or (iv) other Person which shall have originated or owned any
of the Pool Receivables; or
(f) (i) Any litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings not disclosed in
writing by Seller Parties to the Administrator and Purchaser prior to the date
of execution and delivery of this Agreement is pending against any Seller
Parties or any Affiliate thereof, or (ii) any material development not so
disclosed has occurred in any litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental proceedings so
disclosed, which, in the case of clause (i) or (ii), in the opinion of the
Administrator, has a reasonable likelihood of having a Material Adverse
Effect; or
(g) Either (i) the Average Maturity of Select Pool Receivables shall
exceed 55 days; or (ii) the ratio (expressed as a percentage) obtained by
dividing (A) the aggregate Unpaid Balance of Select Pool Receivables that has
been outstanding less than 61 days since the original invoice dates thereof,
by (B) the aggregate Unpaid Balance of Select Pool Receivables shall be less
than 65%; or
(h) (i) The Current Default Ratio at any Cut-Off Date exceeds 2%; or
(ii) the average of the Current Default Ratios at any three consecutive
Cut-Off Dates exceeds 1.5; or
(i) Servicer (if any Seller Party or Affiliate thereof is Servicer)
or any Originator shall make any material change in the policies as to
origination of Receivables or in the Credit and Collection Policy without the
prior written consent of the Administrator; or
(j) On any Weekly Settlement Date, after giving effect to the
payments made under Section 1.03(c), (i) the Asset Interest exceeds the
Allocation Limit or (ii) the Purchaser's Total Investment exceeds the Purchase
Limit; or
(k) Either (i) the Delinquency Ratio at any Cut-Off Date is greater
than 13.5% or (ii) the average of the Delinquency Ratios at any three
consecutive Cut-Off Dates is greater than 11.5%; or
(l) There shall exist any event or occurrence that has a reasonable
possibility of causing a Material Adverse Effect (other than a Material
Adverse Effect of the type described in clause (i) of the definition thereof);
or
(m) There shall have occurred any event which materially adversely
impairs the ability of Seller or any Originator to originate Receivables of a
credit quality which are at least of the credit quality of the Receivables
included in the first Purchase (i) made under the Original Purchase Agreement
(in the case of Receivables originated by the Seller or by Marketing Co., as
Originator) or (ii) made after the Amendment Effective Time (in the case of
Receivables originated by Valenite, as Originator) or (iii) made after July
26, 1996 (in the case of Receivables originated by D-M-E, as Originator) or
(iv) made after June 25, 1999 (in the case of Receivables originated by
Uniloy, as Originator) or (v) made after June 9, 2000 (in the case of
Receivables originated by Talbot, as Originator); or
(n) Any Seller Party is subject to a Change-in-Control; or
(o) The Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Internal Revenue Code with regard to any of
the Receivables or Related Assets and such lien shall not have been released
within 5 days, or the Pension Benefit Guaranty Corporation shall, or shall
indicate its intention to, file notice of a lien pursuant to Section 4068 of
the Employee Retirement Income Security Act of 1974 with regard to any of the
Receivables or Related Assets; or
(p) Failure to obtain a Liquidity Agreement in substitution for the
then existing Liquidity Agreement on or before 30 days prior to the expiration
of the commitments of the Liquidity Banks thereunder; or
(q) (i) A Downgrading Event with respect to a Liquidity Bank shall
have occurred and been continuing for not less than 45 days, (ii) the
Downgraded Liquidity Bank shall not have been replaced by a Qualifying
Liquidity Bank pursuant to a Liquidity Agreement in form and substance
acceptable to Purchaser and the Administrator, and (iii) the commitment of
such Downgraded Liquidity Bank under the Liquidity Agreement shall not have
been funded or collateralized in such a manner that such Downgrading Event
will not result in a reduction or withdrawal of the credit rating applied to
the Commercial Paper Notes by any of the rating agencies then rating the
Commercial Paper Notes; or
(r) Purchaser shall become an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
SECTION 10.02. REMEDIES.
(a) OPTIONAL LIQUIDATION. Upon the occurrence of a Liquidation Event
(other than a Liquidation Event described in subsection (e) of Section 10.01),
the Administrator shall, at the request, or may with the consent, of
Purchaser, by notice to Seller declare the Purchase Termination Date to have
occurred and the Liquidation Period to have commenced.
(b) AUTOMATIC LIQUIDATION. Upon the occurrence of a Liquidation
Event described in subsection (e) of Section 10.01, the Purchase Termination
Date shall occur and the Liquidation Period shall commence automatically.
(c) ADDITIONAL REMEDIES. Upon any Purchase Termination Date pursuant
to this Section 10.02, no Purchases or Reinvestments thereafter will be made,
and the Administrator and Purchaser shall have, in addition to all other
rights and remedies under this Agreement or otherwise, all other rights and
remedies provided under the UCC of each applicable jurisdiction and other
applicable laws, which rights shall be cumulative.
ARTICLE XI
THE ADMINISTRATOR
SECTION 11.01. AUTHORIZATION AND ACTION. Pursuant to agreements
entered into with the Administrator, Purchaser has appointed and authorized
the Administrator (or its respective designees) to take such action as agent
on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrator by the terms hereof, together with such powers
as are reasonably incidental thereto.
SECTION 11.02. ADMINISTRATOR'S RELIANCE, ETC. The Administrator and
its directors, officers, agents or employees shall not be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Transaction Documents (including, without limitation, the servicing,
administering or collecting Pool Receivables as Servicer pursuant to Section
8.01), except for its or their own breach of the terms of the applicable terms
of the Transaction Documents or its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, the
Administrator: (a) may consult with legal counsel (including counsel for
Seller), independent certified public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (b) makes no warranty or representation to Purchaser or any other
holder of any interest in Pool Receivables and shall not be responsible to
Purchaser or any such other holder for any statements, warranties or
representations made by any Seller Party or any Originator in or in connection
with any Transaction Document; (c) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of any Transaction Document on the part of any Seller Party or any
Originator or to inspect the property (including the books and records) of any
Seller Party or any Originator; (d) shall not be responsible to Purchaser or
any other holder of any interest in Pool Receivables for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of any
Transaction Document (except by and against the Administrator); and (e) shall
incur no liability under or in respect of this Agreement by acting upon any
notice (including notice by telephone where permitted herein), consent,
certificate or other instrument
or writing (which may be by facsimile or telex) in good faith believed by it
to be genuine and signed or sent by the proper party or parties.
SECTION 11.03. PNC BANK AND AFFILIATES. PNC Bank and any of its
Affiliates may generally engage in any kind of business with any Seller Party,
any Originator or any Obligor, any of their respective Affiliates and any
Person who may do business with or own securities of any Seller Party, any
Originator or any Obligor or any of their respective Affiliates, all as if PNC
Bank were not the Administrator, and without any duty to account therefor to
Purchaser or any other holder of an interest in Pool Receivables.
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01. RESTRICTIONS ON ASSIGNMENTS.
(a) No Seller Party may assign its rights, or delegate its duties
hereunder or any interest herein without the prior written consent of the
Administrator. Purchaser may not assign its rights hereunder (although it may
delegate its duties hereunder as expressly indicated herein) or the Asset
Interest (or any portion thereof) to any Person without the prior written
consent of Seller, which consent shall not be unreasonably withheld; provided,
however, that
(i) Purchaser may assign all of its rights and interests in the
Transaction Documents, together with all its interest in the Asset
Interest, to PNC Bank or any Affiliate thereof, or to any
"bankruptcy remote" special purpose entity, the business of which is
administered by PNC Bank or any Affiliate thereof (which assignee
shall then be subject to this Article XII); and
(ii) Purchaser may assign and/or grant a security interest in
all or a portion of its interest in the Asset Interest to the
Liquidity Agent and/or the Liquidity Banks in accordance with the
Liquidity Agreement, which assignment and/or grant of a security
interest (and any subsequent assignment by the Liquidity Agent or a
Liquidity Bank) shall not be considered an "assignment" for purposes
of Section 12.01(b) or, prior to the enforcement of such security
interest, for purposes of any other provision of this Agreement
(other than Section 12.03).
(b) Seller agrees to advise the Administrator within five Business
Days after notice to Seller of any proposed assignment by Purchaser of the
Asset Interest (or any portion thereof), not otherwise permitted under
subsection (a), of Seller's consent or non-consent to such assignment, and if
it does not consent, the reasons therefor. If Seller does not consent to such
assignment, Purchaser may immediately or at any time thereafter assign such
Asset Interest (or portion thereof) to any Person or Persons permitted under
clause (i) of Section 12.01(a).
SECTION 12.02. RIGHTS OF ASSIGNEE. Upon the assignment by Purchaser
in accordance with this Article XII, the assignee receiving such assignment
shall have all of the rights of Purchaser with respect to the Transaction
Documents and the Asset Interest (or such portion thereof as has been
assigned).
SECTION 12.03. TERMS AND EVIDENCE OF ASSIGNMENT. Any assignment of
the Asset Interest (or any portion thereof) to any Person which is otherwise
permitted under this Article XII shall be upon such terms and conditions as
Purchaser and the assignee may mutually agree,
and may be evidenced by such instrument(s) or document(s) as may be
satisfactory to Purchaser, the Administrator and the assignee.
