Exhibit 10.2
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RECEIVABLES PURCHASE AGREEMENT
Dated as of November 1, 2001
Among
CONMED RECEIVABLES CORPORATION
as Seller
and
CONMED CORPORATION
as initial Servicer
and
BLUE KEEL FUNDING, LLC
as Conduit Purchaser
and
FLEET NATIONAL BANK
as Committed Purchaser
and
FLEET SECURITIES, INC.
as Administrator
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TABLE OF CONTENTS
Page
ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.01. Commitment to Purchase; Limits on Purchasers' Obligations............................2
SECTION 1.02. Purchase Procedures; Assignment of Purchaser's Interests.............................2
SECTION 1.03. Reinvestments of Certain Collections; Payment of Remaining Collections...............2
SECTION 1.04. Asset Interest.......................................................................3
SECTION 1.05. Voluntary Termination of Purchase and Reinvestment Obligations or
Reduction of Purchase Limit..........................................................4
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.01. Computation of Capital...............................................................5
SECTION 2.02. Computation of Concentration Limit...................................................5
SECTION 2.03. Computation of Earned Discount.......................................................5
SECTION 2.04. Estimates of Earned Discount Rate, Fees, Etc.........................................5
ARTICLE III
SETTLEMENTS
SECTION 3.01. Settlement Procedures................................................................6
SECTION 3.02. Deemed Collections; Reduction of Capital, Etc........................................8
SECTION 3.03. Payments and Computations, Etc.......................................................9
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees................................................................................10
SECTION 4.02. Yield Protection....................................................................10
SECTION 4.03. Funding Losses......................................................................12
ARTICLE V
CONDITIONS TO PURCHASES
SECTION 5.01. Conditions Precedent to Initial Purchase............................................12
SECTION 5.02. Conditions Precedent to All Purchases and Reinvestments.............................14
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of Seller............................................15
SECTION 6.02. Representations and Warranties of Parent............................................18
ARTICLE VII
GENERAL COVENANTS
SECTION 7.01. Affirmative Covenants...............................................................20
SECTION 7.02. Reporting Requirements..............................................................22
SECTION 7.03. Negative Covenants..................................................................24
SECTION 7.04. Separate Existence..................................................................25
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer.............................................................27
SECTION 8.02. Duties of Servicer..................................................................28
SECTION 8.03. Rights of the Administrator.........................................................30
SECTION 8.04. Responsibilities of Seller..........................................................31
SECTION 8.05. Further Action Evidencing Purchases and Reinvestments...............................31
SECTION 8.06. Application of Collections..........................................................32
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest..........................................................32
SECTION 9.02. Further Assurances..................................................................33
SECTION 9.03. Remedies............................................................................33
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Page
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.01. Liquidation Events..................................................................33
SECTION 10.02. Remedies............................................................................35
ARTICLE XI
THE ADMINISTRATOR
SECTION 11.01. Authorization and Action............................................................35
SECTION 11.02. Administrator's Reliance, Etc.......................................................35
SECTION 11.03. Fleet and Affiliates................................................................36
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01. Restrictions on Assignments.........................................................36
SECTION 12.02. Rights of Assignee..................................................................37
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities.........................................................................37
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc.....................................................................39
SECTION 14.02. Notices, Etc........................................................................39
SECTION 14.03. No Waiver; Remedies.................................................................40
SECTION 14.04. Binding Effect; Survival............................................................40
SECTION 14.05. Costs, Expenses and Taxes...........................................................40
