RECEIVABLES PURCHASE AGREEMENT
dated as of April 4, 2000
Among
ENERGIZER RECEIVABLES FUNDING CORPORATION, as Seller,
EVEREADY BATTERY COMPANY, INC., as Servicer,
FALCON ASSET SECURITIZATION CORPORATION
and
BANK ONE, NA (MAIN OFFICE CHICAGO)
as Agent
RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement dated as of April 4, 2000 is among
ENERGIZER RECEIVABLES FUNDING CORPORATION, a Delaware corporation ("Seller"),
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EVEREADY BATTERY COMPANY, INC., a Delaware corporation ("Eveready"), as initial
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Servicer (the Servicer together with Seller, the "Seller Parties" and each a
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"Seller Party"), the entities listed on Schedule A to this Agreement (together
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with any of their respective successors and assigns hereunder, the "Financial
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Institutions"), FALCON ASSET SECURITIZATION CORPORATION ("Conduit") and BANK
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ONE, NA (MAIN OFFICE CHICAGO), as agent for the Purchasers hereunder or any
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successor agent hereunder (together with its successors and assigns hereunder,
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the "Agent"). Unless defined elsewhere herein, capitalized terms used in this
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Agreement shall have the meanings assigned to such terms in Exhibit I.
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PRELIMINARY STATEMENTS
Seller desires to transfer and assign Purchaser Interests to the Purchasers
from time to time.
Conduit may, in its absolute and sole discretion, purchase Purchaser
Interests from Seller from time to time.
In the event that Conduit declines to make any purchase, the Financial
Institutions shall, at the request of Seller, purchase Purchaser Interests from
time to time. In addition, the Financial Institutions have agreed to provide a
liquidity facility to Conduit in accordance with the terms hereof.
Bank One, NA (Main Office Chicago) has been requested and is willing to act
as Agent on behalf of Conduit and the Financial Institutions in accordance with
the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility. Upon the terms and subject to the
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conditions hereof, Seller may, at its option, sell and assign Purchaser
Interests to the Agent for the benefit of one or more of the Purchasers. In
accordance with the terms and conditions set forth herein, Conduit may, at its
option, instruct the Agent to purchase on behalf of Conduit, or if Conduit shall
decline to purchase, the Agent shall purchase, on behalf of the Financial
Institutions, Purchaser Interests from time to time in an aggregate amount not
to exceed at such time the lesser of (i) the Purchase Limit and (ii) the
aggregate amount of the Commitments during the period from the date hereof to
but not including the Facility Termination Date.
Section 1.2 Increases.
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Seller shall provide the Agent with at least one Business Days' prior
notice in a form set forth as Exhibit II hereto of each Incremental Purchase (a
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"Purchase Notice"). Each Purchase Notice shall be subject to Section 6.2 hereof
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and, except as set forth below, shall be irrevocable and shall specify the
requested Purchase Price (which shall be at least $1,000,000 and integral
multiples of $100,000 in excess thereof) and date of purchase and, in the case
of an Incremental Purchase to be funded by the Financial Institutions, the
requested Discount Rate and Tranche Period. Following receipt of a Purchase
Notice, the Agent will determine whether Conduit agrees to make the purchase.
Without the prior approval of Conduit, Seller shall not request more than three
proposed purchases in any calendar month and, unless approved by Conduit in its
sole discretion, any such requests in excess of three in any calendar month
shall be void. If Conduit declines to make a proposed purchase, Seller may
cancel the Purchase Notice or, in the absence of such a cancellation, the
Incremental Purchase of the Purchaser Interest will be made by the Financial
Institutions. On the date of each Incremental Purchase, upon satisfaction of
the applicable conditions precedent set forth in Article VI, Conduit or the
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Financial Institutions, as applicable, shall deposit to the Facility Account, in
immediately available funds, no later than 12:00 noon (Chicago time), an amount
equal to (i) in the case of Conduit, the aggregate Purchase Price of the
Purchaser Interests Conduit is then purchasing or (ii) in the case of a
Financial Institution, such Financial Institution's Pro Rata Share of the
aggregate Purchase Price of the Purchaser Interests the Financial Institutions
are purchasing.
Section 1.3 Decreases. Seller shall provide the Agent with prior
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written notice in conformity with the Required Notice Period (a "Reduction
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Notice") of any proposed reduction of Aggregate Capital from Collections. Such
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Reduction Notice shall designate (i) the date (the "Proposed Reduction Date")
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upon which any such reduction of Aggregate Capital shall occur (which date shall
give effect to the applicable Required Notice Period), and (ii) the amount of
Aggregate Capital to be reduced which shall be applied ratably to the Purchaser
Interests of Conduit and the Financial Institutions in accordance with the
amount of Capital (if any) owing to Conduit, on the one hand, and the amount of
Capital (if any) owing to the Financial Institutions (ratably, based on their
respective Pro Rata Shares), on the other hand (the "Aggregate Reduction").
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Only one (1) Reduction Notice shall be outstanding at any time. No Aggregate
Reduction will be made following the occurrence of the Amortization Date without
the consent of the Agent.
Section 1.4 Payment Requirements. All amounts to be paid or deposited
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by any Seller Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (Chicago
time) on the day when due in immediately available funds, and if not received
before 11:00 a.m. (Chicago time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the Agent, for the account of such Purchaser, at ▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ until the applicable Seller Party is otherwise notified
in writing by the Agent. Upon notice to Seller, the Agent may debit the
Facility Account for all amounts due and payable hereunder. All computations of
Yield, per annum fees calculated as part of any CP Costs, per annum fees
hereunder and per annum fees under the Fee Letter shall be made on the basis of
a year of 360 days for the actual number of days elapsed. If any amount
hereunder shall be payable on a day which is not a Business Day, such amount
shall be payable on the next succeeding Business Day.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Notwithstanding any limitation on recourse
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contained in this Agreement, Seller shall immediately pay to the Agent when due,
for the account of the relevant Purchaser or Purchasers on a full recourse
basis, (i) such fees as set forth in the Fee Letter (which fees shall be
sufficient to pay all fees owing to the Financial Institutions), (ii) all CP
Costs, (iii) all amounts payable as Yield, (iv) all amounts payable as Deemed
Collections (which shall be immediately due and payable by Seller and applied to
reduce outstanding Aggregate Capital hereunder in accordance with Sections 2.2
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and 2.3 hereof), (v) all amounts payable to reduce the Purchaser Interest, if
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required, pursuant to Section 2.6, (vi) all amounts payable pursuant to Article
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X, if any, (vii) all Servicer costs and expenses, including the Servicing Fee,
in connection with servicing, administering and collecting the Receivables,
(viii) all Broken Funding Costs and (ix) all Default Fees (collectively, the
"Obliga-tions"). If any Person fails to pay any of the Obligations when due,
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such Person agrees to pay, on demand, the Default Fee in respect thereof until
paid. Notwithstanding the foregoing, no provision of this Agreement or the Fee
Letter shall require the payment or permit the collection of any amounts
hereunder in excess of the maximum permitted by applicable law. If at any ▇▇▇▇
▇▇▇▇▇▇ receives any Collections or is deemed to receive any Collections, Seller
shall immediately pay such Collections or Deemed Collections to the Servicer for
application in accordance with the terms and conditions hereof and, at all times
prior to such payment, such Collections or Deemed Collections shall be held in
trust by Seller for the exclusive benefit of the Purchasers and the Agent.
Section 2.2 Collections Prior to Amortization. Prior to the
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Amortization Date, any Collections and/or Deemed Collections received by the
Servicer shall be set aside and held in trust by the Servicer for the payment of
any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in
this Section 2.2. If at any time any Collections and/or Deemed Collections are
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received by the Servicer prior to the Amortization Date, (i) the Servicer shall
set aside the Termination Percentage (hereinafter defined) of Collections
evidenced by the Purchaser Interests of each Terminat-ing Financial Institution
and (ii) Seller hereby requests and the Purchasers (other than any Terminating
Financial Institutions) hereby agree to make, simultaneously with such receipt,
a reinvestment (each a "Reinvestment") with that portion of the balance of each
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and every Collection and Deemed Collection received by the Servicer that is part
of any Purchaser Interest (other than any Purchaser Interests of Terminating
Financial Institutions), such that after giving effect to such Reinvestment, the
amount of Capital of such Purchaser Interest immediately after such receipt and
corresponding Reinvestment shall be equal to the amount of Capital immediately
prior to such receipt. On each Settlement Date prior to the occurrence of the
Amortization Date, the Servicer shall remit to the Agent's account the amounts
set aside during the preceding Settlement Period that have not been subject to a
Reinvestment and apply such amounts (if not previously paid in accordance with
Section 2.1) first, to reduce unpaid Obligations and second, to reduce the
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Capital of all Purchaser Interests of Terminating Financial Institutions,
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applied ratably to each Terminating Financial Institution according to its
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respective Termination Percentage. If such Capital and Obligations shall be
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reduced to zero, any additional Collections received by the Servicer (i) if
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applicable, shall be remitted to the Agent's account no later than 11:00 a.m.
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(Chicago time) to the extent required to fund any Aggregate Reduction on such
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Settlement Date and (ii) any balance remaining thereafter shall be remitted from
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the Servicer to Seller on such Settlement Date. Each Terminating Financial
Institution shall be allocated a ratable portion of Collections from the date of
any assignment by Conduit pursuant to Section 13.6 (the "Termination Date")
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until such Terminating Financing Institution's Capital shall be paid in full.
This ratable portion shall be calculated on the Termination Date of each
Terminating Financial Institution as a percentage equal to (i) Capital of such
Terminating Financial Institution outstanding on its Termination Date, divided
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by (ii) the Aggregate Capital outstanding on such Termination Date (the
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"Termination Percentage"). Each Terminating Financial Institution's Termination
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Percentage shall remain constant prior to the Amortization Date. On and after
the Amortization Date, each Termination Percentage shall be disregarded, and
each Terminating Financial Institution's Capital shall be reduced ratably with
all Financial Institutions in accordance with Section 2.3.
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Section 2.3 Collections Following Amortization. On the Amortization
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Date and on each day thereafter, the Servicer shall set aside and hold in trust,
for the holder of each Purchaser Interest, all Collections received on such day
and an additional amount, from Seller's assets, for the payment of any accrued
and unpaid Obligations owed by Seller and not previously paid by Seller in
accordance with Section 2.1. On and after the Amortization Date, the Servicer
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shall, at any time upon the request from time to time by (or pursuant to
standing instructions from) the Agent (i) remit to the Agent's account the
amounts set aside pursuant to the preceding sentence, and (ii) apply such
amounts to reduce the Capital associated with each such Purchaser Interest and
any other Aggregate Unpaids.
Section 2.4 Application of Collections. If there shall be insufficient
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funds on deposit for the Servicer to distribute funds in payment in full of the
aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable), the
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Servicer shall distribute such funds:
first, to the payment of the Servicer's reasonable out-of-pocket costs and
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expenses in connection with servicing, administering and collecting the
Receivables , including the Servicing Fee, if Seller or one of its Affiliates is
not then acting as the Servicer,
second, to the reimbursement of the Agent's costs of collection and
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enforcement of this Agreement,
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third, (to the extent applicable) to the ratable reduction of the Aggregate
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Capital (without regard to any Termination Percentage),
fourth, for the ratable payment of all other unpaid Obligations, provided
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that to the extent such Obligations relate to the payment of Servicer costs and
expenses, including the Servicing Fee, when Seller or one of its Affiliates is
acting as the Servicer, such costs and expenses will not be paid until after the
payment in full of all other Obligations, and
fifth, after the Aggregate Unpaids have been indefeasibly reduced to zero,
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to Seller.
Collections applied to the payment of Aggregate Unpaids shall be
distributed in accordance with the aforementioned provisions, and, giving effect
to each of the priorities set forth in Section 2.4 above, shall be shared
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ratably (within each priority) among the Agent and the Purchasers in accordance
with the amount of such Aggregate Unpaids owing to each of them in respect of
each such priority.
Section 2.5 Payment Recission. No payment of any of the Aggregate
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Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Agent (for application to the Person or Persons who suffered such
recission, return or refund) the full amount thereof, plus the Default Fee from
the date of any such recission, return or refunding.