SECTION 12.04. RIGHTS OF LIQUIDITY AGENT. Seller hereby agrees that,
upon notice to Seller, the Liquidity Agent may exercise all the rights of the
Administrator hereunder, with respect to the Asset Interest (or any portions
thereof), and Collections with respect thereto, which are owned by Purchaser,
and all other rights and interests of Purchaser in, to or under this Agreement
or any other Transaction Document. Without limiting the foregoing, upon such
notice or at any time thereafter (but subject to any conditions applicable to
the exercise of such rights by the Administrator), the Liquidity Agent may
request Servicer to segregate Purchaser's allocable shares of Collections from
Seller's allocable share, may give a Successor Notice pursuant to and in
accordance with Section 8.01(b), may give or require the Administrator to give
notice to the Lock-Box Banks as referred to in Section 8.03(b) and may direct
the Obligors of Pool Receivables to make payments in respect thereof directly
to an account designated by them, in each case, to the same extent as the
Administrator might have done.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. INDEMNITIES BY PARENT AND SELLER.
(a) GENERAL INDEMNITY. Without limiting any other rights which any
such Person may have hereunder or under applicable law, Parent and Seller
hereby jointly and severally agree to indemnify each of the Administrator,
Purchaser, the Liquidity Banks, the Credit Bank, the Liquidity Agent, each of
their respective Affiliates, and all successors, transferees, participants and
assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing (each an "Indemnified Party"),
forthwith on demand (which demand shall be accompanied by a statement setting
forth the reason for such demand and a calculation of the amount thereof),
from and against any and all damages, losses, claims, liabilities and related
costs and expenses, including reasonable attorneys' fees and disbursements
(all of the foregoing being collectively referred to as "Indemnified Amounts")
awarded against or incurred by any of them arising out of or relating to the
Transaction Documents or the ownership or funding of the Asset Interest or in
respect of any Receivable or any Contract, excluding, however, (a) Indemnified
Amounts to the extent determined by a court of competent jurisdiction to have
resulted from gross negligence or willful misconduct on the part of such
Indemnified Party or (b) recourse (except as otherwise specifically provided
in this Agreement) for Defaulted Receivables. Without limiting the foregoing,
Parent and Seller shall indemnify each Indemnified Party for Indemnified
Amounts arising out of or relating to:
(i) the transfer by any Seller Party or any Originator of any
interest in any Receivable other than the transfer of Receivables
and related property by the Originators to Seller pursuant to the
Sale Agreement, the transfer of an Asset Interest to Purchaser
pursuant to this Agreement and the grant of a security interest to
Purchaser pursuant to Section 9.01;
(ii) any representation or warranty made by any Seller Party or
any Originator (or any of its officers or Affiliates) under or in
connection with any Transaction Document, any Information Package,
any Weekly Information Package or (if required) any Daily
Information Package or any other information or report delivered by
or on behalf of any Seller Party or any Originator pursuant hereto,
which shall have been
false, incorrect or misleading in any material respect when made or
deemed made or delivered, as the case may be;
(iii) the failure by any Seller Party or any Originator to
comply with any applicable law, rule or regulation with respect to
any Pool Receivable or the related Contract, or the nonconformity of
any Pool Receivable or the related Contract with any such applicable
law, rule or regulation;
(iv) the failure to vest and maintain vested in Purchaser an
undivided percentage ownership interest, to the extent of the Asset
Interest, in the Receivables in, or purporting to be in, the
Receivables Pool, free and clear of any Lien, other than a Lien
arising solely as a result of an act of Purchaser or the
Administrator whether existing at the time of any Purchase or
Reinvestment of such Asset Interest or at any time thereafter;
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC
of any applicable jurisdiction or other applicable laws with respect
to any Receivables in, or purporting to be in, the Receivables Pool,
whether at the time of any Purchase or Reinvestment or at any time
thereafter;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool
(including, without limitation, a defense based on such Receivables
or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with
its terms), or any other claim resulting from the sale of the
merchandise or services related to such Receivable or the furnishing
or failure to furnish such merchandise or services;
(vii) any matter described in clause (i) or (ii) of Section
3.02(a);
(viii) any failure of any Seller Party, as Servicer or
otherwise, to perform its duties or obligations in accordance with
the provisions of Article III or Article VIII;
(ix) any products liability claim arising out of or in
connection with merchandise or services that are the subject of any
Pool Receivable;
(x) any claim of breach by any Originator or Seller of any
related Contract with respect to any Pool Receivable; or
(xi) any tax or governmental fee or charge (but not including
taxes upon or measured by net income), all interest and penalties
thereon or with respect thereto, and all out-of-pocket costs and
expenses, including the reasonable fees and expenses of counsel in
defending against the same, which may arise by reason of the
purchase or ownership of any Asset Interest, or any other interest
in the Pool Receivables or in any goods which secure any such Pool
Receivables.
(b) CONTEST OF TAX CLAIM; AFTER-TAX BASIS. If any Indemnified Party
shall have notice of any attempt to impose or collect any tax or governmental
fee or charge for which indemnification will be sought from any Seller Party
under Section 13.01(a)(xi), such Indemnified Party shall give prompt and
timely notice of such attempt to Seller and Parent and Seller shall have the
right, at their expense, to participate in any proceedings resisting or
objecting to the imposition or collection of any such tax, governmental fee or
charge.
Indemnification hereunder shall be in an amount necessary to make the
Indemnified Party whole after taking into account any tax consequences to the
Indemnified Party of the payment of any of the aforesaid taxes and the receipt
of the indemnity provided hereunder or of any refund of any such tax
previously indemnified hereunder, including the effect of such tax or refund
on the amount of tax measured by net income or profits which is or was payable
by the Indemnified Party.
(c) CONTRIBUTION. If for any reason the indemnification provided
above in this Section 13.01 (and subject to the exceptions set forth therein)
is unavailable to an Indemnified Party (other than by reason of a final
adjudication by a court of competent jurisdiction that a claim is not within
the scope of such indemnification) or is insufficient to hold an Indemnified
Party harmless, then Parent and Seller shall contribute to the amount paid or
payable by such Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Indemnified Party on the one hand and
Seller on the other hand but also the relative fault of such Indemnified Party
as well as any other relevant equitable considerations.
SECTION 13.02. INDEMNITIES BY SERVICER. Without limiting any other
rights which any Indemnified Party may have hereunder or under applicable law,
the Servicer hereby agrees to indemnify each of the Indemnified Parties
forthwith on demand (which demand shall be accompanied by a statement setting
forth the reason for such demand and a calculation of the amount thereof),
from and against any and all Indemnified Amounts awarded against or incurred
by any of them arising out of or relating to the Servicer's performance of, or
failure to perform, any of its obligations under or in connection with any
Transaction Document.
Notwithstanding the foregoing, in no event shall any Indemnified Party be
awarded any Indemnified Amounts (a) to the extent determined by a court of
competent jurisdiction to have resulted from gross negligence or willful
misconduct on the part of such Indemnified Party or (b) recourse for Defaulted
Receivables.
If for any reason the indemnification provided above in this Section
13.02 (and subject to the exceptions set forth therein) is unavailable to an
Indemnified Party (other than by reason of a final adjudication by a court of
competent jurisdiction that a claim is not within the scope of such
indemnification) or is insufficient to hold an Indemnified Party harmless,
then the Servicer shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits
received by such Indemnified Party on the one hand and the Servicer on the
other hand but also the relative fault of such Indemnified Party as well as
any other relevant equitable considerations.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement nor consent to any departure by any Seller Party
therefrom shall in any event be effective unless the same shall be in writing
and signed by (a) each Seller Party, the Administrator and Purchaser (with
respect to an amendment), or (b) the Administrator and Purchaser (with respect
to a waiver or consent by them) or any Seller Party (with respect to a waiver
or consent by it), as the case may be, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such material amendment, waiver or
consent shall be effective unless the Administrator
shall have received a written statement from the rating agencies then rating
the Commercial Paper Notes that such amendment, waiver or consent will not
result in a downgrade or withdrawal of the then current rating of such
Commercial Paper Notes. The parties acknowledge that, before entering into
such an amendment or granting such a waiver or consent, Purchaser may also be
required to obtain the approval of some or all of the Liquidity Banks or the
Credit Bank or to obtain confirmation from certain rating agencies that such
amendment, waiver or consent will not result in a withdrawal or reduction of
the ratings of the Commercial Paper Notes.
SECTION 14.02. 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, (a) if personally delivered or sent by express mail or courier
or if sent by certified mail, when received, and (b) if transmitted by
facsimile, when sent, receipt confirmed by telephone or electronic means.
SECTION 14.03. NO WAIVER; REMEDIES. No failure on the part of the
Administrator, any Affected Party, any Indemnified Party, Purchaser or any
other holder of the Asset Interest (or any portion thereof) to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law. Without limiting the foregoing, each of PNC Bank,
individually and as Administrator, the Liquidity Agent, the Credit Bank and
each Liquidity Bank is hereby authorized by Seller at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by PNC Bank, the Liquidity
Agent and such Liquidity Bank to or for the credit or the account of Seller,
now or hereafter existing under this Agreement, to the Administrator, any
Affected Party, any Indemnified Party or Purchaser, or their respective
successors and assigns.
SECTION 14.04. BINDING EFFECT; SURVIVAL. This Agreement shall be
binding upon and inure to the benefit of each Seller Party, the Administrator,
Purchaser and their respective successors and assigns, and the provisions of
Section 4.02 and Article XIII shall inure to the benefit of the Affected
Parties and the Indemnified Parties, respectively, and their respective
successors and assigns; provided, however, nothing in the foregoing shall be
deemed to authorize any assignment not permitted by Section 12.01. This
Agreement shall create and constitute the continuing obligations of the
parties hereto in accordance with its terms, and shall remain in full force
and effect until the Final Payout Date. The rights and remedies with respect
to any breach of any representation and warranty made by Seller pursuant to
Article VI and the indemnification and payment provisions of Article XIII and
Sections 4.02, 14.05, 14.06, 14.07, 14.08 and 14.15 shall be continuing and
shall survive any termination of this Agreement.