SECTION 14.06. No Proceedings; Limitations on Recourse.............................................40
SECTION 14.07. Confidentiality of Program Information..............................................41
SECTION 14.08. Confidentiality of Parent Information...............................................42
SECTION 14.09. Captions and Cross References.......................................................44
SECTION 14.10. Integration.........................................................................44
SECTION 14.11. Governing Law.......................................................................44
SECTION 14.12. Waiver Of Jury Trial................................................................44
SECTION 14.13. Consent To Jurisdiction; Waiver Of Immunities.......................................44
SECTION 14.14. Execution in Counterparts...........................................................45
SECTION 14.15. No Recourse Against Other Parties...................................................45
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APPENDICES
APPENDIX A Definitions
SCHEDULES
SCHEDULE 6.01(m) List of Offices of Seller where Records Are Kept
SCHEDULE 6.01(n) List of Lock-Box Banks
SCHEDULE 7.01(g) Description of Credit and Collection Policy
SCHEDULE 14.02 Notice Addresses
EXHIBITS
EXHIBIT 1.02(a) Form of Purchase Notice
EXHIBIT 3.01(a) Form of Servicer Report
EXHIBIT 3.01(a)-W Form of Weekly Report
EXHIBIT 5.01(f) Form of Lock-Box Agreement
EXHIBIT 5.01(g)-1 Form of Enforceability/Perfection Opinion
EXHIBIT 5.01(g)-2 Form of True Sale/Substantive Consolidation Opinion
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RECEIVABLES PURCHASE AGREEMENT
Dated as of November 1, 2001
THIS IS A RECEIVABLES PURCHASE AGREEMENT, among CONMED RECEIVABLES
CORPORATION, a New York corporation ("Seller"), CONMED CORPORATION, a New York
corporation ("Parent"), as initial Servicer, BLUE KEEL FUNDING, LLC, a Delaware
limited liability company (the "Conduit Purchaser"), FLEET NATIONAL BANK, a
national banking association (together with any other financial institution
hereafter party hereto, each a "Committed Purchaser", and collectively with the
Conduit Purchaser, the "Purchasers") and FLEET SECURITIES, INC., a New York
corporation ("Fleet Securities"), as administrator for Purchasers (in such
capacity, the "Administrator"). Unless otherwise indicated, capitalized terms
used in this Agreement are defined in Appendix A.
Background
1. The Originators are engaged in the business of distribution and sale
of medical devices, equipment and related products.
2. Seller is a single purpose corporation formed for the purpose of
purchasing, and accepting contributions of, Receivables generated by the
Originators.
3. Seller has, and expects to have, Pool Receivables in which Seller,
subject to the terms and conditions of this Agreement, intends to sell an
undivided interest. Seller has requested Purchasers, and Conduit Purchaser may
(and if Conduit Purchaser does not, Committed Purchasers shall), subject to the
terms and conditions contained in this Agreement, fund the purchase of such
undivided interest, referred to herein as the Asset Interest, from Seller from
time to time during the term of this Agreement.
4. Seller and Purchasers also desire that, subject to the terms and
conditions of this Agreement, certain of the daily Collections in respect of the
Asset Interest be reinvested in Pool Receivables, which reinvestment shall
constitute part of the Asset Interest.
5. Parent has been requested, and is willing, to act as initial
Servicer.
6. Fleet Securities has been requested, and is willing, to act as the
Administrator.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
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ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.01. Commitment to Purchase; Limits on Purchasers'
Obligations. Upon the terms and subject to the conditions of this Agreement,
from time to time prior to the Termination Date, Seller may request that
Administrator, for the benefit of Purchasers, purchase from Seller an undivided
ownership interest in the Pool Assets (each being a "Purchase") and Conduit
Purchaser may, in its sole discretion, fund each Purchase. If Conduit Purchaser
elects not to fund such Purchase, each Committed Purchaser shall fund its
Percentage of such Purchase, and the Administrator, for the benefit of
Purchasers, shall make such Purchase with the proceeds of such funding by the
Committed Purchasers; provided that no Purchase shall be funded by any Purchaser
if, after giving effect thereto, either (a) the Capital after giving effect to
such Purchase would exceed $50,000,000 (the "Purchase Limit"), as such Purchase
Limit may be decreased from time to time as provided in Section 1.05, or (b) the
Asset Interest would exceed 100% (the "Allocation Limit"); and provided further
that each Purchase made pursuant to this Section 1.01 shall have a purchase
price of at least $1,000,000.
SECTION 1.02. Purchase Procedures; Assignment of Purchaser's Interests.
(a) Notice of Purchase. Each Purchase from Seller shall be made on
notice from Seller to the Administrator received by the Administrator not later
than 11:00 a.m. (Boston, Massachusetts time) on the second Business Day next
preceding the date of such proposed Purchase. Each such notice of a proposed
Purchase shall be substantially in the form of Exhibit 1.02(a) (each a "Purchase
Notice"), and shall specify the desired amount and date of such Purchase, which
shall be a Settlement Date.
