EXHIBIT 10.25
RECEIVABLES PURCHASE AGREEMENT
among
CITGO FUNDING COMPANY, L.L.C.,
as Seller
CITGO PETROLEUM CORPORATION,
as Servicer
ASSET ONE SECURITIZATION, LLC,
as Issuer
and
SOCIETE GENERALE,
as Agent
Dated as of February 28, 2003
TABLE OF CONTENTS
PAGE
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ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASES........................................................ 1
Section 1.1. Purchase Facility................................................................ 1
Section 1.2. Making Purchases................................................................. 1
Section 1.3. Purchased Interest Computation................................................... 3
Section 1.4. Settlement Procedures............................................................ 3
Section 1.5. Fees............................................................................. 6
Section 1.6. Payments and Computations, Etc................................................... 7
Section 1.7. Dividing or Combining Portions of the Capital of the Purchased Interest.......... 7
Section 1.8. Increased Costs.................................................................. 7
Section 1.9. Requirements of Law.............................................................. 8
Section 1.10. Inability to Determine Eurodollar Rate........................................... 9
ARTICLE II. REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS............................. 10
Section 2.1. Representations and Warranties; Covenants........................................ 10
Section 2.2. Termination Events............................................................... 10
ARTICLE III. INDEMNIFICATION........................................................................... 10
Section 3.1. Indemnities by the Seller........................................................ 10
Section 3.2. Indemnification by the Servicer.................................................. 12
ARTICLE IV. ADMINISTRATION AND COLLECTIONS............................................................ 13
Section 4.1. Appointment of Servicer.......................................................... 13
Section 4.2. Duties of Servicer............................................................... 14
Section 4.3. Lock-Box Arrangements............................................................ 15
Section 4.4. Enforcement Rights............................................................... 15
Section 4.5. Responsibilities of the Originator; Assignment of Rights Under Purchase
and Sale Agreement............................................................... 16
Section 4.6. Servicing Fee.................................................................... 17
ARTICLE V. MISCELLANEOUS............................................................................. 17
Section 5.1. Amendments, Etc.................................................................. 17
Section 5.2. Notices, Etc..................................................................... 17
Section 5.3. Assignability.................................................................... 18
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Section 5.4. Costs, Expenses and Taxes........................................................ 18
Section 5.5. No Proceedings; Limitation on Payments........................................... 19
Section 5.6. Confidentiality.................................................................. 19
Section 5.7. GOVERNING LAW AND JURISDICTION................................................... 19
Section 5.8. Execution in Counterparts........................................................ 20
Section 5.9. Termination; Survival of Termination............................................. 20
Section 5.10. WAIVER OF JURY TRIAL............................................................. 20
Section 5.11. Entire Agreement................................................................. 20
Section 5.12. Headings......................................................................... 21
Section 5.13. Issuer's Liabilities............................................................. 21
EXHIBIT I - DEFINITIONS..................................................................................... I-1
EXHIBIT II - CONDITIONS OF PURCHASES........................................................................ II-1
EXHIBIT III - REPRESENTATIONS AND WARRANTIES................................................................ III-1
EXHIBIT IV - COVENANTS...................................................................................... IV-1
EXHIBIT V - TERMINATION EVENTS.............................................................................. V-1
EXHIBIT VI - DIRECT DILUTION ITEMS.......................................................................... VI-1
EXHIBIT VII - SUPPLEMENTAL PERFECTION REPRESENTATIONS,
WARRANTIES AND COVENANTS...................................................................... VII-1
SCHEDULE I - CREDIT AND COLLECTION POLICY
SCHEDULE II - LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
SCHEDULE III - TRADE NAMES
SCHEDULE IV - SPECIAL CONCENTRATION PERCENTAGES
SCHEDULE V - DESCRIPTION OF RECEIVABLES
SCHEDULE VI - LIST OF OFFICES WHERE RECORDS CONCERNING RECEIVABLES
ARE KEPT
ANNEX A - FORM OF NOTICE OF REQUEST TO INCREASE PURCHASED INTEREST
ANNEX B - FORM OF NOTICE OF REDUCTION OF PURCHASED INTEREST
ANNEX C - FORM OF LOCK-BOX AGREEMENT
ANNEX D-1 - FORM OF INTERIM RECEIVABLES REPORT
ANNEX D-2 - FORM OF MONTHLY RECEIVABLES REPORT
ANNEX E - FORM OF GENERAL CORPORATE OPINION
ANNEX F - FORM OF ENFORCEABILITY AND PERFECTION OPINION
ANNEX G - FORM OF TRUE SALE AND NONCONSOLIDATION OPINION
ANNEX H - FORM OF LLC AGREEMENT OPINION
ANNEX I - FORM OF CHOICE OF LAW OPINION
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RECEIVABLES PURCHASE AGREEMENT
This RECEIVABLES PURCHASE AGREEMENT (this "Agreement") is
entered into as of February 28, 2003 among CITGO FUNDING COMPANY, L.L.C. a
limited liability company, as seller (the "Seller"), CITGO PETROLEUM
CORPORATION, a Delaware corporation, as initial servicer (in such capacity,
together with its successors and permitted assigns in such capacity, the
"Servicer"), ASSET ONE SECURITIZATION, LLC, a Delaware corporation (together
with its successors and permitted assigns, the "Issuer"), and SOCIETE GENERALE,
a banking corporation organized under the laws of France, as agent (in such
capacity, together with its successors and assigns in such capacity, the
"Agent") for the Issuer pursuant to an agreement between the Issuer and the
Agent.
PRELIMINARY STATEMENTS. Certain terms that are capitalized and
used throughout this Agreement are defined in Exhibit I to this Agreement.
References in the Exhibits hereto to "the Agreement" refer to this Agreement, as
amended, modified or supplemented from time to time.
The Seller desires to sell, transfer and assign an undivided
variable percentage interest in a pool of receivables, and the Issuer may, from
time to time, in its sole discretion acquire such undivided variable percentage
interest, as such percentage interest shall be adjusted from time to time based
upon, in part, reinvestment payments which are made by the Issuer and additional
incremental payments made to the Seller.
In consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereto agree as follows:
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1 Purchase Facility. (a) On the terms and conditions
hereinafter set forth, the Issuer agrees to purchase and make reinvestments in
the Purchased Interest from the Seller from time to time during the period from
the date hereof to the Facility Termination Date. Under no circumstances shall
the Issuer make any such purchase or reinvestment if (i) after giving effect to
such purchase or reinvestment the aggregate outstanding Capital of the Purchased
Interest would exceed the Purchase Limit or (ii) as a result of the making of
such purchase or reinvestment, the Purchased Interest would exceed 100%. Nothing
in this Agreement shall be deemed to be or construed as a commitment by the
Issuer to purchase or reinvest in the Purchased Interest.
(b) The Seller may, upon at least five Business Days' notice to
the Agent, terminate the purchase facility provided in this Section 1.1 in whole
or, from time to time, irrevocably reduce in part the unused portion of the
Purchase Limit; provided that each partial reduction shall be in the amount of
at least $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
Section 1.2 Making Purchases. (a) Each purchase (but not
reinvestments) of undivided ownership interests with regard to the Purchased
Interest hereunder, upon the Seller's irrevocable written notice in
substantially the form of Annex A delivered to the Agent in
accordance with Section 5.2 (which notice must be received by the Agent prior to
11:00 a.m., New York City time) at least two Business Days prior to the
requested purchase date, which notice shall specify (A) the amount requested to
be paid to the Seller (such amount, which shall not be less than $5,000,000 and
shall be in integral multiples of $250,000, being the "Capital" relating to the
undivided ownership interest then being purchased), (B) the date of such
purchase (which shall be a Business Day) and (C) the pro forma calculation of
the Purchased Interest after giving effect to the increase in Capital and (D)
the duration of the initial Fixed Period(s) for such purchase. The Agent shall
select the duration of such initial Fixed Period(s), and each subsequent Fixed
Period in its sole discretion; provided that the Agent shall use reasonable
efforts, taking into account market conditions, to accommodate Seller's
preference.
(b) On the date of each purchase (but not reinvestment) of
undivided ownership interests with regard to the Purchased Interest hereunder,
the Issuer shall, upon satisfaction of the applicable conditions set forth in
Exhibit II hereto, make available to the Seller in same day funds, at Bank of
New York, account # 8900126485, ABA # ▇▇▇▇▇▇▇▇▇ an amount equal to the Capital
relating to the undivided ownership interest then being purchased.
(c) Effective on the date of each purchase pursuant to this
Section 1.2 and each reinvestment pursuant to Section 1.4, the Seller hereby
sells and assigns to the Issuer an undivided percentage ownership interest in
(i) each Receivable then existing, (ii) all Related Security with respect to
such Receivables, and (iii) Collections with respect to, and other proceeds of,
such Receivables and Related Security.
(d) To secure all of the Seller's obligations (monetary or
otherwise) under this Agreement and the other Transaction Documents to which it
is a party, whether now or hereafter existing or arising, due or to become due,
direct or indirect, absolute or contingent, the Seller hereby grants to the
Issuer a security interest in all of the Seller's right, title and interest
(including without limitation any undivided interest of the Seller) in, to and
under all of the following, whether now or hereafter owned, existing or arising
(A) all Receivables, (B) all Related Security with respect to such Receivables,
(C) all Collections with respect to such Receivables, (D) the Lock Box Accounts
and all amounts relating to Receivables on deposit therein and all certificates
and instruments, if any, from time to time evidencing such Lock Box Accounts and
amounts relating to Receivables on deposit therein, and (E) all proceeds of, and
all amounts received or receivable under any or all of, the foregoing. The
Issuer shall have, with respect to the property described in this Section
1.2(d), and in addition to all the other rights and remedies available to the
Issuer, all the rights and remedies of a secured party under any applicable UCC.
Notwithstanding anything to the contrary contained herein or in any other
Transaction Document, the Seller's interest in the foregoing is expressly
subordinated in all respects to the payment of the Capital, the Discount on the
Purchased Interest, all fees and all other amounts payable by Seller hereunder
and under other Transaction Documents to Issuer, the Agent, the Affected Persons
and all Indemnified Parties. In connection with the grant of the transfer of
ownership of those assets set forth in Section 1.2(c) or the security interest
in the assets set forth in this Section 1.2(d) by signing this Agreement in the
space provided, the Seller hereby authorizes the filing of, as applicable, UCC
financing statements in all necessary jurisdictions.
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Section 1.3 Purchased Interest Computation. The Purchased
Interest shall be initially computed on the date of the initial purchase
hereunder. Thereafter until the Termination Date, the Purchased Interest shall
be automatically recomputed (or deemed to be recomputed) on each Business Day
other than a Termination Day. From and after the occurrence of any Termination
Day, the Purchased Interest (and the percentage of Collections represented by
the Purchased Interest) shall (until the event(s) giving rise to such
Termination Day are satisfied or waived by the Agent) be deemed to be 100%. With
respect to each calculation of the Purchased Interest, the Discount Reserve, the
Required Loss Reserve, the Required Dilution Reserve and the Fee Reserve used in
such calculation shall be measured using the information reported in the most
recent Interim Receivables Report or Monthly Receivables Report, as applicable.
The Purchased Interest shall become zero when the Capital thereof and Discount
thereon shall have been paid in full, all the amounts owed by the Seller
hereunder to the Issuer, the Agent, and any other Indemnified Party or Affected
Person, are paid in full and the Servicer shall have received all accrued and
unpaid Servicing Fees.
Section 1.4 Settlement Procedures. (a) Collection of the
Receivables shall be administered by the Servicer in accordance with the terms
of this Agreement. All Collections of Receivables shall be remitted on a daily
basis to the Lock-Box Accounts. All amounts deposited to a Lock-Box Account
shall be identified as Collections of Receivables and collections of Excluded
Receivables ("Excluded Receivables Collections"). All Excluded Receivables
Collections shall be removed from each Lock-Box Account within one (1) Business
Day of deposit thereof and remitted to the Originator pursuant to Section
4.2(b).
(b) The Servicer shall, on each day on which Collections of
Receivables are received (or deemed received) by the Seller or Servicer:
(i) set aside and hold in trust (and, at the request of
the Agent, segregate by depositing into a separate account approved by
the Agent) for the Issuer, the Agent, the Affected Persons and the
Indemnified Parties, as applicable, out of the percentage of such
Collections represented by the Purchased Interest an amount equal to
(A) first, the Discount accrued through such day for each Portion of
Capital and not previously set aside; (B) second, to the extent funds
are available therefor, an amount equal to the Program Fees accrued
through such day for the Purchased Interest and not previously set
aside; (C) third, to the extent funds are available therefor, an amount
equal to the Servicing Fee accrued through such day for the Purchased
Interest and not previously set aside; and (D) if such day is a
Termination Day, fourth, all other amounts (other than Capital) payable
to the Issuer, the Agent, and any other Affected Person or Indemnified
Party;
(ii) subject to Section 1.4(f), if such day is not a
Termination Day, remit to the Seller, on behalf of the Issuer, the
remainder of all such Collections that were not set aside pursuant to
paragraph (i) above; such Collections shall be automatically reinvested
in Receivables, and in the Related Security and Collections and other
proceeds with respect thereto, and the Purchased Interest shall be
automatically recomputed pursuant to Section 1.3; provided, however,
that if the Purchased Interest would exceed 100%, then the Servicer
shall not reinvest but shall set aside and hold in trust for the Issuer
(and shall, at the request of the Agent, segregate in a separate
account approved by the Agent) a
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portion of such Collections that, together with the other Collections
set aside pursuant to this paragraph, shall equal the amount necessary
to reduce the Purchased Interest to 100%;
(iii) if such day is a Termination Day, set aside,
segregate and hold in trust (and shall at the request of the Agent,
segregate in a separate account approved by the Agent) for the Issuer
all Collections less the amount set aside pursuant to paragraph (i)
above; provided that if amounts are set aside and held in trust, on any
Termination Day of the type described in clause (a) of the definition
of "Termination Day", and on such day or thereafter, the conditions set
forth in Section 2 of Exhibit II are satisfied or are waived by the
Agent, such previously set aside amounts shall be reinvested in
accordance with the preceding paragraph (ii) on the day of such
subsequent satisfaction or waiver of conditions; and
(iv) during such times as amounts are required to be
reinvested in accordance with the foregoing paragraph (ii) or the
proviso to paragraph (iii), release to the Seller within one (1)
Business Day (subject to Section 1.4(f)) for its own account any
Collections in excess of (x) such amounts, (y) the amounts that are
required to be set aside pursuant to paragraph (i) above, the proviso
to paragraph (ii) above and paragraph (iii) above and (z) all
reasonable and appropriate out-of-pocket costs and expenses of the
Servicer of servicing, collecting and administering the Receivables.
(c) The Servicer shall deposit into the Administration Account (or
such other account designated by the Agent), (i) on the last day of each
Settlement Period relating to a Portion of Capital, Collections held for the
Issuer pursuant to Section 1.4(b)(i)(A) and Section 1.4(f), if applicable, with
respect to such Portion of Capital and the lesser of (x) the amount of
Collections then held for the Issuer pursuant to Sections 1.4(b)(ii) and
1.4(b)(iii) and (y) the sum of such Portion of Capital and any amounts due under
this Agreement other than Capital, Discount, Program Fees or Servicer Fees and
(ii) on each Settlement Date, Collections held for the Issuer pursuant to
clauses (B) and (C) of Section 1.4(b)(i), provided that so long as CITGO is the
Servicer and the Agent has not requested the Servicer to deposit into a separate
account those Collections set aside pursuant to Section 1.4(b)(i), the Servicing
Fee may be retained by the Servicer rather than deposited into the
Administration Account.
(d) Upon receipt of funds deposited into the Administration
Account pursuant to Section 1.4(c) with respect to any Portion of Capital, the
Agent shall cause such funds to be distributed as follows:
(i) if such distribution occurs on a day that is not a
Termination Day and the Purchased Interest does not exceed 100%, first
to the Issuer in payment in full of all accrued Discount with respect
to such Portion of Capital, second, to the Issuer (payable in arrears
on the Settlement Date) in payment in full of all accrued Program Fees
and third, if the Servicer has set aside amounts in respect of the
Servicing Fee pursuant to clause (C) of Section 1.4(b)(i) and deposited
such amounts in the Administration Account pursuant to Section 1.4(c),
to the Servicer (payable in arrears on the Settlement Date) in payment
in full of accrued Servicing Fees so set aside; and
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(ii) if such distribution occurs on a Termination Day or
on a day when the Purchased Interest exceeds 100%, first, to the Issuer
in payment in full of all accrued Discount with respect to such Portion
of Capital, second, to the Issuer in payment in full of all accrued
Program Fees, third, if CITGO is not the Servicer and the Servicer has
set aside amounts in respect of the Servicing Fee pursuant to clause
(C) of Section 1.4(b)(i) and deposited such amounts in the
Administration Account pursuant to Section 1.4(c), to the Servicer in
payment in full of all accrued Servicing Fees, fourth, to the Issuer,
the Agent and any other Affected Person or Indemnified Party all other
amounts (other than Indemnified Amounts) payable to the Issuer, the
Agent and any other Affected Person or Indemnified Party under this
Agreement and other Transaction Documents, including, without
limitation, amounts payable pursuant to Section 5.04, fifth, to the
Issuer in payment in full of such Portion of Capital (or if such day is
not a Termination Day, the amount necessary to reduce the Purchased
Interest to 100%), sixth, if the Capital and accrued Discount with
respect to each Portion of Capital has been reduced to zero, all
accrued Program Fees payable to the Issuer have been paid in full, all
amounts payable to the Issuer, the Agent and any other Affected Person
or Indemnified Party pursuant to clause fourth above, have been paid in
full, and all accrued Servicing Fees payable to the Servicer pursuant
to clause third above have been paid in full, to the Issuer, the Agent
and any other Indemnified Party or Affected Person in payment in full
of any other amounts owed thereto by the Seller hereunder and seventh,
if CITGO is the Servicer and the Servicer has set aside amounts in
respect of the Servicing Fee pursuant to clause (C) of Section
1.4(b)(i) and deposited such amounts in the Administration Account
pursuant to Section 1.4(c), to the Servicer in payment in full of all
accrued Servicing Fees.
After the Capital and Discount, Program Fees and Servicing Fees with respect to
the Purchased Interest, and any other amounts payable by the Seller to the
Issuer, the Agent or any other Indemnified Party or Affected Person hereunder,
have been paid in full, all additional or remaining Collections with respect to
the Purchased Interest shall be paid to the Seller for its own account.
(e) For the purposes of this Section 1.4:
(i) if on any day the Outstanding Balance of any
Receivable is reduced or adjusted as a result of any defective,
rejected, returned, repossessed or foreclosed goods or services, or any
discount or other adjustment made by the Seller, or any setoff or
dispute between the Seller and an Obligor, the Seller shall be deemed
to have received on such day a Collection of such Receivable in the
amount of such reduction or adjustment;
(ii) if on any day any of the representations or
warranties of the Seller in paragraphs (g) or (o) of Exhibit III or
Sections 2, 3 or 4 of Exhibit VII is not true with respect to any
Receivable, the Seller shall be deemed to have received on such day a
Collection of such Receivable in full;
(iii) except as provided in paragraph (i) or (ii) of this
Section 1.4(e), or as otherwise required by applicable law or the
relevant Contract, all Collections received from an Obligor with
respect to any Receivable shall be applied to the Receivables of such
Obligor in the order of the age of such Receivables, starting with the
oldest such
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Receivable, unless such Obligor designates its payment for application
to specific Receivables; and
(iv) if and to the extent the Agent or the Issuer shall be
required for any reason to pay over to an Obligor (or any trustee,
receiver, custodian or similar official in any Insolvency Proceeding)
any amount received by it hereunder, such amount shall be deemed not to
have been so received but rather to have been retained by the Seller
and, accordingly, the Agent or the Issuer, as the case may be, shall
have a claim against the Seller for such amount, payable when and to
the extent that any distribution from or on behalf of such Obligor is
made in respect thereof.
The Seller shall deposit to the Administration Account an amount equal to all
Collections deemed to have been received by the Seller pursuant to this Section
1.4(e).
(f) If at any time the Seller shall wish to cause the reduction of
a Portion of Capital (but not to commence the liquidation, or reduction to zero,
of the entire Capital of the Purchased Interest), the Seller may do so as
follows:
(i) the Seller shall give the Agent at least five
Business Days' prior written notice thereof in substantially the form
of Annex B (including the amount of such proposed reduction and the
proposed date on which such reduction will commence),
(ii) on the proposed date of commencement of such
reduction and on each day thereafter, the Servicer shall cause
Collections with respect to such Portion of Capital not to be
reinvested until the amount thereof not so reinvested shall equal the
desired amount of reduction, and
(iii) the Servicer shall hold such Collections in trust for
the Issuer, for payment to the Agent on the last day of the current
Settlement Period relating to such Portion of Capital, and the
applicable Portion of Capital shall be deemed reduced in the amount to
be paid to the Agent only when in fact finally so paid;
provided that,
A. the entire Capital of the Purchased Interest after
giving effect to such reduction shall be not less than $10,000,000,
B. the Seller shall choose a reduction amount, and the
date of commencement thereof, so that to the extent practicable such
reduction shall commence and conclude in the same Fixed Period, and
C. if two or more Portions of Capital shall be
outstanding at the time of any proposed reduction, such proposed
reduction shall be applied, unless the Seller shall otherwise specify
in the notice given pursuant to Section 1.4(f)(i), to the Portion of
Capital with the shortest remaining Fixed Period.
Section 1.5. Fees. The Seller shall pay to the Agent certain fees in
the amounts and on the dates set forth in a letter dated February 28, 2003
between the Seller and the Agent delivered
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pursuant to Section 1 of Exhibit II, as such letter agreement may be amended,
supplemented or otherwise modified from time to time.