SECTION 14.05. COSTS, EXPENSES AND TAXES. In addition to its
obligations under Article XIII, Seller Parties jointly and severally agree to
pay on demand:
(a) all costs and expenses incurred by the Administrator, the Credit
Bank, the Liquidity Agent and the Purchaser and their respective Affiliates in
connection with
(i) the negotiation, preparation, execution and delivery of
this Agreement and the other Transaction Documents, any amendment of
or consent or waiver under any of the Transaction Documents which is
requested or proposed by any Seller Party or any Originator (whether
or not consummated), or the enforcement of, or any actual or claimed
breach of, this Agreement or any of the other Transaction Documents,
including, without limitation, the reasonable fees and expenses of
counsel to any of such Persons incurred in connection with any of
the foregoing or in advising such Persons as to their respective
rights and remedies under any of the Transaction Documents in
connection with any of the foregoing, and
(ii) the administration (including semi-annual auditing as
provided for herein) of this Agreement and the other Transaction
Documents, including, without limitation, all reasonable
out-of-pocket expenses (including reasonable fees and expenses of
independent accountants), incurred in connection with any review of
any Seller Party's or any Originator's books and records either
prior to the execution and delivery hereof or pursuant to Section
7.02(h) or 7.01(c)(iii); and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of
this Agreement or the other Transaction Documents (and Seller Parties jointly
and severally agree to indemnify each Indemnified Party against any
liabilities with respect to or resulting from any delay in paying or omission
to pay such taxes and fees).
SECTION 14.06. NO PROCEEDINGS. Each of Parent, Servicer and each
Subservicer hereby agrees that it will not institute against Seller, or join
any Person in instituting against Seller, and each Seller Party, Servicer and
PNC Bank (individually and as Administrator) each hereby agrees that it will
not institute against Purchaser, or join any other Person in instituting
against Purchaser, any insolvency proceeding (namely, any proceeding of the
type referred to in the definition of Event of Bankruptcy) so long as any
Commercial Paper Notes issued by Purchaser shall be outstanding or there shall
not have elapsed one year plus one day since the last day on which any such
Commercial Paper Notes shall have been outstanding.
SECTION 14.07. CONFIDENTIALITY OF SELLER INFORMATION.
(a) CONFIDENTIAL SELLER INFORMATION. Each party hereto (other than
Seller Parties) acknowledges that certain of the information provided to such
party by or on behalf of Seller Parties or the Originators in connection with
this Agreement and the transactions contemplated hereby is or may be
confidential, and each such party severally agrees that, unless Parent shall
otherwise agree in writing, and except as provided in subsection (b), such
party will not disclose to any other person or entity:
(i) any information regarding, or copies of, any non-public
financial statements, reports, schedules and other information
furnished by any Seller Party or any Originator to Purchaser or the
Administrator (A) prior to the date hereof in connection with such
party's due diligence relating to the Seller Parties or the
Originators and the transactions contemplated hereby, or (B)
pursuant to Section 3.01, 5.01, 6.01(i), 6.01(j), 7.01(c) or 7.02,
or
(ii) any other information regarding any Seller Party or any
Originator which is designated by any Seller Party or any Originator
to such party in writing as confidential
(the information referred to in clauses (i) and (ii) above, whether furnished
by any Seller Party, any Originator or any attorney for or other
representative thereof (each a "Seller Information Provider"), is collectively
referred to as the "Seller Information"); provided, however, "Seller
Information" shall not include any information which is or becomes generally
available to the general public or to such party on a nonconfidential basis
from a source other than any Seller Information Provider, or which was known
to such party on a nonconfidential basis prior to its disclosure by any Seller
Information Provider.
(b) DISCLOSURE. Notwithstanding subsection (a), each party may
disclose any Seller Information:
(i) to any of such party's independent attorneys, consultants
and auditors, and to each Liquidity Bank, the Credit Bank, any
dealer or placement agent for Purchaser's commercial paper, and any
actual or potential assignees of, or participants in, any of the
rights or obligations of Purchaser, any Liquidity Bank, the Credit
Bank or the Administrator under or in connection with this
Agreement, who (A) in the good faith belief of such party, have a
need to know such Seller Information, (B) are informed by such party
of the confidential nature of the Seller Information and the terms
of this Section 14.07, and (C) are subject to confidentiality
restrictions generally consistent with this Section 14.07,
(ii) to any rating agency that maintains a rating for
Purchaser's commercial paper or is considering the issuance of such
a rating, for the purposes of reviewing the credit of Purchaser in
connection with such rating,
(iii) to any other party to this Agreement (and any independent
attorneys, consultants and auditors of such party), for the purposes
contemplated hereby,
(iv) as may be required by any municipal, state, federal or
other regulatory body having or claiming to have jurisdiction over
such party, in order to comply with any law, order, regulation,
regulatory request or ruling applicable to such party, or
(v) subject to subsection (c), in the event such party is
legally compelled (by interrogatories, requests for information or
copies, subpoena, civil investigative demand or similar process) to
disclose such Seller Information.
In addition, Purchaser and the Administrator may disclose on a "no name" basis
to any actual or potential investor in Purchaser's Commercial Paper Notes
information regarding the nature of this Agreement, the basic terms hereof
(including without limitation the amount and nature of Purchaser's commitment
and Purchaser's Total Investment with respect to the Asset Interest and of
Loss Reserve and any other credit enhancement provided by any Seller Party or
any Originator hereunder), the nature, amount and status of the Pool
Receivables, and the current and/or historical ratios of losses to
liquidations and/or outstandings with respect to the Receivables Pool.
(c) LEGAL COMPULSION. In the event that any party hereto (other than
any Seller Party) or any of its representatives is requested or becomes
legally compelled (by interrogatories, requests for information or documents,
subpoena, civil investigative demand or similar process) to disclose any of
the Seller Information, such party will (or will cause its representative to)
(i) provide Parent with prompt written notice so that (A)
Parent or any other Seller Information Provider may seek a
protective order or other appropriate remedy, or (B) Parent may, if
it so chooses, agree that such party (or its representatives) may
disclose such Seller Information pursuant to such request or legal
compulsion; and
(ii) unless Parent agrees that such Seller Information may be
disclosed, make a timely objection to the request or compulsion to
provide such Seller Information on the basis that such Seller
Information is confidential and subject to the agreements contained
in this Section 14.07.
In the event such protective order or remedy is not obtained, or Parent agrees
that such Seller Information may be disclosed, such party will furnish only
that portion of the Seller Information which (in such party's good faith
judgment) is legally required to be furnished and will exercise reasonable
efforts to obtain reliable assurance that confidential treatment will be
afforded the Seller Information.
(d) This Section 14.07 shall survive termination of this Agreement.
SECTION 14.08. CONFIDENTIALITY OF PROGRAM INFORMATION.
(a) CONFIDENTIAL INFORMATION. Each party hereto acknowledges that
PNC Bank regards the structure of the transactions contemplated by this
Agreement to be proprietary, and each such party agrees that:
(i) it will not disclose without the prior consent of PNC Bank
(other than to the directors, employees, auditors, counsel or
affiliates (collectively, "representatives") of such party, each of
whom shall be informed by such party of the confidential nature of
the Program Information (as defined below) and of the terms of this
Section 14.08), (A) any information regarding the pricing in, or
copies of, this Agreement any other Transaction Document or any
transaction contemplated hereby or thereby, (B) any information
regarding the organization, business or operations of Purchaser
generally or the services performed by the Administrator for
Purchaser, or (C) any information which is furnished by PNC Bank to
such party and which is designated by PNC Bank to such party in
writing or otherwise as confidential or not otherwise available to
the general public (the information referred to in clauses (A), (B)
and (C) is collectively referred to as the "Program Information");
provided, however, that such party may disclose any such Program
Information (I) to any other party to this Agreement (and any
independent attorneys, consultants and auditors of any such party)
for the purposes contemplated hereby, (II) as may be required by any
municipal, state, federal or other regulatory body having or
claiming to have jurisdiction over such party, (III) in order to
comply with any law, order, regulation, regulatory request or ruling
applicable to such party, or (IV) subject to subsection (c), in the
event such party is legally compelled (by interrogatories, requests
for information or copies, subpoena, civil investigative demand or
similar process) to disclose any such Program Information;
(ii) it will use the Program Information solely for the
purposes of evaluating, administering and enforcing the transactions
contemplated by this Agreement and making any necessary business
judgments with respect thereto; and
(iii) it will, upon demand, return (and cause each of its
representatives to return) to State Street Capital, all documents or
other written material received from State
Street Capital, as the case may be, in connection with (a)(i)(B) or
(C) above and all copies thereof made by such party which contain
the Program Information.
(b) AVAILABILITY OF CONFIDENTIAL INFORMATION. This Section 14.08
shall be inoperative as to such portions of the Program Information which are
or become generally available to the public or such party on a nonconfidential
basis from a source other than State Street Capital or were known to such
party on a nonconfidential basis prior to its disclosure by PNC Bank.