(b) Funding of Purchase. On the date of each Purchase, Conduit
Purchaser (or, if Conduit Purchaser has elected not to fund such Purchase, each
Committed Purchaser) shall, upon satisfaction of the applicable conditions set
forth in Article V, make available to the Administrator at the Administrator's
Office the amount of its Purchase in immediately available funds, and after
receipt by the Administrator of such funds, the Administrator shall
wire-transfer immediately available funds to an account designated by Seller in
the related Purchase Notice.
(c) Assignment of Asset Interest. Seller hereby sells, assigns and
transfers to Administrator, for the benefit of Purchasers, the Asset Interest.
SECTION 1.03. Reinvestments of Certain Collections; Payment of
Remaining Collections. (a) As of the close of business on each day during the
period from the date hereof to the Termination Date, Servicer shall, out of all
Collections received on such day:
(i) determine the portion of Collections attributable on any
day to the Asset Interest by multiplying (x) the amount of all
Collections received on such day times (y) the Asset Interest;
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(ii) out of the portion of Collections allocated to the Asset
Interest pursuant to clause (i), set aside and hold in trust for
Purchasers an amount equal to the sum of the estimated amount of Earned
Discount accrued in respect of the Capital (based on rate information
provided by the Administrator pursuant to Section 2.04), the accrued
Fees, all other amounts due to Purchasers, the Administrator, the
Affected Parties or the Indemnified Parties hereunder (other than the
Capital) and the Purchasers' Share of Servicer's Fee (in each case,
accrued through such day) and not so previously set aside;
(iii) apply the Collections allocated to the Asset Interest
pursuant to clause (i) and not set aside pursuant to clause (ii) to the
purchase from Seller of ownership interests in Pool Assets (each such
purchase being a "Reinvestment"); provided that (A) if there is an
Excess Amount after giving effect to other Collections previously set
aside pursuant to this clause (iii) and then so held, then Servicer
shall not make a Reinvestment to such extent, but shall set aside and
hold for the benefit of Purchasers, a portion of such Collections
which, together with other Collections previously set aside and then so
held, shall equal the Excess Amount; and (B) if the conditions
precedent to Reinvestment in Section 5.02 are not satisfied, then
Servicer shall not reinvest any of such Collections;
(iv) pay to Seller (A) the portion of Collections not
allocated to the Asset Interest pursuant to clause (i), less Seller's
Share of Servicer's Fee accrued through such day, and (B) the
Collections applied to Reinvestment pursuant to clause (iii); and
(v) out of the portion of Collections not allocated to the
Asset Interest pursuant to clause (i), pay to Servicer Seller's Share
of Servicer's Fee accrued through such day.
(b) Unreinvested Collections. Servicer shall set aside and hold in
trust for the benefit of Purchasers all Collections which pursuant to clause
(ii) or (iii) of Section 1.03(a) may not be reinvested in Pool Assets; provided
that unless the Administrator shall request it to do so in writing, Servicer
shall not be required to hold Collections that have been set aside in a separate
deposit account containing only such Collections. If, prior to the date when
such Collections are required to be paid to the Administrator pursuant to
Section 3.01, the amount of Collections set aside pursuant to clause (iii) of
Section 1.03(a) exceeds the Excess Amount, if any, and the conditions precedent
to Reinvestment set forth in Section 5.02 are satisfied, then Servicer shall
apply such Collections (or, if less, a portion of such Collections equal to the
amount of such excess) to the making of a Reinvestment.
SECTION 1.04. Asset Interest. (a) Components of Asset Interest. On any
date the Asset Interest will represent Administrator's (for the benefit of
Purchasers) combined undivided percentage ownership interest in (i) all then
outstanding Pool Receivables, (ii) all Related Security with respect to such
Pool Receivables, (iii) all of Seller's right and claims under the Purchase
Agreement, (iv) all lock-boxes and lock-box or collection accounts into which
Collections of Pool Receivables are or may be deposited, and all funds and
investments therein, (v) all Collections with respect to, and other proceeds of,
the foregoing and (vi) all books and records (including computer disks, tapes
and software) evidencing or relating to any of the foregoing, in each case,
whether now
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owned by Seller or hereafter acquired or arising, and wherever located (all of
the foregoing, collectively referred to as "Pool Assets").