Section 1.6. Payments and Computations, Etc. (a) All amounts to be
paid or deposited by the Seller or the Servicer hereunder shall be paid or
deposited no later than noon (New York City time) on the day when due in same
day funds to the Administration Account. All amounts received after noon (New
York City time) will be deemed to have been received on the immediately
succeeding Business Day.
(b) The Seller shall, to the extent permitted by law, pay interest
on any amount not paid or deposited by the Seller (whether as Servicer or
otherwise) when due hereunder, at an interest rate equal to 2.0% per annum above
the Base Rate, payable on demand.
(c) All computations of interest under subsection (b) above and
all computations of Discount, fees, and other amounts hereunder shall be made on
the basis of a year of 360 days for the actual number of days elapsed. Whenever
any payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
Section 1.7. Dividing or Combining Portions of the Capital of the
Purchased Interest. The Seller may, on the last day of any Fixed Period, either
(i) divide the Capital of the Purchased Interest into two or more portions
(each, a "Portion of Capital") equal, in aggregate, to the Capital of the
Purchased Interest, provided that after giving effect to such division the
amount of each such Portion of Capital shall not be less than $5,000,000, or
(ii) combine any two or more Portions of Capital outstanding on such last day
and having Fixed Periods ending on such last day into a single Portion of
Capital equal to the aggregate of the Capital of such Portions of Capital.
Section 1.8. Increased Costs. (a) If the Agent, the Issuer, any
Purchaser, any other Program Support Provider or any of their respective
Affiliates (each an "Affected Person") determines that the existence of or
compliance with (i) any law or regulation or any change therein or in the
interpretation or application thereof, in each case adopted, issued or occurring
after the date hereof or (ii) any request, guideline or directive from any
central bank or other Governmental Authority (whether or not having the force of
law) issued or occurring after the date of this Agreement affects or would
affect the amount of capital required or expected to be maintained by such
Affected Person and such Affected Person determines that the amount of such
capital is increased by or based upon the existence of any commitment to make
purchases of or otherwise to maintain the investment in Receivables related to
this Agreement or any related liquidity facility or credit enhancement facility
and other commitments of the same type, then, upon demand by such Affected
Person (with a copy to the Agent), the Seller shall immediately pay to the
Agent, for the account of such Affected Person, from time to time as specified
by such Affected Person, additional amounts sufficient to compensate such
Affected Person in the light of such circumstances, to the extent that such
Affected Person reasonably determines such increase in capital to be allocable
to the existence of any of such commitments. A certificate with supporting
documentation, if available and applicable, as to such amounts submitted to the
Seller and the Agent by such Affected Person shall be conclusive and binding
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for all purposes, absent manifest error. For avoidance of doubt any increase in
cost and/or reduction in yield caused by regulatory capital allocation
adjustments due to Financial Accounting Standards Board's Interpretation 46 (or
any future statement or interpretation issued by the Financial Accounting
Standards Board or any successor thereto) shall be covered by this Section 1.8.
(b) If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements
referred to in Section 1.9) in or in the interpretation of any law or regulation
issued or occurring after the date hereof or (ii) compliance with any guideline
or request from any central bank or other Governmental Authority (whether or not
having the force of law) issued or occurring after the date hereof, there shall
be any increase in the cost to any Affected Person of agreeing to purchase or
purchasing, or maintaining the ownership of the Purchased Interest in respect of
which Discount is computed by reference to the Eurodollar Rate, then, upon
demand by such Affected Person, the Seller shall immediately pay to such
Affected Person, from time to time as specified, additional amounts sufficient
to compensate such Affected Person for such increased costs. A certificate with
supporting documentation, if available and applicable, as to such amounts
submitted to the Seller by such Affected Person shall be conclusive and binding
for all purposes, absent manifest error.
(c) If any of the events requiring payments of additional amounts
by the Seller under paragraphs (a) or (b) above occurs, the applicable Affected
Person shall take such steps as may be reasonable (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
funding office if such change would avoid the Seller being required to pay any
additional amounts and would not increase any cost to such Affected Person or be
otherwise disadvantageous to the Agent or such Affected Person, and shall
consult with the Seller in good faith with a view to agreeing to alternative
arrangements whereby any such requirement can be avoided or mitigated.
Section 1.9. Requirements of Law. (a) In the event that any Affected
Person determines that the existence of or compliance with (i) any law or
regulation or any change therein or in the interpretation or application
thereof, in each case adopted, issued or occurring after the date hereof or (ii)
any request, guideline or directive from any central bank or other Governmental
Authority (whether or not having the force of law) issued or occurring after the
date of this Agreement:
(i) does or shall subject such Affected Person to any tax
of any kind whatsoever with respect to this Agreement, any increase in
the Purchased Interest or in the amount of Capital relating thereto, or
does or shall change the basis of taxation of payments to such Affected
Person on account of Collections, Discount or any other amounts payable
hereunder (excluding taxes imposed on the overall net income of such
Affected Person, and franchise taxes imposed on such Affected Person,
by the jurisdiction under the laws of which such Affected Person is
organized or a political subdivision thereof);
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the
account of, purchases, advances or loans by, or other credit
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extended by, or any other acquisition of funds by, any office of such
Affected Person which are not otherwise included in the determination
of the Eurodollar Rate or the Base Rate hereunder; or
(iii) does or shall impose on such Affected Person any
other condition;
and, the result of any of the foregoing is (x) to increase the cost to such
Affected Person of acting as Agent, or of agreeing to purchase or purchasing or
maintaining the ownership of undivided ownership interests with regard to the
Purchased Interest (or interests therein) or any Portion of Capital in respect
of which Discount is computed by reference to the Eurodollar Rate or the Base
Rate or (y) to reduce any amount receivable hereunder (whether directly or
indirectly) funded or maintained by reference to the Eurodollar Rate or the Base
Rate, then, in any such case, upon demand by such Affected Person the Seller
shall pay such Affected Person any additional amounts necessary to compensate
such Affected Person for such additional cost or reduced amount receivable. All
such amounts shall be payable as incurred. A certificate from such Affected
Person to the Seller certifying, in reasonably specific detail, the basis for,
calculation of, and amount of such additional costs or reduced amount receivable
shall be conclusive in the absence of manifest error; provided, however, that no
Affected Person shall be required to disclose any confidential or tax planning
information in any such certificate.
(b) If any of the events requiring payments of additional amounts
by the Seller under paragraph (a) above occurs, the applicable Affected Person
shall take such steps as may be reasonable (consistent with its internal policy
and legal and regulatory restrictions) to change the jurisdiction of its funding
office if such change would avoid the Seller being required to pay any
additional amounts and would not increase any cost to such Affected Person or be
otherwise disadvantageous to the Agent or such Affected Person, and shall
consult with the Seller in good faith with a view to agreeing to alternative
arrangements whereby any such requirement can be avoided or mitigated.
Section 1.10. Inability to Determine Eurodollar Rate. In the event
that the Agent shall have determined prior to the first day of any Fixed Period
(which determination shall be conclusive and binding upon the parties hereto) by
reason of circumstances, affecting the interbank Eurodollar market, either (a)
dollar deposits in the relevant amounts and for the relevant Fixed Period are
not available, (b) adequate and reasonable means do not exist for ascertaining
the Eurodollar Rate for such Fixed Period or (c) the Eurodollar Rate determined
pursuant hereto does not accurately reflect the cost to the Issuer (as
conclusively determined by the Agent) of maintaining any Portion of Capital
during such Fixed Period, the Agent shall promptly give telephonic notice of
such determination, confirmed in writing, to the Seller prior to the first day
of such Fixed Period. Upon delivery of such notice (a) no Portion of Capital
shall be funded thereafter at the Alternate Rate determined by reference to the
Eurodollar Rate, unless and until the Agent shall have given notice to the
Seller that the circumstances giving rise to such determination no longer exist
and (b) with respect to any outstanding Portions of Capital then funded at the
Alternate Rate determined by reference to the Eurodollar Rate, such Alternate
Rate shall automatically be converted to the Alternate Rate determined by
reference to the Base Rate at the respective last days of the then current Fixed
Periods relating to such Portions of Capital.
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ARTICLE II.
REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS
Section 2.1. Representations and Warranties; Covenants. The Seller and
the Servicer each hereby makes the representations and warranties applicable to
it, and hereby agrees to perform and observe the covenants applicable to it, set
forth in Exhibits III, IV and VII, respectively hereto.
Section 2.2. Termination Events. If any of the Termination Events set
forth in Exhibit V hereto shall occur, the Agent may, by notice to the Seller,
declare the Facility Termination Date to have occurred (in which case the
Facility Termination Date shall be deemed to have occurred); provided that,
automatically upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice) described in subsection (g) of Exhibit
V, the Facility Termination Date shall occur; provided, further, that, in the
case of a Termination Event described in subsection (j) of Exhibit V, the
Facility Termination Date shall be deemed to have occurred on the second
Business Day following the date of such notice unless such Termination Event is
cured or waived during the intervening period. Upon any such declaration,
occurrence or deemed occurrence of the Facility Termination Date, the Issuer and
the Agent shall have, in addition to the rights and remedies which they may have
under this Agreement, all other rights and remedies provided after default under
the UCC and under other applicable law, which rights and remedies shall be
cumulative.
ARTICLE III.
INDEMNIFICATION
Section 3.1. Indemnities by the Seller. Without limiting any other
rights that the Agent or the Issuer or any of their respective Affiliates,
employees, agents, successors, transferees or assigns (each, an "Indemnified
Party") may have hereunder or under applicable law, the Seller hereby agrees to
indemnify each Indemnified Party from and against any and all claims, damages,
expenses, losses and liabilities (including Attorney Costs) (all of the
foregoing being collectively referred to as "Indemnified Amounts") arising out
of or resulting from this Agreement (whether directly or indirectly) or the use
of proceeds of purchases or reinvestments or the ownership of the Purchased
Interest, or any interest therein, or in respect of any Receivable or any
Contract, excluding, however, (a) Indemnified Amounts to the extent resulting
from gross negligence, willful misconduct or unlawful conduct on the part of
such Indemnified Party, (b) recourse (except as otherwise specifically provided
in this Agreement) for uncollectible Receivables, or (c) any overall net income
taxes or franchise taxes imposed on such Indemnified Party by the jurisdiction
under the laws of which such Indemnified Party is organized or any political
subdivision thereof. Without limiting or being limited by the foregoing, and
subject to the exclusions set forth in the preceding sentence, the Seller shall
pay on demand to each Indemnified Party any and all amounts necessary to
indemnify such Indemnified Party from and against any and all Indemnified
Amounts relating to or resulting from any of the following:
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(i) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible Receivable to
be an Eligible Receivable, the failure of any information contained in
an Interim Receivables Report or a Monthly Receivables Report to be
true and correct, or the failure of any other information provided to
the Issuer or the Agent with respect to Receivables or this Agreement
to be true and correct;
(ii) the failure of any representation or warranty or
statement (i) made in writing, (ii) deemed made in connection with the
daily reinvestment of Collections pursuant to Section 1.4 or (iii)
verbally communicated, during the due diligence process prior to the
date of closing by the Seller (or any of its officers) or the
originator (or any of its officers), as Servicer or otherwise, under or
in connection with this Agreement, the Purchase and Sale Agreement or
any Transaction Document to have been true and correct in all respects
when made;
(iii) the failure by the Seller or the Servicer to comply
with any covenant set forth in Exhibit IV or Exhibit VII or the failure
by the Originator to comply with any covenant set forth in the Purchase
and Sale Agreement;
(iv) the failure by the Seller, the originator, as
Servicer or otherwise, to comply with any applicable law, rule or
regulation with respect to any Receivable or the related Contract; or
the failure of any Receivable or the related Contract to conform to any
such applicable law, rule or regulation;
(v) the failure to vest in the Issuer a valid and
enforceable (A) perfected undivided percentage ownership interest, to
the extent of the Purchased Interest, in the Receivables and the
Related Security and Collections with respect thereto and (B) first
priority perfected security interest in the items described in Section
1.2(d), in each case, free and clear of any Adverse Claim;
(vi) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivables and the Related Security and Collections in
respect thereof, whether at the time of any purchase or reinvestment or
at any subsequent time;
(vii) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable (including, without limitation, a defense based on
such Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance
with its terms), or any other claim resulting from the sale of the
goods or services related to such Receivable or the furnishing or
failure to furnish such goods or services or relating to collection
activities with respect to such Receivable (if such collection
activities were performed by the Seller, the Originator or any of their
respective Affiliates acting as Servicer or by any agent or independent
contractor retained by the Seller, the Originator or any of their
respective Affiliates);
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(viii) any failure of the Seller or the Originator, as
Servicer or otherwise, to perform its duties or obligations in
accordance with the provisions hereof or to perform its duties or
obligations under the Contracts;
(ix) any products liability or other claim, investigation,
litigation or proceeding arising out of or in connection with
merchandise, insurance or services which are the subject of any
Contract;
(x) the commingling of Collections of Receivables at any
time with other funds of the Seller, the Originator or any CITGO
Entity;
(xi) any investigation, litigation or proceeding related
to this Agreement or the use of proceeds of purchases or reinvestments
or the ownership of the Purchased Interest or in respect of any
Receivable, Related Security or Contract;
(xii) any reduction in Capital as a result of the
distribution of Collections pursuant to Section 1.4(d), in the event
that all or a portion of such distributions shall thereafter be
rescinded or otherwise must be returned for any reason;
(xiii) the Seller's or the Originator's failure to pay when
due any taxes (including sales, excise or personal property taxes)
payable in connection with the Receivables;
(xiv) the failure to vest in the Seller all right, title
and interest in the Receivables purchased by the Seller from the
Originator pursuant to the Purchase and Sale Agreement, free and clear
of any security interest, lien, claim or encumbrance;
(xv) any failure of the Seller to give reasonably
equivalent value to the Originator in consideration of the transfer by
the Originator to the Seller of any Receivables, or any attempt by any
Person to void any such transfer under statutory provisions or common
law or equitable action, including, without limitation, any provision
of the Bankruptcy Code; or
(xvi) any information provided by the Seller, the
Originator or the Servicer in any Transaction Document furnished to the
Issuer or the Agent in connection with this Agreement which shall have
been incorrect in any respect or which shall have omitted any material
fact necessary to make such information not misleading.
Section 3.2. Indemnification by the Servicer. Without limiting any
other rights which any Indemnified Party may have hereunder or under applicable
law, the Servicer hereby agrees to indemnify each Indemnified Party from and
against any and all Indemnified Amounts that arise out of or relate to the
Servicer's performance of, or failure to perform, any of its obligations under
or in connection with this Agreement (whether directly or indirectly) excluding,
however, (a) Indemnified Amounts to the extent resulting from gross negligence,
willful misconduct, or unlawful conduct on the part of such Indemnified Party,
(b) recourse (except as otherwise specifically provided in this Agreement) for
uncollectible Receivables, or (c) any overall net income taxes or franchise
taxes imposed on such Indemnified Party by the jurisdiction under the laws of
which such Indemnified Party is organized or any political subdivision thereof.
Any
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Indemnified Amounts shall be paid by the Servicer to the applicable Indemnified
Party within 5 Business Days following such Indemnified Party's written demand
therefor, setting forth, in reasonable detail, the calculation of such amount
and the basis of such demand. The agreements of the Servicer contained in this
Section 3.2 shall survive the replacement or termination of any Person acting as
Servicer hereunder with respect to any Indemnified Amounts arising in connection
with such Person's acting as Servicer.
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of Servicer. (a) The servicing, administering
and collection of the Receivables shall be conducted by the Person so designated
from time to time as Servicer in accordance with this Section 4.1. Until the
Agent gives notice to CITGO (in accordance with this Section 4.1) of the
designation of a new Servicer as provided in the following sentence, CITGO is
hereby designated as, and hereby agrees to perform the duties and obligations
of, the Servicer pursuant to the terms hereof. Upon the occurrence of a
Termination Event, the Agent may designate as Servicer any Person (including
itself) to succeed CITGO or any successor Servicer, on the condition in each
case that any such Person so designated shall agree to perform the duties and
obligations of the Servicer pursuant to the terms hereof.
(b) Upon the designation of a successor Servicer as set forth in
Section 4.1(a) hereof, CITGO agrees that it will terminate its activities as
Servicer hereunder in a manner which the Agent determines will facilitate the
transition of the performance of such activities to the new Servicer, and CITGO
shall cooperate with and assist such new Servicer in effecting such transition.
Such cooperation shall include (without limitation) access to and transfer of
records and use by the new Servicer of all licenses, hardware or software
necessary or desirable to collect the Receivables and the Related Security.
(c) CITGO acknowledges that the Agent and the Issuer have relied
on CITGO's agreement to act as Servicer hereunder in making their decision to
execute and deliver this Agreement. Accordingly, CITGO agrees that it will not
resign as Servicer until 30 days prior written notice of the occurrence of a
"Servicer Resignation Event" (as defined below) has been delivered to the Agent.
As used herein a "Servicer Resignation Event" shall mean CITGO's determination
that by reason of a change in legal requirements the performance of its duties
under this Agreement would cause it to be in violation of such legal
requirements and (i) the Agent does not elect to waive the obligations of the
Servicer to perform duties which such change in legal requirements renders CITGO
legally unable to perform and (ii) CITGO is unable to delegate those duties to a
Sub-Servicer.
(d) The Servicer may delegate all or any portion of its duties and
obligations hereunder to any subservicer (each, a "Sub-Servicer"); provided
that, in each such delegation, (i) such Sub-Servicer shall agree in writing to
perform the duties and obligations of the Servicer so delegated pursuant to the
terms hereof, (ii) the Servicer shall remain primarily liable to the Issuer for
the performance of the duties and obligations so delegated, (iii) the Seller,
the Agent and the Issuer shall have the right to look solely to the Servicer for
performance and (iv) the terms of any agreement with any Sub-Servicer shall
provide that the Agent may terminate such agreement
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upon the termination of the Servicer hereunder by giving notice of its desire to
terminate such agreement to the Servicer (and the Servicer shall provide
appropriate notice to such Sub-Servicer).
Section 4.2. Duties of Servicer. (a) The Servicer shall take or cause
to be taken all such action as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with this Agreement and all
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy, and shall be responsible
for compliance with the reporting requirements set forth in this Agreement. The
Servicer shall set aside for the accounts of the Seller and the Issuer the
amount of the Collections to which each is entitled in accordance with Article
II hereto but shall not be required (unless otherwise requested by the Agent) to
segregate the funds constituting such portions of such Collections, or to
segregate the respective allocable shares of Issuer, prior to the remittance
thereof in accordance with said Article. If instructed by the Agent, Servicer
shall segregate and deposit with a bank (which may be SG) designated by the
Agent such allocable shares of Collections of Receivables set aside for Issuer,
on the first Business Day following receipt by Servicer of such Collections in
immediately available funds. The Servicer may, in accordance with the Credit and
Collection Policy, alter, amend, or otherwise modify the terms of any
Receivable; provided, however, that in the case of any such alteration,
amendment, or modification which would cause such Receivable to no longer be an
Eligible Receivable, and as a result thereof, cause the Purchased Interest to
exceed 100%, the Servicer shall purchase such Receivable from the Seller for an
amount equal to the Outstanding Balance of such Receivable; and provided
further, that if a Termination Event has occurred and CITGO is still serving as
Servicer, CITGO may make such alteration amendment or modification only upon the
prior written approval of the Agent. The Servicer shall hold for the benefit of
the Seller and the Agent (for the benefit of the Issuer and individually) in
accordance with their respective interests, all records and documents (including
without limitation computer tapes or disks) with respect to each Receivable.
Notwithstanding anything to the contrary contained herein, the Agent may direct
the Servicer (whether the Servicer is the Seller or any other Person) to
commence or settle any legal action to enforce collection of any Receivable or
to foreclose upon or repossess any Related Security; provided, however, that no
such direction may be given unless either a Termination Event or an Unmatured
Termination Event has occurred.
(b) The Servicer shall within one Business Day following actual
receipt of collected funds turn over to the Originator the collections of any
indebtedness that is not a Receivable, less all reasonable and appropriate
out-of-pocket costs and expenses of such Servicer of servicing, collecting and
administering such collections; provided, however, the Servicer shall not be
under any obligation to remit any such funds to the Originator unless and until
the Servicer has received from the Originator supporting documentation, which
may consist of a ledger entry showing the invoice amount matching the applicable
collected payment amount, showing that the Originator is entitled to such funds
hereunder and under applicable law. The Servicer shall as soon as practicable
upon demand, deliver to the Originator all records in its possession which
evidence or relate to any indebtedness that is not a Receivable, and copies of
records in its possession which evidence or relate to any indebtedness that is a
Receivable.
(c) Notwithstanding anything to the contrary contained in this
Article IV, the Servicer shall have no obligation to collect, enforce or take
any other action described in this Article IV
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with respect to any indebtedness that is not a Receivable other than to deliver
to the Originator the collections and records with respect to any such
indebtedness as described in Section 4.2(b). It is expressly understood and
agreed by the parties that such Servicer's duties in respect of any indebtedness
that is not a Receivable are set forth in this Section 4.2 in their entirety.
Upon delivery by such Servicer of collections or records relating to any
indebtedness that is not a Receivable to the Originator, such Servicer shall
have discharged in full all of its responsibilities to make any such delivery.
(d) The Servicer's obligations hereunder shall terminate on the
later of (i) the Facility Termination Date and (ii) the date on which all
amounts required to be paid to the Issuer, the Agent and any other Indemnified
Party or Affected Person hereunder shall have been paid in full.