(c) LEGAL COMPULSION TO DISCLOSE. In the event that any party or
anyone to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Program Information, such party will
(i) provide PNC Bank with prompt written notice so that PNC
Bank may seek a protective order or other appropriate remedy and/or,
if it so chooses, agree that such party may disclose such Program
Information pursuant to such request or legal compulsion; and
(ii) unless PNC Bank agrees that such Program Information may
be disclosed, make a timely objection to the request or confirmation
to provide such Program Information on the basis that such Program
Information is confidential and subject to the agreements contained
in this Section 14.08.
In the event that such protective order or other remedy is not obtained, or
PNC Bank agrees that such Program Information may be disclosed, such party
will furnish only that portion of the Program Information which (in such
party's good faith judgment) is legally required to be furnished and will
exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Program Information. In the event any Seller
Party is required to file a copy of this Agreement with the Securities and
Exchange Commission or any other governmental authority, it will (A) provide
PNC Bank with prompt written notice of such requirement and (B) exercise
reasonable efforts to obtain reliable assurance that such governmental
authority will give confidential treatment to this Agreement.
(d) SURVIVAL. This Section 14.08 shall survive termination of this
Agreement.
SECTION 14.09. CAPTIONS AND CROSS REFERENCES. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning
or interpretation of any provision of this Agreement. Unless otherwise
indicated, references in this Agreement to any Section, Appendix, Schedule or
Exhibit are to such Section of or Appendix, Schedule or Exhibit to this
Agreement, as the case may be, and references in any Section, subsection, or
clause to any subsection, clause or subclause are to such subsection, clause
or subclause of such Section, subsection or clause.
SECTION 14.10. INTEGRATION. This Agreement, together with the letter
referenced in Section 4.01, contains a final and complete integration of all
prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire understanding among the parties hereto
with respect to the subject matter hereof, superseding all prior oral or
written understandings.
SECTION 14.11. GOVERNING LAW. THIS AGREEMENT, INCLUDING THE RIGHTS
AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO PRINCIPLES OF CONFLICTS OF LAW, EXCEPT TO THE EXTENT THAT THE PERFECTION OF
THE INTERESTS OF PURCHASER IN THE RECEIVABLES OR RELATED PROPERTY IS GOVERNED
BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 14.12. WAIVER OF JURY TRIAL. EACH SELLER PARTY HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL NOT
BE TRIED BEFORE A JURY.
SECTION 14.13. CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES. EACH
SELLER PARTY HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY
UNITED STATES FEDERAL COURT, AND SECOND, IF FEDERAL JURISDICTION IS NOT
AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK
COUNTY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR FEDERAL
COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST EXTENT IT
MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO
EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR
IN CONNECTION WITH THIS AGREEMENT.
SECTION 14.14. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same Agreement.
SECTION 14.15. No Recourse Against Other Parties. No recourse under
any obligation, covenant or agreement of Purchaser contained in this Agreement
shall be had against any stockholder, employee, officer, director, or
incorporator of Purchaser, provided, however,
that nothing in this Section 14.15 shall relieve any of the foregoing Persons
from any liability which such Person may otherwise have for his/her or its
gross negligence or willful misconduct.
SECTION 14.16. References. References to the Original Purchase
Agreement in any Transaction Document shall be deemed to include the Original
Purchase Agreement, as amended and restated hereby, whether or not reference
is made to this Agreement.
[Signatures begin on the following page]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
MILACRON INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title: Vice President-Finance and
Chief Financial Officer+
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
MILACRON COMMERCIAL CORP., as Seller
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title: Treasurer
c/o The Corporation Trust Company
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to Parent)
VALENITE INC., as sub-servicer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Treasurer
c/o Milacron Marketing Company
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
D-M-E Company, as sub-servicer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title: Treasurer
c/o Milacron Marketing Company
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
UNILOY MILACRON INC., as a Subservicer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Treasurer
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ HOLDINGS, LTD. as a Subservicer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Treasurer
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▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
MILACRON MARKETING COMPANY, as initial
Servicer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title: Treasurer
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
MARKET STREET FUNDING CORPORATION,
as Purchaser
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title: Vice President
c/o AMACAR Group, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
PNC BANK, NATIONAL ASSOCIATION,
as Administrator
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
APPENDIX A
DEFINITIONS
This is Appendix A to the Third Amended and Restated Receivables
Purchase Agreement dated as of November 15, 2001 among Milacron Inc., Milacron
Commercial Corp., as Seller, Valenite Inc., as sub-servicer, D-M-E Company, as
sub-servicer, Uniloy Milacron Inc., a sub-servicer, Talbot Holdings, Ltd., as
sub-servicer, Milacron Marketing Company, as initial Servicer, Market Street
Funding Corporation, as Purchaser, and PNC Bank, National Association, as
Administrator (as amended, supplemented or otherwise modified from time to
time, the "Agreement"). Each reference in this Appendix A to any Section,
Appendix or Exhibit refers to such Section of or Appendix or
Exhibit to this Agreement.
A. DEFINED TERMS. As used in this Agreement, unless the context
requires a different meaning, the following terms have the meanings indicated
hereinbelow:
"ACCOUNT PLEDGE AGREEMENT" means the Amended and Restated Account
Pledge Agreement dated as January 26, 1996 among Seller, the Administrator and
PNC-Ohio (or such other bank as may be approved by the Administrator),
substantially in the form of Exhibit 5.01(d), as it may be amended,
supplemented or otherwise modified from time to time.
"ADMINISTRATOR" has the meaning set forth in the preamble.
"ADMINISTRATOR'S OFFICE" means the office of the Administrator at
the address set below its signature to the Agreement or such other address as
shall be designated by the Administrator in writing to Seller and Purchaser.
"AFFECTED PARTY" means each of Purchaser, each Liquidity Bank, any
assignee or participant of Purchaser or any Liquidity Bank, the Credit Bank,
any assignee or participant of the Credit Bank, PNC Bank, any successor to PNC
Bank as Administrator, any sub-agent of the Administrator, the Liquidity Agent
and any co-agent or sub-agent of the Liquidity Agent.
"AFFILIATE" when used with respect to a Person means any other
Person controlling, controlled by, or under common control with, such Person.
"AFFILIATED OBLIGOR" in relation to any Obligor means an Obligor
which Servicer knows or has reason to believe to be an Affiliate of such
Obligor.
"ALLOCATION LIMIT" has the meaning set forth in Section 1.01.
"ALTERNATE BASE RATE" means, on any date, a fluctuating rate of
interest per annum equal to the higher of
(a) the rate of interest most recently announced by the
Liquidity Agent in Pittsburgh, Pennsylvania, as its reference rate
for prime loans to corporate borrowers; and
(b) the Federal Funds Rate (as defined below) most recently
determined by the Liquidity Agent plus 1.5% per annum.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Liquidity Agent in connection with extensions of
credit.
"AMENDMENT EFFECTIVE TIME" means the time when the conditions
precedent for effectiveness of this Agreement specified in Section 5.01 shall
have been met.
"ASSET INTEREST" means an undivided percentage ownership interest,
determined from time to time as provided in Section 1.04(b), in (i) all then
outstanding Pool Receivables, and (ii) all Related Assets.
"ASSET TRANCHE" means at any time a portion of the Asset Interest
selected by the Administrator pursuant to Section 2.01.
"AVERAGE MATURITY" means, on any day, that time period (expressed in
days) equal to the weighted average (based on the respective Unpaid Balances
of the Select Pool Receivables) of the periods from the invoice dates to the
due dates of the Select Pool Receivables, as calculated by Servicer and set
forth in the most recent Information package in accordance with the provisions
hereof. If the Administrator shall disagree with any such calculation, the
Administrator may recalculate the Average Maturity for such day, which
calculation shall, absent demonstrable error, be binding upon each
Subservicer, Servicer, Seller and Purchaser.
"BANK RATE" for any Yield Period with respect to any Asset Tranche
means
(a) in the case of any Yield Period other than a Yield Period
described in clause (b) or (c), an interest rate per annum equal to
the sum of (x) 0.75% per annum, plus (y) the Eurodollar Rate
(Reserve Adjusted) for such Yield Period;
(b) in the case of any Yield Period with respect to any Asset
Tranche funded by a Liquidity Purchase and commencing more than 30
days after the making of such Liquidity Purchase, an interest rate
per annum equal to the sum of (x) 1.50% per annum, plus (y) the
Eurodollar Rate (Reserve Adjusted) for such Yield Period);
(c) in the case of
(i) any Yield Period on or prior to the first day of which
Purchaser or any Liquidity Bank shall have notified the
Administrator that (A) the introduction of or any change in or
in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority
asserts that it is unlawful, for such Person to fund such Asset
Tranche at the rate described in clause (a), or (B) due to
market conditions affecting the interbank eurodollar market,
funds are not reasonably available to such Person in such
market in order to enable it to fund such Asset Tranche at the
rate described in clause (a) (and in the case of subclause (A)
or (B), such Person shall not have subsequently notified the
Administrator that such circumstances no longer exist),
(ii) any Yield Period as to which the Administrator does
not receive notice or determine, by no later than 12:00 noon
(New York City time) on the third Business Day preceding the
first day of such Yield Period, that the related Asset Tranche
will be funded by Liquidity Purchases and not by the issuance
of Commercial Paper Notes, or
(iii) any Yield Period for an Asset Tranche the
Purchaser's Tranche Investment of which is less than $500,000,
an interest rate per annum equal to (x) 0.5% per annum, plus (y) the
Alternate Base Rate in effect from time to time during such Yield
Period;
provided, however, at any time on or after the date of the Agreement, upon any
extension or renewal of the Liquidity Banks' commitments under the Liquidity
Agreement (but not more than twice in any calendar year) either or both of the
percentages set forth in subclause (x) of clauses (a) and (b) above may, in
the discretion of the Administrator be adjusted from time to time to reflect
changes in the market rate of discount on purchases under facilities
reasonably similar to the Liquidity Agreement as determined by the
Administrator.