(b) Computation of Asset Interest. On any date of computation, the
Asset Interest will be equal to a percentage, expressed as the following
fraction:
C
--------------------------
NPB x (1 - RRP)
where:
C = the Capital on such date.
RRP = the Required Reserve Percentage on such date.
NPB = the Net Pool Balance on such date;
provided, however, that from and after the Termination Date, the Asset Interest
will be 100%.
(c) Frequency of Computation. The Asset Interest shall be computed as
of the Cut-Off Date for each Settlement Period. In addition, the Administrator
may require Servicer to provide a Servicer Report for purposes of computing the
Asset Interest as of any other date, and Servicer agrees to do so within two
Business Days of its receipt of the Administrator's request in writing.
SECTION 1.05. Voluntary Termination of Purchase and Reinvestment
Obligations or Reduction of Purchase Limit. Seller may, upon at least 60 days'
prior written notice to the Administrator, either (a) terminate Conduit
Purchaser's option to fund, and each Committed Purchaser's commitment to make,
Purchases and Reinvestments hereunder, or (b) reduce the Purchase Limit to an
amount not less than $25,000,000; provided, however, that (i) each partial
reduction of the Purchase Limit shall be in an amount equal to $1,000,000 or an
integral multiple thereof, and (ii) after giving effect to such reduction, the
Capital will not exceed the Purchase Limit as so reduced. Any such reduction of
the Purchase Limit shall reduce each Committed Purchaser's Commitment on a pro
rata basis. The Purchase Limit may be increased upon the request of Seller and
the written consent of the Administrator and each Purchaser thereto, which
consent may be granted or withheld in their sole discretion and may be subject
to such conditions as they may require.
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.01. Computation of Capital. In making any determination of
Capital, the following rules shall apply:
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(a) Capital shall not be considered reduced by any allocation,
setting aside or distribution of any portion of Collections unless such
Collections shall have been actually delivered to the Administrator
pursuant hereto for application to the Capital; and
(b) Capital shall not be considered reduced by any
distribution of any portion of Collections if at any time such
distribution is rescinded or must otherwise be returned for any reason.
SECTION 2.02. Computation of Concentration Limit. In the case of any
Obligor that is (a) a Subsidiary of any other Obligor, (b) a parent of any other
Obligor, or (c) a Subsidiary of the same parent as any other Obligor, the
Concentration Limit and the aggregate Unpaid Balance of Pool Receivables of such
Obligors shall be calculated as if such Obligors were one Obligor.
SECTION 2.03. Computation of Earned Discount. In making any
determination of Earned Discount, the following rules shall apply:
(a) no provision of this Agreement shall require the payment
or permit the collection of Earned Discount in excess of the maximum
permitted by Applicable Law; and
(b) Earned Discount for any period shall not be considered
paid by any distribution if at any time such distribution is rescinded
or must otherwise be returned for any reason.
SECTION 2.04. Estimates of Earned Discount Rate, Fees, Etc. For
purposes of determining the amounts required to be set aside by Servicer
pursuant to Section 1.03, the Administrator shall notify Servicer from time to
time of the Earned Discount Rate applicable to the Capital and the rates at
which fees and other amounts are accruing hereunder. It is understood and agreed
that (i) the Earned Discount Rate may change from time to time, (ii) certain
rate information provided by the Administrator to Servicer shall be based upon
the Administrator's good faith estimate, (iii) the amount of Earned Discount
actually accrued with respect to the Capital during any Settlement Period may
exceed, or be less than, the amount set aside with respect thereto by Servicer,
and (iv) the amount of fees or other payables accrued hereunder with respect to
any Settlement Period may exceed, or be less than, the amount set aside with
respect thereto by Servicer. Failure to set aside any amount so accrued shall
not relieve Servicer of its obligation to remit Collections to the Administrator
with respect to such accrued amount, as and to the extent provided in Section
3.01.