After such termination the Servicer shall promptly deliver to the
Seller all books, records and related materials that the Seller previously
provided to the Servicer in connection with this Agreement.
Section 4.3. Lock-Box Arrangements. Prior to the initial purchase
hereunder, in accordance with Section 1 of Exhibit II, the Originator and the
Seller shall enter into Lock-Box Agreements with all of the Lock-Box Banks, and
deliver original counterparts thereof to the Agent. Following the occurrence of
a Termination Event, the Agent may at any time give notice to each Lock-Box Bank
that the Agent is exercising its rights under the Lock-Box Agreements to do any
or all of the following: (i) to have the exclusive ownership and control of the
Lock-Box Accounts transferred to the Agent and to exercise exclusive dominion
and control over the funds deposited therein, (ii) to have the proceeds that are
sent to the respective Lock-Box Accounts be redirected pursuant to its
instructions rather than deposited in the applicable Lock-Box Account, and (iii)
to take any or all other actions permitted under the applicable Lock-Box
Agreement. The Seller hereby agrees that if the Agent, at any time, takes any
action set forth in the preceding sentence, the Agent shall have exclusive
control of the proceeds (including Collections) of all Receivables and the
Seller hereby further agrees to take any other action that the Agent may
reasonably request to transfer such control. Any proceeds of Receivables
received by the Seller or the Servicer thereafter shall be sent immediately to
the Agent. The parties hereto hereby acknowledge that if at any time the Agent
takes control of any Lock-Box Account, the Agent shall not have any rights to
the funds therein in excess of the unpaid amounts due to the Agent, the Issuer
or any other Person hereunder and the Agent shall, in the case of collections
that is not a Receivable, distribute or cause to be distributed such funds in
accordance with Section 4.2(b) hereof (including the proviso thereto) and
Article II hereof (in each case as if such funds were held by the Servicer
thereunder). Upon termination of this Agreement in accordance with Section 5.9
hereof, the Agent shall take such actions as are reasonably requested by the
Originator and the Seller to terminate and release all of its right, title and
interest in and control of the Lock-Box Accounts.
Section 4.4. Enforcement Rights. (a) At any time following either (i)
the occurrence of a Termination Event or (ii) the designation of a Servicer
(other than CITGO) pursuant to Section 4.1 hereof:
(i) the Agent may direct the Obligors to make payment of
all amounts payable under any Receivable directly to the Agent or its
designee;
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(ii) the Agent may instruct the Seller to give notice of
the Issuer's interest in Receivables to each obligor, which notice
shall direct that payments be made directly to the Agent or its
designee, and upon such instruction from the Agent the Seller shall
give such notice at the expense of the Seller; provided, that if the
Seller fails to so notify each Obligor, the Agent may so notify the
Obligors; and
(iii) the Agent may request the Seller to cause the
Originator to, and upon such request the Seller shall cause the
Originator to, (A) assemble all of the records necessary or desirable
to collect the Receivables and the Related Security, and make the same
available to the Agent or its designee at a place selected by the
Agent, (B) use reasonable efforts to obtain consent to assign the
license for the use of, to the new Servicer, all software necessary or
desirable to collect the Receivables and the Related Security, and
deliver such software to the Agent or its designee and (C) segregate
all cash, checks and other instruments received by it from time to time
constituting Collections with respect to the Receivables in a manner
acceptable to the Agent and, promptly upon receipt, remit all such
cash, checks and instruments duly endorsed or with duly executed
instruments of transfer, to the Agent or its designee.
(b) The Seller hereby authorizes the Agent, and irrevocably
appoints the Agent as its attorney-in-fact with full power of substitution and
with full authority in the place and stead of the Seller, which appointment is
coupled with an interest and which may be exercised by the Agent only upon the
occurrence of a Termination Event, to take any and all steps in the name of the
Seller and on behalf of the Seller necessary or desirable, in the determination
of the Agent, to collect any and all amounts or portions thereof due under any
and all Receivables or Related Security, including, without limitation,
endorsing the name of the Seller or the originator on checks and other
instruments representing Collections and enforcing such Receivables, Related
Security and the related Contracts. Notwithstanding anything to the contrary
contained in this subsection (b), none of the powers conferred upon such
attorney-in-fact pursuant to the immediately preceding sentence shall subject
such attorney-in-fact to any liability if any action taken by it shall prove to
be inadequate or invalid, nor shall they confer any obligations upon such
attorney-in-fact in any manner whatsoever.
Section 4.5. Responsibilities of the Originator; Assignment of Rights
Under Purchase and Sale Agreement. (a) Anything herein to the contrary
notwithstanding, the Seller shall cause the Originator to (i) perform all of its
obligations under the Contracts related to the Receivables to the same extent as
if interests in such Receivables had not been transferred to the Seller or the
Issuer, and the exercise by the Agent or the Issuer of its rights hereunder
shall not relieve the Originator from such obligations, and (ii) pay when due
any taxes, including, without limitation, any sales taxes payable in connection
with the Receivables and their creation and satisfaction. The Agent and the
Issuer shall not have any obligation or liability with respect to any
Receivable, any Related Security or any related Contract, nor shall any of them
be obligated to perform any of the obligations of the Originator under any of
the foregoing.
(b) The Seller shall cause the Originator to hold in trust and
promptly turn over to the Servicer (if the Servicer is not the Originator) any
Collections received by the Originator on the Seller's behalf.
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(c) The Seller hereby assigns to the Issuer, consistent with the
Purchase and Sale Agreement, all rights of the Seller against the Originator
under the Purchase and Sale Agreement and hereby agrees that (i) the Issuer
shall be a third party beneficiary of the Seller's rights under the Purchase and
Sale Agreement, (ii) the Seller will enforce its rights under the Purchase and
Sale Agreement on behalf of the Issuer and (iii) the Issuer shall be entitled to
enforce such rights against the Originator as if the Issuer had been party to
the Purchase and Sale Agreement.
(d) CITGO hereby irrevocably agrees that if at any time it shall
cease to be the Servicer hereunder, it shall act (if the then current Servicer
so requests) as the data-processing agent of the Servicer and, in such capacity,
CITGO shall conduct the data-processing functions of the administration of the
Receivables and the Collections thereon in substantially the same way that CITGO
conducted such data-processing functions while it acted as the Servicer.
(e) The Seller hereby agrees that during the period that this
Agreement is in effect, the prior consent of the Agent and the Issuer shall be
required in order for the Seller to grant any material consent, authorization or
approval under the Purchase and Sale Agreement.
Section 4.6. Servicing Fee. (a) The Servicer shall be paid a monthly
fee, through distributions contemplated by Section 1.4(d), equal to 1.0% per
annum of the average outstanding Receivables for the applicable month paid on
the Settlement Date.
(b) If the Servicer ceases to be CITGO or an Affiliate hereof, the
servicing fee shall be the greater of: (i) the amount calculated pursuant to
clause (a), and (ii) an alternative amount specified by the successor Servicer
not to exceed 110% of the aggregate reasonable costs and expenses incurred by
such successor Servicer in connection with the performance of its obligations as
Servicer.
ARTICLE V.
MISCELLANEOUS
Section 5.1. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or consent to any departure by the Seller or Servicer
therefrom shall be effective unless in a writing signed by the Agent, and, in
the case of any amendment, by the Seller and the Servicer and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No failure on the part of the
Issuer or Agent 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.
Section 5.2. Notices, Etc. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and sent or delivered, to each party hereto, at
its address set forth under its name on the signature pages hereof or at such
other address as shall be designated by such party in a written notice to the
other parties hereto. Notices and communications by facsimile shall be effective
when received (and shall be followed by hard copy sent by first class mail), and
notices and communications sent by other means shall be effective when received.
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Section 5.3. Assignability. (a) This Agreement and the Issuer's rights
and obligations herein (including ownership of the Purchased Interest) shall be
assignable, in whole or in part, by the Issuer and its successors and assigns
with, unless a Termination Event has occurred and is continuing, the prior
written consent of the Seller; provided; however, that such consent shall not be
unreasonably withheld; and provided, further, however, that no such consent
shall be required if the assignment is made to SG, any Affiliate of SG (other
than a director or officer of SG), any Purchaser or other Program Support
Provider or any Person which is (i) in the business of issuing notes similar to
the Notes and (ii) associated with or administered by SG or any Affiliate of SG.
Subject to Section 5.6, each assignor may, in connection with the assignment,
disclose to the applicable assignee any information relating to the Seller or
the Receivables furnished to such assignor by or on behalf of the Seller, the
Issuer or the Agent.
(b) The Issuer may at any time grant to one or more banks or other
institutions (each a "Purchaser") party to the Liquidity Asset Purchase
Agreement or to any other Program Support Provider participating interests in
the Purchased Interest. In the event of any such grant by the Issuer of a
participating interest to a Purchaser or other Program Support Provider, the
Issuer shall remain responsible for the performance of its obligations
hereunder. The Seller agrees that each Purchaser or other Program Support
Provider shall be entitled to the benefits of Sections 1.8 and 1.9 with respect
to its participating interest.
(c) Upon five (5) Business Days prior written notice to the
Seller, this Agreement and the rights and obligations of the Agent hereunder
shall be assignable, in whole or in part, by the Agent and its successors and
assigns.
(d) Except as provided in Section 4.1(d), neither the Seller nor
the Servicer may assign its rights or delegate its obligations hereunder or any
interest herein without the prior written consent of the Agent.
(e) Without limiting any other rights that may be available under
applicable law, the rights of the Issuer may be enforced through it or by its
agents.
Section 5.4. Costs, Expenses and Taxes. (a) In addition to the rights
of indemnification granted under Section 3.1 hereof, the Seller agrees to pay on
demand all costs and expenses in connection with the preparation, execution,
delivery and administration (including periodic auditing of Receivables) of this
Agreement, the Liquidity Asset Purchase Agreement, any asset purchase agreement,
reimbursement agreement, letter of credit or similar agreement relating to the
sale or transfer of interests in Purchased Interests and the other documents and
agreements to be delivered hereunder, including, without limitation, reasonable
Attorney Costs for the Agent, the Issuer and their respective Affiliates and
agents with respect thereto and with respect to advising the Agent, the Issuer
and their respective Affiliates and agents as to their rights and remedies under
this Agreement and the other Transaction Documents, and all costs and expenses,
if any (including reasonable Attorney Costs), of the Agent, the Issuer and their
respective Affiliates and agents, in connection with the enforcement of this
Agreement and the other Transaction Documents.
(b) In addition, the Seller shall pay on demand any and all stamp
and other taxes and fees payable in connection with the execution, delivery,
filing and recording of this Agreement
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or the other documents or agreements to be delivered hereunder, and agrees to
save each Indemnified Party harmless from and against any liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees.
Section 5.5. No Proceedings; Limitation on Payments. Each of the
Seller, the Servicer, the Agent, each assignee of the Purchased Interest or any
interest therein and each Person which enters into a commitment to purchase the
Purchased Interest or interests therein hereby covenants and agrees that it will
not institute against, or join any other Person in instituting against, the
Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, for one year and one day after the latest maturing Note or note referred to
in clause (i) of Section 5.3(a) issued by the Issuer is paid in full.
Section 5.6. Confidentiality. (a) Unless otherwise required by
applicable law, the Seller agrees to maintain the confidentiality of this
Agreement and the other Transaction Documents (and all drafts thereof) in
communications with third parties and otherwise; provided that this Agreement
may be disclosed to (a) third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the Agent, and (b) the Seller's legal counsel and
auditors if they agree to hold it confidential.
(b) The Issuer and the Agent agree to maintain the confidentiality of
any information regarding the Seller, the Originator or the Receivables obtained
in accordance with the terms of this Agreement but the Issuer and the Agent may
reveal such information (i) to applicable rating agencies, liquidity providers
and credit providers, including participants and assignees (provided that the
Issuer or the Agent, as applicable, gives notice of the provisions of this
Section 5.6 prior to the disclosure of such information and obtains the
agreement of any such party to be bound by the provisions of this Section 5.6),
(ii) as necessary or appropriate in connection with the administration or
enforcement of this Agreement or its funding of purchases under this Agreement,
(iii) as required by law, government regulation, court proceeding or subpoena,
or (iv) to counsel and bank regulatory agencies and examiners and auditors or
accountants of the Issuer and Agent.
Section 5.7. GOVERNING LAW AND JURISDICTION. (a) THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAWS, BUT
OTHERWISE WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE ISSUER, THE SELLER, THE SERVICER AND THE ADMINISTRATOR
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE ISSUER, THE SELLER, THE SERVICER AND
THE ADMINISTRATOR IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW,
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
-19-
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
ISSUER, THE SELLER, THE SERVICER AND THE ADMINISTRATOR EACH WAIVE PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY NEW YORK LAW.
Section 5.8. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall constitute one and the
same agreement.
Section 5.9. Termination; Survival of Termination. This Agreement shall
terminate on the latest of the Facility Termination Date or the date on which no
Capital, Discount or Program Fees in respect of the Purchased Interest shall be
outstanding and all other amounts owed by the Seller to the Issuer, the Agent
and any other Indemnified Party or Affected Person shall have been paid in full.
The provisions of Sections 1.8, 1.9, 1.10, 3.1, 5.4, 5.5, 5.6, 5.7 and 5.10
shall survive any termination of this Agreement.
Section 5.10. WAIVER OF JURY TRIAL. THE ISSUER, THE SELLER, THE
SERVICER AND THE ADMINISTRATOR EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE ISSUER, THE SELLER, THE SERVICER AND THE ADMINISTRATOR
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES HERETO
FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
Section 5.11. Entire Agreement. This Agreement and the other
Transaction Documents required to be delivered hereunder embody the entire
agreement and understanding between the Issuer, the Seller, the Servicer and the
Agent, and supersede all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof, except for any prior arrangements made with respect to the payment by
the Issuer of (or any indemnification for) any fees, costs or expenses payable
to or incurred (or to be incurred) by or on behalf of the Seller, the Servicer
and the Agent.
-20-
Section 5.12. Headings. The captions and headings of this Agreement and
in any Exhibit hereto are for convenience of reference only and shall not affect
the interpretation hereof or thereof.
Section 5.13. Issuer's Liabilities. The obligations of the Issuer under
this Agreement are solely the corporate obligations of the Issuer. No recourse
shall be had for any obligation or claim arising out of or based upon this
Agreement against any stockholder, employee, officer, member, manager, director,
agent or incorporator of the Issuer; and provided, however, that this Section
5.13 shall not relieve any such Person of any liability it might otherwise have
for its own gross negligence, willful misconduct or unlawful conduct. The
agreements provided in this Section 5.13 shall survive termination of this
Agreement.
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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.
CITGO FUNDING COMPANY, L.L.C.,
as Seller
By:____________________________________
Name:
Title:
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
CITGO PETROLEUM CORPORATION,
as Servicer
By:____________________________________
Name:_______________________________
Title:______________________________
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇ ▇▇/▇▇▇▇▇ ▇▇▇
ASSET ONE SECURITIZATION, LLC,
as Issuer
By:____________________________________
Name:_______________________________
Title:______________________________
c/o AMACAR Group, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇-▇ ▇▇/▇▇▇▇▇ ▇▇▇
SOCIETE GENERALE,
as the Agent
By:____________________________________
Name:_______________________________
Title:______________________________
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Asset Securitization
Group
▇-▇ ▇▇/▇▇▇▇▇ ▇▇▇
EXHIBIT I
DEFINITIONS
As used in the Agreement (including the Exhibits to this Agreement),
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined).
Unless otherwise indicated, all Section, Annex, Exhibit and Schedule references
in this Exhibit are to Sections of and Annexes, Exhibits and Schedules to this
Agreement.
"Administration Account" means the special account (ABA#
▇▇▇-▇▇▇-▇▇▇, Account# ▇▇▇▇▇▇▇; Attention SG Asset One (CITGO)) of the Issuer
maintained at the office of SG in New York, New York, or such other account as
may be so designated in writing by the Agent to the Seller and the Servicer.
"Adverse Claim" means a lien, security interest or other
charge or encumbrance, or any other type of preferential arrangement, it being
understood that a lien, security interest or other charge or encumbrance, or any
other type of preferential arrangement, in favor of the Issuer shall not
constitute an Adverse Claim.
"Affected Person" has the meaning set forth in Section 1.8.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person.
"Agent" has the meaning set forth in the preamble to this
Agreement.
"Agreed Upon Procedures Report" means, the Agreed Upon
Procedures Report, which report shall cover the sample testing of procedures,
data reports and calculations for three (3) calendar months and be in a form and
substance reasonably acceptable to the Agent.
"Alternate Rate" for any Fixed Period for any Portion of
Capital of the Purchased Interest means an interest rate per annum equal to (a)
1.25% per annum above the Eurodollar Rate for such Fixed Period or (b) if
Eurodollar Rate quotations are unavailable, the Base Rate for such Fixed Period;
provided, however, that in the case of
(1) any Fixed Period on or prior to the first
day of which the Agent shall have been
notified by the Issuer or a Purchaser or
other Program Support Provider that 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 the Issuer or such
Purchaser or other Program Support Provider
to fund any Portion of Capital (based on the
Eurodollar Rate) set forth above (and the
Issuer or such Purchaser or other Program
Support Provider shall not have subsequently
notified the Agent that such circumstances
no longer exist), or
I-1
(2) any Fixed Period as to which the Agent does
not receive notice, by no later than 11:00
a.m. (New York City time) on the second
Business Day preceding the first day of such
Fixed Period,
the "Alternate Rate" for each such Fixed Period shall be an interest rate per
annum equal to the Base Rate in effect on each day of such Fixed Period.
Following the occurrence of a Termination Event, the "Alternate Rate" for all
Fixed Periods shall be an interest rate equal to 2% per annum above the Base
Rate in effect on each day of such Fixed Period.
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel.
"Average Maturity" means, in respect of any calendar month,
the number of days (computed as of the last day of such calendar month) equal to
the product of (a) the average of the Outstanding Balance of all Receivables as
of the first day and the last day of such calendar month divided by the
aggregate amount of Collections for such calendar month and (b) the number of
days in such calendar month.
"Bankruptcy Code" means the United States Bankruptcy Reform
Act of 1978 (11 U.S.C. Section 101, et seq.), as amended from time to time.
"Base Rate" means for any day, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall be at all times
equal to the higher of:
i. the rate of interest in effect for such day as
publicly announced from time to time by SG at its
branch office in New York, New York, as its
"reference rate." It is a rate set by SG based upon
various factors including SG's costs and desired
return, general economic conditions and other
factors, and is used as a reference point for pricing
some loans, which may be priced at, above, or below
such announced rate; and
ii. 0.50% per annum above the latest Federal Funds Rate.
"Branded Receivable" means a Receivable, the Obligor of which
operates under the "CITGO" tradename.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City, Chicago, San Francisco or
Tulsa, Oklahoma are authorized or required by law to remain closed; provided
that, when used in connection with the Eurodollar Rate, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.
"Capital" means with respect to the Receivables Purchase
Agreement, the amount paid to the Seller in respect of the Purchased Interest by
the Issuer pursuant to Section 1.2 of this Agreement, or such amount divided or
combined in accordance with Section 1.7 of this Agreement, in each case reduced
from time to time by Collections distributed and applied on account of such
Capital pursuant to Section 1.4(d) of this Agreement and increased from time to
time by reinvestments pursuant to Section 1.4(b)(ii) of this Agreement;
provided, that if such
I-2
Capital shall have been reduced by any distribution and thereafter all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason, such Capital shall be increased by the amount of such rescinded or
returned distribution, as though it had not been made.
"CITGO" means CITGO Petroleum Corporation, a Delaware
corporation.
"CITGO Entity" has the meaning set forth in Subsection (l) of
the covenants of the Seller set forth in Exhibit IV.
"Collection Delay Factor" means 2.5 or such other value as the
Agent may from time to time select upon three Business Days' notice to the
Seller.
"Collection Period" means a calendar month.
"Collections" means, with respect to any Receivable, (a) all
funds which are received by the Seller or the Servicer in payment of any amounts
owed in respect of such Receivable (including, without limitation, purchase
price, finance charges, interest and all other charges), or applied to amounts
owed in respect of such Receivable (including, without limitation, insurance
payments and net proceeds of the sale or other disposition of repossessed goods
or other collateral or property of the related obligor or any other Person
directly or indirectly liable for the payment of such Receivable and available
to be applied thereon), (b) all Deemed Collections and (c) all other proceeds of
such Receivable.
"Contract" means, with respect to any Receivable, the portions
of each Distributor Franchise Agreement or similar agreement which relate to the
payment terms and other arrangements that give rise to or evidence such
Receivable and the Originator's rights under each Distributor Franchise
Agreement or similar agreement with respect to the collection and enforcement of
such Receivable.
"CP Market Disruption Event" means, at any time for any reason
whatsoever, the Issuer shall be unable to raise, or shall be precluded or
prohibited from raising, funds through the issuance of Notes in the United
States' commercial paper market at such time.
"CP Rate" for any Fixed Period for any Portion of Capital of
the Purchased Interest means, to the extent the Issuer funds such Portion of
Capital for such Fixed Period by issuing Notes, a rate per annum equal to the
sum of (a) the rate (or if more than one rate, the weighted average of the
rates) at which Notes of the Issuer having a term equal to such Fixed Period and
to be issued to fund such Portion of Capital may be sold by any placement agent
or commercial paper dealer selected by the Agent on behalf of the Issuer, as
agreed between each such agent or dealer and the Agent and notified by the Agent
to the Servicer; provided that if the rate (or rates) as agreed between any such
agent or dealer and the Agent with regard to any Fixed Period for such Portion
of Capital is a discount rate (or rates), then such rate shall be the rate (or
if more than one rate, the weighted average of the rates) resulting from
converting such discount rate (or rates) to an interest-bearing equivalent rate
per annum, plus (b) the greater of (i) the commissions and charges charged by
such placement agent or commercial paper dealer with respect to such Notes and
(ii) 0.05% of the face amount of such Notes, expressed as a percentage of such
face amount and converted to an interest bearing equivalent rate per annum.