"Business Day" means a day on which both (a) the Administrator at
its principal office in Pittsburgh, Pennsylvania is open for business and (b)
commercial banks in New York City, Chicago, Illinois, Cincinnati, Ohio and
Pittsburgh, Pennsylvania are not authorized or required to be closed.
"Change in Control" means:
(a) in relation to Parent, the acquisition by any person or
group of persons (within the meaning of Section 13 or 14 of the
Exchange Act) (but excluding any Excluded Person (as defined
below)), of beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the
Exchange Act) of issued and outstanding shares of the capital stock
of Parent entitled (without regard to the occurrence of any
contingency) to vote for the election of members of the board of
directors of Parent and having a then present right to exercise 20%
or more of the voting power for the election of members of the board
of directors of Parent attached to all such outstanding shares of
capital stock of Parent; for purposes of this clause (a), "Excluded
Person" shall mean (i) any employee stock ownership plan or other
Plan (as defined in the Revolving Credit Agreement, as in effect on
the date hereof) and (ii) each officer and director of Parent as of
the date of this Agreement and members of the extended families of
such officers and directors;
(b) in relation to Marketing Co., any Subservicer or Seller,
any of the following:
(i) the failure of Parent to own (directly or through
wholly-owned Subsidiaries of Parent), free and clear of all
Liens (except for Permitted Pledges), 100% of the issued and
outstanding shares of the capital stock (including all
warrants, options, conversion rights, and other rights to
purchase or convert into
such stock) of Marketing Co., any Subservicer or Seller, as the
case may be, on a fully diluted basis; or
(ii) the creation or imposition of any Lien on any shares
of capital stock of Marketing Co., any Subservicer or Seller
(except for Permitted Pledges), as the case may be; and
(c) in relation to Seller, the failure of Marketing Co. to own
directly, free and clear of all Liens (except for Permitted
Pledges), 100% of the issued and outstanding shares of the capital
stock (including all warrants, options, conversion rights, and other
rights to purchase or convert into such stock) of Seller on a fully
diluted basis.
"COLLECTIONS" means, with respect to any Receivable, all funds which
either (a) are received by Seller, Servicer or any Originator from or on
behalf of the related Obligors in payment of any amounts owed (including,
without limitation, purchase prices, finance charges, interest and all other
charges) in respect of such Receivable, or applied to such amounts owed by
such Obligors (including, without limitation, insurance payments that Seller,
Servicer or such Originator applies in the ordinary course of its business to
amounts owed in respect of such Receivable and net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the
Obligor or any other party directly or indirectly liable for payment of such
Receivable and available to be applied thereon), or (b) are deemed to have
been received by Seller or any other Person as a Collection pursuant to
Section 3.02; provided that, prior to such time as Marketing Co. shall cease
to be Servicer, late payment charges, collection fees and extension fees shall
not be deemed to be Collections.
"COMMERCIAL PAPER NOTES" means short-term promissory notes issued or
to be issued by Purchaser to fund its investments in accounts receivable or
other financial assets.
"CONCENTRATION LIMIT" means the Obligor Concentration Limit.
"CONTRACT" means a contract between Seller and any Person pursuant
to or under which such Person shall be obligated to make payments to Seller
with respect to the sale of goods or provision of services by an Originator
from time to time. A "related" Contract with respect to the Receivables means
a Contract under which Receivables in the Receivables Pool arise or which is
relevant to the collection or enforcement of such Receivables.
"CP RATE" for any period means a rate per annum calculated by the
Administrator equal to the sum of (i) the rate or, if more than one rate, the
weighted average of the rates, determined by converting to an interest-bearing
equivalent rate per annum the discount rate (or rates) at which Commercial
Paper Notes on each day during such period have been sold by the commercial
paper placement agents selected by the Administrator, plus (ii) the
commissions and charges charged by such commercial paper placement agents with
respect to such Commercial Paper Notes, expressed as a percentage of such face
amount and converted to an interest-bearing equivalent rate per annum.
"CREDIT AGREEMENT" means and includes (a) the Credit Agreement dated
as of December 15, 1995, as amended, among Purchaser and the Credit Bank and
(b) any other agreement (other than the Liquidity Agreement) hereafter entered
into by Purchaser providing for the issuance of
one or more letters of credit for the account of Purchaser, the making of
loans to Purchaser or any other extensions of credit to or for the account of
Purchaser to support all or any part of Purchaser's payment obligations under
its Commercial Paper Notes or to provide an alternate means of funding
Purchaser's investments in accounts receivable or other financial assets, in
each case as amended, supplemented or otherwise modified from time to time.
"CREDIT AND COLLECTION POLICY" means those credit and collection
policies and practices of the Originator relating to Contracts and Receivables
described in Schedule 6.01(p)-2, as modified without violating Section
7.03(c).
"CREDIT BANK" means and includes PNC Bank, as lender to Purchaser
under the Credit Agreement, and any other or additional bank or other
financial institution now or hereafter extending credit or having a commitment
to extend credit to or for the account of Purchaser under the Credit
Agreement.
"CREDIT DRAW" means a drawing on a cash collateral account funded
pursuant to the Credit Agreement.
"CURRENT DEFAULT RATIO" at any time during a Settlement Period means
the ratio (expressed as a percentage) computed as of the Cut-Off Date for the
next preceding Settlement Period by dividing (x) the aggregate Unpaid Balance
of all Select Pool Receivables that became Defaulted Receivables during the
related Reporting Period by (y) the aggregate Unpaid Balance of Select Pool
Receivables on such Cut-Off Date.
"CUT-OFF DATE" means each date set forth in Appendix C to this
Agreement (as such Appendix C shall be updated each fiscal year). Each
reference to the Cut-Off Date "for" or "with respect to" any Reporting Period
shall mean and be a reference to the Cut-Off Date on which such Reporting
Period ends in accordance with the definition of "Reporting Period". Each
reference to the Cut-Off Date "for" or "with respect to" a Settlement Period
shall mean and be a reference to the Cut-Off Date next preceding the last day
of such Settlement Period.
"DAILY INFORMATION PACKAGE" means a report, in substantially the
form of a Weekly Information Package, with appropriate modifications to be
mutually agreed upon by the Servicer and the Administrator, furnished to the
Administrator pursuant to the Agreement.
"DEEMED COLLECTIONS" has the meaning set forth in Section 3.02(a).
"DEFAULTED RECEIVABLE" means a Receivable: (a) as to which any
payment, or part thereof, remains unpaid for 180 days from the original due
date for such payment; (b) as to which an Event of Bankruptcy has occurred and
remains continuing with respect to the Obligor thereof; (c) as to which
payments have been extended, or the terms of payment thereof rewritten, other
than as permitted by Section 8.02(c); or (d) which has been, or, consistent
with the Credit and Collection Policy, would be, written off Seller's books as
uncollectible.
"DELINQUENCY RATIO" means the ratio (expressed as a percentage)
computed as of each Cut-Off Date by dividing (x) the aggregate Unpaid Balance
of Select Pool Receivables that are Delinquent Receivables on such Cut-Off
Date by (y) the aggregate Unpaid Balance of all Select Pool Receivables on
such Cut-Off Date.
"DELINQUENT RECEIVABLE" means a Select Pool Receivable (a) that is
not a Defaulted Receivable and (b) as to which any payment, or part thereof,
remains unpaid for 60 days or more from the original due date for such
payment.
"DESIGNATED OBLIGOR" means, at any time, all Obligors of Seller
except any such Obligor (i) as to which, in the judgment of the Administrator
there has been a material adverse change in its financial condition,
operations, business or business prospects, and (ii) as to which the
Administrator has, at least three Business Days prior to the date of
determination, given notice to Seller that such Obligor shall not be
considered a Designated Obligor.
"DILUTION" means the amount of any reduction or cancellation of the
Unpaid Balance of a Select Pool Receivable as described in Section 3.02(a).
"DILUTION RESERVE" means, on any day in a Settlement Period, an
amount equal to the product of (i) 0.05 times (ii) the Purchaser's Total
Investment on such day, provided, however, that if the Administrator notifies
the Servicer of such requirement no later than three Business Days prior to
the commencement of such Settlement Period, the Dilution Reserve shall be the
greater of the foregoing amount and the aggregate amount of Dilutions during
the three Reporting Periods next preceding the first day of such Settlement
Period."
"D-M-E POOL RECEIVABLES" has the meaning set forth in Section
8.01(c)(iii).
"DOLLARS" means dollars in lawful money of the United States of
America.
"DOWNGRADED LIQUIDITY BANK" means a Liquidity Bank which has been
the subject of a Downgrading Event.
"DOWNGRADING EVENT" with respect to any Person means the lowering of
the rating with regard to the short-term securities of such Person to below
(i) A-1 by Standard & Poor's Ratings Services, or (ii) P-1 by ▇▇▇▇▇'▇
Investors Service, Inc.
"EARNED DISCOUNT" means, for any Yield Period with respect to any
Asset Tranche, or, in the case of the Asset Tranche funded by Commercial Paper
Notes, for any Settlement Period:
PTI x ER x ED + LF
------------------
360
where:
PTI = the daily average (calculated at the close of business
each day) of the Purchaser's Tranche Investment in such
Asset Tranche during such Yield Period or Settlement
Period, as applicable,
ER = the Earned Discount Rate for such Yield Period or Settlement
Period,
ED = the actual number of days elapsed during such Yield Period or
Settlement Period, and
LF = the Liquidation Fee, if any, during such Yield Period or
Settlement Period.