ARTICLE III
SETTLEMENTS
SECTION 3.01. Settlement Procedures.
The parties hereto will take the following actions with respect to each
Settlement Period:
5
(a) Servicer Report; Weekly Report. On or before the tenth
(10th) calendar day (or if such day is not a Business Day, the next
succeeding Business Day) of each month prior to the Final Payout Date
(each, a "Reporting Date"), Servicer shall deliver to the Administrator
a report containing the information described in Exhibit 3.01(a) (each,
a "Servicer Report"). On or before the close of business on each
Tuesday (or if such day is not a Business Day, the next succeeding
Business Day) prior to the Final Payment Date, Servicer shall deliver
to the Administrator a report for the immediately preceding calendar
week containing the information described in Exhibit 3.01(a)-W (each, a
"Weekly Report").
(b) Earned Discount; Other Amounts Due. Two Business Days
prior to each Reporting Date, the Administrator shall notify Servicer
of (i) the amount of Earned Discount that will have accrued in respect
of the Capital as of the next Settlement Date and (ii) all Fees and
other amounts that will have accrued and be payable by Seller under
this Agreement on the next Settlement Date (other than Capital).
(c) Settlement Date Procedure - Reinvestment Period. On the
second Business Day after each Reporting Date (each, a "Settlement
Date") prior to the Termination Date, Servicer shall distribute from
Collections set aside pursuant to Sections 1.03(a)(ii) and (iii) during
the immediately preceding Settlement Period the following amounts in
the following order:
(1) to the Administrator, an amount equal to the
Earned Discount accrued during such Settlement Period, plus
any previously accrued Earned Discount not paid on a prior
Settlement Date, which amount shall be distributed by the
Administrator to each Purchaser for application to the accrued
Earned Discount with respect to such Purchaser's Capital;
(2) to the Administrator, an amount equal to the
Program Fee and Commitment Fee accrued during such Settlement
Period, plus any previously accrued Program Fee and Commitment
Fee not paid on a prior Settlement Date;
(3) to Servicer, if Servicer is not Parent, an amount
equal to the Purchasers' Share of Servicer's Fee accrued
during such Settlement Period, plus any previously accrued
Purchasers' Share of Servicer's Fee not paid on a prior
Settlement Date (it being understood that so long as Servicer
is Parent, no amount shall be distributed pursuant to this
clause (3));
(4) to the Administrator, an amount equal to the
Excess Amount, if any, which amount shall be distributed by
the Administrator to each Purchaser, based upon such
Purchaser's Funded Percentage, for application to such
Purchaser's outstanding Capital;
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(5) to the Administrator, all other amounts (other
than Capital) then due under this Agreement to the
Administrator, the Purchasers, the Affected Parties or the
Indemnified Parties;
(6) to Servicer, if Servicer is Parent, an amount
equal to the Purchasers' Share of Servicer's Fee accrued
during such Settlement Period, plus any previously accrued
Purchasers' Share of Servicer's Fee not paid on a prior
Settlement Day (it being understood that so long as Servicer
is not the Parent, no amount shall be distributed pursuant to
clause (6)); and
(7) to Seller, any remaining amounts.