Following
I-3
the occurrence of a Termination Event, the "CP Rate" for all Fixed Periods shall
be an interest rate equal to 2% per annum above the Base Rate in effect on each
day of such Fixed Period.
"CRCC" means CITGO Refining & Chemicals Company L.P., a Texas
limited partnership.
"Credit and Collection Policy" means those receivables credit
and collection policies and practices of the Originator, which have been adopted
by the Seller, in effect on the date of this Agreement and previously furnished
to the Issuer and the Agent and described in Schedule I to this Agreement, as
modified in compliance with the Purchase and Sale Agreement and this Agreement.
"Debt" means (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes or other similar instruments,
(iii) obligations other than accounts payable and accrued liabilities incurred
in the normal course of business to pay the deferred purchase price of property
or services, (iv) obligations as lessee under leases which shall have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases, (v) obligations under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of kinds referred to in clauses (i)
through (iv) above, and (vi) liabilities in respect of unfunded vested benefits
under plans covered by Title IV of ERISA.
"Deemed Collections" means the collections deemed to have been
received pursuant to subsections (i) and (ii) of Section 1 4(e).
"Delinquency Ratio" means the ratio (expressed as a percentage
and rounded upwards to the nearest l/100 of 1%) computed as of the last day of
each calendar month by dividing (i) the aggregate Outstanding Balance of all
Receivables that were Delinquent Receivables on such day by (ii) the aggregate
Outstanding Balance of all Receivables on such day.
"Delinquent Receivable" means a Receivable which:
(i) as to which any payment, or part thereof, remains
unpaid for at least 30 days from the original due date for
such payment; or
(ii) which, consistent with the Credit and Collection
Policy, would be classified as delinquent by the Seller.
"Dilution Factors" means (i) the failure by the Originator to
deliver any merchandise or provide any services or otherwise to perform under
the underlying Contract or ▇▇▇▇ of lading, (ii) any change in the terms of, or
cancellation of, a Contract or invoice or any other adjustment by the Servicer
which reduces the amount payable by the Obligor on the related Receivable, (iii)
any setoff by an Obligor in respect of any claim by such Obligor as to the
amounts owed by it on the related Receivable, and (iv) any specific dispute
(with respect to which a credit is issued) counterclaim or defense asserted by
the Obligor of the related Receivable (except the discharge in bankruptcy of
such Obligor).
I-4
"Dilution Horizon Factor" means a ratio, computed as of the
last day of each Collection Period, computed by dividing (i) the aggregate of
all Eligible Receivables generated during the most recently ended Collection
Period by (ii) the Net Receivables Balance as of such day of computation.
"Dilution Percentage" means, as of any date, a fraction
(expressed as a percentage and rounded upwards to the nearest 1/100 of 1%) equal
to (i) the sum of (x) 2.5 multiplied by the average of the Dilution Ratios for
each of the twelve most recently ended Collection Periods plus (y) the Dilution
Volatility Ratio as of the last day of the most recently completed Collection
Period, multiplied by (ii) the Dilution Horizon Factor as of the last day of the
most recently ended Collection Period. The Dilution Percentage shall be
calculated monthly in each Monthly Receivables Report and such Dilution
Percentage shall, absent manifest error, be effective from the Settlement Date
following such calculation until the next succeeding Settlement Date.
"Dilution Ratio" means, for any Collection Period, the ratio
(expressed as a percentage and rounded upwards to the nearest 1/100th of 1%)
computed as of the last day of such Collection Period by dividing (i) an amount
equal to the aggregate reductions in the Outstanding Balance of any Receivable
as a result of any Dilution Factors other than those listed in clause (ii) of
the definition of Direct Dilution Deduction by (ii) the aggregate Outstanding
Balance of all Receivables generated during the most recently ended Collection
Period.
"Dilution Volatility Ratio" means a ratio (expressed as a
percentage and rounded upwards to the nearest 1/100 of 1%), computed as of the
last day of each Collection Period, equal to the product of (a) the highest of
the Dilution Ratios calculated for any of the twelve most recently ended
Collection Periods minus the average of the Dilution Ratios for each of the
twelve most recently ended Collection Periods, and (b) a ratio calculated by
dividing the highest of the Dilution Ratios calculated for each of the twelve
most recently ended Collection Periods by the average of the Dilution Ratios for
each of the twelve most recently ended Collection Periods.
"Direct Dilution Deduction" means an amount computed as of the
last day of each Collection Period, equal to the greater of (i) 25% of the
aggregate of the Outstanding Balances of each Eligible Receivable or (ii) the
sum of the following Direct Dilution Items applicable with respect to the
Receivables for such Collection Periods: Image Allowance Program Rebates Amount,
Premium Unleaded Rebates Amount, Net Outs Amount, Co-op Credits Amount, Branded
Discounts Amount, Credit Card Credits Amount and Miscellaneous Amount, as each
such Direct Dilution Item is calculated as set forth in Exhibit VI.
"Discount" means:
(i) for the Portion of Capital of the Purchased
Interest for any Fixed Period to the extent the Issuer will be
funding such Portion of Capital on the first day of such Fixed
Period through the issuance of Notes,
CPR x C x ED + TF
--
360
I-5
(ii) for the Portion of Capital of the Purchased
Interest for any Fixed Period to the extent the Issuer will
not be funding such Portion of Capital on the first day of
such Fixed Period through the issuance of Notes,
AR x C x ED + TF
--
360
where:
AR = the Alternate Rate for the Portion of Capital of the
Purchased Interest for such Fixed Period
C = the Portion of Capital of the Purchased Interest
during such Fixed Period
CPR = the CP Rate for the Portion of Capital of the
Purchased Interest for such Fixed Period
ED = the actual number of days during such Fixed Period
TF = the Termination Fee, if any,for the Portion of Capital
of the Purchased Interest for such Fixed Period;
provided that no provision of this Agreement shall require the payment or permit
the collection of Discount in excess of the maximum permitted by applicable law;
and provided, further, that Discount for the Portion of Capital of the Purchased
Interest shall not be considered paid by any distribution to the extent that at
any time all or a portion of such distribution is rescinded or must otherwise be
returned for any reason.
"Discount Reserve" for the Purchased Interest at any time
means the sum of (i) the Termination Discount at such time for the Purchased
Interest, and (ii) the then accrued and unpaid Discount for the Purchased
Interest.
"Distributor Franchise Agreement" means an agreement between
the Originator and a distributor of petroleum which provides for the sale and
purchase of CITGO branded petroleum products.
"EFT Receivable" means any Receivable which is to be paid or
is otherwise paid by the Obligor thereof through an electronic funds transfer or
ACH transfer to a Lock-Box Account.
"Eligible Agent" means a commercial bank having a combined
capital and surplus of at least $250,000,000 whose short-term debt is rated by
Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. not lower than A-1, and at least as highly as the Notes by each rating
agency which then rates the Notes.
"Eligible Assignee" means any commercial bank having a
combined capital and surplus of at least $250,000,000 (i) whose short-term debt
is rated by Standard & Poor's Ratings
I-6
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. not lower than A-1, and
at least as highly as the Notes by each rating agency which then rates the Notes
or (ii) if a written statement is obtained from each of the rating agencies
rating the Notes that the rating of the Notes will not be downgraded or
withdrawn solely as a result of the assignment of rights and obligations under
this Agreement to such Eligible Assignee.
"Eligible Investments" means (i) securities issued or directly
and fully guaranteed or insured by the United States government or any agency or
instrumentality thereof having maturities on or before the first Settlement Date
after the date of acquisition; (ii) time deposits and certificates of deposit
having maturities on or before the last day of the first Settlement Period after
the date of acquisition, maintained with or issued by any commercial bank having
capital and surplus in excess of $500,000,000 and having a short term senior
unsecured debt rating of at least A-1 by S&P, and at least P-1 by Moody's or at
least F1 by Fitch; (iii) repurchase agreements having maturities on or before
the last day of the first Settlement Period after the date of acquisition for
underlying securities of the types described in clauses (i) and (ii) above or
clause (iv) below and/or overnight time deposits in any depositary institution
having a short term senior unsecured debt rating of at least A-1 by S&P, and at
least P-1 by Moody's or at least F1 by Fitch; and (iv) commercial paper maturing
on or before the last day of the first Settlement Date after the date of
acquisition and having a short term senior unsecured debt rating of at least A-1
by S&P, and at least P-1 by Moody's or at least F1 by Fitch.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which (A) is a United States resident or a
resident of such other jurisdiction as has been approved in writing by the Agent
and as to which the Agent shall have received letters from each of the rating
agencies then rating the Notes confirming the rating of such Notes after giving
effect to the approval of such other jurisdiction, (B) except for certain
Obligors as indicated on Schedule V, operates under the "CITGO" trade name
(unless otherwise agreed in writing by the Agent), (C) is not an Affiliate of
the Seller or the Originator, (D) is not a government or a governmental
subdivision or agency, (E) is not subject to any action of the type described in
paragraph (g) of Exhibit V, and (F) is not an Excluded Obligor;
(ii) which is denominated and payable only in U.S. dollars in
the United States;
(iii) which has a stated maturity and which stated maturity is
not more than 45 days after the date on which such Receivable was generated;
(iv) which arises in the ordinary course of the Originator's
business and constitutes an EFT Receivable;
(v) which arises under a Contract which is in full force and
effect and which is a legal, valid and binding obligation of the related
Obligor, enforceable against such Obligor in accordance with its terms;
(vi) which conforms with all applicable laws, rulings and
regulations in effect;
I-7
(vii) which is not the subject of any asserted dispute,
offset, hold back defense, Adverse Claim or other claim (other than a Permitted
Offset Claim) and which does not arise from the sale of inventory which is
subject to any Adverse Claim;
(viii) which complies with the requirements of the Credit and
Collection Policy and the payment and other terms of the Contract related to the
Receivable are consistent with customary terms for the Originator's industry and
type of Receivables;
(ix) which arises from the completion of the sale and delivery
of goods, and must not represent an invoice in advance of such completion;
(x) which is not subject to any contingent performance
requirements of the Originator unless such requirements are guaranteed or
insured by third parties acceptable to the Agent;
(xi) which has not been modified or restructured since its
creation, except as permitted pursuant to Section 4.2(a) of the Agreement;
(xii) in which the Seller owns good and marketable title and
which is freely transferable and assignable by the Seller without the consent of
the Obligor;
(xiii) for which the Issuer shall have a valid and enforceable
undivided percentage ownership interest, to the extent of the Purchased
Interest, and a valid and enforceable first priority perfected security interest
therein and in the Related Security and Collections with respect thereto, in
each case free and clear of any Adverse Claim;
(xiv) which constitutes an account or general intangible as
defined in the UCC, and which is not evidenced by an instrument or chattel
paper;
(xv) which is not aged more than 60 days past the due date;
(xvi) the Obligor of which is not the Obligor of Receivables
aged more than 60 days past the applicable due dates having an aggregate
Outstanding Balance which exceeds 10% of all such Obligor's Receivables;
(xvii) solely for the purposes of this Agreement, a purchase
of which with the proceeds of the Notes issued by the Issuer would constitute a
"current transaction" within the meaning of Section 3(a)(3) of the Securities
Act of 1933, as amended;
(xviii) solely for the purposes of this Agreement, which is an
account receivable representing all or part of the sales price of merchandise,
insurance or services within the meaning of Section 3(c)(5)(A) of the Investment
Company Act of 1940, as amended;
(xix) which meets the eligibility requirements appropriate to
the specific type of Receivables which the Agent has based on aging, turnover,
delinquency, loss, dilution, type or other factor that the Agent deems
appropriate;
I-8
(xx) which is not written off as uncollectible and should not
have been written off in accordance with the Credit and Collection Policy; and
(xxi) as to which, at or prior to the time of the initial
creation of an interest therein under this Agreement, the Agent has not notified
the Seller that the Agent has determined, in its sole discretion and reasonable
business judgment based upon the Agent's reasonable and good faith estimate of
the credit quality of such Receivable (or class of Receivables), that such
Receivable (or class of Receivables) is not acceptable for purchase hereunder.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute of similar import,
together with the regulations thereunder, in each case as in effect from time to
time. References to Sections of ERISA also refer to any successor sections.
"Eurodollar Rate" means, for any Fixed Period, an interest
rate per annum (rounded upward to the nearest 1/100th of 1.0%) determined
pursuant to the following formula:
Eurodollar Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means, for any Fixed Period,
the maximum reserve percentage (expressed as a decimal, rounded upward
to the nearest 1/100th of 1.0%) in effect on the date LIBOR for such
Fixed Period is determined under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities") having a term comparable to
such Fixed Period; and
"LIBOR" means the rate of interest per annum determined by the
Liquidity Agent to be the arithmetic mean (rounded upward to the
nearest 1/100th of 1.0%) of the rates of interest per annum notified to
the Liquidity Agent by the Reference Bank as the rate of interest at
which dollar deposits in the approximate amount of the Capital
associated with such Fixed Period would be offered to major banks in
the London interbank market at their request at or about 11:00 a.m.
(London time) on the second Business Day prior to the commencement of
such Fixed Period.
"Excluded Obligor" means an Obligor, so designated in writing
as such by the Agent to the Seller, from time to time, following the occurrence
of an Unmatured Termination Event and upon the Agent's reasonable determination
that the creditworthiness of such Obligor warrants such designation, it being
understood that from time to time the Agent may revoke its designation of one or
more Obligors as Excluded Obligors by written notice to the Seller.
"Excluded Receivable" means a receivable that is not a
Receivable.
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"Facility Termination Date" means the earliest to occur of (a)
February 27, 2004, (b) the Purchase Termination Date, as defined in the
Liquidity Asset Purchase Agreement, which on the date of the Agreement is
February 27, 2004, or such later date designated as the Purchase Termination
Date from time to time pursuant to the Liquidity Asset Purchase Agreement (it
being understood that the Agent shall use its reasonably best efforts to notify
the Seller at least 60 days prior to a determination not to designate a later
date as the Purchase Termination Date, provided that failure to provide such
notice shall not limit or otherwise affect the obligations of the Seller or the
rights of the Agent, the Issuer, or any other party to the Liquidity Asset
Purchase Agreement), (c) the date of termination of the commitment under any
other Program Support Agreement, (d) the date determined pursuant to Section 2.2
and (e) the date the Purchase Limit reduces to zero pursuant to Section 1.1(b).
"Federal Funds Rate" means, for any period, the per annum rate
set forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such day under the caption "Federal Funds Effective Rate". If on
any relevant day the appropriate rate for such previous day is not yet published
in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day
will be the arithmetic mean as calculated by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York
time) on that day by each of three leading brokers of Federal funds transactions
in New York City selected by the Agent.
"Fee Letter" means the letter agreement described in Section
1.5.
"Fee Reserve" at any time means the sum of:
(i) the sum of (a) the unpaid Servicing Fee and
(b) the unpaid Program Fee, in each case
relating to the Purchased Interest, accrued
to such time, plus
(ii) an amount equal to (a) the Outstanding
Balance of the Receivables at the time of
computation multiplied by (b) the product of
(x) the percentage per annum at which the
Servicing Fee is accruing on such date and
(y) a fraction having the product of the
Average Maturity multiplied by the
Collection Delay Factor (each as in effect
at such date) as its numerator and 360 as
its denominator, plus
(iii) an amount equal to (a) the outstanding
Capital of the Purchased Interest at the
time of computation multiplied by (b) the
product of (x) the percentage per annum at
which the Program Fee is accruing on such
date and (y) a fraction having the product
of the Average
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Maturity multiplied by the Collection Delay
Factor (each as in effect at such date) as
its numerator and 360 as its denominator.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any entity succeeding to any of its principal
functions.
"Fitch" means Fitch Ratings.
"Fixed Period" means with respect to each Portion of Capital:
(a) initially the period commencing on the date of a
purchase pursuant to Section 1.2 and ending such number of days as the Agent
shall select up to 45 days after such date, and
(b) thereafter each period commencing on the last day
of the immediately preceding Fixed Period for any Portion of Capital of the
Purchased Interest and ending such number of days (not to exceed 45 days) as the
Agent shall select, provided that
(i) any Fixed Period in respect of which Discount is
computed by reference to the Alternate Rate shall be a period
from one to and including 29 days, or a period of one, two or
three months, as the Agent may select as provided above;
(ii) any Fixed Period (other than of one day) which
would otherwise end on a day which is not a Business Day shall
be extended to the next succeeding Business Day; provided,
however, if Discount in respect of such Fixed Period is
computed by reference to the Eurodollar Rate, and such Fixed
Period would otherwise end on a day which is not a Business
Day, and there is no subsequent Business Day in the same
calendar month as such day, such Fixed Period shall end on the
next preceding Business Day;
(iii) in the case of any Fixed Period of one day, (A)
if such Fixed Period is the initial Fixed Period for a
purchase pursuant to Section 1.2, such Fixed Period shall be
the day of purchase of the Purchased Interest; (B) any
subsequently occurring Fixed Period which is one day shall, if
the immediately preceding Fixed Period is more than one day,
be the last day of such immediately preceding Fixed Period,
and, if the immediately preceding Fixed Period is one day, be
the day next following such immediately preceding Fixed
Period; and (C) if such Fixed Period occurs on a day
immediately preceding a day which is not a Business Day, such
Fixed Period shall be extended to the next succeeding Business
Day;
(iv) in the case of any Fixed Period for any Portion
of Capital of the Purchased Interest which commences before
the Termination Date and would otherwise end on a date
occurring after the Termination Date, such Fixed Period shall
end on such Termination Date and the duration of each Fixed
Period which commences on or after the Termination Date shall
be of such duration as shall be selected by the Agent;
I-11
(v) any Fixed Period in respect of which Discount is
computed by reference to the CP Rate may be terminated at the
election of, and upon notice thereof to the Seller by, the
Agent any time upon the occurrence and during the continuance
of any CP Market Disruption Event; and
(vi) if at any time after the occurrence and during
the continuance of any CP Market Disruption Event, the Agent
elects to terminate any Fixed Period in respect of which
Discount is computed by reference to the CP Rate, the Portion
of Capital allocated to such terminated Fixed Period shall be
allocated to a new Fixed Period to be designated by the Agent
(but in no event to exceed 5 days) and shall accrue Discount
at the Alternate Rate.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any body or entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including without limitation any court, and any Person
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"Indemnified Amounts" has the meaning set forth in Section
3.1.
"Insolvency Proceeding" means (a) any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidations, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; in each case (a) and (b) undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"Interim Receivables Report" means a report, in substantially
the form of Annex D-1 furnished by the Servicer to the Agent pursuant to
Subsection (k)(iii) of the covenants of the Servicer set forth in Exhibit IV.
"Issuer" has the meaning set forth in the preamble to the
Agreement.
"Limited Liability Company Agreement" means that certain
Limited Liability Company dated as of December 31, 1999 between Seller and CRCC,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Liquidity Agent" means SG in its capacity as Liquidity Agent
pursuant to the Liquidity Asset Purchase Agreement.
"Liquidity Asset Purchase Agreement" means that certain
Liquidity Asset Purchase Agreement dated as of February 28, 2003 among SG, as
Purchaser, SG, as Liquidity Agent, ▇▇ ▇▇▇▇▇ Securities Corporation, as
administrator and Asset One Securitization, LLC, as the Issuer, as amended,
supplemented or otherwise modified from time to time.
"Lock-Box Account" means an account maintained at a bank or
other financial institution for the purpose of receiving Collections.
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"Lock-Box Agreement" means an agreement, in substantially the
form of Annex C, between the Originator, SG, the Seller and each Lock-Box Bank.
"Lock-Box Bank" means any of the banks or other financial
institutions holding one or more Lock-Box Accounts.
"Loss Horizon Ratio" means, as of any date, a ratio (expressed
as a percentage rounded upwards to the nearest 1/100 of 1%) computed by dividing
(i) the aggregate Outstanding Balance of all Eligible Receivables generated
during the 4 most recently ended Collection Periods by (ii) the Net Receivables
Balance as at the last day of the most recently ended Collection Period.
"Loss Percentage" means a percentage rounded upwards to the
nearest 1/100 of 1% calculated as follows: (i) 2.5, multiplied by (ii) the Loss
Horizon Ratio as of the last day of the most recently ended Collection Period,
multiplied by (iii) the highest average of the Sales-Based Default Ratios which
occurred during the twelve-month period ending on the last day of the most
recently ended Collection Period. The Loss Percentage shall be calculated
monthly in each Monthly Receivables Report and such Loss Percentage shall,
absent manifest error, be effective from the Settlement Date following such
calculation until the next succeeding Settlement Date.
"Loss-to-Liquidation Ratio" means the ratio (expressed as a
percentage and rounded upward to the nearest 1/100th of 1.0%) computed as of the
last day of each calendar month by dividing (i) the aggregate Outstanding
Balance of all Receivables written off by the Seller, or which should have been
written off by the Seller in accordance with the Credit and Collection Policy or
the Obligors of which are subject to any action of the type described in
paragraph (g) of Exhibit V, during the Collection Period ending on such last day
by (ii) the aggregate amount of Collections of Receivables actually received
during such period.
"Material Adverse Effect" means, with respect to any Person,
relative to any occurrence of whatever nature (including any adverse
determination in any litigation, arbitration or governmental investigation or
proceeding) and after taking into account insurance coverage and effective
indemnification with respect to such occurrence, a materially adverse effect on:
(a) the consolidated business, operations, property or
financial or other condition of such Person and its
subsidiaries; or
(b) the ability of such Person to perform any of its payment
or other material obligations under any of the Transaction
Documents.