"EARNED DISCOUNT RATE" means for any Yield Period with respect to
any Asset Tranche, or, in the case of the Asset Tranche funded by Commercial
Paper Notes, for any Settlement Period:
(a) in the case of an Asset Tranche funded by a Liquidity
Purchase, the Bank Rate for such Asset Tranche and such Yield
Period;
(b) in the case of an Asset Tranche funded by a Credit Draw, a
rate per annum equal for each day during such Yield Period to the
Alternate Base Rate in effect on such day plus 2% per annum; and
(c) for the Asset Tranche funded by Commercial Paper Notes, the
CP Rate for such Settlement Period;
provided, however, that on any day when any Liquidation Event (other than an
Excepted Liquidation Event) shall have occurred and be continuing, the Earned
Discount Rate for each Asset Tranche shall mean a rate per annum equal to the
Alternate Base Rate plus 2% per annum.
"ELIGIBLE CONTRACT" means a Contract which conforms in all material
respects to one of the forms set forth in Schedule 6.01(p)-1 or otherwise
approved by the Administrator.
"ELIGIBLE RECEIVABLE" means, at any time, a Receivable:
(a) which is a Select Pool Receivable arising out of the sale
by any Originator of goods owned by such Originator free and clear
of any Lien or other claim or right of any Person (and, without
limiting the foregoing, not out of a sale on consignment) or out of
the provision of services by any Originator;
(b) as to which the perfection of Purchaser's undivided
ownership interest therein is governed by the laws of a jurisdiction
where the Uniform Commercial Code -- Secured Transactions is in
force, and which constitutes an "account" as defined in the Uniform
Commercial Code as in effect in such jurisdiction;
(c) the Obligor of which is resident of the United States, or
any of its possessions or territories, is not an Affiliate of any of
the parties hereto, and is not a government or a governmental
subdivision or agency;
(d) the Obligor of which is a Designated Obligor;
(e) which is not a Defaulted Receivable or a Delinquent
Receivable;
(f) with regard to which the warranty of Seller in Section
6.01(l) is true and correct;
(g) the sale of an undivided interest in which does not
contravene or conflict with any law;
(h) which is denominated and payable only in Dollars in the
United States;
(i) which arises under an Eligible Contract that has been duly
authorized and that, together with such Receivable, is in full force
and effect and constitutes the legal, valid and binding obligation
of the Obligor of such Receivable enforceable against such Obligor
in accordance with its terms and is not subject to any dispute,
offset, counterclaim or defense whatsoever;
(j) which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to usury, truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy) and with respect to which no party
to the Contract related thereto is in violation of any such law,
rule or regulation in any material respect if such violation would
impair the collectibility of such Receivable;
(k) which satisfies all applicable requirements of the Credit
and Collection Policy of the applicable Originator;
(l) which, according to the Contract related thereto, is due
and payable (i) within 120 days from the invoice date of such
Receivable, and (ii) in a single installment (or with a down payment
and a single installment thereafter) and not in multiple
installments;
(m) the Unpaid Balance of which, together with the Unpaid
Balances of all Eligible Receivables owed by the same Obligor or an
Affiliated Obligor, would not exceed the Obligor Concentration
Limit;
(n) which has been fully earned by performance on the part of
an Originator and is not subject to any holdback or contingency; and
(o) the Obligor of which is not the Obligor on Defaulted
Receivables having an aggregate Unpaid Balance equal to 20% or more
of the aggregate Unpaid Balance of Receivables owed by such Obligor.
"ERISA" means the U.S. Employee Retirement Income Security Act of
1974, as amended from time to time.
"EURODOLLAR RATE (RESERVE ADJUSTED)" means, with respect to any
Yield Period and any Asset Tranche, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:
Eurodollar Rate = Eurodollar Rate
---------------
(Reserve Adjusted) 1 - Eurodollar
Reserve Percentage
where:
"EURODOLLAR RATE" means, with respect to any Yield Period and any
Asset Tranche, the rate per annum at which Dollar deposits in
immediately available funds are offered to the Eurodollar Office of
the Administrator two Eurodollar Business Days prior to the
beginning of such period by prime banks in the interbank eurodollar
market at or about 11:00 a.m., New York City time, for delivery on
the first day of such Yield Period, for the number of days comprised
therein and in an amount equal or comparable to the Purchaser's
Tranche Investment of such Asset Tranche for such Yield Period.
"EURODOLLAR BUSINESS DAY" means a day of the year on which dealings
are carried on in the eurodollar interbank market and banks are not
required or authorized to close in New York City, or Pittsburgh,
Pennsylvania.
"EURODOLLAR RESERVE PERCENTAGE" means, with respect to any Yield
Period, the then applicable percentage (expressed as a decimal)
prescribed by the Federal Reserve Board for determining reserve
requirements applicable to "Eurocurrency Liabilities" pursuant to
Regulation D.
"EVENT OF BANKRUPTCY" shall be deemed to have occurred with respect
to a Person if either:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding
up, or composition or readjustment of debts of such Person, the
appointment of a trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for such Person or all or substantially all
of its assets, or any similar action with respect to such Person
under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or
proceeding shall continue undismissed, or unstayed and in effect,
for a period of 60 consecutive days; or an order for relief in
respect of such Person shall be entered in an involuntary case under
the federal bankruptcy laws or other similar laws now or hereafter
in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency,
reorganization, debt arrangement, dissolution or other similar law
now or hereafter in effect, or shall consent to the appointment of
or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) for, such Person
or for any substantial part of its property, or shall make any
general assignment for the benefit of creditors, or shall be
adjudicated insolvent, or admit in writing its inability to, pay its
debts generally as they become due, or, if a corporation or similar
entity, its board of directors shall vote to implement any of the
foregoing.
"EXCEPTED LIQUIDATION EVENT" means a Liquidation Event described in
clause (p), (q) or (r) of Section 10.01 or (when used with reference to any
Unmatured Liquidation Event) an Unmatured Liquidation Event of the type
described in clause (b) or (c) of Section 10.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
rate per annum equal (for each day during such period) to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by PNC Bank from three federal funds brokers
of recognized standing selected by it.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"FINAL PAYOUT DATE" means the date following the Termination Date on
which Purchaser's Total Investment shall have been reduced to zero and all
other amounts payable by Seller under the Transaction Documents (excluding
contingent obligations under indemnities and the like as to which no present
payment obligation exists) shall have been paid in full.
"GAAP" shall mean generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such accounting profession, which are applicable to the
circumstances as of the date of determination.
"INDEMNIFIED AMOUNTS" has the meaning set forth in Section 13.01.
"INDEMNIFIED PARTY" has the meaning set forth in Section 13.01.
"INFORMATION PACKAGE" has the meaning set forth in Section 3.01(a).
"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"LIQUIDATION COST RESERVE" means, on any day during a Settlement
Period, an amount equal to the product of
(a) (x) 2 times (y) the Average Maturity of Select Pool
Receivables, calculated as of the Cut-Off Date for the next
preceding Settlement Period, divided by (z) 360; times
(b) the sum of (i) 2% over the Alternate Base Rate in effect on
such day, plus (ii) the percentage as may be in effect for the
purposes of calculating the Program Fee applicable to the
Purchaser's Total Investment, plus (iii) 1.0% (or, if greater, such
other percentage as may be in effect for purposes of clause (b)(x)
of the definition of "Servicer's Fee"); times
(c) the Purchaser's Total Investment on such day.
"LIQUIDATION EVENT" has the meaning set forth in Section 10.01.
"LIQUIDATION FEE" means, for each Asset Tranche (or portion thereof)
for each day in any Yield Period or Settlement Period (computed without regard
to clause (iii) of the proviso of the definition of "Yield Period"), the
amount, if any, by which:
(a) the additional Earned Discount (calculated without taking
into account any Liquidation Fee) which would have accrued on the
reductions of the Purchaser's Tranche Investment with respect to
such Asset Tranche during such Yield Period or Settlement Period (as
so computed) if such reductions had not been made, exceeds
(b) the income, if any, received by Purchaser from investing
the proceeds of such reductions of the Purchaser's Tranche
Investment.
"LIQUIDATION PERIOD" means the period commencing on the date on
which the conditions precedent to Purchases and Reinvestments set forth in
Section 5.02 are not satisfied (or expressly waived by Purchaser) and the
Administrator shall have notified Seller and Servicer in writing that the
Liquidation Period has commenced, and ending on the Final Payout Date.
"LIQUIDITY AGENT" means PNC Bank, as agent for the Liquidity Banks
under the Liquidity Agreement, or any successor to PNC Bank in such capacity.
"LIQUIDITY AGREEMENT" means and includes (a) the Liquidity Agreement
dated as of January 26, 1996 among Purchaser, as seller, PNC Bank, as
Liquidity Agent and as Administrator, and PNC Bank and/or one or more other
banks or other financial institutions, as purchasers, and (b) any other
agreement hereafter entered into by Purchaser providing for the purchase of,
or the making of loans or other extensions of credit to Purchaser secured by a
direct or indirect security interest in, the Asset Interest (or any portion
thereof), to support all or part of Purchaser's payment obligations under the
Commercial Paper Notes or to provide an alternate means of funding Purchaser's
investments in accounts receivable or other financial assets, and under which
the amount available from such purchase or extensions of credit is limited to
an amount calculated by reference to the value or eligible unpaid balance of
such accounts receivable or other financial assets or any portion thereof or
the level of deal-specific credit enhancement available with respect thereto,
as such Liquidity Agreement or other agreement may be amended, supplemented or
otherwise modified from time to time.