(d) Settlement Date Procedure - Liquidation Period. On each
Settlement Date occurring after the Termination Date, Servicer shall
distribute from Purchasers' Share of Collections received, or deemed
received pursuant to Section 3.02, during the immediately preceding
Settlement Period the following amounts in the following order:
(1) to the Administrator, an amount equal to the
Earned Discount accrued during such Settlement Period, plus
any previously accrued Earned Discount not paid on a prior
Settlement Date, which amount shall be distributed by the
Administrator to each Purchaser for application to the accrued
Earned Discount with respect to such Purchaser's Capital;
(2) to the Administrator, an amount equal to the
Program Fee and Commitment Fee accrued during such Settlement
Period, plus any previously accrued Program Fee and Commitment
Fee not paid on a prior Settlement Date;
(3) to Servicer, if Servicer is not Parent, an amount
equal to the Purchasers' Share of Servicer's Fee accrued
during such Settlement Period, plus any previously accrued
Purchasers' Share of Servicer's Fee not paid on a prior
Settlement Date (it being understood that so long as Servicer
is Parent, no amount shall be distributed pursuant to this
clause (3));
(4) to the Administrator, an amount equal to the
remaining Purchasers' Share of Collections until the Capital
is reduced to zero, which amount shall be distributed by the
Administrator to each Purchaser, based upon such Purchaser's
Funded Percentage, for application to such Purchaser's
outstanding Capital;
(5) to the Administrator, all other amounts (other
than Capital) then due under this Agreement to the
Administrator, the Purchasers, the Affected Parties or the
Indemnified Parties;
(6) to Servicer, if Servicer is Parent, an amount
equal to the Purchasers' Share of Servicer's Fee accrued
during such Settlement Period, plus any previously
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accrued Purchasers' Share of Servicer's Fee not paid on a
prior Settlement Date (it being understood that so long as
Servicer is not the Parent, no amount shall be distributed
pursuant to clause (6)); and
(7) to Seller, any remaining amounts.
(e) Delayed Payment. If on any day described in this Section
3.01, because Collections during the relevant Settlement Period were
less than the aggregate amounts payable, Servicer does not make any
payment described in clauses (1) through (6) of Section 3.01(c) or (d),
as applicable, the next available Collections in respect of the Asset
Interest shall be applied to such payment, and no Reinvestment shall be
permitted hereunder until such amount payable has been paid in full.
SECTION 3.02. Deemed Collections; Reduction of Capital, Etc.
(a) Deemed Collections. If
(i) a Dilution occurs or the Unpaid Balance of any Pool
Receivable is less than the amount included in calculating the Net Pool
Balance for purposes of any Servicer Report for any other reason, or
(ii) any of the representations or warranties of Seller set
forth in Section 6.01(k) or (o) with respect to any Pool Receivable
were not true when made with respect to any Pool Receivable, or any of
the representations or warranties of Seller set forth in Section
6.01(k) are no longer true with respect to any Pool Receivable, or
(iii) without duplication, Seller receives a Deemed Collection
pursuant to the Purchase Agreement,
then, on the next succeeding Settlement Date (or, if earlier, on the date an
Originator pays a Deemed Collection pursuant to the Purchase Agreement), Seller
shall be deemed to have received a Collection of such Pool Receivable
(I) in the case of clause (i) above, in the amount of such
Dilution or the difference between the actual Unpaid Balance and the
amount included in calculating such Net Pool Balance, as applicable;
and
(II) in the case of clause (ii) above, in the amount of the
Unpaid Balance of such Pool Receivable; and
(III) in the case of clause (iii) above, in the amount of such
Deemed Collection.
(b) Seller's Optional Reduction of Capital. Seller may at any time
elect to reduce the Capital as follows:
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(i) Seller shall give the Administrator at least five (5)
Business Days' prior written notice of such reduction (including the
amount of such proposed reduction and the proposed date on which such
reduction will commence),
(ii) on the proposed date of commencement of such reduction
and on each day thereafter, Servicer shall refrain from reinvesting
Collections pursuant to Section 1.03 until the amount thereof not so
reinvested shall equal the desired amount of reduction, and
(iii) Servicer shall hold such Collections in trust for
Purchasers, pending payment to the Administrator on the next Settlement
Date, as provided in Section 1.03;
provided that,
(A) the amount of any such reduction shall be not less than
$1,000,000, and the Capital after giving effect to such reduction shall
be not less than $25,000,000 (unless Capital shall thereby be reduced
to zero), and
(B) Seller shall use reasonable efforts to attempt to choose a
reduction amount, and the date of commencement thereof, so that such
reduction shall commence and conclude in the same Settlement Period.
SECTION 3.03. Payments and Computations, Etc.
(a) Payments. All amounts to be paid or deposited by Seller or Servicer
to the Administrator hereunder shall be paid or deposited in accordance with the
terms hereof no later than 10:00 a.m. (Boston, Massachusetts time) on the day
when due in lawful money of the United States of America in immediately
available funds to the Administrator at ABA# 011 000 138, account # 940 518
9033; attention: Blue Keel.