Section 2.6 Maximum Purchaser Interests. Seller shall ensure that the
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Purchaser Interests of the Purchasers shall at no time exceed in the aggregate
100%. If the aggregate of the Purchaser Interests of the Purchasers exceeds
100%, Seller shall pay to the Agent within three (3) Business Days an amount to
be applied to reduce the Aggregate Capital (as allocated by the Agent), such
that after giving effect to such payment the aggregate of the Purchaser
Interests equals or is less than 100%.
Section 2.7 Clean Up Call. In addition to Seller's rights
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pursuant to Section 1.3, Seller shall have the right (after providing written
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notice to the Agent in accordance with the Required Notice Period), at any time
following the reduction of the Aggregate Capital to a level that is less than
10.0% of the original Purchase Limit, to repurchase from the Purchasers all, but
not less than all, of the then outstanding Purchaser Interests. The purchase
price in respect thereof shall be an amount equal to the Aggregate Unpaids
through the date of such repurchase, payable in immediately available funds.
Such repurchase shall be without representation, warranty or recourse of any
kind by, on the part of, or against any Purchaser or the Agent.
ARTICLE III
CONDUIT FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with respect to the
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Capital associated with each Purchaser Interest of Conduit for each day that any
Capital in respect of such Purchaser Interest is outstanding. Each Purchaser
Interest funded substantially with Pooled Commer-cial Paper will accrue CP Costs
each day on a pro rata basis, based upon the percentage share the Capital in
respect of such Purchaser Interest represents in relation to all assets held by
Conduit and funded substantially with Pooled Commercial Paper.
Section 3.2 CP Costs Payments. On each Settlement Date, Seller shall
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pay to the Agent (for the benefit of Conduit) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the Capital associated with all
Purchaser Interests of Conduit for the immediately preceding Accrual Period in
accordance with Article II.
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Section 3.3 Calculation of CP Costs. On the tenth calendar day of each
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month or, if such day is not a Business Day, on the next succeeding Business
Day, Conduit shall calculate the aggregate amount of CP Costs for the applicable
Accrual Period and shall notify Seller of such aggregate amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each Purchaser Interest of
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the Financial Institutions shall accrue Yield for each day during its Tranche
Period at either the LIBO Rate or the Prime Rate in accordance with the terms
and conditions hereof. Until Seller gives notice to the Agent of another
Discount Rate in accordance with Section 4.4, the initial Discount Rate for any
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Purchaser Interest transferred to the Financial Institutions pursuant to the
terms and conditions hereof shall be the Prime Rate. If the Financial
Institutions acquire by assignment from Conduit any Purchaser Interest pursuant
to Article XIII, each Purchaser Interest so assigned shall each be deemed to
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have a new Tranche Period commencing on the date of any such assignment.
Section 4.2 Yield Payments. On the Settlement Date for each Purchaser
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Interest of the Financial Institutions, Seller shall pay to the Agent (for the
benefit of the Financial Institutions) an aggregate amount equal to the accrued
and unpaid Yield for the entire Tranche Period of each such Purchaser Interest
in accordance with Article II.
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Section 4.3 Selection and Continuation of Tranche Periods.
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(a) With consultation from (and approval by) the Agent, Seller shall
from time to time request Tranche Periods for the Purchaser Interests of the
Financial Institutions, provided that, if at any time the Financial Institutions
shall have a Purchaser Interest, Seller shall always request Tranche Periods
such that at least one Tranche Period shall end on the date specified in clause
(A) of the definition of Settlement Date.
(b) Seller or the Agent, upon notice to and consent by the other
received at least three (3) Business Days prior to the end of a Tranche Period
(the "Terminating Tranche") for any Purchaser Interest, may, effective on the
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last day of the Terminating Tranche: (i) divide any such Purchaser Interest
into multiple Purchaser Interests, (ii) combine any such Purchaser Interest with
one or more other Purchaser Interests that have a Terminating Tranche ending on
the same day as such Terminating Tranche or (iii) combine any such Purchaser
Interest with a new Purchaser Interests to be purchased on the day such
Terminating Tranche ends, provided, that in no event may a Purchaser Interest of
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Conduit be combined with a Purchaser Interest of the Financial Institutions.
Section 4.4 Financial Institution Discount Rates. Seller may select
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the LIBO Rate or the Prime Rate for each Purchaser Interest of the Financial
Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least three (3)
Business Days prior to the expiration of any Terminating Tranche with respect to
which the LIBO Rate is being requested as a new Discount Rate and (ii) at least
one (1) Business Day prior to the expiration of any Terminating Tranche with
respect to which the Prime Rate is being requested as a new Discount Rate, give
the Agent irrevocable notice of the new Discount Rate for the Purchaser Interest
associated with such Terminating Tranche. Until Seller gives notice to the
Agent of another Discount Rate, the initial Discount Rate for any Purchaser
Interest transferred to the Financial Institutions pursuant to the terms and
conditions hereof shall be the Prime Rate.
Section 4.5 Suspension of the LIBO Rate. (a) If any Financial
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Institution notifies the Agent that it has determined that funding its Pro Rata
Share of the Purchaser Interests of the Financial Institutions at a LIBO Rate
would violate any applicable law, rule, regulation or directive of any
governmental or regulatory authority, whether or not having the force of law, or
that (i) deposits of a type and maturity appropriate to match fund its Purchaser
Interests at such LIBO Rate are not available or (ii) such LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Purchaser Interest at
such LIBO Rate, then the Agent shall suspend the availability of such LIBO Rate
and require Seller to select the Prime Rate for any Purchaser Interest accruing
Yield at such LIBO Rate.
(b) If less than all of the Financial Institutions give a
notice to the Agent pursuant to Section 4.5(a), each Financial Institution which
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gave such a notice shall be obliged, at the request of Seller, Conduit or the
Agent, to assign all of its rights and obligations hereunder to (i) another
Financial Institution or (ii) another funding entity nominated by Seller or the
Agent that is acceptable to Conduit and willing to participate in this Agreement
through the Liquidity Termination Date in the place of such notifying Financial
Institution; provided that (i) the notifying Financial Institution receives
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payment in full, pursuant to an Assignment Agreement, of an amount equal to such
notifying Financial Institution's Pro Rata Share of the Capital and Yield owing
to all of the Financial Institutions and all accrued but unpaid fees and other
costs and expenses payable in respect of its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, and (ii) the replacement Financial
Institution otherwise satisfies the requirements of Section 12.1(b).
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of The Seller Parties. Each
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Seller Party hereby represents and warrants to the Agent and the Purchasers, as
to itself, as of the date hereof and as of the date of each Incremental Purchase
and the date of each Reinvestment that:
(a) Corporate Existence and Power. Such Seller Party is a corpora-tion
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duly organized, validly existing and in good standing under the laws of its
state of incorporation. Such Seller Party is duly qualified to do business and
is in good standing as a foreign corporation, and has and holds all corporate
power and all governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which its business is
conducted, except where the failure to so qualify or so hold could not
reasonably be expected to have a Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and Delivery.
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The execution and delivery by such Seller Party of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and, in the case of Seller, Seller's use of
the proceeds of purchases made hereunder, are within its corporate powers and
authority and have been duly authorized by all necessary corporate action on its
part. This Agreement and each other Transaction Document to which such Seller
Party is a party has been duly executed and delivered by such Seller Party.
(c) No Conflict. The execution and delivery by such Seller Party of
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this Agreement and each other Transaction Document to which it is a party, and
the performance of its obligations hereunder and thereunder do not contravene or
violate (i) its certificate or articles of incorporation or by-laws, (ii) any
law, rule or regulation applicable to it, (iii) any restrictions under any
agreement, contract or instrument to which it is a party or by which it or any
of its property is bound, or (iv) any order, writ, judgment, award, injunction
or decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of such Seller Party or
its Subsidiaries (except as created hereunder), except, in any case, where such
contravention or violation could not reasonably be expected to have a Material
Adverse Effect; and no transaction contemplated hereby requires compliance with
any bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the financing
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statements required hereunder, no authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution and delivery by such Seller Party of this
Agreement and each other Transaction Document to which it is a party and the
performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
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pending, or to the best of such Seller Party's knowledge, threatened, against or
affecting such Seller Party, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. Such Seller Party is not in default with respect to any order
of any court, arbitrator or governmental body, which default, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
(f) Binding Effect. This Agreement and each other Transaction Document
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to which such Seller Party is a party constitute the legal, valid and binding
obligations of such Seller Party enforceable against such Seller Party in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished by
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such Seller Party or any of its Affiliates to the Agent or the Purchasers for
purposes of or in connec-tion with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by such Seller Party or any of its Affiliates to
the Agent or the Purchasers will be, true and accurate in every material respect
on the date such information is stated or certified and does not and will not
contain any material misstatement of fact or omit to state a material fact or
any fact necessary to make the statements contained therein not misleading.
(h) Use of Proceeds. No proceeds of any purchase hereunder will be
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used (i) for a purpose that violates, or would be inconsistent with, Regulation
T, U or X promulgated by the Board of Governors of the Federal Reserve System
from time to time or (ii) to acquire any security in any transaction which is
subject to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as
amended.
(i) Good Title. Immediately prior to each purchase hereunder, Seller
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shall be the legal and beneficial owner of the Receivables and Related Security
with respect thereto, free and clear of any Adverse Claim, except as created by
the Transaction Documents. There have been duly filed all financing statements
or other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect Seller's ownership
interest in each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the
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financing statements contemplated hereby, is effective to, and shall, upon each
purchase hereunder, transfer to the Agent for the benefit of the relevant
Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or
Purchasers shall acquire from Seller) a valid and perfected first priority
undivided percentage ownership or security interest in each Receivable existing
or hereafter arising and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transactions Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect the Agent's (on
behalf of the Purchasers) ownership or security interest in the Receivables, the
Related Security and the Collections.
(k) Places of Business and Locations of Records. The principal places
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of business and chief executive office of such Seller Party and the offices
where it keeps all of its Records are located at the address(es) listed on
Exhibit III or such other locations of which the Agent has been notified in
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accordance with Section 7.2(a) in jurisdictions where all action required by
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Section 14.4(a) has been taken and completed. Seller's Federal Employer
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Identification Number is correctly set forth on Exhibit III.
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(l) Collections. The conditions and requirements set forth in Section
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7.1(j) and Section 8.2 have at all times been satisfied and duly performed. The
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names and addresses of all Collection Banks, together with the account numbers
of the Collection Accounts of Seller at each Collection Bank and the post office
box number of each Lock-Box, are listed on Exhibit IV. Seller has not granted
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any Person, other than the Agent as contemplated by this Agreement, dominion and
control of any Lock-Box or Collection Account, or the right to take dominion and
control of any such Lock-Box or Collection Account at a future time or upon the
occurrence of a future event.
(m) Material Adverse Effect. (i) The initial Servicer represents and
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warrants that since December 31, 1999, no event has occurred that would have a
material adverse effect on the financial condition or operations of the initial
Servicer and its Subsidiaries or the ability of the initial Servicer to perform
its obligations under this Agreement, and (ii) Seller represents and warrants
that since the date of this Agreement, no event has occurred that would have a
material adverse effect on (A) the financial condition or operations of Seller,
(B) the ability of Seller to perform its obligations under the Transaction
Documents, or (C) the collectibility of the Receivables generally or any
material portion of the Receivables.
(n) Names. In the past five (5) years, Seller has not used any
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corporate names, trade names or assumed names other than the name in which it
has executed this Agreement.
(o) Ownership of Seller. Originator owns, directly or indirectly, 100%
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of the issued and outstanding capital stock of Seller, free and clear of any
Adverse Claim. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Seller.
(p) Not a Holding Company or an Investment Company. Such Seller Party
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is not a "holding company" or a "subsidiary holding company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or any successor statute. Such Seller Party is not an "invest-ment
compa-ny" within the mean-ing of the Invest-ment Compa-ny Act of 1940, as
amended, or any successor statute.
(q) Compliance with Law. Such Seller Party has complied in all
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respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Receiv-able, together with the Contract related thereto, does not
contravene any laws, rules or regula-tions applicable thereto (in-cluding,
----------
without limitation, laws, rules and regulations relating to truth in lending,
--------------
fair credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regu-lation, except where such contravention or
violation could not reasonably be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policy. Such Seller Party
-----------------------------------------------
has complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract, and has not made any change
to such Credit and Collection Policy, except such material change as to which
the Agent has been notified in accordance with Section 7.1(a)(vii).