"Monthly Receivables Report" means a report, in substantially
the form of Annex D-2, furnished by the Servicer to the Agent pursuant to
Subsection (k)(iii) of the covenants of the Servicer set forth in Exhibit IV.
"Moody's" means ▇▇▇▇▇'▇ Investor Service, Inc.
"Net Receivables Balance" means at any time the Outstanding
Balance of Eligible Receivables reduced by the sum of (i) the aggregate amount
by which the Outstanding Balance
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of Eligible Receivables of each Obligor exceeds the product of (A) the Normal
Concentration Percentage for such Obligor multiplied by (B) the Outstanding
Balance of the Eligible Receivables and (ii) the Direct Dilution Deduction for
the most recently ended Collection Period.
"Normal Concentration Percentage" for any Obligor means at any
time 3%, or such other amount as set forth on Schedule IV with respect to any
Special Obligor, as such Schedule may be modified from time to time with the
consent of the Agent and the Agent's receipt of letters from each of the rating
agencies then rating the Notes confirming the rating of such Notes after giving
effect to such amount with respect to such Special Obligor.
"Notes" means short-term promissory notes issued or to be
issued by the Issuer to fund its investments in accounts receivable or other
financial assets.
"Obligor" means, with respect to any Receivable, the Person
obligated to make payments pursuant to the Contract relating to such Receivable.
"Originator" means CITGO Petroleum Corporation, a Delaware
corporation, and its successors and assigns.
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal balance thereof.
"Permitted Offset Claim" means a claim included in the Direct
Dilution Deduction.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity, or a
government or any political subdivision or agency thereof.
"Portion of Capital" has the meaning set forth in Section 1.7.
In addition, at any time when the Capital of the Purchased Interest is not
divided into two or more portions, "Portion of Capital" means 100% of the
Capital of the Purchased Interest.
"Program Fee" shall have the meaning set forth in the Fee
Letter.
"Program Support Agreement" means and includes the Liquidity
Asset Purchase Agreement and any other agreement entered into by any Program
Support Provider providing for the issuance of one or more letters of credit for
the account of the Issuer, the issuance of one or more surety bonds for which
the Issuer is obligated to reimburse the applicable Program Support Provider for
any drawings thereunder, the sale by the Issuer to any Program Support Provider
of the Purchased Interest (or portions thereof) and/or the making of loans
and/or other extensions of credit to the Issuer in connection with the Issuer's
securitization program, together with any letter of credit, surety bond or other
instrument issued thereunder (but excluding any discretionary advance facility
provided by the Agent).
"Program Support Provider" means and includes any Purchaser
and any other or additional Person (other than any customer of the Issuer) now
or hereafter extending credit or having a commitment to extend credit to or for
the account of, or to make purchases from, the
I-14
Issuer or issuing a letter of credit, surety bond or other instrument to support
any obligations arising under or in connection with the Issuer's securitization
program.
"Purchase and Sale Agreement" means that certain Purchase and
Sale Agreement dated as of February 28, 2003 between the Seller and the
Originator, as amended, supplemented or otherwise modified from time to time.
"Purchase Commitment" has the meaning assigned to that term in
the preamble of this Agreement.
"Purchase Limit" means:
the lesser of (a) $200,000,000, as such amount may be reduced
pursuant to Section 1.1(b) and (b) the aggregate of the
Liquidity Commitments (as defined in the Liquidity Asset
Purchase Agreement) of the Purchasers under the Liquidity
Asset Purchase Agreement, as such amount may be reduced
pursuant to Section 1.1(b).
References to the unused portion of the Purchase Limit shall
mean, at any time, the Purchase Limit minus the then outstanding Capital of the
Purchased Interest under the Agreement.
"Purchased Interest" means, at any time, the undivided
percentage ownership interest in (i) each and every Receivable now existing or
hereafter arising, other than any Receivable that arises on or after the
Facility Termination Date, (ii) all Related Security with respect to such
Receivables, and (iii) all Collections with respect to, and other proceeds of,
such Receivables and Related Security. Such undivided percentage interest shall
be computed as
C
--------------------------
NRB - (RLR + RDR + FR + DR)
where:
C = the Capital of the Purchased Interest at the time of
computation.
DR = the Discount Reserve at the time of computation.
RLR = the Required Loss Reserve at the time of computation.
RDR = the Required Dilution Reserve at the time of computation.
FR = the Fee Reserve at the time of computation.
NRB = the Net Receivables Balance at the time of computation.
The Purchased Interest shall he determined from time to time pursuant to the
provisions of Section 1.3.
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"Purchaser" has the meaning set forth in Section 5.3(b).
"Rate Variance Factor" means a number greater than one that
reflects the potential variance in selected interest rates over a period of time
designated by the Agent, as computed by the Servicer each month and set forth in
the Monthly Receivables Report in accordance with the provisions thereof;
provided that the factors used in computing the "Rate Variance Factor" may be
changed from time to time upon at least five days' prior notice to the Servicer.
"Receivable" means any indebtedness and other obligations
(whether or not earned by performance) owed to the Seller as assignee or any
right of the Seller to payment from or on behalf of an Obligor whether
constituting an account, chattel paper or general intangible, arising in
connection with property or goods that have been or are to be sold or otherwise
disposed of, or services rendered or to be rendered by the Originator, as more
particularly described on Schedule V, and includes, without limitation, the
obligation to pay any finance charges, fees and other charges with respect
thereto. Indebtedness and other obligations arising from any one transaction,
including, without limitation, indebtedness and other obligations represented by
an individual invoice or agreement, shall constitute a Receivable separate from
a Receivable consisting of the indebtedness and other obligations arising from
any other transaction.
"Reference Bank" means SG.
"Related Security" means with respect to any Receivable:
(i) all of the Seller's interest in any goods
(including returned goods), and documentation or title
evidencing the shipment or storage of any goods (including
returned goods), relating to any sale giving rise to such
Receivable;
(ii) all other security interests or liens and
property subject thereto from time to time purporting to
secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together
with all UCC financing statements or similar filings signed by
an Obligor relating thereto; and
(iii) all guaranties, indemnities, insurance and
other agreements (including the related Contract) or
arrangements of whatever character from time to time
supporting or securing payment of such Receivable.
Notwithstanding the foregoing, any proceeds from Related
Security shall be applied to receivables which are secured or supported by such
Related Security, whether or not such receivables are Excluded Receivables, in
the order of the age of such receivables, starting with the oldest such
receivable.
"Required Dilution Percentage" means, on any day, the Dilution
Percentage.
"Required Dilution Reserve" means, on any date, an amount
equal to
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(RDP) x (NRB)
where:
RDP = the Required Dilution Percentage for the Purchased Interest on such
date.
NRB = the Net Receivables Balance on such date.
"Required Loss Percentage" means, on any day, the greater of
(i) the Loss Percentage and (ii) 15%.
"Required Loss Reserve" means, on any date, an amount equal to
(RLP) x (NRB)
where:
RLP = the Required Loss Percentage for the Purchased Interest on such
date.
NRB = the Net Receivables Balance on such date.
"Sales-Based Default Ratio" means, for any Collection Period,
a fraction (expressed as a percentage and rounded upwards to the nearest 1/100
of 1%), computed as of the last day of each Collection Period, equal to (i) the
sum of (A) the aggregate Outstanding Balance of all Receivables which were 60-90
days past due on the last day of such Collection Period plus (without
duplication) (B) the aggregate Outstanding Balance of all Receivables (1) which
were written off as uncollectible or should have been written off in accordance
with the Credit and Collection Policy or (2) the Obligors of which are subject
to any action of the type described in paragraph (g) of Exhibit V at any time
during such Collection Period, divided by (ii) the aggregate original
Outstanding Balances of all Receivables generated during the third Collection
Period preceding such Collection Period.
"Seller" has the meaning set forth in the preamble to the
Agreement.
"Servicer" has the meaning set forth in the preamble to the
Agreement.
"Servicing Fee" means the fee referred to in Section 4.6.
"Settlement Date" means the 20th day of every calendar month,
or if such day is not a Business Day, the next succeeding Business Day.
"Settlement Period" for each Portion of Capital means each
Fixed Period for such Portion of Capital and, on and after the Termination Date,
such period (including, without limitation, a period of one day) as shall be
selected from time to time by the Agent or, in the absence of any such
selection, each period of 30 days from the last day of the immediately preceding
Settlement Period.
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"SG" means Societe Generale, a banking corporation organized
under the laws of France.
"S&P" means Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
"Special Obligor" means an Obligor, so designated in writing
by the Agent and set forth on Schedule IV; provided that such designation may be
withdrawn in writing by the Agent at any time.
"Subordinated Note" means the subordinated note in
substantially the form attached to the Purchase and Sale Agreement as Annex B
executed and delivered by the Seller in favor of the originator in connection
with the Purchase and Sale Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with this
Agreement and the applicable Purchase and Sale Agreement.
"Termination Date" means the earliest of (i) the Business Day
which the Seller so designates by notice to the Agent at least five Business
Days in advance, (ii) the Business Day which the Agent so designates by notice
to the Seller at least five Business Days in advance and (iii) the Facility
Termination Date.
"Termination Day" means with respect to this Agreement (i)
each day on which the conditions set forth in Section 2 of Exhibit II are not
satisfied and (ii) each day which occurs on or after the Termination Date.
"Termination Discount" means, for the Purchased Interest on
any date, an amount equal to the Rate Variance Factor on such date multiplied by
the product of (i) the Net Receivables Balance on such date and (ii) the product
of (a) the Base Rate for the Purchased Interest for a 30-day Fixed Period deemed
to commence on such date and (b) a fraction having as its numerator the product
of the Average Maturity multiplied by the Collection Delay Factor (each as in
effect at such date) and 360 as its denominator.
"Termination Event" has the meaning specified in Exhibit V.
"Termination Fee" means, for any Fixed Period during which a
Termination Day occurs, the amount, if any, by which (i) the additional Discount
(calculated without taking into account any Termination Fee or any shortened
duration of such Fixed Period pursuant to clause (iv) of the definition thereof)
which would have accrued during such Fixed Period on the reductions of Capital
of the Purchased Interest relating to such Fixed Period had such reductions
remained as Capital, exceeds (ii) the income, if any, received by the Issuer
from the Issuer investing the proceeds of such reductions of Capital, as
determined by the Agent, which determination shall be binding and conclusive for
all purposes, absent manifest error.
"Transaction Documents" means the Agreement, the Lock-Box
Agreements, the Liquidity Asset Purchase Agreement, the Purchase and Sale
Agreement and all other certificates, instruments, UCC financing statements,
reports, notices, agreements and documents executed or delivered under or in
connection with the Agreement, in each case as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
Agreement.
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"UCC" means the Uniform Commercial Code as from time to time
in effect in the applicable jurisdiction.
"Unmatured Termination Event" means an event which but for the
lapse of time or the giving of notice, or both, would constitute a Termination
Event.
Other Terms. All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles. All
terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article 9.
Unless the context otherwise requires, or means "and/or", and "including" (and
with correlative meaning "include" and "includes") means including without
limiting the generality of any description preceding such term.
I-19
EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The initial
purchase under the Agreement is subject to the conditions precedent that the
Agent shall have received on or before the date of such purchase the following,
each in form and substance (including the date thereof) satisfactory to the
Agent:
(a) A counterpart of this Agreement duly executed by the
Seller.
(b) Certified copies of (i) the resolutions of the Board
of Directors of the Seller authorizing the execution, delivery, and performance
by the Seller of the Agreement and the other Transaction Documents to which it
will be a party, (ii) all documents evidencing other necessary organizational
action and governmental approvals, if any, with respect to the Agreement and the
other Transaction Documents to which it will be a party and (iii) the
Certificate of Formation and Limited Liability Company Agreement of the Seller.
(c) A certificate of the Secretary or Assistant Secretary
of the Seller certifying the names and true signatures of the officers of the
Seller authorized to sign the Agreement and the other Transaction Documents to
which it will be a party. Until the Agent receives a subsequent incumbency
certificate from the Seller in form and substance satisfactory to the Agent, the
Agent shall be entitled to rely on the last such certificate delivered to it by
the Seller.
(d) Certified copies of (i) the resolutions of the Board
of Directors of the Originator authorizing the execution, delivery, and
performance by the Originator of the Agreement and the other Transaction
Documents to which it will be a party, (ii) all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to
the Agreement and the other Transaction Documents to which it will be a party
and (iii) the certificate of incorporation and by-laws of the Originator.
(e) A certificate of the Secretary or Assistant Secretary
of the Originator certifying the names and true signatures of the officers of
the Originator authorized to sign the Agreement and the other Transaction
Documents to which it will be a party. Until the Agent receives a subsequent
incumbency certificate from the Originator in form and substance satisfactory to
the Agent, the Agent shall be entitled to rely on the last such certificate
delivered to it by the Originator.
(f) Acknowledgment copies, or time stamped receipt copies
of proper financing statements, duly filed on or before the date of such initial
purchase under the UCC of all jurisdictions that the Agent may deem necessary or
desirable in order to perfect the interests of the Issuer contemplated by the
Agreement and to perfect the interests of the Seller as contemplated by the
Purchase and Sale Agreement.
(g) Acknowledgment copies, or time stamped receipt copies
of proper terminations of financing statements, if any, necessary to release all
security interests and other rights of any Person in the Receivables, Contracts
or Related Security previously granted by the Originator or the Seller.
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(h) Completed UCC requests for information, dated on or
before the date of such initial purchase, listing the financing statements
referred to in subsection (f) above and all other effective financing statements
filed in the jurisdictions referred to in subsection (f) above that name the
Seller or the Originator as debtor, together with copies of such other financing
statements (none of which shall cover any Receivables, Contracts or Related
Security), and similar search reports with respect to federal tax liens and
liens of the Pension Benefit Guaranty Corporation in such jurisdictions as the
Agent may request, showing no such liens on any of the Receivables, Contracts or
Related Security.
(i) Copies of executed Lock-Box Agreements with the
Lock-Box Banks.
(j) A favorable opinion of W. ▇▇▇▇ ▇▇▇▇▇▇, Senior Counsel
for the Originator and the Seller, substantially in the form of Annex E hereto
and as to such other matters as the Agent may reasonably request.
(k) A favorable opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
LLP, counsel for the Originator and the Seller, substantially in the form of
Annex F hereto and as to such other matters as the Agent may reasonably request.
(l) A favorable opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
LLP, counsel for the Seller and the Originator, substantially in the form of
Annex G hereto and as to such other matters as the Agent may reasonably request.
(m) A favorable opinion of Morris, Nichols, Arsht &
▇▇▇▇▇▇▇, special Delaware counsel for the Originator and the Seller,
substantially in the form of Annex H hereto and as to such other matters as the
Agent may reasonably request.
(n) A favorable opinion of Morris, Nichols, Arsht &
▇▇▇▇▇▇▇, special Delaware counsel for the Originator and the Seller,
substantially in the form of Annex I hereto and as to such other matters as the
Agent may reasonably request.
(o) Satisfactory results of a review and audit of the
Seller's and the Originator's collection, operating and reporting systems,
Credit and Collection Policy, historical receivables data and accounts,
including satisfactory results of a review of the Seller's and the Originator's
operating locations) and satisfactory review and approval of the Eligible
Receivables in existence on the date of the initial purchase under the
Agreement.
(p) Monthly Receivables Report representing the
performance of the portfolio purchased through the Agreement for the month prior
to closing.
(q) Evidence of payment by the Seller of all accrued and
unpaid fees (including those contemplated by the letter agreement referred to in
Section 1.5), costs and expenses to the extent then due and payable on the date
thereof, together with Attorney Costs of the Agent to the extent invoiced prior
to or on such date, plus such additional amounts of Attorney Costs as shall
constitute the Agent's reasonable estimate of Attorney Costs incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude final settling of accounts between the Seller and
the Agent); including any such costs, fees and expenses arising under or
referenced in Section 5.4.
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(r) The Fee Letter between the Seller and the Agent
contemplated by Section 1.5.
(s) Good standing certificates with respect to the Seller
issued by the Secretaries of the States of Delaware and Oklahoma.
(t) Good standing certificates with respect to the
Originator issued by the Secretaries of the States of Delaware and Oklahoma.
(u) An executed Purchase and Sale Agreement.
(v) Letters from each of the rating agencies then rating
the Notes confirming the rating of such Notes after giving effect to the
transactions contemplated by this Agreement.
(w) Such other approvals, opinions or documents as the
Agent or Purchasers may reasonably request.
2. Conditions Precedent to All Purchases and
Reinvestments. Each purchase (including the initial purchase) and each
reinvestment shall be subject to the further conditions precedent that:
(a) in the case of each purchase, the Servicer shall have
delivered to the Agent on or prior to such purchase, in form and substance
satisfactory to the Agent, a completed Monthly Receivables Report with respect
to the immediately preceding Collection Period, dated within 51 days prior to
the date of such purchase together with a listing by Obligor of all Receivables
and a current completed Interim Receivables Report and such additional
information as may reasonably be requested by the Agent;
(b) on the date of such purchase or reinvestment the
following statements shall be true (and acceptance of the proceeds of such
purchase or reinvestment shall be deemed a representation and warranty by the
Seller that such statements are then true):
(i) the representations and warranties contained
in Exhibit III are true and correct on and as of the date of
such purchase or reinvestment as though made on and as of such
date;
(ii) the representations and warranties of the
originator in the Purchase and Sale Agreement are true and
correct on and as of the date of such purchase or reinvestment
as though made on and as of such date; and
(iii) no event has occurred and is continuing, or
would result from such purchase or reinvestment, that
constitutes a Termination Event or an Unmatured Termination
Event.
(c) the Purchase and Sale Agreement is in full force and
effect, and the Agent shall have received such other approvals, opinions or
documents as it may reasonably request.
II-3
EXHIBIT III
REPRESENTATIONS AND WARRANTIES
The Seller represents and warrants as follows:
(a) The Seller is a limited liability company duly
formed, validly existing and in good standing under the laws of the State of
Delaware, its organizational number is 2761406, and is duly qualified to do
business, and is in good standing, as a foreign limited liability company in
every jurisdiction where the nature of its business requires it to be so
qualified.
(b) The execution, delivery and performance by the Seller
of the Agreement and the other Transaction Documents to which it is a party,
including the Seller's use of the proceeds of purchases and reinvestments, (i)
are within the Seller's limited liability company powers, (ii) have been duly
authorized by all necessary membership action, (iii) do not contravene or result
in a default under or conflict with (1) the Seller's Certificate of Formation or
Limited Liability Company Agreement, (2) any law, rule or regulation applicable
to the Seller, (3) any contractual restriction binding on or affecting the
Seller or its property or (4) any order, writ, judgment, award, injunction or
decree binding on or affecting the Seller or its property, and (iv) do not
result in or require the creation of any Adverse Claim upon or with respect to
any of its properties. The Agreement and the other Transaction Documents to
which it is a party have been duly executed and delivered by the Seller.
(c) No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority or other Person is
required for the due execution, delivery and performance by the Seller of the
Agreement or any other Transaction Document to which it is a party, or for the
perfection of the Issuer's interests under the Transaction Documents or for the
perfection of the Seller's interests under the Purchase and Sale Agreement,
except for the filing of the financing statements referred to in Section 1(f) of
Exhibit II.
(d) Each of the Agreement and the other Transaction
Documents to which it is a party constitutes the legal, valid and binding
obligation of the Seller enforceable against the Seller in accordance with its
terms.
(e) There is no pending or threatened action or
proceeding affecting the Seller or any of its subsidiaries before any
Governmental Authority or arbitrator which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect or would materially
adversely affect the collectibility of the Receivables, or which affects or
purports to affect the legality, validity or enforceability of the Agreement or
the other Transaction Documents to which it is a party.
(f) No proceeds of any purchase or reinvestment will be
used to acquire any equity security of a class which is registered pursuant to
Section 12 of the Securities Exchange Act of 1934.
(g) The Seller is the legal and beneficial owner of the
Receivables, the Related Security and related Collections free and clear of any
Adverse Claim; upon each purchase or reinvestment, the Issuer shall acquire a
valid and enforceable perfected undivided
III-1
percentage ownership interest, to the extent of the Purchased Interest, in each
Receivable then existing or thereafter arising and in the Related Security (to
the extent such interest may be perfected by the filing of the financing
statements referred to in paragraph (f) of Exhibit II) and Collections and other
proceeds, with respect thereto, free and clear of any Adverse Claim; the
Agreement creates a security interest in favor of the Issuer in the items
described in Section 1.2(d), and the Issuer has a first priority perfected
security interest in such items, free and clear of any Adverse Claims. No
effective financing statement or other instrument similar in effect covering any
Contract or any Receivable or the Related Security or Collections with respect
thereto or any Lock-Box Account is on file in any recording office, except those
filed in favor of the Issuer relating to the Agreement.
(h) Each Interim Receivables Report and each Monthly
Receivables Report (if prepared by the Seller or one of its Affiliates, or to
the extent that information contained therein is supplied by the Seller or an
Affiliate), and any information, exhibit, financial statement, document, book,
record or report furnished or to be furnished at any time by or on behalf of the
Seller to the Agent in connection with the Agreement is or will be accurate in
all material respects as of its date or (except as otherwise disclosed to the
Agent at such time) as of the date so furnished, and no such item contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.
(i) The principal place of business and chief executive
office (as such terms are used in the UCC) of the Seller and the office where
the Seller keeps its records concerning the Receivables are located at the
address referred to in paragraph (b) of the covenants of the Seller set forth in
Exhibit IV.