"LIQUIDITY BANK" means any one of, and "Liquidity Banks" means all
of, the commercial lending institutions that are at any time parties to the
Liquidity Agreement as "Purchasers" thereunder.
"LIQUIDITY PURCHASE" means a purchase made by the Liquidity Bank (or
simultaneous purchases made by the Liquidity Banks) pursuant to the Liquidity
Agreement.
"LOCK-BOX AGREEMENT" means a letter agreement, in substantially the
form of Exhibit 5.01(c), among an Originator, Purchaser, the Administrator,
Seller and any Lock-Box Bank.
"LOCK-BOX BANK" means any of the banks holding one or more lock-box
accounts for receiving Collections from Pool Receivables.
"LOSS RESERVE" means, on any day during a Settlement Period, an
amount equal to the product of
(i) the Purchaser's Total Investment on such day, times
(ii) the greatest of
(A) 10%, and
(B) 3 times the average of the Total Default Ratios as of
the Cut-off Dates for the three next preceding Settlement
Periods; and
(C) 1.25 times the average of the Delinquency Ratios as of
the Cut-Off Dates for the three next preceding Settlement
Periods
"MARKETING CO." has the meaning set forth in the preamble.
"MATERIAL ADVERSE EFFECT" with respect to any event or circumstance,
means a material adverse effect on:
(i) the business, assets, financial condition, operations or
prospects of any Seller Party or any Originator;
(ii) the ability of any Seller Party or any Originator to
perform its obligations under this Agreement or any other
Transaction Document;
(iii) the validity or enforceability of this Agreement or any
other Transaction Document, or the validity, enforceability or
collectibility of the Receivables or the related Contracts; or
(iv) the status, existence, perfection, priority or
enforceability of Purchaser's interest in the Pool Receivables.
"MONTHLY SETTLEMENT DATE" means, with respect to any Settlement
Period, the third Business Day following the Reporting Date for such
Settlement Period.
"NET CHARGE-OFFS" for any Reporting Period means the excess, if any,
of (a) the aggregate Unpaid Balance of Pool Receivables which during such
Reporting Period have been, or, consistent with the Credit and Collection
Policy of the applicable Originator, would be, written off Seller's books as
uncollectible, over (b) the aggregate amount, if any, of Collections received
by Seller, Servicer or any Originator (and not required to be returned to the
Obligor or any Person on its behalf) in respect of such Receivables after such
Receivables were written off (or would have been written off as described in
clause (a)).
"NET POOL BALANCE" at any time means an amount equal to the
aggregate Unpaid Balance of the Eligible Receivables in the Receivables Pool
at such time.
"OBLIGOR" means a Person obligated to make payments with respect to
a Receivable, including any guarantor thereof.
"OBLIGOR CONCENTRATION LIMIT" means, at any time, in relation to the
aggregate Unpaid Balance of Receivables owed by any single Obligor and its
Affiliated Obligors (if any):
(a) in the case of any Obligor the long-term debt securities of
which are rated in one of the top three rating categories (that is,
as of the date hereof, a rating of "A" or a higher rating), by each
of ▇▇▇▇▇'▇ Investors Service, Inc. and Standard & Poor's
Corporation, an amount equal to 4% of the aggregate Unpaid Balance
of Eligible Receivables at such time;
(b) in the case of any Obligor other than an Obligor described
in clause (a) above or clause (c) below, an amount equal to 2% of
the aggregate Unpaid Balance of Eligible Receivables at such time;
and
(c) in the case of any Obligor listed in Appendix D hereto, as
such Appendix D may be amended or replaced from time to time with
the concurrence of Seller, Servicer and the Administrator, so long
as the long-term debt securities of such Obligor have each of the
ratings set forth opposite the name of such Obligor on such Appendix
D or higher ratings, an amount equal to the percentage of the
aggregate Unpaid Balance of Eligible Receivables set forth opposite
the name of such Obligor on such Appendix D;
provided that, for purposes of this definition, the aggregate Unpaid Balance
of Eligible Receivables will be calculated without giving effect to clause (m)
of the definition of "Eligible Receivable".
"ORIGINAL PURCHASE AGREEMENT" has the meaning set forth in the
Background.
"ORIGINATOR" and "Originators" have the meanings set forth in the
Sale Agreement.
"ORIGINATOR NOTE" and "Originator Notes" have the meanings set forth
in the Sale Agreement.
"PARENT" has the meaning set forth in the preamble.
"PERMITTED PLEDGES" means, as the context requires, the Liens in
favor of Bankers Trust Company, as administrative agent, arising from the
pledge (x) by Marketing Co. of all of the outstanding capital stock of Seller
pursuant to the Stock Pledge Agreement dated as of November 15, 2001 and (y)
by Parent of all of the outstanding capital stock of Marketing Co., Valenite,
D-M-E and Uniloy pursuant to the Stock Pledge Agreement dated as of October
15, 2001, each delivered in connection with the Revolving Credit Agreement.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, government or any agency or political subdivision thereof or any
other entity.
"PNC BANK" has the meaning set forth in the preamble.
"PNC-OHIO" means PNC Bank, Ohio, National Association, a national
banking association (formerly known as The Central Trust Company, N.A.).
"POOL RECEIVABLE" means a Receivable in the Receivables Pool.
"PROGRAM FEE" has the meaning set forth in Section 4.01.
"PROGRAM INFORMATION" has the meaning set forth in Section
14.08(a)(i).
"PURCHASE" has the meaning set forth in Section 1.01.
"PURCHASE LIMIT" has the meaning set forth in Section 1.01.
"PURCHASE TERMINATION DATE" means that day on which a Liquidation
Event has occurred and is continuing, and
(a) the Administrator declares a Purchase Termination Date in a
notice to Seller in accordance with Section 10.02(a); or
(b) in accordance with Section 10.02(b), becomes the Purchase
Termination Date automatically.
"PURCHASER" has the meaning set forth in the preamble.
"PURCHASER'S TOTAL INVESTMENT" means at any time with respect to the
Asset Interest an amount equal to (a) the aggregate of the amounts theretofore
paid to Seller for Purchases pursuant to Section 1.01, less (b) the aggregate
amount of Collections theretofore received and actually distributed to
Purchaser on account of such Purchaser's Total Investment pursuant to Section
1.03.
"PURCHASER'S TRANCHE INVESTMENT" means in relation to any Asset
Tranche the amount of the Purchaser's Total Investment allocated by the
Administrator to that Asset Tranche pursuant to Section 2.01, provided, that
at all times the aggregate amounts allocated to all Asset Tranches shall equal
the Purchaser's Total Investment.
"QUALIFYING LIQUIDITY BANK" means a Liquidity Bank with a rating of
its short-term securities equal to or higher than (i) A-1 by Standard & Poor's
Ratings Services and (ii) P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.
"RECEIVABLE" means any right to payment from a Person organized
under the laws of or resident in the United States or any state thereof,
whether constituting an account, chattel paper, instrument or a general
intangible, arising from the sale of merchandise or provision of services by
any Originator, and includes the right to payment of any interest or finance
charges and other obligations of such Person with respect thereto; provided,
however, "Receivable" shall not include any promissory note or chattel paper
evidencing the obligation of a purchaser of inventory of an Originator and
originally representing that portion of the purchase price of such inventory
not paid to such Originator at the time of purchase; provided, further,
however, "Receivable" also shall not include any receivable originated by the
American Mine Tool
Division of Valenite, Inc.; and provided, further, however, that "Receivable"
shall not include any promissory note or chattel paper described on Schedule 1
to this Appendix A.
"RECEIVABLES POOL" means at any time all then outstanding
Receivables which have been sold or contributed as capital by any Originator
to Seller.
"REGULATION D" means Regulation D of the Federal Reserve Board, or
any other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.
"REGULATORY CHANGE" means, relative to any Affected Party
(a) any change in (or the adoption, implementation, phase-in or
commencement of effectiveness of) any
(i) United States federal or state law or foreign law
applicable to such Affected Party;
(ii) regulation, interpretation, directive, requirement or
request (whether or not having the force of law) applicable to
such Affected Party of (A) any court, government authority
charged with the interpretation or administration of any law
referred to in clause (a)(i) or of (B) any fiscal, monetary or
other authority having jurisdiction over such Affected Party;
or
(iii) GAAP or regulatory accounting principles applicable
to such Affected Party and affecting the application to such
Affected Party of any law, regulation, interpretation,
directive, requirement or request referred to in clause (a)(i)
or (a)(ii) above; or
(b) any change in the application to such Affected Party of any
existing law, regulation, interpretation, directive, requirement,
request or accounting principles referred to in clause (a)(i),
(a)(ii) or (a)(iii) above.
"REINVESTMENT" has the meaning set forth in Section 1.03(a)(iii).
"RELATED ASSETS" means (a) all rights to, but not any obligations
under, all related Contracts and Related Security with respect to any Pool
Receivables, (b) all rights and interests of Seller under the Sale Agreement
in relation to any Pool Receivables, (c) all books and records evidencing or
otherwise relating to any Pool Receivables, and (d) all Collections in respect
of, and other proceeds of, any Pool Receivables or any other Related Assets.