--------------------
(s) Payments to Originator. With respect to each Receivable
------------------------
transferred to Seller under the Receivables Sale Agreement, Seller has given
reasonably equivalent value to Originator in consideration therefor and such
transfer was not made for or on account of an antecedent debt. No transfer by
Originator of any Receivable under the Receivables Sale Agreement is or may be
voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C.
101 et seq.), as amended.
--------
(t) Enforceability of Contracts. Each Contract -with respect to each
-----------------------------
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforce-able
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforce-ment is sought in a
proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable included in the Net
---------------------
Receivables Balance as an Eligible Receivable on the date of its purchase under
the Receivables Sale Agreement was an Eligible Receivable on such purchase date.
(v) Net Receivables Balance. Seller has determined that, immediately
-------------------------
after giving effect to each purchase hereunder, the Net Receivables Balance is
at least equal to the sum of (i) the Aggregate Capital, plus (ii) the Aggregate
----
Reserves.
(w) Accounting. The manner in which such Seller Party accounts for the
----------
transactions contemplated by this Agreement and the Receivables Sale Agreement
does not jeopardize the true sale analysis.
Section 5.2 Financial Institution Representations and Warranties. Each
----------------------------------------------------
Financial Institution hereby represents and warrants to the Agent and Conduit
that:
(a) Existence and Power. Such Financial Institution is a corporation
---------------------
or a banking association duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, and has all
corporate power to perform its obligations hereunder.
(b) No Conflict. The execution and delivery by such Financial
------------
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any Adverse
Claim on its assets. This Agreement has been duly authorized, executed and
delivered by such Financial Institution.
(c) Governmental Authorization. No authorization or approval or other
---------------------------
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder.
(d) Binding Effect. This Agreement constitutes the legal, valid and
---------------
binding obligation of such Financial Institution enforceable against such
Financial Institution in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Incremental Purchase. The
-----------------------------------------------------
initial Incremental Purchase of a Purchaser Interest under this Agreement is
subject to the conditions precedent that (a) the Agent shall have received on or
before the date of such purchase those documents listed on Schedule B and (b)
----------
the Agent shall have received all fees and expenses required to be paid on such
date pursuant to the terms of this Agreement and the Fee Letter.
Section 6.2 Conditions Precedent to All Purchases and Reinvestments.
----------------------------------------------------------
Each purchase of a Purchaser Interest (other than pursuant to Section 13.1) and
------------
each Reinvestment shall be subject to the further conditions precedent that (a)
in the case of each such purchase or Reinvestment: (i) the Servicer shall have
delivered to the Agent on or prior to the date of such purchase, in form and
substance satisfactory to the Agent, all Monthly Reports as and when due under
Section 8.5 and (ii) upon the Agent's request, the Servicer shall have delivered
----------
to the Agent at least three (3) days prior to such purchase or Reinvestment an
interim Monthly Report showing the amount of Eligible Receivables; (b) the
Facility Termination Date shall not have occurred; (c) the Agent shall have
received such other approvals, opinions or documents as it may reasonably
request and (d) on the date of each such Incremental Purchase or Reinvestment,
the following statements shall be true (and acceptance of the proceeds of such
Incremental Purchase or Reinvestment shall be deemed a representation and
warranty by Seller that such statements are then true):
(i) the representations and warranties set forth in Section 5.1 are
-----------
true and correct in all material respects on and as of the date of such
Incremental Purchase or Reinvestment as though made on and as of such date;
(ii) no event has occurred and is continuing, or would result from such
Incremental Purchase or Reinvestment, that would constitute an Amortization
Event or a Potential Amortization Event; and
(iii) the Aggregate Capital does not exceed the Purchase Limit and the
aggregate Purchaser Interests do not exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent for the
benefit of the Purchasers an amount equal to the Collections prior to the
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of The Seller Parties. Until the
----------------------------------------------
date on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will maintain, for itself
--------------------
and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent:
(i) Annual Reporting. Within 90 days after the
----------------
close of each of its respective fiscal years, audited financial statements
(which shall include balance sheets, statements of income and retained earnings
and a statement of cash flows) for such Seller Party and Provider for such
fiscal year, together with an unqualified audit report (in form satisfactory to
the Agent) on such financial statements of, and certified in a manner acceptable
to the Agent by, PricewaterhouseCoopers LLP or other independent public
accountants reasonably acceptable to the Agent.
(ii) Quarterly Reporting. Within 45 days after the close of the first
--------------------
three (3) quarterly periods of each of its respective fiscal years, balance
sheets of each of Originator, Provider and the Servicer as at the close of each
such period and statements of income and retained earnings and a statement of
cash flows for each such Person for the period from the beginning of such fiscal
year to the end of such quarter, all certified by its respective chief financial
officer on behalf of such Person.
(iii) Compliance Certificate. Together with the financial statements
-----------------------
required hereunder, a compliance certificate in substantially the form of
Exhibit V signed by such Seller Party's or Provider's, as applicable, Authorized
---
Officer on behalf of such Person and dated the date of such annual financial
statement or such quarterly financial statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly upon the furnishing
-----------------------------------
thereof to the shareholders of such Seller Party or Provider copies of all
financial statements, reports and proxy statements so fur-nished.
(v) S.E.C. Filings. Promptly upon the filing thereof, copies of all
---------------
registration statements (other than registration statements on Form S-8) and
annual, quarterly or other reports which Originator, Provider or any of their
respective Subsidiaries files with the Securities and Exchange Commission.
(vi) Copies of Notices. Promptly upon its receipt of any notice,
-------------------
request for consent, financial statements, certification, report or other
communication under or in connection with any Transaction Document from any
Person other than the Agent or Conduit, copies of the same.
(vii) Change in Credit and Collection Policy. At least thirty (30)
------------------------------------------
days prior to the effectiveness of any material change in or material amendment
to the Credit and Collection Policy, a copy of the Credit and Collection Policy
then in effect and a notice (A) indicating such change or amend-ment, and (B) if
such proposed change or amendment would be reasonably likely to adversely affect
the collectibility of the Receivables or decrease the credit quality of any
newly created Receivables, requesting the Agent's consent thereto; provided that
--------
if such change or amendment was required pursuant to any change in any
applicable law, rule or regulation, such Seller Party shall only be required to
give prompt notice of such change or amendment and shall not be required to
request the consent of the Agent.
(viii) Other Information. Promptly, from time to time, such other
------------------
information, documents, records or reports relating to the Receivables or the
condition or operations, financial or otherwise, of such Seller Party or
Provider as the Agent may from time to time reasonably request in order to
protect the interests of the Agent and the Purchasers under or as contemplated
by this Agreement.
(b) Notices. Such Seller Party will notify the Agent in writing of any
-------
of the following promptly upon becoming aware of the occurrence thereof,
describing the same and, if applicable, the steps being taken with respect
thereto:
(i) Amortization Events or Potential Amortization Events. The
---------------------------------------------------------
occurrence of each Amortization Event and each Poten-tial Amortization Event, by
a statement of an Authorized Officer on behalf of such Seller Party.
(ii) Judgment and Proceedings. (A) (1) The entry of any judgment or
--------------------------
decree against the Servicer or any of its respective Subsidiaries if the
aggregate amount of all judgments and decrees then outstanding against the
Servicer and its Subsidiaries exceeds $10,000,000 and (2) the institution of any
material litigation, arbitration proceeding or governmental proceeding against
the Servicer; and (B) the entry of any judgment or decree or the institution of
any litigation, arbitration proceeding or governmental proceeding against
Seller.
(iii) Material Adverse Effect. The occur-rence of any event or
-------------------------
condition that has had, or could reasonably be expected to have, a Material
Adverse Effect.
(iv) Termination Date. The occurrence of the "Termination Date" under
-----------------
and as defined in the Receivables Sale Agreement.
(v) Defaults Under Other Agree-ments. (A) The occurrence of a default
---------------------------------
or an event of default under any other financing arrange-ment pursuant to which
Seller is a debtor or an obligor and (B) the occurrence of any default or event
of default under any other financing arrangement or arrange-ments governing
Indebtedness, individually or in the aggregate, greater than or equal to
$30,000,000 pursuant to which Servicer is a debtor or an obligor.
(vi) Downgrade of Originator or Provider. Any
---------------------------------------
downgrade in the rating of any Indebtedness of Originator or Provider by
Standard & Poor's Ratings Group or by ▇▇▇▇▇'▇ Investors Service, Inc., setting
forth the Indebtedness affected and the nature of such change.
(c) Compliance with Laws and Preservation of Corporate Existence. Such
------------------------------------------------------------
Seller Party will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Such Seller Party will preserve and
maintain its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where its business is
conducted, except where the failure to so preserve and maintain or qualify could
not reasonably be expected to have a Material Adverse Effect.
(d) Audits. Such Seller Party will furnish to the Agent from time to
------
time such information with respect to it and the Receivables as the Agent may
reasonably request. Such Seller Party will, from time to time during regular
business hours as requested by the Agent upon reasonable notice and at the sole
cost of such Seller Party, permit the Agent, or its agents or represen-tatives,
(i) to examine and make copies of and abstracts from all Records in the
possession or under the control of such Person relating to the Receivables and
the Related Security, including, without limitation, the related Contracts, and
(ii) to visit the offices and properties of such Person for the purpose of
examining such materials described in clause (i) above, and to discuss matters
relating to such Person's financial condition or the Receivables and the Related
Security or any Person's performance under any of the Transaction Documents or
any Person's performance under the Contracts and, in each case, with any of the
Authorized Officers or financial officers of Seller or the Servicer having
knowledge of such matters. So long as no Potential Amortization Event or
Amortiza-tion Event exists, the visits under this Section 7.1(d) that are at the
--------------
sole cost of the applicable Seller Party shall be limited to once a calendar
year; and upon the occurrence and during the continuance of a Potential
Amortization Event or an Amortization Event, any and all visits shall be at the
sole cost of the applicable Seller Party.
(e) Keeping and Marking of Records and Books.
----------------------------------------------
(i) The Servicer will maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all
Receiv-▇▇▇▇▇ (including, without limitation, records adequate to permit the
immediate identification of each new Receivable and all Collections of and
adjustments to each existing Receivable). The Servicer will give the Agent
notice of any material change in the administrative and operating procedures
referred to in the previous sentence.
(ii) Such Seller Party will (A) on or prior to the date hereof, ▇▇▇▇
its master data processing records and other books and records relating to the
Purchaser Interests with a legend, acceptable to the Agent, describing the
Purchaser Interests and (B) upon the request of the Agent (x) ▇▇▇▇ each Contract
with a legend describing the Purchaser Interests and (y) at any time after the
occurrence of a Potential Amortization Event, deliver to the Agent all Contracts
(including, without limitation, all multiple originals of any such Contract)
relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy. Such
------------------------------------------------------------
Seller Party will timely and fully (i) perform and comply with all provisions,
covenants and other promises required to be observed by it under the Contracts
related to the Receivables and (ii) comply in all respects with the Credit and
Collection Policy in regard to each Receivable and the related Contract.
(g) Performance and Enforcement of Receivables Sale Agreement. Seller
----------------------------------------------------------
will, and will require Originator to, perform each of their respective
obligations and undertak-ings under and pursuant to the Receivables Sale
Agreement, will purchase Receivables thereunder in strict compliance with the
terms thereof and will vigorously enforce the rights and remedies accorded to
Seller under the Receivables Sale Agreement. Seller will take all actions to
perfect and enforce its rights and interests (and the rights and interests of
the Agent and the Purchasers as assignees of Seller) under the Receivables Sale
Agreement as the Agent may from time to time reasonably request, including,
---------
without limitation, making claims to which it may be entitled under any
---------------
indemnity, reimbursement or similar provision contained in the Receivables Sale
----
Agreement.