(j) The principal place of business and chief executive
office (as such terms are used in the UCC) of the Originator and the office
where the Originator keeps its records concerning the Receivables are located at
the address set forth on Schedule VI hereto.
(k) The names and addresses of all the Lock-Box Banks,
together with the account numbers of the Lock-Box Accounts (and all related post
office boxes) of the Seller at such Lock-Box Banks, are specified in Schedule II
to the Agreement (or at such other Lock-Box Banks and/or with such other
Lock-Box Accounts (and such other related post office boxes) as have been
notified to the Agent in accordance with the Agreement) and all Lock-Box
Accounts (and all related post office boxes) are subject to Lock-Box Agreements.
(l) The Seller is not in violation of any order of any
court, arbitrator or Governmental Authority.
(m) Neither the Seller nor any Affiliate of the Seller
has any direct or indirect ownership or other financial interest in the Issuer.
(n) No proceeds of any purchase or reinvestment will be
used for any purpose that violates any applicable law, rule or regulation,
including, without limitation, Regulations T, U or X of the Federal Reserve
Board.
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(o) Each Receivable included as an Eligible Receivable in
the calculation of the Net Receivables Balance, is an Eligible Receivable at the
time of the calculation.
(p) No event has occurred and is continuing, or would
result from a purchase in respect of, or reinvestment in respect of, the
Purchased Interest, or from the application of the proceeds therefrom, which
constitutes a Termination Event.
(q) The Seller has accounted for each sale of undivided
percentage ownership interests in Receivables in its books and financial
statements as sales, consistent with generally accepted accounting principles.
(r) The Originator has complied in all material respects
with the Credit and Collection Policy with regard to each Receivable.
(s) The Seller has complied with all of the terms,
covenants and agreements contained in the Agreement and the other Transaction
Documents to which it is a party and that are applicable to it.
(t) The Seller's complete company name is set forth in
the preamble to the Agreement, and the Seller does not use and has not during
the last six years used any other company name, corporate name, trade name,
doing business name or fictitious name, except as set forth on Schedule III and
except for names first used after the date of the Agreement and set forth in a
notice delivered to the Agent pursuant to paragraph(r)(ii) of Exhibit IV.
(u) Prior to a transfer pursuant to the Purchase and Sale
Agreement, the Originator shall be the legal and beneficial owner of the
Receivables, the Related Security and related Collections sold by the Originator
to the Seller pursuant to the Purchase and Sale Agreement free and clear of any
lien, security interest or encumbrance and the Purchase and Sale Agreement is
effective to, and shall, transfer to the Seller (and the Seller shall acquire)
from the Originator all right, title and interest of the Originator in each such
Receivable, Related Security and Collections with respect thereto free and clear
of any lien, security interest or encumbrance.
(v) With respect to each Receivable sold by the
Originator to the Seller, the Seller shall have paid or promised to pay to the
Originator at the time of such sale reasonably equivalent value in consideration
of the transfer of such Receivable.
(w) CRCC owns 100% of the outstanding membership interest
of the Seller.
(x) As of the date hereof, the Seller has a tangible net
worth of at least $10,000, as determined in accordance with generally accepted
accounting principles.
The Servicer represents and warrants as follows:
(a) The Servicer is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware,
and is duly qualified to do business, and is in good standing, as a foreign
corporation in every jurisdiction where the nature of its business requires it
to be so qualified.
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(b) The execution, delivery and performance by the
Servicer of the Agreement and the other Transaction Documents to which it is a
party (i) are within the Servicer's corporate powers, (ii) have been duly
authorized by all necessary corporate action, (iii) do not contravene or result
in a default under or conflict with (1) the Servicer's charter or by-laws, (2)
any law, rule or regulation applicable to the Servicer, (3) any contractual
restriction binding on or affecting the Servicer or its property or (4) any
order, writ, judgment, award, injunction or decree binding on or affecting the
Servicer or its property, and (iv) do not result in or require the creation of
any Adverse Claim upon or with respect to any of its properties. The Agreement
and the other Transaction Documents to which it is a party have been duly
executed and delivered by the Servicer.
(c) No authorization or approval or other action by, and
no notice to or filing with, any Governmental Authority or other Person is
required for the due execution, delivery and performance by the Servicer of the
Agreement or any other Transaction Document to which it is a party.
(d) Each of the Agreement and the other Transaction
Documents to which it is a party constitutes the legal, valid and binding
obligation of the Servicer enforceable against the Servicer in accordance with
its terms.
(e) The balance sheets of the Servicer and its
subsidiaries as at December 31, 2002, and the related statements of income and
retained earnings of the Servicer and its subsidiaries for the fiscal year then
ended, copies of which have been furnished to the Agent, fairly present the
financial condition of the Servicer and its subsidiaries as at such date and the
results of the operations of the Servicer and its subsidiaries for the period
ended on such date, all in accordance with generally accepted accounting
principles consistently applied, and since December 31, 2002 there has been no
material adverse change in the business, operations, property or financial or
other condition or operations of the Servicer or any of its subsidiaries, the
ability of the Servicer to perform its obligations under the Agreement or the
other Transaction Documents to which it is a party or the collectibility of the
Receivables, or which affects the legality, validity or enforceability of the
Agreement or the other Transaction Documents to which it is a party.
(f) There is no pending or threatened action or
proceeding affecting the Servicer or any of its subsidiaries before any
Governmental Authority or arbitrator which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect or would materially
adversely affect the collectibility of the Receivables, or which affects or
purports to affect the legality, validity or enforceability of the Agreement or
the other Transaction Documents to which it is a party.
(g) Each Interim Receivables Report and each Monthly
Receivables Report (if prepared by the Servicer or one of its Affiliates, or to
the extent that information contained therein is supplied by the Servicer or an
Affiliate), and any information, exhibit, financial statement, document, book,
record or report furnished or to be furnished at any time by or on behalf of the
Servicer to the Agent in connection with the Agreement is or will be accurate in
all material respects as of its date or (except as otherwise disclosed to the
Agent at such time) as of the date so furnished, and no such item contains or
will contain any untrue statement of a
III-4
material fact or omits or will omit to state a material fact necessary in order
to make the statements contained therein, in the light of the circumstances
under which they were made, not misleading.
(h) The Servicer is not in violation of any order of any
court, arbitrator or Governmental Authority.
(i) Neither the Servicer nor any Affiliate of the
Servicer has any direct or indirect ownership or other financial interest in the
Issuer.
(j) The Servicer has complied in all material respects
with the Credit and Collection Policy with regard to each Receivable.
(k) The Servicer has complied with all of the terms,
covenants and agreements contained in the Agreement and the other Transaction
Documents and applicable to it.
(l) Each Receivable included as an Eligible Receivable in
the calculation of the Net Receivables Balance, is an Eligible Receivable at the
time of the calculation.
(m) No event has occurred and is continuing, or would
result from a purchase in respect of, or reinvestment in respect of the
Purchased Interest or from the application of the proceeds therefrom, which
constitutes a Termination Event.
III-5
EXHIBIT IV
COVENANTS
Covenants of the Seller. Until the latest of the Facility Termination
Date, the date on which no Capital of or Discount in respect of the Purchased
Interest shall be outstanding or the date all other amounts owed by the Seller
under the Agreement to the Issuer, the Agent and any other Indemnified Party or
Affected Person shall be paid in full:
(a) Compliance with Laws, Etc. The Seller shall comply in
all material respects with all applicable laws, rules, regulations and orders,
and preserve and maintain its organizational existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve and
maintain such existence, rights, franchises, qualifications, and privileges
would not materially adversely affect the collectibility of the Receivables or
the enforceability of any related Contract or the ability of the Seller to
perform its obligations under any related Contract or under the Agreement.
(b) Offices, Records and Books of Account; Etc. The
Seller (i) shall keep its principal place of business and chief executive office
(as such terms are used in the UCC) and the office where it keeps its records
concerning the Receivables at the address of the Seller set forth under its name
on the signature page to the Agreement and keep its State of organization at the
State set forth in Section 1(a) of Exhibit III or, upon at least 30 days' prior
written notice of a proposed change to the Agent, at any other locations in
jurisdictions where all actions reasonably requested by the Agent to protect and
perfect the interest of the Issuer in the Receivables and related items
(including without limitation the items described in Section 1.2(d)) have been
taken and completed and (ii) shall provide the Agent with at least 30 days'
written notice prior to making any change in the Seller's name or making any
other change in the Seller's identity or corporate structure (including a
merger) which could render any UCC financing statement filed in connection with
this Agreement "seriously misleading" as such term is used in the UCC; each
notice to the Agent pursuant to this sentence shall set forth the applicable
change and the effective date thereof. The Seller will also file and maintain in
effect all filings, and take all such other actions, as may be necessary to
protect the validity and perfection of its ownership interest in the Receivables
purchased from the Originator pursuant to the terms of the Purchase and Sale
Agreement. The Seller also will maintain and implement or will cause to be
maintained and implemented administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Receivables and
related Contracts in the event of the destruction of the originals thereof), and
keep and maintain all documents, books, records, computer tapes and disks and
other information reasonably necessary or advisable for the collection of all
Receivables (including, without limitation, records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to each
existing Receivable).
(c) Performance and Compliance with Contracts and Credit
and Collection Policy. The Seller shall, at its expense, timely and fully
perform and comply with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to the Receivables,
and timely and fully comply in all material respects with the Credit and
Collection Policy with regard to each Receivable and the related Contract.
IV-1
(d) Ownership Interest, Etc. The Seller shall, at its
expense, take all action necessary or desirable to establish and maintain, in
favor of the Issuer, a valid and enforceable undivided ownership interest, to
the extent of the Purchased Interest, in the Receivables and the Related
Security and Collections and other proceeds with respect thereto, and a first
priority perfected security interest in the items described in Section 1.2(d),
in each case free and clear of any Adverse Claim including, without limitation,
taking such action to perfect, protect or more fully evidence the interest of
the Issuer under the Agreement as the Issuer, through the Agent, may request.
(e) Sales, Liens, Etc. The Seller shall not sell, assign
(by operation of law or otherwise) or otherwise dispose of, or create or suffer
to exist any Adverse Claim upon or with respect to, any or all of its right,
title or interest in, to or under, any item described in Section 1.2(d)
(including without limitation the Seller's undivided interest in any Receivable,
Related Security, or Collections, or upon or with respect to any account to
which any Collections of any Receivables are sent), or assign any right to
receive income in respect of any items contemplated by this paragraph (e).
(f) Extension or Amendment of Receivables. Except with
respect to actions by the Servicer that are permitted as provided in Section 4.2
of this Agreement, the Seller shall not approve any action by the Servicer which
would extend the maturity or adjust the Outstanding Balance or otherwise modify
the terms of any Receivable, or amend, modify or waive any term or condition of
any related Contract.
(g) Change in Business or Credit and Collection Policy.
The Seller shall not make any material change in the character of its business
or in the Credit and Collection Policy, or any change in the Credit and
Collection Policy that would adversely affect the enforceability of any related
Contract or the ability of the Seller to perform its obligations under any
related Contract or under the Agreement; provided that the Seller may make any
of the changes described above to the extent such change is required in order to
comply with applicable laws. Notwithstanding any of the foregoing, the Seller
shall not make any material change in the Credit and Collection Policy that
would adversely affect the collectibility of any Receivable.
(h) Audits. (i) The Seller shall, from time to time
during regular business hours as reasonably requested by the Agent, permit the
Agent, or 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 the Seller
relating to Receivables and the Related Security, including, without limitation,
the related Contracts, and (B) to visit the offices and properties of the Seller
for the purpose of examining such materials described in clause (i)(A) above,
and to discuss matters relating to Receivables and the Related Security or the
Seller's performance hereunder or under the Contracts with any of the officers,
employees, agents or contractors of the Seller having knowledge of such matters;
and (ii) without limiting the provisions of clause (i) next above, from time to
time during regular business hours as reasonably requested by the Agent, permit
certified public accountants or other auditors acceptable to the Agent to
conduct (at Seller's expense once each year or if a Termination Event has
occurred) a review of its books and records with respect to the Receivables. The
Agent, or its agents and representatives, may (and the Agent (or such other
Person who may be designated from time to time by Issuer) shall, upon the
request of
IV-2
Issuer) conduct a review of the type described hereinabove whenever Issuer or
the Agent, as the case may be, in its and their reasonable judgment, deem such
review appropriate.
(i) Change in Lock-Box Banks, Lock-Box Accounts and
Payment Instructions to Obligors. The Seller shall not add or terminate any bank
as a Lock-Box Bank or any account as a Lock-Box Account (or any related post
office box) from those listed in Schedule II to the Agreement, or make any
change in its instructions to Obligors regarding payments to be made to the
Seller or the Originator or payments to be made to any Lock-Box Account (or
related post office box), unless the Agent shall have consented prior thereto in
writing (such consent not to be unreasonably withheld or delayed) and the Agent
shall have received copies of all agreements and documents (including without
limitation Lock-Box Agreements) that it may request in connection therewith.
(j) Deposits to Lock-Box Accounts. The Seller shall (i)
instruct or cause to be instructed all Obligors to make payments of all
Receivables to one or more Lock-Box Accounts directly or to post office boxes to
which only Lock-Box Banks have access (and shall instruct the-Lock-Box Banks to
cause all items and amounts relating to such Receivables received in such post
office boxes to be removed and deposited into a Lock-Box Account on a daily
basis), and (ii) deposit, or cause to be deposited, any Collections of
Receivables received by it into Lock-Box Accounts not later than one Business
Day after receipt thereof. Each Lock-Box Account shall at all times be subject
to a Lock-Box Agreement.
(k) Marking of Records. At its expense, the Seller shall
▇▇▇▇ or cause the Servicer to ▇▇▇▇ the master data processing records relating
to Receivables and related Contracts, including with a legend, as mutually
agreed upon, evidencing that the undivided percentage ownership interests with
regard to the Purchased Interest related to such Receivables and related
Contracts have been sold in accordance with the Agreement and directing all
inquiries to the Originator's Treasurer or Manager of General Credit for further
details. The Originator's Treasurer and Manager of General Credit shall at all
times keep in their possession copies of the Transaction Documents.
(l) Separateness. The Seller hereby acknowledges that the
Issuer is entering into the transactions contemplated by the Agreement in
reliance upon the Seller's identity as a separate legal entity from the
Originator, CRCC or any CITGO Entity (as defined below). Therefore, from and
after the date of execution and delivery of this Agreement, the Seller shall
take all reasonable steps including, without limitation, all steps that the
Issuer may from time to time reasonably request to maintain the Seller's
identity as a separate legal entity and to make it manifest to third parties
that the Seller is an entity with assets and liabilities distinct from those of
the Originator, CRCC and their respective Affiliates (other than the Seller)
(each of the Originator, CRCC and their respective Affiliates (other than the
Seller) shall be referred to herein as a "CITGO Entity"), and not just a
division of any CITGO Entity. Without limiting the generality of the foregoing
and in addition to and consistent with the covenant set forth in paragraph (a)
above, the Seller shall:
(i) compensate all consultants and agents
directly, from the Seller's bank accounts, for services
provided to the Seller by such consultants and agents and, to
the extent any consultant or agent of the Seller is also a
consultant or agent
IV-3
of any CITGO Entity, allocate the compensation of such
consultant or agent between the Seller and such CITGO Entity
on a basis which reflects the services rendered to the Seller
and such CITGO Entity;
(ii) maintain office space separate and apart
from the offices of CRCC through which the Seller's business
will be conducted;
(iii) allocate all overhead expenses (including,
without limitation, telephone and other utility charges) for
items shared between the Seller and any CITGO Entity on the
basis of actual use to the extent practicable and, to the
extent such allocation is not practicable, on a basis
reasonably related to actual use;
(iv) at all times have at least one member of its
Management Committee (an "Independent Manager") who is
acceptable to the Agent and is a natural person who, for the
five-year period prior to his or her appointment as
Independent Manager has not been, and during the continuation
of his or her service as Independent Manager is not: (A) a
director, officer or employee of CRCC or any of its
subsidiaries or affiliates (other than the Seller or any other
special purpose subsidiary of CRCC engaged primarily in the
securitization of assets or other financing activities); (B)
is not a beneficial owner at the time of such individual's
appointment as an Independent Manager, or at any time
thereafter while serving as an Independent Manager, or more
than 2% of the voting securities of CRCC or any of its
subsidiaries or affiliates; (C) is not affiliated with a
significant customer, supplier or creditor of CRCC or any of
its subsidiaries or affiliates; (D) is not affiliated with a
company of which CRCC or any of its subsidiaries or affiliates
is a significant customer or supplier; (E) does not have any
significant personal services contract(s) with CRCC or any of
its subsidiaries or affiliates; and (F) is not a spouse,
parent, sibling or child of any person described in (A)
through (E) above;
(v) ensure that all company actions are duly
authorized by its Management Committee;
(vi) maintain the Seller's books and records
separate from those of any CITGO Entity;
(vii) prepare its financial statements separately
from those of other CITGO Entities and insure that any
consolidated financial statements of the Originator that
include the Seller indicate the Seller is a special-purpose
finance subsidiary;
(viii) except as herein specifically otherwise
provided, not commingle funds or other assets of the Seller
with whose of any other CITGO Entity and not maintain bank
accounts or other depository accounts to which any CITGO
Entity is an account party, into which any CITGO Entity makes
deposits or from which any CITGO Entity has the power to make
withdrawals;
IV-4
(ix) not permit any CITGO Entity to pay any of
the Seller's operating expenses (except pursuant to allocation
arrangements that comply with the requirements of subparagraph
(i) and (iii) of this paragraph (l)); and
(x) not permit the Seller to be named as an
insured on the insurance policy covering the property of any
CITGO Entity, or enter into an agreement with the holder of
such policy whereby in the event of a loss in connection with
such property, proceeds are paid to the Seller.
(m) Net Worth. At all times, the Seller will have a
tangible net worth of $10,000 as determined in accordance with generally
accepted accounting principles.
(n) Consideration. With respect to each Receivable sold
by the Originator to the Seller, the Seller will pay to the Originator
reasonably equivalent value in consideration of the transfer of such Receivable.
(o) Other Agreements. The Seller will not enter into or
be a party to any agreement or instrument other than the Agreement, the Purchase
and Sale Agreement and other documents or instruments contemplated thereby or
amend, modify or waive any provision in any thereof, or give any approval or
consent or permission provided for in any thereof.
(p) Other Business. The Seller will not engage in any
business or enterprise or enter into any transaction other than as contemplated
by the Agreement and the Purchase and Sale Agreement.
(q) Certificate of Formation and Limited Liability
Company Agreement. The Seller will not amend its Certificate of Formation or
Limited Liability Company Agreement other than in compliance with the terms
hereof.
(r) Reporting Requirements. The Seller will provide to
the Agent (in multiple copies, if requested by the Agent) the following:
(i) as soon as possible and in any event within
five days after the occurrence of each Termination Event or
event which, with the giving of notice or lapse of time, or
both, would constitute a Termination Event, a statement of the
treasurer of the Seller setting forth details of such
Termination Event or event and the action that the Seller has
taken and proposes to take with respect thereto;
(ii) at least thirty days prior to any change in
the Seller's name or any other change requiring the amendment
of UCC financing statements, a notice setting forth such
changes and the effective date thereof;
(iii) such other information respecting the
Receivables or the condition or operations, financial or
otherwise, of the Seller or any of its Affiliates as the Agent
may from time to time reasonably request;
(iv) promptly after the Seller obtains knowledge
thereof, notice of any (A) litigation, investigation or
proceeding which may exist at any time between
IV-5
the Seller and any Governmental Authority which, if not cured
or if adversely determined, as the case maybe, is reasonably
likely to have a Material Adverse Effect; or (B) litigation or
proceeding which is reasonably likely to have a Material
Adverse Effect (C) litigation or proceeding relating to any
Transaction Document; and
(v) promptly after the occurrence thereof,
notice of any event which is reasonably likely to have a
Material Adverse Effect.
(s) Limited Payments. The Seller will not make any cash
payment to or otherwise transfer any funds to any of its Affiliates except for
(i) payments of the purchase price under the Purchase and Sale Agreement, (ii)
repayments of amounts owed under the Subordinated Note in accordance with the
terms thereof or (iii) dividends, which are declared by the Seller's board of
directors in accordance with all formalities of limited liability company law;
provided that the Seller shall not make any such payment under clause (ii) above
at any time with the funds which are required to be set aside for the benefit
of, or otherwise to be distributed to, the Issuer, the Agent or any other
Indemnified Party or Affected Person pursuant to Section 1.4(b) or Section
1.4(d).
(t) Negative Pledge of Seller's Membership Interest.
Create, or permit to be created, any Adverse Claims with respect to any share of
Seller's membership interest (whether now owned or hereafter acquired), any cash
dividends or stock dividends received or receivable in connection with Seller's
membership interest, unless the holder(s) of such Adverse Claim(s) shall have
entered into an intercreditor agreement with the Agent and Issuer in form and
substance satisfactory to the Agent.
(u) Negative Pledge of Subordinated Notes. Create, or
permit to be created, any Adverse Claims with respect to any of the Subordinated
Notes (including any payment or distribution in connection therewith), unless
the holder(s) of such Adverse Claim(s) shall have entered into an intercreditor
agreement with the Agent and Issuer in form and substance satisfactory to the
Agent.
Covenants of the Servicer. Until the latest of the Facility Termination
Date, the date on which no Capital of or Discount in respect of the Purchased
Interest shall be outstanding or the date all other amounts owed by the Seller
under the Agreement to the Issuer, the Agent and any other Indemnified Party or
Affected Person shall be paid in full:
(a) Compliance with Laws, Etc. The Servicer shall comply
in all material respects with all applicable laws, rules, regulations and
orders, and preserve and maintain its corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve and
maintain such existence, rights, franchises, qualifications, and privileges
would not materially adversely affect the collectibility of the Receivables or
the enforceability of any related Contract or the ability of the Servicer to
perform its obligations under any related Contract or under the Agreement.