"RELATED SECURITY" means, with respect to any Pool Receivable, all
of Seller's right, title and interest in and to: (a) all Contracts that relate
to such Pool Receivable; (b) all merchandise (including returned merchandise),
if any, relating to the sale which gave rise to such Pool Receivable; (c) all
other security interests or liens and property subject thereto from time to
time purporting to secure payment of such Pool Receivable, whether pursuant to
the Contract related to such Pool Receivable or otherwise; (d) all UCC
financing statements covering any collateral
securing payment of such Pool Receivable (but only to the extent of the
interest of Purchaser in the respective Pool Receivable); and (e) all
guarantees and other agreements or arrangements of whatever character from
time to time supporting or securing payment of such Pool Receivable whether
pursuant to the Contract related to such Pool Receivable or otherwise. The
interest of Purchaser in any Related Security is only to the extent of
Purchaser's undivided percentage interest, as more fully described in the
definition of Asset Interest.
"REPORTING DATE" with respect to any Reporting Period or Settlement
Period means the tenth day after the Cut-Off Date for such Reporting Period or
Settlement Period.
"REPORTING PERIOD" means each period from a Cut-Off Date to the next
following Cut-Off Date. The "related" Reporting Period with respect to any
Settlement Period means the Reporting Period ending on the Cut-Off Date for
such Settlement Period.
"RESTRICTED PAYMENT" has the meaning set forth in the Revolving
Credit Agreement, as in effect on the date hereof.
"REVOLVING CREDIT AGREEMENT" means the Amended and Restated
Revolving Credit Agreement dated as of November 30, 1998, among Parent,
Cincinnati Milacron Kunststoffmaschinen Europa GmbH, the Lenders listed
therein and Bankers Trust Company, as Agent, as further amended, supplemented
or otherwise modified from time to time.
"SALE AGREEMENT" means the Amended and Restated Purchase and Sale
Agreement dated as of March 18, 1994, as heretofore amended, among the
Servicer, the Originators, as sellers, and Seller, as initial purchaser, as it
may be further amended, supplemented or otherwise modified in accordance with
Section 7.03(f).
"SECURED PARTIES" means Purchaser, the Administrator, the
Indemnified Parties and the Affected Parties.
"SELECT POOL RECEIVABLE" means a Pool Receivable originated by one
of the divisions of an Originator, as listed in Appendix B.
"SELECT POOL RECEIVABLE NET CHARGE-OFF RATIO" at any time during a
Settlement Period means the percentage equivalent of a fraction (a) the
numerator of which is the average of the Net Charge Offs for Select Pool
Receivables for the three Reporting Periods next preceding the date of such
Settlement Period and (b) the denominator of which is the average aggregate
Unpaid Balance of all Select Pool Receivables as of the Cut-Off Dates for such
three preceding Reporting Periods."
"SELLER" has the meaning set forth in the preamble.
"SELLER DEPOSIT ACCOUNT" has the meaning set forth in Section
8.07(b).
"SELLER INFORMATION" has the meaning set forth in Section 14.07(a).
"SELLER INFORMATION PROVIDER" has the meaning set forth in Section
14.07(a).
"SELLER PARTY" and "Seller Parties" have the meanings set forth in
the preamble.
"SERVICER" has the meaning set forth in the preamble.
"SERVICER DEPOSIT ACCOUNT" has the meaning set forth in Section
8.07(a).
"SERVICER TRANSFER EVENT" has the meaning set forth in Section
8.01(b).
"SERVICER'S FEE" accrued for any day in a Settlement Period means
(a) an amount equal to (x) 1% per annum, times (y) the amount
of the Purchaser's Total Investment at the close of business on the
first day of such Settlement Period, times (z) 1/360; or
(b) on and after Servicer's reasonable request made at any time
when Marketing Co. shall no longer be Servicer, an alternative
amount specified by Servicer not exceeding (x) 110% of Servicer's
reasonable cost and expenses of performing its obligations under the
Agreement during the Settlement Period when such day occurs, divided
by (y) the number of days in such Settlement Period.
"SETTLEMENT PERIOD" means
(a) the period from the date hereof to the first Business Day
after the first Reporting Date thereafter; and
(b) thereafter, each period from the last day of the next
preceding Settlement Period to the first Business Day after the next
following Reporting Date;
provided, however, that the last Settlement Period shall end on the Final
Payout Date.
"SUBSCRIPTION AGREEMENT" means the Subscription Agreement entered
into on or prior to January 29, 1993 between Marketing Co. and Seller, as
amended, supplemented or otherwise modified from time to time.
"SUBSERVICER" has the meaning set forth in the preamble.
"SUBSIDIARY" of any Person means (i) a corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned or controlled by such
Person, directly or indirectly through Subsidiaries, and (ii) any partnership,
association, joint venture or other entity in which such Person, directly or
indirectly through Subsidiaries, has more than a 50% equity interest at the
time. A "wholly-owned" Subsidiary of any Person shall mean (i) any Subsidiary
whose jurisdiction of incorporation is within the United States, with "99%"
being substituted for "50%" in the next preceding sentence each time it
appears, and (ii) any "Foreign Subsidiary" (as such term is defined in the
Revolving Credit Agreement, as in effect on the date hereof), with "95%" being
substituted for "50%" in the next preceding sentence each time it appears.
Notwithstanding the foregoing, for purposes of this Agreement, The Factory
Power Company, an Ohio corporation which is 82.2% owned by parent, is deemed a
wholly-owned Subsidiary of Parent.
"SUCCESSOR NOTICE" has the meaning set forth in Section 8.01(b).
"TALBOT POOL RECEIVABLES" has the meaning set forth in Section
8.01(c)(v).
"TERMINATION DATE" means the earliest of
(a) the date of termination (whether by scheduled expiration,
termination on default or otherwise) of either the Liquidity Banks'
commitments under the Liquidity Agreement or the Credit Bank's
commitment under the Credit Agreement (unless such commitments are
renewed, extended or replaced on or before such date);
(b) the Purchase Termination Date; and
(c) August 1, 2004.
"TOTAL DEFAULT RATIO" at any time during a Settlement Period means
the ratio (expressed as a percentage) computed as of the Cut-Off Date for the
next preceding Settlement Period by dividing
(a) an amount equal to:
(i) the aggregate Unpaid Balance of all Select Pool
Receivables that were Defaulted Receivables on such Cut-Off
Date, plus
(ii) the aggregate Unpaid Balance of all Select Pool
Receivables that were written off during such preceding
Settlement Period (and therefore were not included in the
Defaulted Receivables described in clause (a)(i) above), minus
(iii) the aggregate amount of Collections received by the
Seller, Servicer or any Originator on written-off Receivables
described in clause (a)(ii) above (and not required to be
returned to the Obligor thereof or any other Person); by
(b) the aggregate Unpaid Balance of all Select Pool Receivables
on such Cut-Off Date.
"TRANSACTION DOCUMENTS" means this Agreement, the Lock-Box
Agreements, the Sale Agreement, the Subscription Agreement, the Account Pledge
Agreement and the other documents to be executed and delivered in connection
herewith.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the applicable jurisdiction or jurisdictions.
"UNILOY POOL RECEIVABLES" has the meaning set forth in Section
8.01(c)(iv).
"UNMATURED LIQUIDATION EVENT" means any event which, with the giving
of notice or lapse of time, or both, would become a Liquidation Event.
"UNPAID BALANCE" of any Receivable means at any time the unpaid
amount thereof, but excluding all late payment charges, delinquency charges,
and extension or collection fees.
"VALENITE POOL RECEIVABLES" has the meaning set forth in Section
8.01(c)(ii).
"WEEKLY INFORMATION PACKAGE" means a report, in substantially the
form of Exhibit 8.01(h) to the Agreement, furnished to the Administrator
pursuant to the Agreement, reflective of the Pool Receivables as of the most
recent Friday.
"WEEKLY SETTLEMENT DATE" means each Friday of each week (or the next
succeeding Business Day if such day is not a Business Day), beginning December
14, 2001.
"YIELD PERIOD" with respect to any Asset Tranche funded by a
Liquidity Purchase or Credit Draw means
(a) the period commencing on the date of the initial Purchase
of the Asset Interest, the making of such Liquidity Purchase or
Credit Draw or the creation of such Asset Tranche pursuant to
Section 2.01 (whichever is latest) and ending such number of days
thereafter as the Administrator shall select; and
(b) each period commencing on the last day of the immediately
preceding Yield Period for the related Asset Tranche and ending such
number of days thereafter as the Administrator shall select;
provided, however, that
(i) any such Yield Period (other than a Yield Period
consisting of one day) which would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding
Business Day (unless the related Asset Tranche shall be
accruing Earned Discount at a rate determined by reference to
the Eurodollar Rate (Reserve Adjusted), in which case if such
succeeding Business Day is in a different calendar month, such
Yield Period shall instead be shortened to the next preceding
Business Day);
(ii) in the case of Yield Periods of one day for any Asset
Tranche, (A) the initial Yield Period shall be the date such
Yield Period commences as described in clause (a) above; and
(B) any subsequently occurring Yield Period which is one day
shall, if the immediately preceding Yield Period is more than
one day, be the last day of such immediately preceding Yield
Period, and if the immediately preceding Yield Period is one
day, shall be the next day following such immediately preceding
Yield Period; and
(iii) in the case of any Yield Period for any Asset
Tranche which commences before the Termination Date and would
otherwise end on a date occurring after such Termination Date,
such Yield Period shall end on such
Termination Date and the duration of each such Yield Period
which commences on or after the Termination Date for such Asset
Tranche shall be of such duration as shall be selected by the
Administrator.
B. 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.
C. COMPUTATION OF TIME PERIODS. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding".