(h) Ownership. Seller will (or will cause Originator to) take all
---------
necessary action to (i) vest legal and equitable title to the Receivables, the
Related Security and the Collections purchased under the Receivables Sale
Agreement irrevocably in Seller, free and clear of any Adverse Claims other than
Adverse Claims in favor of the Agent and the Purchasers (including, without
--------- -------
limitation, the filing of all financing statements or other similar instruments
------
or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Seller's interest in such Receivables, Related Security
and Collections and such other action to perfect, protect or more fully evidence
the interest of Seller therein as the Agent may reasonably request), and (ii)
establish and maintain, in favor of the Agent, for the benefit of the
Purchasers, a valid and perfected first priority undivided percentage ownership
interest (or a valid and perfected first priority security interest) in all
Receivables, Related Security and Collections to the full extent contemplated
herein, free and clear of any Adverse Claims other than Adverse Claims in favor
of the Agent for the benefit of the Purchasers (including, without limitation,
--------- ------------------
the filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect the Agent's (for the benefit of the Purchasers) interest in such
Receivables, Related Security and Collections and such other action to perfect,
protect or more fully evidence the interest of the Agent for the benefit of the
Purchasers as the Agent may reasonably request).
(i) Purchasers' Reliance. Seller acknowledges that the
---------------------
Purchasers are entering into the transactions contemplated by this Agreement in
reliance upon Seller's identity as a legal entity that is separate from
Originator. Therefore, from and after the date of execution and delivery of
this Agreement, Seller shall take all reasonable steps, including, without
limitation, all steps that the Agent or any Purchaser may from time to time
reasonably request, to maintain Seller's identity as a separate legal entity and
to make it manifest to third parties that Seller is an entity with assets and
liabilities distinct from those of Originator and any Affiliates thereof and not
just a division of Originator or any such Affiliate. Without limiting the
generality of the foregoing and in addition to the other covenants set forth
herein, Seller will:
(A) conduct its own business in its own name and require that all
full-time employees of Seller, if any, identify themselves as such and not as
employees of Originator (including, without limitation, by means of providing
appropriate employees with business or identification cards identifying such
employees as Seller's employees);
(B) compensate all employees, consultants and agents directly, from
Seller's own funds, for services provided to Seller by such employees,
consultants and agents and, to the extent any employee, consultant or agent of
Seller is also an employee, consultant or agent of Originator or any Affiliate
thereof, allocate the compensation of such employee, consultant or agent between
Seller and Originator or such Affiliate, as applicable, on a basis that reflects
the services rendered to Seller and Originator or such Affiliate, as applicable;
(C) clearly identify its offices (by signage or otherwise) as its
offices and, if such office is located in the offices of Originator, Seller
shall lease such office at a fair market rent;
(D) have a separate telephone number, which will be answered only in
its name and separate stationery, invoices and checks in its own name;
(E) conduct all transactions with Originator and the Servicer
(including, without limitation, any delegation of its obligations hereunder as
Servicer) strictly on an arm's-length basis, allocate all overhead expenses
(including, without limitation, telephone and other utility charges) for items
shared between Seller and Originator on the basis of actual use to the extent
practicable and, to the extent such allocation is not practicable, on a basis
reasonably related to actual use;
(F) at all times have a Board of Directors consisting of three members,
at least one member of which is an Independent Director;
(G) observe all corporate formalities as a distinct entity, and ensure
that all corporate actions relating to (A) the selection, maintenance or
replacement of the Independent Director, (B) the dissolution or liquidation of
Seller or (C) the initiation of, participation in, acquiescence in or consent to
any bankruptcy, insolvency, reorganization or similar proceeding involving
Seller, are duly authorized by unanimous vote of its Board of Directors
(including the Independent Director);
(H) maintain Seller's books and records separate from those of
Originator and any Affiliate thereof and otherwise readily identifiable as its
own assets rather than assets of Originator and any Affiliate thereof;
(I) prepare its financial statements separately from those of
Originator and insure that any consolidated financial statements of Originator
or any Affiliate thereof that include Seller and that are filed with the
Securities and Exchange Commission or any other governmental agency have notes
clearly stating that Seller is a separate corporate entity and that its assets
will be available first and foremost to satisfy the claims of the creditors of
Seller;
(J) except as herein specifically otherwise provided, maintain the
funds or other assets of Seller separate from, and not com-mingled with, those
of Originator or any Affiliate thereof and only maintain bank accounts or other
depository accounts to which Seller alone is the account party;
(K) pay all of Seller's operating expenses from Seller's own assets
(except for certain payments by Originator or other Persons pursuant to
allocation arrangements that comply with the requirements of this Section
-------
7.1(i));
(L) operate its business and activities such that: it does not engage
in any business or activity of any kind, or enter into any transaction or
indenture, mortgage, instrument, agreement, contract, lease or other
undertaking, other than the transactions contemplated and authorized by this
Agreement and the Receivables Sale Agreement; and does not create, incur,
guaran-tee, assume or suffer to exist any indebtedness or other liabilities,
whether direct or contingent, other than (1) as a result of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (2) the incurrence of obligations under this
Agreement, (3) the incurrence of obligations, as expressly contemplated in the
Receivables Sale Agreement, to make payment to Originator thereunder for the
purchase of Receivables from Originator under the Receivables Sale Agreement,
and (4) the incurrence of operating expenses in the ordinary course of business
of the type otherwise contemplated by this Agreement;
(M) maintain its corporate charter in conformity with this Agreement,
such that it does not amend, restate, supplement or otherwise modify its
Certificate of Incorporation or By-Laws in any respect that would impair its
ability to comply with the terms or provisions of any of the Trans-action
Documents, including, without limitation, Section 7.1(i) of this Agreement;
---------------
(N) maintain the effectiveness of, and continue to perform under the
Receivables Sale Agreement and the Performance Undertaking, such that it does
not amend, restate, supplement, cancel, terminate or otherwise modify the
Receivables Sale Agreement or the Performance Undertaking, or give any consent,
waiver, directive or approval thereunder or waive any default, action, omission
or breach under the Receivables Sale Agreement or the Perfor-▇▇▇▇▇ Undertaking
or otherwise grant any indulgence thereunder, without (in each case) the prior
written consent of the Agent;
(O) maintain its corporate separateness such that it does not merge or
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions, and except as
otherwise contemplated herein) all or substantially all of its assets (whether
now owned or hereafter acquired) to, or acquire all or substantially all of the
assets of, any Person, nor at any time create, have, acquire, maintain or hold
any interest in any Subsidiary.
(P) maintain at all times the Required Capital Amount (as defined in
the Receivables Sale Agreement) and refrain from making any dividend,
distribution, redemption of capital stock or payment of any subordinated
indebtedness which would cause the Required Capital Amount to cease to be so
maintained; and
(Q) take such other actions as are necessary on its part to ensure that
the facts and assumptions set forth in the opinion issued by ▇▇▇▇▇ ▇▇▇▇ LLP, as
counsel for Seller, in connection with the closing or initial Incremental
Purchase under this Agreement and relating to substantive consolidation issues,
and in the certificates accompanying such opinion, remain true and correct in
all material respects at all times.
(j) Collections. Such Seller Party will cause (1) all proceeds from
-----------
all Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account and (2) each Lock-Box and Collection Account to be subject at all times
to a Collection Account Agreement that is in full force and effect. In the
event any payments relating to Receivables are remitted directly to Seller or
any Affiliate of Seller, Seller will remit (or will cause all such payments to
be remitted) directly to a Collection Bank and deposited into a Collection
Account within two (2) Business Days following receipt thereof, and, at all
times prior to such remittance, Seller will itself hold or, if applicable, will
cause such payments to be held in trust for the exclusive benefit of the Agent
and the Purchasers. Seller will maintain exclusive ownership, dominion and
control (subject to the terms of this Agreement and the applicable Collection
Account Agreement) of each Lock-Box and Collection Account and shall not grant
the right to take dominion and control of any Lock-Box or Collection Account at
a future time or upon the occurrence of a future event to any Person, except to
the Agent as contemplated by this Agreement.
(k) Taxes. Such Seller Party will file all tax returns and reports
-----
required by law to be filed by it and will promptly pay all taxes and
governmental charges at any time owing by it. Seller will pay when due any
taxes payable in connection with the Receivables, exclusive of taxes on or
measured by income or gross receipts of Conduit, the Agent or any Financial
Institution.
(l) Insurance. Seller will maintain in effect, or cause to be
---------
maintained in effect, at Seller's own expense, such casualty and liability
insurance as Seller shall deem appropriate in its good faith business judgment.
The Agent, for the benefit of the Purchasers, shall be named as an additional
insured with respect to all such liability insurance maintained by Seller.
Seller will pay or cause to be paid, the premiums therefor and deliver to the
Agent evidence satisfactory to the Agent of such insurance coverage. Evidence
of each policy shall be furnished to the Agent and any Purchaser in certificated
form upon the Agent's or such Purchaser's request. The foregoing requirements
shall not be construed to negate, reduce or modify, and are in addition to,
Seller's obligations hereunder.
(m) Payment to Originator. With respect to any Receivable purchased by
---------------------
Seller from Originator, such sale shall be effected under, and in strict
compliance with the terms of, the Receivables Sale Agreement, including, without
--------- -------
limitation, the terms relating to the amount and timing of payments to be made
----------
to Originator in respect of the purchase price for such Receivable.
Section 7.2 Negative Covenants of The Seller Parties. Until the date
-----------------------------------------
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Seller Party will not
------------------------------------
change its name, identity or corporate structure (within the meaning of Section
9-402(7) of any applicable enactment of the UCC) or relocate its chief executive
office or any office where Records are kept unless it shall have: (i) given the
Agent at least thirty (30) days' prior written notice thereof and (ii) delivered
to the Agent all financing statements, instruments and other documents requested
by the Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Except as may be
-----------------------------------------------
required by the Agent pursuant to Section 8.2(b), such Seller Party will not add
--------------
or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box or
Collection Account, unless the Agent shall have received, at least ten (10) days
before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account or Lock-Box, an executed Collection
Account Agreement with respect to the new Collection Account or Lock-Box;
provided, however, that the Servicer may make changes in instructions to
-- -------
Obligors regarding payments if such new instructions require such Obligor to
-
make payments to another existing Collection Account.
(c) Modifications to Contracts and Credit and Collection Policy. Such
------------------------------------------------------------
Seller Party will not, and will not permit Originator to, make any change to the
Credit and Collection Policy that could adversely affect the collectibility of
the Receivables or decrease the credit quality of any newly created Receivables.
Except as provided in Section 8.2(d), the Servicer will not, and will not permit
--------------
Originator to, extend, amend or otherwise modify the terms of any Receivable or
any Contract related thereto other than in accordance with the Credit and
Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation of law or
------------
otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any Receivable,
Related Security or Collections, or upon or with respect to any Contract under
which any Receivable arises, or any Lock-Box or Collection Account, or assign
any right to receive income with respect thereto (other than, in each case, the
creation of the interests therein in favor of the Agent and the Purchasers
provided for herein), and Seller will defend the right, title and interest of
the Agent and the Purchasers in, to and under any of the foregoing property,
against all claims of third parties claiming through or under Seller or
Originator.
(e) Net Receivables Balance. At no time prior to the Amortization Date
-----------------------
shall Seller permit the Net Receivables Balance to be less than an amount equal
to the sum of (i) the Aggregate Capital plus (ii) the Aggregate Reserves.
----
(f) Termination Date Determination. Seller will not designate the
--------------------------------
Termination Date (as defined in the Receivables Sale Agreement), or send any
written notice to Originator in respect thereof, without the prior written
consent of the Agent, except with respect to the occurrence of such Termination
Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.
(g) Restricted Junior Payments. From and after the occurrence of any
----------------------------
Amortization Event, Seller will not make any Restricted Junior Payment if, after
giving effect thereto, Seller would fail to meet its obligations set forth in
Section 7.2(e).
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ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer. (a) The servicing,
-------------------------
administration and collection of the Receivables shall be conducted by such
Person (the "Servicer") so designated from time to time in accordance with this
--------
Section 8.1. Eveready is hereby designated as, and hereby agrees to perform
------------
the duties and obligations of, the Servicer pursuant to the terms of this
--
Agreement. Upon the occurrence and during the continuance of a Potential
--
Amortization Event or an Amortization Event, the Agent may designate as Servicer
--
any Person to succeed Eveready or any successor Servicer as "Servicer"
hereunder. With the prior written consent of the Agent and upon the assumption
of all of the duties and obligations of "Servicer" hereunder by a successor
Servicer acceptable to the Agent, Eveready may resign as Servicer.