IV-6
(b) Records. The Servicer will maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Receivables and related Contracts in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records, computer tapes and disks and other information
reasonably necessary or advisable for the collection of all Receivables
(including, without limitation, records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to each
existing Receivable).
(c) Performance and Compliance with Contracts and Credit
and Collection Policy. The Servicer shall, at its expense, timely and fully
perform and comply with all material provisions, covenants and other promises
required to be observed by the Servicer under the Contracts related to the
Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy with regard to each Receivable and the related
Contract.
(d) Ownership Interest, Etc. The Servicer shall, at its
expense, take all action necessary or desirable to establish and maintain a
valid and enforceable undivided ownership interest, to the extent of the
Purchased Interest, in the Receivables and the Related Security and Collections
and other proceeds with respect thereto, and a first priority perfected security
interest in the items described in Section 1.2(d), in each case free and clear
of any Adverse Claim, in favor of the Issuer, including, without limitation,
taking such action to perfect, protect or more fully evidence the interest of
the Issuer under the Agreement as the Issuer, through the Agent, may request.
(e) Extension or Amendment of Receivables. Except as
provided in Section 4.2 of the Agreement, the Servicer shall not extend the
maturity or adjust the Outstanding Balance or otherwise modify the terms of any
Receivable, or amend, modify or waive any term or condition of any related
Contract.
(f) Audits. (i) The Servicer shall, from time to time
during regular business hours as reasonably requested by the Agent, permit the
Agent, or 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 the Servicer
relating to Receivables and the Related Security, including, without limitation,
the related Contracts, and (B) to visit the offices and properties of the
Servicer for the purpose of examining such materials described in clause (i)(A)
above, and to discuss matters relating to Receivables and the Related Security
or the Servicer's performance hereunder or under the Contracts with any of the
officers, employees, agents or contractors of the Servicer having knowledge of
such matters; and (ii) without limiting the provisions of clause (i) next above,
from time to time during regular business hours as reasonably requested by the
Agent, permit certified public accountants or other auditors acceptable to the
Agent to conduct (at the Servicer's expense once each year or if a Termination
Event has occurred) a review of its books and records with respect to the
Receivables. The Agent, or its agents and representatives, may (and the Agent
(or such other Person who may be designated from time to time by Issuer) shall,
upon the request of Issuer) conduct a review of the type described hereinabove
whenever Issuer or the Agent, as the case may be, in its and their reasonable
judgment, deem such review appropriate.
IV-7
(g) Change in Lock-Box Banks, Lock-Box Accounts and
Payment Instructions to Obligors. The Servicer shall not add or terminate any
bank as a Lock-Box Bank or any account as a Lock-Box Account (or any related
post office box) from those listed in Schedule II to the Agreement, or make any
change in its instructions to Obligors regarding payments to be made to the
Servicer or the Originator or payments to be made to any Lock-Box Account (or
related post office box), unless the Agent shall have consented prior thereto in
writing (such consent not to be unreasonably withheld or delayed) and the Agent
shall have received copies of all agreements and documents (including without
limitation Lock-Box Agreements) that it may request in connection therewith.
(h) Deposits to Lock-Box Accounts. The Servicer shall (i)
instruct all Obligors to make payments of all Receivables to one or more
Lock-Box Accounts or to post office boxes to which only Lock-Box Banks have
access (and shall instruct the Lock-Box Banks to cause all items and amounts
relating to such Receivables received in such post office boxes to be removed
and deposited into a Lock-Box Account on a daily basis), and (ii) deposit, or
cause to be deposited, any Collections of Receivables received by it into
Lock-Box Accounts not later than one Business Day after receipt thereof. Each
Lock-Box Account shall at all times be subject to a Lock-Box Agreement.
(i) Marking of Records. At its expense, the Servicer
shall ▇▇▇▇ the master data processing records relating to Receivables and
related Contracts, including with a legend, as mutually agreed upon, evidencing
that the undivided percentage ownership interests with regard to the Purchased
Interest related to such Receivables and related Contracts have been sold in
accordance with the Agreement and directing all inquiries to the Originator's
Treasurer or Manager of General Credit for further details. The Originator's
Treasurer and Manager of General Credit shall at all times keep in their
possession copies of the Transaction Documents.
(j) Merger, Sale of Assets. The Servicer shall not:
(i) be a party to any merger or consolidation,
except that, so long as no Termination Event has occurred or
would occur immediately after giving effect thereto or would
result therefrom, the Servicer may merge with any other
Person, provided that the Servicer is the survivor of such
merger; or
(ii) sell, transfer, assign or convey all or
substantially all of its assets.
(k) Reporting Requirements. The Servicer will provide to
the Agent (in multiple copies, if requested by the Agent) the following:
(i) as soon as available and in any event within
60 days after the end of each of the first three quarters of
each fiscal year of the Servicer, balance sheets of the
Servicer and its subsidiaries as of the end of such quarter
and statements of income and retained earnings of the Servicer
and its subsidiaries for the period commencing at the end of
the previous fiscal year and ending with the end of such
quarter, certified by the treasurer of the Servicer; provided,
that, to the extent CITGO is the Servicer and CITGO or any
Affiliate thereof has delivered such balance sheets or
statements to the Agent, the Servicer shall have no obligation
IV-8
under this clause (i) to provide such balance sheets or
statements, as the case may be, to the Agent;
(ii) as soon as available and in any event within
120 days after the end of each fiscal year of the Servicer, a
copy of the annual report for such year for the Servicer and
its subsidiaries, containing financial statements for such
year audited by Deloitte & Touche LLP or other independent
certified public accountants reasonably acceptable to the
Agent; provided, that to the extent CITGO is the Servicer and
CITGO or any Affiliate thereof has delivered such annual
report to the Agent, the Servicer shall have no obligation
under this clause (ii) to provide such annual report to the
Agent;
(iii) (A) on the 5th day of every month (or if
such day is not a Business Day on the immediately succeeding
Business Day), an Interim Receivables Report setting forth
information as of the 15th day of the immediately preceding
calendar month, (B) on the 20th day of every month (or if such
day is not a Business Day on the immediately succeeding
Business Day), a Monthly Receivables Report for the
immediately preceding Collection Period and (C) upon the
request of the Agent, a daily report showing the calculation
of the Purchased Interest as of the close of business on the
immediately preceding Business Day (which shall be calculated
using the Required Loss Reserve and the Required Dilution
Reserve as most recently calculated hereunder);
(iv) as soon as possible and in any event within
five days after the occurrence of each Termination Event or an
Unmatured Termination Event, a statement of the treasurer of
the Servicer setting forth details of such Termination Event
or event and the action that the Servicer has taken and
proposes to take with respect thereto;
(v) promptly after the sending or filing
thereof, copies of all reports that the Servicer sends to any
of its security holders, and copies of all other reports and
registration statements that the Servicer or any subsidiary
files with the Securities and Exchange Commission or any
national securities exchange;
(vi) promptly after the filing or receiving
thereof, copies of all reports and notices that the Servicer
or any Affiliate files under ERISA with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation or the
U.S. Department of Labor or that the Servicer or any Affiliate
receives from any of the foregoing or from any multiemployer
plan (within the meaning of Section 4001(a)(3) of ERISA) to
which the Servicer or any Affiliate is or was, within the
preceding five years, a contributing employer, in each case in
respect of the assessment of withdrawal liability or an event
or condition which could, in the aggregate, result in the
imposition of liability on the Servicer and/or any such
Affiliate in excess of $5,000,000;
IV-9
(vii) such other information respecting the
Receivables or the condition or operations, financial or
otherwise, of the Servicer or any of its Affiliates as the
Agent may from time to time reasonably request;
(viii) promptly after the Servicer obtains
knowledge thereof, notice of any (A) litigation, investigation
or proceeding which may exist at any time between the Servicer
and any Governmental Authority which, if not cured or if
adversely determined, as the case may be, is reasonably likely
to have a Material Adverse Effect; or (B) litigation or
proceeding which is reasonably likely to have a Material
Adverse Effect or (C) litigation or proceeding relating to any
Transaction Document;
(ix) on or before March 31 of each year an Agreed
Upon Procedures Report; and
(x) promptly after the occurrence thereof,
notice of any event which is reasonably likely to have a
Material Adverse Effect.
IV-10
EXHIBIT V
TERMINATION EVENTS
Each of the following shall be a "Termination Event":
(a) (i) The Servicer (if CITGO or any of its Affiliates)
shall fail to perform or observe any term, covenant or agreement under the
Agreement, (ii) any Person which is the Servicer shall fail to make when due any
payment or deposit (including without limitation, any deposit or transfer
required to be made to any Lock-Box Account or the Administration Account, as
applicable) to be made by it under the Agreement or (iii) CITGO shall fail to
transfer to any successor Servicer when required any rights, pursuant to the
Agreement, which CITGO then has as Servicer; or
(b) The Seller shall fail to make any payment required
under the Agreement; or
(c) Any representation or warranty made or deemed made by
the Seller or the Servicer (or any of their respective officers) under or in
connection with the Agreement or any information or report delivered by the
Seller or the Servicer pursuant to the Agreement shall prove to have been
incorrect or untrue in any material respect when made or deemed made or
delivered; or
(d) The Seller shall fail to perform or observe any other
material term, covenant or agreement contained in the Agreement on its part to
be performed or observed and any such failure shall remain unremedied for 10
days after receiving notice or becoming aware of such failure, (or, with respect
to a failure to deliver the Interim Receivables Report or the Monthly
Receivables Report pursuant to the Agreement, such failure shall remain
unremedied for five days); or
(e) The Seller, the Servicer, the Originator or any of
their subsidiaries shall fail to pay any principal of or premium or interest on
any of their Debt which is outstanding in a principal amount of at least
$35,000,000 in the aggregate when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement, mortgage, indenture or instrument relating to such Debt (but
regardless of whether such failure is waived or the holder(s) of such Debt in
any other manner excuse such failure); or any other event (other than an event
which is administrative in nature and is not material to the transactions under
this Agreement, as determined by the Agent), shall occur or condition shall
exist under any agreement, mortgage, indenture or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement, mortgage, indenture or instrument, if the effect of
such event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt unless waived by the Agent; or any such Debt shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), redeemed, purchased or defeased, or an
offer to repay, redeem, purchase or defease such Debt shall be required to be
made, in each case prior to the stated maturity thereof; or
V-1
(f) The Agreement or any purchase or any reinvestment
pursuant to the Agreement shall for any reason (other than pursuant to the terms
hereof) (i) cease to create, or the Purchased Interest shall for any reason
cease to be, a valid and enforceable perfected undivided percentage ownership
interest to the extent of the Purchased Interest in each Receivable and the
Related Security and Collections and other proceeds with respect thereto, free
and clear of any Adverse Claim or (ii) cease to create with respect to the items
described in Section 1.2(d), or the interest of the Issuer with respect to such
items shall cease to be, a valid and enforceable first priority perfected
security interest, free and clear of any Adverse Claim; or
(g) The Seller, the Servicer or the Originator or any of
their subsidiaries shall generally not pay its debts as such debts become due,
or shall admit in writing its inability to pay its debts generally, or shall
make a general assignment for the benefit of creditors; or any proceeding shall
be instituted by or against the Seller, the Servicer or the Originator or any of
their subsidiaries seeking to declare it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it),
either such proceeding shall remain undismissed or unstayed for a period of 60
days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Seller, the Servicer or
the Originator or any of their subsidiaries shall take any organizational action
to authorize any of the actions set forth above in this paragraph (g); or
(h) At any time (i) the average of the Sales-Based
Default Ratios of the three most recently ended Collection Periods shall exceed
0.75% or (ii) the average of the Dilution Ratios of the three most recently
ended Collection Periods shall exceed 1.20% or (iii) the average of the
Delinquency Ratios of the three most recently ended Collection Periods shall
exceed 8.00% or (iv) the average of the Loss-to-Liquidation Ratios of the three
most recently ended Collection Periods shall exceed 0.50%; or
(i) The Purchased Interest shall exceed 100% and such
circumstance shall not have been cured within two (2) Business Days; or
(j) The Originator shall fail to comply with any of the
covenants set forth in Section 7.02 of that certain Credit Agreement dated as of
December 11, 2002 among CITGO Petroleum Corporation, Bank of America, NA, as
Administrative Agent, and the other financial institutions party thereto, as the
same has been amended by that certain Amendment dated as of January 29, 2003
(the "Revolver"), as in effect on January 29, 2003, or as otherwise modified
with the consent of the Agent hereunder; provided, however, if, after the date
hereof, the Revolver is replaced with a similar revolving credit facility (the
"New Revolver") and the Agent approves the covenants contained in the New
Revolver which are similar in nature to the foregoing covenants, such similar
covenants in the New Revolver shall replace the covenants described above; or
V-2
(k) At any time, there shall be a material adverse change
in (i) the financial condition, operations or prospects of the Originator or
(ii) the collectibility of the Receivables; or
(l) At any time, there shall be an occurrence of a
Servicer Resignation Event as defined in Section 4.1(c) of the Agreement; or
(m) At any time, less than 65% of the voting stock of any
class of PDV America shall be owned, directly or indirectly, by Petroleos de
Venezuela, S.A.; or
(n) At any time, less than 65% of the voting stock of any
class of the Originator shall be owned, directly or indirectly, by PDV America;
or
(o) The Seller shall at any time cease to be a direct or
indirect subsidiary of the Originator; or
(p) The Internal Revenue Service shall at any time file
notice of a lien pursuant to Section 6323 of the Internal Revenue Code with
regard to any of the assets of the Originator or the Seller and such lien shall
not have been released within 10 Business Days; or
(q) The Pension Benefit Guaranty Corporation shall, or
shall indicate its intention to, file notice of a lien pursuant to Section 4068
of ERISA with regard to any of the assets of the Originator and, within 10
Business Days of the earlier of the filing of such lien or such indication of
intent to file notice of such lien, such lien shall not have been released or
such indication shall not have been revoked, as applicable.
V-3
EXHIBIT VI
DIRECT DILUTION ITEMS
Calculation of Direct Dilution Items. The following Direct Dilution
Items shall be calculated as set forth herein and such amounts shall be included
in each Interim Receivables Report and each Monthly Receivables Report:
(a) Image Allowance Program Rebates Amount. The Image
Allowance Program Rebates Amount for each Collection Period shall equal the sum
of (i) the 12 month rolling average, as reflected on the Originator's books and
records as of the last day of each such month, of the aggregate incentive
rebates to distributors of "CITGO" branded gasoline for volumes sold through
their qualified retail locations to the motoring public and (ii) the product of
(A) 3 and (B) the standard deviation of the amount described in clause (i)
above.
(b) Premium Unleaded Rebates Amount. The Premium Unleaded
Rebates Amount for each Collection Period shall equal the sum of (i) the 12
month rolling average, as reflected on the Originator's books and records as of
the last day of each such month, of the aggregate rebates to distributors of
"CITGO" branded gasoline for the sale of incremental volumes of premium unleaded
gasoline and (ii) the product of (A) 3 and (B) the standard deviation of the
amount described in clause (i) above.
(c) Net Outs Amount. The Net Outs Amount for each
Collection Period shall equal the sum of (i) the 12 month rolling average, as
reflected on the Originator's books and records as of the last day of each such
month, of the total amount of netting out of receivables with payables between
the Originator and distributors of "CITGO" branded gasoline and (ii) the product
of (A) 3 and (B) the standard deviation of the amount described in clause (i)
above.
(d) Co-op Credits Amount. The Co-op Credits Amount for
each Collection Period shall equal the sum of (i) the 12 month rolling average,
as reflected on the Originator's books and records as of the last day of each
such month, of the aggregate co-op credits to distributors of "CITGO" branded
gasoline based on sales volumes and (ii) the product of (A) 3 and (B) the
standard deviation of the amount described in clause (i) above.
(e) Credit Card Credits Amount. The Credit Card Credits
Amount for each Collection Period shall equal the sum of (i) the 12 month
rolling average, as reflected on the Originator's books and records as of the
last day of each such month, of the credits to distributors of "CITGO" branded
gasoline for charges debited to retail customers' credit card accounts for the
first 5 days of each Collection Period and (ii) the product of (A) 3 and (B) the
standard deviation of the amount described in clause (i) above.
(f) Branded Discounts Amount. The Branded Discounts
Amount for each Collection Period shall equal 1% of the total sales of Branded
Receivables arising during the prior Collection Period.
VI-1
(g) Miscellaneous Amount. The Miscellaneous Amount shall
equal the sum of (i) the 12 month rolling average, as reflected on the
Originator's books and records as of the last day of each such month, of the
dilutive items not related to sales and not covered by items (a) through (f)
above and (ii) the product of (A) 3 and (B) the standard deviation of the amount
described in clause (i) above.
VI-2
EXHIBIT VII
SUPPLEMENTAL PERFECTION REPRESENTATIONS,
WARRANTIES AND COVENANTS
In addition to the representations, warranties and covenants contained
in Exhibit III and Exhibit IV hereof, the Seller and the Servicer, as
applicable, hereby makes the following additional representations, warranties
and covenants:
1. Receivables; Lock-Box Accounts.
(a) The Receivables constitute "accounts", "general
intangibles" or "tangible chattel paper", each within the meaning of the
applicable UCC.
(b) Lock-Box Accounts. Each Lock-Box Account constitutes
a "deposit account" within the meaning of the applicable UCC.
2. Creation of Security Interest. The Seller owns and
has good and marketable title to the Receivables and Lock-Box Accounts (and the
related post office boxes), free and clear of any Adverse Claim. The Agreement
creates a valid and continuing security interest (as defined in the applicable
UCC) in the Receivables and the Lock-Box Accounts (and the related post office
boxes) in favor of the Issuer, which security interest is prior to all other
Adverse Claims and is enforceable as such as against any creditors of and
purchasers from the Seller.
3. Perfection.
(a) General. The Seller has or has caused or will or will
cause within ten days after the date hereof, the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law and enter into Lock-Box Agreements in order
to perfect the sale of the Receivables from the Originator to the Seller
pursuant to the Purchase and Sale Agreement and the security interest granted by
the Seller to the Issuer in the Receivables hereunder.
(b) Tangible Chattel Paper. With respect to any
Receivable that constitutes "tangible chattel paper", the Servicer is in
possession of the original copies of the tangible chattel paper that constitute
or evidence such Receivables, and the Seller has filed and has caused the
Originator to file, or will file or will cause the Originator to file within ten
days after the date hereof, the financing statements described in paragraph (a)
above, each of which will contain a statement that: "A purchase of or a grant of
a security interest in any property described in this financing statement will
violate the rights of the Issuer." The Receivables to the extent they are
evidenced by "tangible chattel paper" do not have any marks or notations
indicating that they have been pledged, assigned or otherwise conveyed to any
Person other than the Seller or the Purchaser.
(c) Lock-Box Accounts. With respect to all Lock-Box
Accounts (and all related post office boxes), the Seller has delivered to the
Agent, on behalf of the Issuer, a fully executed Lock-Box Agreement pursuant to
which the applicable Lock-Box Bank has agreed,
VII-1
following the occurrence and continuation of a Termination Event, to comply with
all instructions given by the Agent with respect to all funds on deposit in such
Lock-Box Account (and all funds sent to the respective post office box), without
further consent by the Seller or the Servicer.
4. Priority.
(a) Other than the transfer of the Receivables by the
Originator to the Seller pursuant to the Purchase and Sale Agreement and the
grant of security interest by the Seller to the Issuer in the Receivables and
Lock-Box Accounts (and the related post office box) hereunder, neither the
Seller nor the Originator has pledged, assigned, sold, conveyed, or otherwise
granted a security interest in any of the Receivables or Lock-Box Accounts (and
the related post office box) to any other Person.
(b) Neither the Seller nor the Originator has authorized,
or is aware of, any filing of any financing statement against the Seller or the
Originator that include a description of collateral covering the Receivables or
all other collateral pledged to the Issuer pursuant to the Transaction
Documents, other than any financing statement filed pursuant to the Purchase and
Sale Agreement and the Agreement or financing statements that have been validly
terminated prior to the date hereof.
(c) The Seller is not aware of any judgment, ERISA or tax
lien filings against either the Seller or the Originator.
(d) None of the Lock-Box Accounts (and the related post
office boxes) are in the name of any Person other than the Seller or the Agent.
Neither the Seller, the Servicer or the Originator has consented to any Lock-Box
Bank's complying with instructions of any person other than the Agent.
5. Survival of Supplemental Representations.
Notwithstanding any other provision of the Agreement or any other Transaction
Document, the representations contained in this Exhibit VII shall be continuing,
and remain in full force and effect until such time as all the Capital has
finally been paid in full and all other obligations of the Seller under the
Agreement or any other Transaction Documents have been fully performed.
6. No Waiver. The parties to the Agreement: (i) shall
not, without obtaining a written confirmation of the then-current rating of the
Notes by the rating agencies then rating the Notes, waive any of the
representations set forth in this Exhibit VII; (ii) shall provide the rating
agencies rating the Notes with prompt written notice of any breach of any
representations set forth in this Exhibit VII, and (iii) shall not, without
obtaining a written confirmation of the then-current rating of the Notes by the
rating agencies then rating the Notes (as determined after any adjustment or
withdrawal of the ratings following notice of such breach) waive a breach of any
of the representations set forth in this Exhibit VII.