(b) In the ordinary course of business and with the prior consent of
the Agent (which consent shall not be unreasonably withheld), the Servicer may
delegate any of its duties or responsibilities as Servicer to any Person who
agrees to conduct such duties or responsibilities in accordance with the
Contracts, the Credit and Collection Policy and this Agreement. The fees of any
Person to whom such duties or responsibilities are delegated shall be for the
sole account of the Servicer. Any delegation shall not relieve the Servicer of
its duties, responsibilities or liabilities hereunder and shall not constitute a
resignation under Section 8.1(a). Any Collections or other amounts due to the
--------------
Agent or Purchasers hereunder held by any such delegate shall, for the purposes
of this Agreement, be treated as held by the Servicer in trust for the holders
of the Purchaser Interests. Each agreement by which the Servicer delegates any
of its duties or responsibilities to any other Person (including, without
limitation, Seller) shall state that if at any time the Agent shall designate as
Servicer any Person other than such delegating Servicer, all duties and
responsibilities theretofore delegated by such Servicer to such Person may, at
the discretion of the Agent, be terminated forthwith on notice given by the
Agent to such delegating Servicer and such Person. If the Servicer shall
delegate any duties or responsibilities to Seller, Seller shall not be permitted
to further delegate to any other Person any of such duties or responsibilities.
(c) Notwithstanding the foregoing subsection (b), (i) the Servicer
shall be and remain primarily liable to the Agent and the Purchasers for the
full and prompt performance of all duties and responsibilities of the Servicer
hereunder and (ii) the Agent and the Purchasers shall be entitled to deal
exclusively with the Servicer in matters relating to the discharge by the
Servicer of its duties and responsibilities hereunder. The Agent and the
Purchasers shall not be required to give notice, demand or other communication
to any Person other than the Servicer in order for communication to the Servicer
and its sub-servicer or other delegate with respect thereto to be accomplished.
The Servicer shall be responsible for providing any sub-servicer or other
delegate of the Servicer with any notice given to the Servicer under this
Agreement.
Section 8.2 Duties of Servicer. (a) The Servicer shall take or cause
------------------
to be taken all such actions as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.
(b) The Servicer will instruct all Obligors to pay all Collections
directly to a Lock-Box or Collection Account. The Servicer shall effect a
Collection Account Agreement substantially in the form of Exhibit VI with each
----------
bank maintaining a Collection Account at any time. In the case of any
remittances received in any Lock-Box or Collection Account that shall have been
identified, to the satisfaction of the Servicer, to not constitute Collections
or other proceeds of the Receivables or the Related Security, the Servicer shall
promptly remit such items to the Person identified to it as being the owner of
such remittances. From and after the date the Agent delivers to any Collection
Bank a Collection Notice pursuant to Section 8.3, the Agent may request that the
-----------
Servicer, and the Servicer thereupon promptly shall instruct all Obligors with
respect to the Receivables, to remit all payments thereon to a new depositary
account specified by the Agent and, at all times thereafter, Seller and the
Servicer shall not deposit or otherwise credit, and shall not permit any other
Person to deposit or otherwise credit to such new depositary account any cash or
payment item other than Collections.
(c) The Servicer shall administer the Collections in accordance with
the procedures described herein and in Article II. The Servicer shall set aside
----------
and hold in trust for the account of Seller and the Purchasers their respective
shares of the Collections in accordance with Article II. The Servicer shall,
----------
upon the request of the Agent, segregate, in a manner acceptable to the Agent,
all cash, checks and other instruments received by it from time to time
constituting Collections from the general funds of the Servicer or Seller prior
to the remittance thereof in accordance with Article II. If the Servicer shall
----------
be required to segregate Collections pursuant to the preceding sentence, the
Servicer shall segregate and deposit with a bank designated by the Agent such
allocable share of Collections of Receivables set aside for the Purchasers on
the first Business Day following receipt by the Servicer of such Collections,
duly endorsed or with duly executed instruments of transfer.
(d) The Servicer may, in accordance with the Credit and Collection
Policy, extend the maturity of any Receivable or adjust the Outstanding Balance
of any Receivable as the Servicer determines to be appropriate to maximize
Collections thereof; provided, however, that such extension or adjustment shall
-------- -------
not alter the status of such Receivable as a Delinquent Receivable or
Charged-Off Receivable or limit the rights of the Agent or the Purchasers under
this Agreement. Notwithstanding anything to the contrary contained herein, the
Agent shall have the absolute and unlimited right to direct the Servicer to
commence or settle any legal action with respect to any Receivable or to
foreclose upon or repossess any Related Security.
(e) The Servicer shall hold in trust for Seller and the Purchasers all
Records that (i) evidence or relate to the Receivables, the related Contracts
and Related Security or (ii) are otherwise necessary or desirable to collect the
Receivables and shall, as soon as practicable upon demand of the Agent at any
time following a Potential Amortization Event, deliver or make available to the
Agent all such Records, at a place selected by the Agent. The Servicer shall,
as soon as practicable following receipt thereof turn over to Seller any cash
collections or other cash proceeds received with respect to Indebtedness not
constituting Receivables and belonging to Seller. The Servicer shall, from time
to time at the request of any Purchaser, furnish to the Purchasers (promptly
after any such request) a calculation of the amounts set aside for the
Purchasers pursuant to Article II.
-----------
(f) Any payment by an Obligor in respect of any indebtedness owed by it
to Originator or Seller shall, except as otherwise specified by such Obligor or
otherwise required by contract or law or unless otherwise permitted by the
Agent, be applied as a Collection of any Receivable of such Obligor (starting
with the oldest such Receivable) to the extent of any amounts then due and
payable thereunder before being applied to any other receivable or other
obligation of such Obligor.
Section 8.3 Collection Notices. The Agent is authorized, at any time
-------------------
during the continuance of a Potential Amortization Event, to date and to deliver
to the Collection Banks the Collection Notices. Seller hereby transfers to the
Agent for the benefit of the Purchasers, effective when the Agent delivers such
notice, the exclusive ownership and control of each Lock-Box and the Collection
Accounts. In case any authorized signatory of Seller whose signature appears on
a Collection Account Agreement shall cease to have such authority before the
delivery of such notice, such Collection Notice shall nevertheless be valid as
if such authority had remained in force. Seller hereby authorizes the Agent,
and agrees that the Agent shall be entitled to, following the delivery of the
Collection Notices, (i) endorse Seller's name on checks and other instruments
representing Collections, (ii) enforce the Receivables, the related Contracts
and the Related Security and (iii) take such action as shall be necessary or
desirable to cause all cash, checks and other instruments constituting
Collections of Receivables to come into the possession of the Agent rather than
Seller.
Section 8.4 Responsibilities of Seller. Anything herein to the
-----------------------------
contrary notwithstanding, the exercise by the Agent and the Purchasers of their
rights hereunder shall not release the Servicer, Originator or Seller from any
of their duties or obligations with respect to any Receivables or under the
related Contracts. The Purchasers shall have no obligation or liability with
respect to any Receivables or related Contracts, nor shall any of them be
obligated to perform the obligations of Seller.
Section 8.5 Reports. The Servicer shall prepare and forward to the
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Agent (i) on the tenth day of each month and at such times as the Agent shall
request, a Monthly Report and (ii) at such times as the Agent shall request, a
listing by Obligor of all Receivables together with an aging of such
Receivables.
Section 8.6 Servicing Fees. In consideration of Eveready's agreement
---------------
to act as Servicer hereunder, the Purchasers hereby agree that, so long as
Eveready shall continue to perform as Servicer hereunder, Seller shall pay over
to Eveready, as compensation for its servicing activities, a fee (the "Servicing
---------
Fee") on the first calendar day of each month, in arrears for the immediately
---
preceding month, at such rate as Eveready and Seller shall agree upon from time
--
to time on fair and reasonable basis and no less favorable to Eveready or Seller
than a rate Eveready or Seller could obtain in an arm's-length transaction for
servicing with a Person other than Eveready or Seller.
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more of
-------------------
the following events shall constitute an Amortization Event:
(a) Any Seller Party shall fail (i) to make any payment or deposit
required hereunder when due, or (ii) to perform or observe any term, covenant or
agreement hereunder (other than as referred to in clause (i) of this paragraph
(a) and paragraph 9.1(e)) and such failure shall continue for three (3)
consecutive Business Days.
(b) Any representation, warranty, certification or statement made by
any Seller Party or Provider in this Agreement, any other Transaction Document
or in any other document delivered pursuant hereto or thereto shall prove to
have been incorrect when made or deemed made.
(c) Failure of Seller to pay any Indebtedness when due or the failure
of any other Seller Party or Provider to pay Indebtedness (other than
Indebtedness hereunder), which individually or together with other such
Indebtedness as to which any failure exists (other than Indebtedness hereunder)
has an aggregate outstanding principal amount equal to or greater than
$30,000,000, when due; or the default by any Seller Party in the performance of
any term, provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness of any Seller
Party or Provider shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the date of
maturity thereof.
(d) (i) Any Seller Party, any Subsidiary of Seller, Provider or any
Material Provider Subsidiary shall generally not pay its debts as such debts
become due or shall admit in writing its inability to pay its debts generally or
shall make a general assignment for the benefit of creditors; or (ii) any
proceeding shall be instituted by or against any Seller Party, any Subsidiary of
Seller, Provider or any Material Provider Subsidiary seeking to adjudicate it
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or any substantial part of
its property; provided that in the event any such proceeding shall have been
instituted against such Seller Party, Subsidiary of Seller, Provider or Material
Provider Subsidiary, such proceeding shall have continued undismissed, or
unstayed and in effet, for a period of 60 consecutive days or (iii) any Seller
Party, any Subsidiary of Seller, Provider or any Material Provider Subsidiary
shall take any corporate action to authorize any of the actions set forth in
clauses (i) or (ii) above in this subsection (d).
(e) Seller shall fail to comply with the terms of Section 2.6 hereof.
-----------
(f) As at the end of any calendar month, (i) the three month rolling
average of the Delinquency Ratio shall exceed 6.25%, (ii) the three month
rolling average of the Loss-to-Liquidation Ratio shall exceed 3.5%, (iii) the
six month rolling average of the Dilution Ratio shall exceed 10.25% or (iv) the
Dilution Accrual Ratio shall be less than 85% of the six month rolling average
of the Dilution Accrual Ratio.
(g) A Change of Control with respect to Originator, Provider or any
Seller Party shall occur.
(h) (i) One or more final judgments for the payment of money shall be
entered against Seller or (ii) one or more final judgments for the payment of
money in an amount in excess of $30,000,000, individually or in the aggregate,
shall be entered against the Servicer on claims not covered by insurance or as
to which the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for fifteen (15) consecutive days
without a stay of execution.
(i) The "Termination Date" under and as defined in the Receivables Sale
Agreement shall occur under the Receivables Sale Agreement or Originator shall
for any reason cease to transfer, or cease to have the legal capacity to
transfer, or otherwise be incapable of transferring Receivables to Seller under
the Receivables Sale Agreement.
(j) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Seller, or any Obligor shall
directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of the Purchasers
shall cease to have a valid and perfected first priority security interest in
the Receivables, the Related Security and the Collections with respect thereto
and the Collection Accounts.
(k) Provider shall fail to perform or observe any term, covenant or
agreement required to be performed by it under the Performance Undertaking, or
the Performance Undertaking shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Provider, or Provider shall
directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability.
(l) Provider shall fail to perform or observe the covenants set forth
in Section 7.4 of the 5-Year Revolving Credit Agreement, dated as of March 30,
2000, as such revolving credit agreement may be amended, restated, supplemented
or otherwise modified from time to time, among ▇▇▇▇▇▇▇ Purina Company, Bank One,
NA, as agent, Bank of America, N.A., as syndication agent, and the financial
institutions parties thereto, which agreement has been assigned by ▇▇▇▇▇▇▇
Purina Company to, and assumed by, Provider pursuant to the Debt Assignment,
Assumption and Release Agreement, dated as of April 1, 2000, among ▇▇▇▇▇▇▇
Purina Company, Provider and Bank One, NA. For the purposes of this Agreement,
such covenants shall survive the termination of such revolving credit agreement
and any amendment, restatement, supplement or other modification thereof
occurring while Bank One is not the agent thereunder shall have no effect.
Section 9.2 Remedies. Upon the occurrence and during the continuation
--------
of an Amortization Event, the Agent may, or upon the direction of the Required
Financial Institutions shall, take any of the following actions: (i) replace the
Person then acting as Servicer, (ii) declare the Amortization Date to have
occurred, whereupon the Amortization Date shall forthwith occur, without demand,
protest or further notice of any kind, all of which are hereby expressly waived
by each Seller Party; provided, however, that upon the occurrence of an
Amortization Event described in Section 9.1(d)(ii), or of an actual or deemed
------------------
entry of an order for relief with respect to any Seller Party under the Federal
Bankruptcy Code, the Amortization Date shall automatically occur, without
demand, protest or any notice of any kind, all of which are hereby expressly
waived by each Seller Party, (iii) to the fullest extent permitted by applicable
law, declare that the Default Fee shall accrue with respect to any of the
Aggregate Unpaids outstanding at such time, (iv) deliver the Collection Notices
to the Collection Banks, and (v) notify Obligors of the Purchasers' interest in
the Receivables. The aforementioned rights and remedies shall be without
limitation, and shall be in addition to all other rights and remedies of the
Agent and the Purchasers otherwise available under any other provision of this
Agreement, by operation of law, at equity or otherwise, all of which are hereby
expressly preserved, including, without limitation, all rights and remedies
provided under the UCC, all of which rights shall be cumulative.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnities by The Seller Parties. Without limiting any
----------------------------------
other rights that the Agent or any Purchaser may have hereunder or under
applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to)
the Agent and each Purchaser and their respective assigns, officers, directors,
agents and employees (each an "Indemnified Party") from and against any and all
-----------------
damages, losses, claims, taxes, liabilities, costs, expenses and for all other
amounts payable, including reasonable attorneys' fees (which attorneys may be
employees of the Agent or such Purchaser) and disbursements (all of the
foregoing being collectively referred to as "Indemnified Amounts") awarded
-------------------
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by a Purchaser of
an interest in the Receivables, and (B) the Servicer hereby agrees to indemnify
(and pay upon demand to) each Indemnified Party for Indemnified Amounts awarded
against or incurred by any of them arising out of the Servicer's activities as
Servicer hereunder excluding, however, in all of the foregoing instances under
the preceding clauses (A) and (B):
(i) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from gross
negligence or willful misconduct on the part of the Indemnified Party seeking
indemnification;
(ii) Indemnified Amounts to the extent the same includes losses in
respect of Receivables that are uncollectible on account of the insolvency,
bankruptcy or lack of creditworthiness of the related Obligor; or
(iii) taxes imposed by the jurisdiction in which such Indemnified
Party's principal executive office is located, on or measured by the overall net
income of such Indemnified Party to the extent that the computation of such
taxes is consistent with the characterization for income tax purposes of the
acquisition by the Purchasers of Purchaser Interests as a loan or loans by the
Purchasers to Seller secured by the Receivables, the Related Security, the
Collection Accounts and the Collections;
provided, however, that nothing contained in this sentence shall limit the
--------- --------
liability of any Seller Party or limit the recourse of the Purchasers to any
-----
Seller Party for amounts otherwise specifically provided to be paid by such
---
Seller Party under the terms of this Agreement. Without limiting the generality
---
of the foregoing indemnification, Seller shall indemnify each Indemnified Party
for Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to Seller or the Servicer) relating to or resulting from:
(i) any representation or warranty made by any Seller Party, Provider
or Originator (or any officers of any such Person) under or in connection with
this Agreement, any other Transaction Document or any other information or
report delivered by any such Person pursuant hereto or thereto, which shall have
been false or incorrect when made or deemed made;
(ii) the failure by Seller, the Servicer, Provider or Originator to
comply with any applicable law, rule or regulation with respect to any
Receivable or Contract related thereto, or the nonconformity of any Receivable
or Contract included therein with any such applicable law, rule or regulation or
any failure of Originator to keep or perform any of its obligations, express or
implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer, Provider or Originator to
perform its duties, covenants or other obligations in accordance with the
provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage suit, or other
similar claim arising out of or in connection with merchandise, insurance or
services that are the subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
(including, without limitation, a defense based on such Receivable or the
related Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the sale of the merchandise or service related to such Receivable
or the furnishing or failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at any time with
other funds;
(vii) any investigation, litigation or proceeding related to or arising
from this Agreement or any other Transaction Document, the transactions
contemplated hereby, the use of the proceeds of an Incremental Purchase or a
Reinvestment, the ownership of the Purchaser Interests or any other
investigation, litigation or proceeding relating to Seller, the Servicer,
Provider or Originator in which any Indemnified Party becomes involved as a
result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any Obligor in
respect of any Receivable as a result of such Obligor being immune from civil
and commercial law and suit on the grounds of sovereignty or otherwise from any
legal action, suit or proceeding;
(ix) any Amortization Event described in Section 9.1(d);
---------------
(x) any failure of Seller to acquire and maintain legal and equitable
title to, and ownership of any Receivable and the Related Security and
Collections with respect thereto from Originator, free and clear of any Adverse
Claim (other than as created hereunder); or any failure of Seller to give
reasonably equivalent value to Originator under the Receivables Sale Agreement
in consideration of the transfer by Originator of any Receivable, or any attempt
by any Person to void such transfer under statutory provisions or common law or
equitable action;
(xi) any failure to vest and maintain vested in the Agent for the
benefit of the Purchasers, or to transfer to the Agent for the benefit of the
Purchasers, legal and equitable title to, and ownership of, a first priority
perfected undivided percentage ownership interest (to the extent of the
Purchaser Interests contemplated hereunder) or security interest in the
Receivables, the Related Security and the Collections, free and clear of any
Adverse Claim (except as created by the Transaction Documents);
(xii) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any Receivable,
the Related Security and Collections with respect thereto, and the proceeds of
any thereof, whether at the time of any Incremental Purchase or Reinvestment or
at any subsequent time;
(xiii) any action or omission by any Seller Party or Provider which
reduces or impairs the rights of the Agent or the Purchasers with respect to any
Receivable or the value of any such Receivable;
(xiv) any attempt by any Person to void any Incremental Purchase or
Reinvestment hereunder under statutory provisions or common law or equitable
action; and
(xv) the failure of any Receivable included in the calculation of the
Net Receivables Balance as an Eligible Receivable to be an Eligible Receivable
at the time so included.
Section 10.2 Increased Cost and Reduced Return. If after the date
-------------------------------------
hereof, any Funding Source shall be charged any fee, expense or increased cost
on account of the adoption of any applicable law, rule or regulation (including
any applicable law, rule or regulation regarding capital adequacy) or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency (a "Regulatory Change"): (i) that subjects
-----------------
any Funding Source to any charge or withholding on or with respect to any
Funding Agreement or a Funding Source's obligations under a Funding Agreement,
or on or with respect to the Receivables, or changes the basis of taxation of
payments to any Funding Source of any amounts payable under any Funding
Agreement (except for changes in the rate of tax on the overall net income of a
Funding Source or taxes excluded by Section 10.1) or (ii) that imposes, modifies
------------
or deems applicable any reserve, assessment, insurance charge, special deposit
or similar requirement against assets of, deposits with or for the account of a
Funding Source, or credit extended by a Funding Source pursuant to a Funding
Agreement or (iii) that imposes any other condition the result of which is to
increase the cost to a Funding Source of performing its obligations under a
Funding Agreement, or to reduce the rate of return on a Funding Source's capital
as a consequence of its obligations under a Funding Agreement, or to reduce the
amount of any sum received or receivable by a Funding Source under a Funding
Agreement or to require any payment calculated by reference to the amount of
interests or loans held or interest received by it, then, upon demand by the
Agent, Seller shall pay to the Agent, for the benefit of the relevant Funding
Source, such amounts charged to such Funding Source or such amounts to otherwise
compensate such Funding Source for such increased cost or such reduction.
Section 10.3 Other Costs and Expenses. Seller shall pay to the Agent
-------------------------
and Conduit on demand all reasonable out-of-pocket costs and expenses in
connection with the preparation, execution, delivery and administration of this
Agreement, the transactions contemplated hereby and the other documents to be
delivered hereunder, including without limitation, the cost of Conduit's
auditors auditing the books, records and procedures of Seller, reasonable fees
and out-of-pocket expenses of legal counsel for Conduit and the Agent (which
such counsel may be employees of Conduit or the Agent) with respect thereto and
with respect to advising Conduit and the Agent as to their respective rights and
remedies under this Agreement. Seller shall pay to the Agent on demand any and
all costs and expenses of the Agent and the Purchasers, if any, including
reasonable counsel fees and expenses in connection with the enforcement of this
Agreement and the other documents delivered hereunder and in connection with any
restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following an Amortization Event. Seller shall
reimburse Conduit on demand for all other costs and expenses incurred by Conduit
("Other Costs"), including, without limitation, the cost of auditing Conduit's
------------
books by certified public accountants, the cost of rating the Commercial Paper
by independent financial rating agencies, and the reasonable fees and
out-of-pocket expenses of counsel for Conduit or any counsel for any shareholder
of Conduit with respect to advising Conduit or such shareholder as to matters
relating to Conduit's operations.
Section 10.4 Allocations. Conduit shall allocate the liability for
-----------
Other Costs among Seller and other Persons with whom Conduit has entered into
agreements to purchase interests in receivables ("Other Sellers"). If any Other
-------------
Costs are attributable to Seller and not attributable to any Other Seller,
Seller shall be solely liable for such Other Costs. However, if Other Costs are
attributable to Other Sellers and not attributable to Seller, such Other Sellers
shall be solely liable for such Other Costs. All allocations to be made
pursuant to the foregoing provisions of this Article X shall be made by Conduit
---------
in its sole discretion on a reasonable basis and shall be binding on Seller and
the Servicer.
ARTICLE XI
THE AGENT
Section 11.1 Authorization and Action. Each Purchaser hereby
--------------------------
designates and appoints Bank One to act as its agent hereunder and under each
other Transaction Document, and authorizes the Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the Agent by
the terms of this Agreement and the other Transaction Documents together with
such powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth herein or in any
other Transaction Document, or any fiduciary relationship with any Purchaser,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns.
The Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent
hereunder shall terminate upon the indefeasible payment in full of all Aggregate
Unpaids. Each Purchaser hereby authorizes the Agent to execute each of the
Uniform Commercial Code financing statements on behalf of such Purchaser (the
terms of which shall be binding on such Purchaser).
Section 11.2 Delegation of Duties. The Agent may execute any of its
----------------------
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its
----------------------
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party or Provider contained in this Agreement, any
other Transaction Document or any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement, or any other Transaction Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, or any other Transaction Document or any other document furnished in
connection herewith or therewith, or for any failure of any Seller Party or
Provider to perform its obligations hereunder or thereunder, or for the
satisfaction of any condition specified in Article VI, or for the perfection,
----------
priority, condition, value or sufficiency of any collateral pledged in
connection herewith. The Agent shall not be under any obligation to any
Purchaser to ascertain or to inquire as to the observance or performance of any
of the agreements or covenants contained in, or conditions of, this Agreement or
any other Transaction Document, or to inspect the properties, books or records
of the Seller Parties or Provider. The Agent shall not be deemed to have
knowledge of any Amortization Event or Potential Amortization Event unless the
Agent has received notice from Seller or a Purchaser.
Section 11.4 Reliance by Agent. The Agent shall in all cases be
-------------------
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Seller), independent
accountants and other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence of Conduit or the Required Financial Institutions or all
of the Purchasers, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Purchasers, provided that unless and
--------
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Conduit or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
Section 11.5 Non-Reliance on Agent and Other Purchasers. Each
-----------------------------------------------
Purchaser expressly acknowledges that neither the Agent, nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Seller
Party or Provider, shall be deemed to constitute any representation or warranty
by the Agent. Each Purchaser represents and warrants to the Agent that it has
and will, independently and without reliance upon the Agent or any other
Purchaser and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and
creditworthiness of Seller and made its own decision to enter into this
Agreement, the other Transaction Documents and all other documents related
hereto or thereto.