7. Seller or Servicer to Maintain Perfection and
Priority. In order to evidence the interests of the Issuer under this Agreement,
the Seller or Servicer shall, from time to time take such action, or execute and
deliver such instruments (other than filing financing statements) as may be
necessary or advisable (including, without limitation, such actions as are
VII-2
requested by the Agent (on behalf of the Issuer)) to maintain and perfect, as a
first-priority interest, the Issuer's security interest in the Receivables, and
all other collateral pledged to the Issuer pursuant to the Transaction
Documents. The Seller or Servicer shall, from time to time and within the time
limits established by law, prepare and present to the Agent for the Agent's
authorization and approval all financing statements, amendments, continuations
or initial financing statements in lieu of a continuation statement in the, or
other filings necessary to continue, maintain and perfect the Issuer's security
interest in the Receivables, and all other collateral pledged to the Issuer
pursuant to the Transaction Documents as a first-priority interest. The Agent's
approval of such filings shall authorize the Seller or Servicer to file such
financing statements under the UCC without the signature of the Seller, the
Originator or the Agent where allowed by applicable law. Notwithstanding
anything else in the Transaction Documents to the contrary, neither the Seller,
the Servicer, nor the Originator, shall have any authority to file a
termination, partial termination, release, partial release or any amendment that
deletes the name of a debtor or excludes collateral of any such financing
statements, without the prior written consent of the Agent.
VII-3
SCHEDULE I
CREDIT AND COLLECTION POLICY
SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
SCHEDULE III
TRADE NAMES
CITGO Funding Corporation
SCHEDULE IV
SPECIAL CONCENTRATION PERCENTAGES
None.
SCHEDULE V
DESCRIPTION OF RECEIVABLES
As used in the Agreement, Receivables shall include all receivables originated
by the following "Customer Groups" of the Originator:
A. Using the "CITGO" tradename
CODE CUSTOMER GROUPS
---- ---------------
CLOS-BR CITGO Light Oil Sales - Branded Marketer
B. Not using the "CITGO" tradename
CODE CUSTOMER GROUPS
---- ---------------
CLOS-UB CITGO Light Oil Sales - Unbranded
CLOS-UM CITGO Light Oil Sales - Unbranded Marketer
CLOC-AV CITGO Light Oil Commercial - Aviation
CLOC-CM CITGO Light Oil Commercial - Commercial
CLOC-CR CITGO Light Oil Commercial - Commercial Resale
CLOC-RF CITGO Light Oil Commercial - Racing Fuel
CSAD-AV CITGO Supply & Dist. - Aviation
CSAD-CR CITGO Supply & Dist. - Commercial Resale
CSAD-DM CITGO Supply & Dist. - Domestic
CSAD-EX CITGO Supply & Dist. - Exchange Sales
CSAD-MI CITGO Supply & Dist. - Misc. Sales
SCHEDULE VI
LIST OF OFFICES WHERE RECORDS CONCERNING RECEIVABLES ARE KEPT
CITGO PETROLEUM CORPORATION
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CITGO FUNDING COMPANY, L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ANNEX A
FORM OF NOTICE OF REQUEST TO INCREASE PURCHASED INTEREST
(Attached)
ANNEX A
Form of Notice For Initial
And Incremental Purchases
Societe Generale
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Asset Securitization
Re: Receivables Purchase Agreement dated as of February 28, 2003
among CITGO Funding Company, L.L.C., as Seller, CITGO
Petroleum Corporation, as Servicer, Asset One Securitization,
LLC, as Issuer and Societe Generale, as Agent (the
"Agreement")
Ladies and Gentlemen:
This Notice is delivered to you pursuant to Section 1.2 of the
Agreement. Unless otherwise defined herein or the context otherwise requires,
all capitalized terms used herein will have the respective meanings assigned to
them in the Agreement.
The Seller hereby requests that [the initial] [an incremental]
purchase be made by the Issuer on _________, 20__ in the amount of $__________,
for Receivables.
The Purchased Interest after giving effect to the incremental
purchase proposed hereby shall be [_____________].
The Seller hereby certifies and warrants that on the date on
which the purchase requested hereby is made (and the Seller, by accepting the
payment of the purchase price relating to such purchase, will be deemed to have
certified that), (i) the representations and warranties of the Seller contained
in Exhibit III of the Agreement are correct on and as of the date of such
purchase as though made on and as of such date, (ii) the Seller is in compliance
with the covenants set forth in Exhibit IV of the Agreement and (iii) all
applicable conditions precedent to such purchase have been fully satisfied.
The Seller agrees that if, prior to the time that the purchase
requested hereby is made, any matter certified to herein will not be true and
correct at such time as if then made, it will immediately so notify the Issuer
and the Agent.
Annex A-1
Please wire transfer the proceeds of the requested purchase to
the Seller's account indicated below:
Seller's account
Amount to be ------------------------------- Name, Address, etc.
Transferred Name Account No. of Transferee Bank
----------- ---- ----------- ------------------
$__________ ____ ___________ __________________
__________________
__________________
__________________
__________________
Attention:________
The Seller has caused this notice to be executed and
delivered, and the certifications and warranties contained herein to be made, by
its duly authorized officer this ______ day of _________________, 20__.
CITGO FUNDING COMPANY, L.L.C.
By:_____________________________________
Name:
Title:
Phone No.:
Fax No.:
Annex A-2
ANNEX B
FORM OF NOTICE OF REDUCTION OF PURCHASED INTEREST
(Attached)
ANNEX B
Form of Notice of Election
of Reduction in Capital
Societe Generale
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Asset Securitization
Re: Receivables Purchase Agreement dated as of February 28, 2003
among CITGO Funding Company, L.L.C., as Seller, CITGO
Petroleum Corporation, as Servicer, Asset One Securitization,
LLC, as Issuer and Societe Generale, as Agent (the
"Agreement")
Gentlemen:
This notice is delivered to you pursuant to Section 1.4(f)(i).
Unless otherwise defined herein or the context otherwise requires, all
capitalized terms used herein will have the respective meanings assigned to them
in the Agreement.
The undersigned hereby notifies you that pursuant to Section
1.4(f)(i) of the Agreement, it has elected to reduce a Portion of Capital by
$__________ (the "Reduction Amount") and, therefore, commencing on
_______________, 20__, reinvestment of Collections with respect to such Portion
of Capital shall be suspended until the amount of Collections not so reinvested
shall equal the Reduction Amount.
This notice has been executed and delivered by a duly
authorized officer of the undersigned this ____ day of _____________, 20__.
CITGO FUNDING COMPANY, L.L.C.,
as Seller
By:___________________________________
Title:
Annex B-1
ANNEX C
FORM OF LOCK-BOX AGREEMENT
(Attached)
ANNEX C
FORM OF LOCKBOX AGREEMENT
[DATE]
[LOCKBOX BANK NAME AND
ADDRESS]
Re: Lockbox Agreement (this "Agreement")
for Lockbox Number(s) [_________] and [_________]
Lockbox Account Number(s) [_________] and [_________]
Ladies and Gentlemen:
CITGO PETROLEUM CORPORATION, a Delaware corporation
("Originator"), hereby notifies you that in connection with certain transactions
involving the trade receivables of Originator, Originator hereby transfers
exclusive ownership and control of its lockbox number(s) [_________] and
[_________] (the "Lockbox") and the corresponding lockbox account number(s)
[_________] and [_________] maintained with you (the "Lockbox Account") to CITGO
Funding Company, L.L.C. ("SPV") (or its assigns or designees), and SPV hereby
notifies you that in connection with such transactions SPV hereby transfers
exclusive dominion and control of the Lockbox and the Lockbox Account to Societe
Generale, in its capacity as agent for and on behalf of certain other parties
(the "Agent"). Originator has agreed to act as initial servicer of such
receivables for SPV and the Agent (Originator, or any successor servicer, the
"Servicer"). Originator shall have no ownership of, or rights in, the Lockbox or
Lockbox Account or any funds therein.
In connection with the foregoing, SPV and the Agent hereby
jointly instruct you, beginning on the date hereof until you are otherwise
notified by the Agent in writing, (i) to change the name on the Lockbox and the
Lockbox Account to "CITGO Funding Company, L.L.C. and Societe Generale, as Agent
for and on behalf of certain parties"; (ii) to follow your usual operating
procedures for the handling of any checks, except as modified by this Agreement;
(iii) to follow your usual procedures in the event the Lockbox, the Lockbox
Account or any check should be or become the subject of any writ, levy, order or
other similar judicial or regulatory order or process, except as modified by
this Agreement; (iv) to collect the monies, checks, instruments and other items
of payment mailed to the Lockbox; (v) to maintain the Lockbox Account as a
"Deposit Account" (as defined in Section 9-102 of the Uniform Commercial Code
as in effect in the State of New York (the "Applicable UCC")); (vi) to deposit
in the Lockbox Account all such monies, checks, instruments and other items of
payment (unless
Annex C-1
otherwise instructed by the Agent); and (vii) to transfer all collected and
available funds in the Lockbox Account in accordance with the instructions of
the Servicer; provided, however, that, at all times from and after the date of
your receipt of notice from the Agent of termination of the Servicer's access to
the Lockbox and Lockbox Account, which notice may be in the form attached hereto
as Annex A or in any other form that gives you reasonable notice of such
termination (the "Agent's Notice"), such funds shall be transferred by you
directly to the Agent, at its address set forth below its signature hereto or as
the Agent otherwise notifies you, or otherwise in accordance with the
instructions of the Agent. You are hereby further instructed to permit the
Servicer and the Agent to obtain upon request any information relating to the
Lockbox and the Lockbox Account, including, without limitation, any information
regarding the balance or activity of the Lockbox Account.
Originator and SPV also hereby jointly notify you that
notwithstanding anything herein or elsewhere to the contrary, the Agent, or any
party designated in writing by the Agent, shall be irrevocably entitled to
exercise any and all rights in respect of or in connection with the Lockbox and
the Lockbox Account, including, without limitation, the right to specify when
payments are to be made out of or in connection with the Lockbox and the Lockbox
Account. At all times from and after the date of your receipt of the Agent's
Notice, neither Originator (including, in its capacity as Servicer), SPV nor any
of our respective affiliates shall be given any access to the Lockbox or Lockbox
Account.
The Agent's Notice may be personally served or sent by
facsimile or U.S. mail, certified return receipt requested, to the address or
facsimile number set forth under your signature to this letter agreement (or to
such other address or facsimile number as to which you shall notify the Agent in
writing). If the Agent's Notice is given by facsimile or electronic mail, it
will be deemed to have been received when the Agent's Notice is sent and receipt
is confirmed by telephone or other electronic means. All other notices will be
deemed to have been received when actually received or, in the case of personal
delivery, delivered.
The monies, checks, instruments and other items of payment
mailed to the Lockbox and the funds deposited into the Lockbox Account will not
be subject to deduction, set-off, banker's lien, or any other right in favor of
any person other than the Agent (except that you may set off the face amount of
any items (including, without limitation, checks and automated clearinghouse
transactions) returned unpaid because of uncollected or insufficient funds in
accordance with your customary practices). To the extent that funds in the
Lockbox Account are insufficient, Originator shall pay you for such returned
items. All service charges and fees with respect to the Lockbox and Lockbox
Account shall continue to be payable by Originator under the arrangements
currently in effect. Originator hereby authorizes you, without prior notice,
from time to time to debit any other account Originator may have with you for
the amount or amounts due you under the two preceding sentences.
By executing this Agreement, you (a) irrevocably waive and
agree not to assert, claim or endeavor to exercise, (b) irrevocably bar and
estop yourself from asserting, claiming or exercising and (c) acknowledge that
you have not heretofore received a notice, writ, order or any form of legal
process from any other party asserting, claiming or exercising, any right of
set-off, banker's lien, security interest or other purported form of claim with
respect to the Lockbox or Lockbox Account or any funds from time to time therein
(except for security interests which
Annex C-2
have been terminated on or prior to the date hereof). You agree to give the
Agent and SPV prompt notice if the Lockbox or the Lockbox Account becomes
subject to any writ, judgment, warrant of attachment, execution or similar
process. Except for your right to payment of your service charges and fees from
Originator and to make deductions for returned items, you shall have no rights
in the Lockbox or Lockbox Account or funds therein. To the extent you may ever
have such rights, you hereby expressly subordinate all such rights to all rights
of the Agent.
In addition, as collateral security for SPV's obligations to
the Agent and certain other persons in connection with the transactions
referenced in the first paragraph of this Agreement, SPV hereby grants to the
Agent a present and continuing security interest in (a) the Lockbox and the
Lockbox Account, (b) all general intangibles and privileges in respect of the
Lockbox or the Lockbox Account, and (c) all cash, checks, money orders and other
items of value of SPV now or hereafter paid, deposited, credited, held (whether
for collection, provisionally or otherwise) or otherwise, in the possession or
under the control of, or in transit to you or any agent, bailee or custodian
thereof in respect of the Lockbox or the Lockbox Account, and all proceeds of
the foregoing (collectively, "Receipts"). You acknowledge and agree that (i) the
Agent has "Control" (as defined in Section. 9-104 of the Applicable UCC) of the
Lockbox Account and you are required to comply with the instructions of the
Agent directing disposition of the funds in the Lockbox Account without further
consent by the Originator, Servicer, SPV or any affiliate thereof and (ii) you
shall at all times maintain the Lockbox Account as a "Deposit Account" (as
defined in Section 9-102 of the Applicable UCC). The Agent hereby appoints you
as the Agent's bailee for the Lockbox, Lockbox Account and all Receipts for the
purpose of perfecting the Agent's security interest in such collateral, and you
hereby accept such appointment and agree to be bound by the terms of this
Agreement. SPV hereby agrees to such appointment and further agrees that you, on
behalf of the Agent, shall be entitled to exercise, as directed in accordance
with the terms of this Agreement, any and all rights which the Agent may have in
connection with the transactions referenced in the first paragraph of this
Agreement or under applicable law with respect to the Lockbox, Lockbox Account,
all Receipts and all other collateral described in this paragraph.
You will not be liable to Originator, SPV or the Agent for any
expense, claim, loss, damage or cost ("Damages") arising out of or relating to
your performance under this Agreement other than those Damages which result
directly from your acts or omissions constituting gross negligence. In no event
will you be liable for any special, indirect, exemplary or consequential
Damages, including but not limited to lost profits.
Originator shall indemnify you against, and hold you harmless
from, any and all liabilities, claims, costs, expenses and damages of any nature
(including but not limited to allocated costs of staff counsel, other reasonable
attorneys' fees and any fees and expenses incurred in enforcing this Agreement)
in any way arising out of or relating to disputes or legal actions concerning
this Agreement, the Lockbox or the Lockbox Account. Originator agrees to pay to
you, upon receipt of your invoice, all costs, expenses and attorneys' fees
(including allocated costs for in-house legal services) incurred by you in
connection with the preparation and administration (including any amendments)
and enforcement of this Agreement. This paragraph does not apply to any cost or
damage attributable to your negligence or intentional misconduct. Originator's
obligations under this paragraph shall survive termination of this Agreement.
Annex C-3
Notwithstanding any of the other provisions in this Agreement,
in the event of the commencement of a case pursuant to ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Code, filed by or against SPV, or in the event of the commencement of any
similar case under then applicable federal or state law providing for the relief
of debtors or the protection of creditors by or against SPV, you may act as you
deem necessary to comply with all applicable provisions of governing statutes
and shall be held harmless from any claim of any of the parties for so doing,
provided that you shall not release any funds other than in accordance with (i)
this Agreement or (ii) an order of a court of competent jurisdiction.
You hereby agree not to institute or join any other person or
entity in instituting, any suit pursuant to ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any
similar suit or proceeding under then applicable state or federal law providing
for the relief of debtors or the protection of creditors, against SPV prior to
the date which is one year and one day after payment of all obligations of SPV
to the Agent (and the parties for which it is acting as agent) are paid in full.
This section shall survive any termination of this Agreement.
You may terminate this Agreement upon 30 days' prior written
notice to SPV and the Agent. The Agent may terminate this Agreement upon 30
days' prior written notice to SPV and you. Neither SPV nor the Servicer may
terminate this Agreement, except with the written consent of the Agent and upon
30 days' prior written notice to you and the Agent. Originator may not terminate
this Agreement. Incoming mail addressed to the Lockbox or Lockbox Account
(including, without limitation, any direct funds transfer to the Lockbox
Account) received after any such termination shall be forwarded in accordance
with the Agent's instructions.
You shall not assign or transfer your rights or obligations
hereunder (other than to the Agent) without the prior written consent (which
consent shall not be unreasonably withheld) of the Agent and SPV. Originator
(except to the extent of its limited capacity as Servicer) shall not assign or
transfer its rights and obligations hereunder without your consent and the
consent of the Agent. Neither SPV nor Servicer shall not assign or transfer its
rights or obligations hereunder without the consent of the Agent. The Agent may
at any time assign its rights and obligations hereunder upon notice to the other
parties hereto. Subject to the preceding sentences, this Agreement shall be
binding upon each of the parties hereto and their respective successors and
assigns, and shall inure to the benefit of, and be enforceable by, the Agent,
each of the parties hereto and their respective successors and assigns.
This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof, and may not be altered,
modified or amended in any respect, nor except as set forth in the preceding
paragraph may any right, power or privilege of any party hereunder be waived or
released or discharged, except upon execution by you, SPV and the Agent of a
written instrument so providing. The terms and conditions of any agreement
between Originator and/or SPV and you (a "Lockbox Service Agreement") (whether
now existing or executed hereafter) with respect to the lockbox arrangements, to
the extent not inconsistent with this Agreement, are made part of this Agreement
with respect to matters not explicitly covered in this Agreement. In the event
that any provision in this Agreement is in conflict with, or inconsistent with,
any provision of any such Lockbox Service Agreement, this Agreement will
exclusively govern and control. Each party agrees to take all actions reasonably
requested by
Annex C-4
any other party to carry out the purposes of this Agreement or to preserve and
protect the rights of each party hereunder.
Except as otherwise expressly provided herein, notice, demand
or other communication required or permitted to be given hereunder shall be in
writing and may be (a) personally served, (b) sent by courier service, (c) sent
by facsimile or electronic mail or (d) sent by United States mail and shall be
deemed to have been given when (a) delivered in person, (b) delivered by courier
service, (c) upon confirmation by telephone or other electronic means of receipt
of the telex, facsimile or electronic mail or (d) five business days after
deposit in the United States mail (registered or certified, with postage prepaid
and properly addressed); provided, however, that notices to the Agent hereunder
shall not be effective until actually received by the Agent. For the purposes
hereof, the addresses of the parties hereto shall be as set forth below each
party's name below, or, as to each party, at such other address as may be
designated by such party in a written notice to the other parties.
This Agreement and the rights and obligations of the parties
hereunder will be governed by and construed and interpreted in accordance with
the internal laws of the State of New York. The SPV, the Agent and you agree
that New York is your "jurisdiction" for purposes of Section 9-304 of the
Applicable UCC. This Agreement may be executed in any number of counterparts and
by different parties hereto on separate counterparts, each of which
counterparts, when so executed shall be deemed to be an original and all of
which counterparts, taken together, shall constitute one and the same agreement.
Delivery of an executed counterpart of the signature pages of this Agreement by
telecopier or other electronic means shall be equally effective as delivery of a
manually executed counterpart.
Please evidence your agreement to the terms of, and
acknowledge receipt of, this Agreement by signing in the space provided below.
Very truly yours,
CITGO PETROLEUM CORPORATION,
as Originator and Servicer
By:___________________________
Name:_________________________
Title:________________________
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Annex C-5
CITGO FUNDING COMPANY, L.L.C.
By:___________________________
Name:_________________________
Title:________________________
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Annex C-6
SOCIETE GENERALE, as Agent
By:___________________________________
Name:_________________________________
Title:________________________________
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Asset Securitization Group
ACKNOWLEDGED AND AGREED:
[NAME OF LOCKBOX BANK]
By:___________________________________
Name:_________________________________
Title:________________________________
Date:_________________________________
[ADDRESS]
Attention: [__________]
Telephone: [__________]
Telecopy: [___________]
Annex C-7
ANNEX A TO
LOCKBOX AGREEMENT
[NAME AND ADDRESS OF LOCKBOX BANK]
Re: Lockbox Agreement for
Lockbox Numbers [___________] and [___________]
and Lockbox Account Numbers [___________] and [___________]
Ladies and Gentlemen:
Reference is made to the Lockbox Agreement, dated [______________],
2003 (the "Lockbox Agreement"), among CITGO PETROLEUM CORPORATION, CITGO FUNDING
COMPANY, L.L.C., the undersigned, as Agent, and you concerning the
above-described lockboxes and lockbox accounts. We hereby give you notice of the
termination of the Servicer's access to the Lockbox and Lockbox Accounts as
provided in the Lockbox Agreement.
We hereby instruct you not to permit any other party to have access to
the above-described lockboxes and lockbox accounts and to make all payments to
be made by you out of or in connection thereunder directly to the undersigned
upon our instructions, at our address set forth above.
Very truly yours,
SOCIETE GENERALE, as Agent
By:_____________________________
Name:___________________________
Title:__________________________
By:_____________________________
Name:___________________________
Title:__________________________
Annex C-8
ANNEX D-1
FORM OF INTERIM RECEIVABLES REPORT
ANNEX D-2
FORM OF MONTHLY RECEIVABLES REPORT
ANNEX E
FORM OF GENERAL CORPORATE OPINION
ANNEX F
FORM OF ENFORCEABILITY AND PERFECTION OPINION
ANNEX G
FORM OF TRUE SALE AND NONCONSOLIDATION OPINION
ANNEX H
FORM OF LLC AGREEMENT OPINION
ANNEX I
FORM OF CHOICE OF LAW OPINION