Section 11.6 Reimbursement and Indemnification. The Financial
-----------------------------------
Institutions agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller Parties (i) for
any amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Seller Parties hereunder and (ii) for any other expenses
incurred by the Agent, in its capacity as Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.
Section 11.7 Agent in its Individual Capacity. The Agent and its
------------------------------------
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with Seller or any Affiliate of Seller as though the Agent were
not the Agent hereunder. With respect to the acquisition of Purchaser Interests
pursuant to this Agreement, the Agent shall have the same rights and powers
under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent, and the terms "Financial
Institution," "Purchaser," "Financial Institutions" and "Purchasers" shall
include the Agent in its individual capacity.
Section 11.8 Successor Agent. The Agent may, upon thirty days' notice
---------------
to Seller and the Purchasers, and the Agent will, upon the direction of all of
the Purchasers (other than the Agent, in its individual capacity) resign as
Agent. If the Agent shall resign, then the Required Financial Institutions
during such thirty-day period shall appoint from among the Purchasers a
successor agent. If for any reason no successor Agent is appointed by the
Required Financial Institutions during such thirty-day period, then effective
upon the termination of such thirty-day period, the Purchasers shall perform all
of the duties of the Agent hereunder and under the other Transaction Documents
and Seller and the Servicer (as applicable) shall make all payments in respect
of the Aggregate Unpaids directly to the applicable Purchasers and for all
purposes shall deal directly with the Purchasers. After the effectiveness of
any retiring Agent's resignation hereunder as Agent, the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other
Transaction Documents and the provisions of this Article XI and Article X shall
---------- ---------
continue in effect for its benefit with respect to any actions taken or omitted
to be taken by it while it was Agent under this Agreement and under the other
Transaction Documents.
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments. (a) Seller and each Financial Institution
-----------
hereby agree and consent to the complete or partial assignment by Conduit of all
or any portion of its rights under, interest in, title to and obligations under
this Agreement to the Financial Institutions pursuant to Section 13.1 or, with
------------
the consent of the Seller (which consent shall not be unreasonably withheld), to
any other Person, and upon such assignment, Conduit shall be released from its
obligations so assigned. Further, Seller and each Financial Institution hereby
agree that any assignee of Conduit of this Agreement or all or any of the
Purchaser Interests of Conduit shall have all of the rights and benefits under
this Agreement as if the term "Conduit" explicitly referred to such party, and
no such assignment shall in any way impair the rights and benefits of Conduit
hereunder. Neither Seller nor the Servicer shall have the right to assign its
rights or obligations under this Agreement.
(b) Any Financial Institution may at any time and from time to time
assign to one or more Persons ("Purchasing Financial Institutions") all or any
---------------------------------
part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
-----------
(the "Assignment Agreement") executed by such Purchasing Financial Institution
---------------------
and such selling Financial Institution. The consent of Conduit shall be
required prior to the effectiveness of any such assignment; and, in the event of
any such assignment by any Financial Institution, other than to an Affiliate of
such Financial Institution, another Financial Institution or an Affiliate of
another Financial Institution, the consent of Seller (which consent shall not be
unreasonably withheld) shall be required prior to the effectiveness of any such
assignment. Each assignee of a Financial Institution must (i) have a short-term
debt rating of A-1 or better by Standard & Poor's Ratings Group and P-1 by
▇▇▇▇▇'▇ Investor Service, Inc. and (ii) agree to deliver to the Agent, promptly
following any request therefor by the Agent or Conduit, an enforceability
opinion in form and substance satisfactory to the Agent and Conduit. Upon
delivery of the executed Assignment Agreement to the Agent, such selling
Financial Institution shall be released from its obligations hereunder to the
extent of such assignment. Thereafter the Purchasing Financial Institution
shall for all purposes be a Financial Institution party to this Agreement and
shall have all the rights and obligations of a Financial Institution under this
Agreement to the same extent as if it were an original party hereto and no
further consent or action by Seller, the Purchasers or the Agent shall be
required.
(c) Each of the Financial Institutions agrees that in the event that it
shall cease to have a short-term debt rating of A-1 or better by Standard &
Poor's Ratings Group and P-1 by ▇▇▇▇▇'▇ Investor Service, Inc. (an "Affected
--------
Financial Institution"), such Affected Financial Institution shall be obliged,
-------------------
at the request of Conduit or the Agent, to assign all of its rights and
obligations hereunder to (x) another Financial Institution or (y) another
funding entity nominated by the Agent and acceptable to Conduit, and willing to
participate in this Agreement through the Liquidity Termination Date in the
place of such Affected Financial Institution; provided that the Affected
--------
Financial Institution receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such Financial Institution's Pro Rata Share of
the Aggregate Capital and Yield owing to the Financial Institutions and all
accrued but unpaid fees and other costs and expenses payable in respect of its
Pro Rata Share of the Purchaser Interests of the Financial Institutions.
Section 12.2 Participations. Any Financial Institution may, in the
--------------
ordinary course of its business at any time sell to one or more Persons (each a
"Participant") participating interests in its Pro Rata Share of the Purchaser
-----------
Interests of the Financial Institutions, its obligation to pay Conduit its
-
Acquisition Amounts or any other interest of such Financial Institution
-
hereunder. Notwithstanding any such sale by a Financial Institution of a
-
participating interest to a Participant, such Financial Institution's rights and
-
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Conduit and the Agent shall continue to deal
solely and directly with such Financial Institution in connection with such
Financial Institution's rights and obligations under this Agreement. Each
Financial Institution agrees that any agreement between such Financial
Institution and any such Participant in respect of such participating interest
shall not restrict such Financial Institution's right to agree to any amendment,
supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in Section 14.1(b)(i).
-------------------
ARTICLE XIII
LIQUIDITY FACILITY
Section 13.1 Transfer to Financial Institutions. Each Financial
-------------------------------------
Institution hereby agrees, subject to Section 13.4, that immediately upon
-------------
written notice from Conduit delivered on or prior to the Liquidity Termination
Date, it shall acquire by assignment from Conduit, without recourse or warranty,
its Pro Rata Share of one or more of the Purchaser Interests of Conduit as
specified by Conduit. Each such assignment by Conduit shall be made pro rata
among all of the Financial Institutions, except for pro rata assignments to one
or more Terminating Financial Institutions pursuant to Section 13.6. Each such
------------
Financial Institution shall, no later than 1:00 p.m. (Chicago time) on the date
of such assignment, pay in immediately available funds (unless another form of
payment is otherwise agreed between Conduit and any Financial Institution) to
the Agent at an account designated by the Agent, for the benefit of Conduit, its
Acquisition Amount. Unless a Financial Institution has notified the Agent that
it does not intend to pay its Acquisition Amount, the Agent may assume that such
payment has been made and may, but shall not be obligated to, make the amount of
such payment available to Conduit in reliance upon such assumption. Conduit
hereby sells and assigns to the Agent for the ratable benefit of the Financial
Institutions, and the Agent hereby purchases and assumes from Conduit, effective
upon the receipt by Conduit of the Conduit Transfer Price, the Purchaser
Interests of Conduit which are the subject of any transfer pursuant to this
Article XIII.
---------
Section 13.2 Transfer Price Reduction Yield. If the Adjusted Funded
--------------------------------
Amount is included in the calculation of the Conduit Transfer Price for any
Purchaser Interest, each Financial Institution agrees that the Agent shall pay
to Conduit the Reduction Percentage of any Yield received by the Agent with
respect to such Purchaser Interest.
Section 13.3 Payments to Conduit. In consideration for the reduction
--------------------
of the Conduit Transfer Prices by the Conduit Transfer Price Reductions,
effective only at such time as the aggregate amount of the Capital of the
Purchaser Interests of the Financial Institutions equals the Conduit Residual,
each Financial Institution hereby agrees that the Agent shall not distribute to
the Financial Institutions and shall immediately remit to Conduit any Yield,
Collections or other payments received by it to be applied pursuant to the terms
hereof or otherwise to reduce the Capital of the Purchaser Interests of the
Financial Institutions.
Section 13.4 Limitation on Commitment to Purchase from Conduit.
-------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have any obligation to purchase any Purchaser Interest from
Conduit, pursuant to Section 13.1 or otherwise, if:
-------------
(i) Conduit shall have voluntarily commenced any proceeding or filed
any petition under any bankruptcy, insolvency or similar law seeking the
dissolution, liquidation or reorganization of Conduit or taken any corporate
action for the purpose of effectuating any of the foregoing; or
(ii) involuntary proceedings or an involuntary petition shall have been
commenced or filed against Conduit by any Person under any bankruptcy,
insolvency or similar law seeking the dissolution, liquidation or reorganization
of Conduit and such proceeding or petition shall have not been dismissed.
Section 13.5 Defaulting Financial Institutions. If one or more
-----------------------------------
Financial Institutions defaults in its obligation to pay its Acquisition Amount
pursuant to Section 13.1 (each such Financial Institution shall be called a
-------------
"Defaulting Financial Institution" and the aggregate amount of such defaulted
-------------------------------
obligations being herein called the "Conduit Transfer Price Deficit"), then upon
------------------------------
notice from the Agent, each Financial Institution other than the Defaulting
Financial Institutions (a "Non-Defaulting Financial Institution") shall promptly
------------------------------------
pay to the Agent, in immediately available funds, an amount equal to the lesser
of (x) such Non-Defaulting Financial Institution's proportionate share (based
upon the relative Commitments of the Non-Defaulting Financial Institutions,
after excluding the Commitment of any Approved Unconditional Liquidity
Providers) of the Conduit Transfer Price Deficit and (y) the unused portion of
such Non-Defaulting Financial Institution's Commitment; provided, however, that
-------- -------
if an Approved Unconditional Liquidity Provider is the Defaulting Financial
Institution, the Non-Defaulting Financial Institutions shall have no obligation
to pay any amount to the Agent pursuant to this Section 13.5as a result of a
------------
default by such Approved Unconditional Liquidity Provider; provided, further,
-------- -------
that in no event shall any Approved Unconditional Liquidity Provider be required
to make any payment as a Non-Defaulting Financial Institution pursuant to this
Section 13.5. A Defaulting Financial Institution shall forthwith upon demand
------------
pay to the Agent for the account of the Non-Defaulting Financial Institutions
-
all amounts paid by each Non-Defaulting Financial Institution on behalf of such
-
Defaulting Financial Institution, together with interest thereon, for each day
from the date a payment was made by a Non-Defaulting Financial Institution until
the date such Non-Defaulting Financial Institution has been paid such amounts in
full, at a rate per annum equal to the Federal Funds Effective Rate plus two
percent (2%). In addition, without prejudice to any other rights that Conduit
may have under applicable law, each Defaulting Financial Institution shall pay
to Conduit forthwith upon demand, the difference between such Defaulting
Financial Institution's unpaid Acquisition Amount and the amount paid with
respect thereto by the Non-Defaulting Financial Institutions, together with
interest thereon, for each day from the date of the Agent's request for such
Defaulting Financial Institution's Acquisition Amount pursuant to Section 13.1
------------
until the date the requisite amount is paid to Conduit in full, at a rate per
annum equal to the Federal Funds Effective Rate plus two percent (2%).
Section 13.6 Terminating Financial Institutions.
------------------------------------
(a) Each Financial Institution hereby agrees to deliver written notice
to the Agent not more than 30 Business Days and not less than 10 Business Days
prior to the Liquidity Termination Date indicating whether such Financial
Institution intends to renew its Commitment hereunder. If any Financial
Institution fails to deliver such notice on or prior to the date that is 10
Business Days prior to the Liquidity Termination Date, such Financial
Institution will be deemed to have declined to renew its Commitment (each
Financial Institution which has declined or has been deemed to have declined to
renew its Commitment hereunder, a "Non-Renewing Financial Institution"). The
----------------------------------
Agent shall promptly notify Conduit of each Non-Renewing Financial Institution
and Conduit, in its sole discretion, may (A) to the extent of Commitment
Availability, declare that such Non-Renewing Financial Institution's Commitment
shall, to such extent, automatically terminate on a date specified by Conduit on
or before the Liquidity Termination Date or (B) upon one (1) Business Days'
notice to such Non-Renewing Financial Institution assign to such Non-Renewing
Financial Institution on a date specified by Conduit its Pro Rata Share of the
aggregate Purchaser Interests then held by Conduit, subject to, and in
accordance with, Section 13.1. In addition, Conduit may, in its sole
-------------
discretion, at any time (x) to the extent of Commitment Availability, declare
that any Affected Financial Institution's Commitment shall automatically
terminate on a date specified by Conduit or (y) assign to any Affected Financial
Institution on a date specified by Conduit its Pro Rata Share of the aggregate
Purchaser Interests then held by Conduit, subject to, and in accordance with,
Section 13.1 (each Affected Financial Institution or each Non-Renewing Financial
----------
Institution is hereinafter referred to as a "Terminating Financial
----------------------
Institution"). The parties hereto expressly acknowledge that any declaration of
the termination of any Commitment, any assignment pursuant to this Section 13.6
------------
and the order of priority of any such termination or assignment among
Terminating Financial Institutions shall be made by Conduit in its sole and
absolute discretion.
(b) Upon any assignment to a Terminating Financial Institution as
provided in this Section 13.6, any remaining Commitment of such Terminating
-------------
Financial Institution shall automatically terminate. Upon reduction to zero of
the Capital of all of the Purchaser Interests of a Terminating Financial
Institution (after application of Collections thereto pursuant to Sections 2.2
------------
and 2.3) all rights and obligations of such Terminating Financial Institution
-------
hereunder shall be terminated and such Terminating Financial Institution shall
-
no longer be a "Financial Institution" hereunder; provided, however, that the
-------- -------
provisions of Article X shall continue in effect for its benefit with respect to
---------
Purchaser Interests held by such Terminating Financial Institution prior to its
termination as a Financial Institution.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Waivers and Amendments. (a) No failure or delay on the
-----------------------
part of the Agent or any Purchaser in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other further
exercise thereof or the exercise of any other power, right or remedy. The
rights and remedies herein provided shall be cumulative and nonexclusive of any
rights or remedies provided by law. Any waiver of this Agreement shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with the provisions of this
Section 14.1(b). Conduit, Seller and the Agent, at the direction of the
---------------
Required Financial Institutions, may enter into written modifications or waivers
------
of any provisions of this Agreement, provided, however, that no such
-------- -------
modification or waiver shall:
(i) without the consent of each affected Purchaser, (A) extend the
Liquidity Termination Date or the date of any payment or deposit of Collections
by Seller or the Servicer, (B) reduce the rate or extend the time of payment of
Yield or any CP Costs (or any component of Yield or CP Costs), (C) reduce any
fee payable to the Agent for the benefit of the Purchasers, (D) except pursuant
to Article XII hereof, change the amount of the Capital of any Purchaser, any
------------
Financial Institution's Pro Rata Share (except pursuant to Sections 13.1 or
-------------
13.5) or any Financial Institution's Commitment, (E) amend, modify or waive any
provision of the definition of Required Financial Institutions or this Section
-------
14.1(b), (F) consent to or permit the assignment or transfer by Seller of any of
------
its rights and obligations under this Agreement, (G) change the definition of
"Eligible Receivable," "Loss Reserve," "Loss-to-Liquidation Ratio,"or "Loss
Percentage" or (H) amend or modify any defined term (or any defined term used
directly or indirectly in such defined term) used in clauses (A) through (G)
above in a manner that would circumvent the intention of the restrictions set
forth in such clauses;
(ii) without the written consent of the then Agent, amend, modify or
waive any provision of this Agreement if the effect thereof is to affect the
rights or duties of such Agent; or
(iii) without the written consent of the then Servicer, amend, modify
or waive any provision of Article VIII if the effect thereof is to affect the
------------
rights or duties of such Servicer.
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Seller, the Agent may amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and Conduit may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII,
---------- -----------
Article XIII, Section 14.13 or any other provision of this Agreement without the
------------ -------------
consent of Seller, provided that such amendment has no negative impact upon
Seller. Any modification or waiver made in accordance with this Section 14.1
------------
shall apply to each of the Purchasers equally and shall be binding upon Seller,
the Purchasers and the Agent.
Section 14.2 Notices. Except as provided in this Section 14.2, all
------- ------------
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other means, when received at the address specified in this
Section 14.2. Seller hereby authorizes the Agent to effect purchases and
---------
Tranche Period and Discount Rate selections based on telephonic notices made by
--
any Person whom the Agent in good faith believes to be acting on behalf of
Seller. Seller agrees to deliver promptly to the Agent a written confirmation
of each telephonic notice signed by an authorized officer of Seller; provided,
--------
however, the absence of such confirmation shall not affect the validity of such
------
notice. If the written confirmation differs from the action taken by the Agent,
the records of the Agent shall govern absent manifest error.
Section 14.3 Ratable Payments. If any Purchaser, whether by setoff or
----------------
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.2 or 10.3) in a greater proportion than that received by any other
------- ----
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
--------
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 14.4 Protection of Ownership Interests of the Purchasers. (a)
---------------------------------------------------
Seller agrees that from time to time, at its expense, it will promptly execute
and deliver all instruments and documents, and take all actions, that may be
necessary or desirable, or that the Agent may request, to perfect, protect or
more fully evidence the Purchaser Interests, or to enable the Agent or the
Purchasers to exercise and enforce their rights and remedies hereunder. At any
time upon the occurrence and during the continuance of a Potential Amortization
Event, the Agent may, or the Agent may direct Seller or the Servicer to, notify
the Obligors of Receivables, at Seller's expense, of the ownership or security
interests of the Purchasers under this Agreement and may also direct that
payments of all amounts due or that become due under any or all Receivables be
made directly to the Agent or its designee. Seller or the Servicer (as
applicable) shall, at any Purchaser's request, withhold the identity of such
Purchaser in any such notification.
(b) If any Seller Party fails to perform any of its obligations
hereunder, the Agent or any Purchaser may (but shall not be required to)
perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's reasonable costs and expenses incurred in connection therewith shall
be payable by Seller as provided in Section 10.3. Each Seller Party irrevocably
------------
authorizes the Agent at any time and from time to time in the sole discretion of
the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf of
such Seller Party (i) to execute on behalf of Seller as debtor and to file
financing statements necessary or desirable in the Agent's sole discretion to
perfect and to maintain the perfection and priority of the interest of the
Purchasers in the Receivables and (ii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Receivables as a financing statement in such offices as the Agent in its sole
discretion deems necessary or desirable to perfect and to maintain the
perfection and priority of the interests of the Purchasers in the Receivables.
This appointment is coupled with an interest and is irrevocable.
Section 14.5 Confidentiality. (a) Each Seller Party, the Agent and
---------------
each Purchaser shall maintain and shall cause each of its employees and officers
to maintain the confidentiality of the Transaction Documents and the other
confidential or proprietary information with respect to the other parties hereto
and their respective businesses obtained by it or them in connection with the
structuring, negotiating and execution of the transactions contemplated herein,
except that such Seller Party, the Agent and such Purchaser and its officers and
employees may disclose such information to such Person's external accountants
and attorneys and as required by any applicable law or order of any judicial or
administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each Seller Party
hereby consents to the disclosure of any nonpublic information with respect to
it (i) to the Agent, the Financial Institutions or Conduit by each other, (ii)
by the Agent or the Purchasers to any prospective or actual assignee or
participant of any of them and (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to Conduit or any entity organized for the purpose of purchasing, or
making loans secured by, financial assets for which Bank One acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing. In addition, the Purchasers
and the Agent may disclose any such nonpublic information pursuant to any law,
rule, regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings (whether or not having the force or effect
of law).
Section 14.6 Bankruptcy Petition. Seller, the Servicer, the Agent and
-------------------
each Financial Institution hereby covenants and agrees that, prior to the date
that is one year and one day after the payment in full of all outstanding senior
indebtedness of Conduit or any Unconditional Liquidity Provider, it will not
institute against, or join any other Person in instituting against, Conduit or
any such entity any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
Section 14.7 Limitation of Liability. Except with respect to any claim
-----------------------
arising out of the willful misconduct or gross negligence of Conduit, the Agent
or any Financial Institution, no claim may be made by any Seller Party or any
other Person against Conduit, the Agent or any Financial Institution or their
respective Affiliates, directors, officers, employees, attorneys or agents for
any special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and each Seller Party hereby waives,
releases, and agrees not to ▇▇▇ upon any claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.
Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
---------------
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF ILLINOIS.
Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY
-------------------------
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING
PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER
OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
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TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of Terms.
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(a) This Agreement and each other Transaction Document contain the
final and complete integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
(b) This Agree-ment shall be binding upon and inure to the benefit of
the parties hereto and their re-spec-tive suc-ces-sors and permitted as-signs
(including any trustee in bank-rupt-cy). This Agreement shall create and
consti-tute the continuing obliga-tions of the parties hereto in accor-dance
with its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and reme-dies with
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respect to (i) any breach of any repre-sen-tation and warranty made by any
Seller Party pursu-ant to Article V, (ii) the indemnifica-tion and payment
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provisions of Arti-cle X, and Sections 14.5 and 14.6 shall be continuing and
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shall survive any termina-tion of this Agree-ment.
Section 14.12 Counterparts; Severability; Section References. This
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Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
Section 14.13 Bank One Roles. Each of the Financial Institutions
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acknowledges that Bank One acts, or may in the future act, (i) as administrative
agent for Conduit or any Financial Institution, (ii) as issuing and paying agent
for the Commercial Paper, (iii) to provide credit or liquidity enhancement for
the timely payment for the Commercial Paper and (iv) to provide other services
from time to time for Conduit or any Financial Institution (collectively, the
"Bank One Roles"). Without limiting the generality of this Section 14.13, each
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Financial Institution hereby acknowledges and consents to any and all Bank One
Roles and agrees that in connection with any Bank One Role, Bank One may take,
or refrain from taking, any action that it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Conduit, and the giving of notice to the Agent of a mandatory purchase
pursuant to Section 13.1.
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Section 14.14 Characterization. (a) It is the intention of the parties
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hereto that each purchase hereunder shall constitute and be treated as an
absolute and irrevocable sale, which purchase shall provide the applicable
Purchaser with the full benefits of ownership of the applicable Purchaser
Interest. Except as specifically provided in this Agreement, each sale of a
Purchaser Interest hereunder is made without recourse to Seller; provided,
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however, that (i) Seller shall be liable to each Purchaser and the Agent for all
--
representations, warranties, covenants and indemnities made by Seller pursuant
to the terms of this Agreement, and (ii) such sale does not constitute and is
not intended to result in an assumption by any Purchaser or the Agent or any
assignee thereof of any obligation of Seller or Originator or any other person
arising in connection with the Receivables, the Related Security, or the related
Contracts, or any other obligations of Seller or Originator.
(b) In addition to any ownership interest which the Agent may from time
to time acquire pursuant hereto, Seller hereby grants to the Agent for the
ratable benefit of the Purchasers a valid and perfected security interest in all
of Seller's right, title and interest in, to and under all Receivables now
existing or hereafter arising, the Collections, each Lock-Box, each Collection
Account, all Related Security, the Demand Note, all other rights and payments
relating to such Receivables and all proceeds of any thereof prior to all other
liens on and security interests therein to secure the prompt and complete
payment of the Aggregate Unpaids. The Agent and the Purchasers shall have, in
addition to the rights and remedies that they may have under this Agreement, all
other rights and remedies provided to a secured creditor under the UCC and other
applicable law, which rights and remedies shall be cumulative.
Section 14.15 Withholding. Any Purchaser that is not incorporated
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under the laws of the United States of America, or a state thereof, agrees to
deliver to the Agent (with copies to Seller) two duly completed copies of
United States Internal Revenue Service Forms W-8BEN or W-8ECI, certifying in
either case that such Purchaser is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
ENERGIZER RECEIVABLES FUNDING CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EVEREADY BATTERY COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President, Treasury
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FALCON ASSET SECURITIZATION CORPORATION
By:
Authorized Signatory
Address: c/o Bank One, NA (Main Office Chicago), as Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANK ONE, NA (MAIN OFFICE CHICAGO), as a Financial Institution and as Agent
By:
Name:
Title:
Address: Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0596, 1-21
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