(b) Late Payments. Seller or Servicer, as applicable, shall, to the
extent permitted by law, pay to the Administrator, interest on all amounts not
paid or deposited when such amount is due hereunder at 2% per annum above the
Alternate Base Rate, payable on demand, provided, however, that such interest
rate shall not at any time exceed the maximum rate permitted by Applicable Law.
(c) Method of Computation. All computations of interest, Earned
Discount and any fees payable hereunder shall be made on the basis of a year of
360 days for the actual number of days (including the first day but excluding
the last day) elapsed.
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ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees. Seller shall pay to the Administrator and
Purchasers the fees in the amounts and at the times set forth in the fee letter,
dated as of the date hereof, among the Administrator, Parent and Seller (as
amended or supplemented from time to time, the "Fee Letter").
SECTION 4.02. Yield Protection.
(a) If (i) Regulation D or (ii) any Regulatory Change occurring after
the date hereof
(A) shall subject an Affected Party to any tax, duty or other
charge with respect to any Asset Interest owned by or funded by it, or
any obligations or right to make Purchases or Reinvestments or to
provide funding therefor, or shall change the basis of taxation of
payments to the Affected Party of any Capital or Earned Discount owned
by, owed to or funded in whole or in part by it or any other amounts
due under this Agreement in respect of the Asset Interest owned by or
funded by it or its obligations or rights, if any, to make Purchases or
Reinvestments or to provide funding therefor (except for franchise
taxes or changes in the rate of tax on the net income of such Affected
Party imposed by any jurisdiction); or
(B) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Federal
Reserve Board), special deposit, compulsory loan or similar requirement
against assets of any Affected Party, deposits or obligations with or
for the account of any Affected Party or with or for the account of any
affiliate (or entity deemed by the Federal Reserve Board to be an
affiliate) of any Affected Party, or credit extended by any Affected
Party, but excluding any reserve, special deposit or similar
requirement included in the determination of Earned Discount; or
(C) shall change the amount of capital maintained or required
or requested or directed to be maintained by any Affected Party; or
(D) shall impose any other condition affecting any Asset
Interest owned or funded in whole or in part by any Affected Party, or
its obligations or rights, if any, to make Purchases or Reinvestments
or to provide funding therefor; or
(E) shall change the rate for, or the manner in which the
Federal Deposit Insurance Corporation (or a successor thereto)
assesses, deposit insurance premiums or similar charges;
and the result of any of the foregoing is
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(x) to increase the cost to or to impose a cost on an Affected
Party funding or making or maintaining any Purchases or Reinvestments,
any purchases, reinvestments, or loans or other extensions of credit
under any Program Agreement, or any commitment of such Affected Party
with respect to any of the foregoing,
(y) to reduce the amount of any sum received or receivable by
an Affected Party under this Agreement, or under any Program Agreement
with respect thereto, or
(z) to reduce the rate of return on the capital of an Affected
Party as a consequence of its obligations hereunder or under any
Program Agreement or arising in connection herewith to a level below
that which such Affected Party could otherwise have achieved,
then within thirty days after demand by such Affected Party (which demand shall
be accompanied by a statement setting forth the basis for, calculation of, and
amount of such additional costs or reduced amount receivable; provided, however,
that no Affected Party shall be required to disclose any confidential or tax
planning information in any such statement), Seller shall pay directly to such
Affected Party such additional amount or amounts as will compensate such
Affected Party for such additional or increased cost or such reduction, but
without duplication of any other similar additional amounts due under any other
Program Agreement.
(b) Seller shall not be required to compensate an Affected Party
pursuant to this Section 4.02 for any amounts incurred more than twelve (12)
months prior to the date such Affected Party notifies Seller of such Affected
Party's intention to claim compensation therefor, provided that, if the
circumstances giving rise to such claim have a retroactive effect, then such
twelve (12) month period shall be extended to include the period of such
retroactive effect.
(c) In determining any amount provided for or referred to in this
Section 4.02, an Affected Party may use any reasonable averaging and attribution
methods that it shall deem applicable. Any Affected Party when making a claim
under this Section 4.02 shall submit to Seller a statement as to such increased
cost or reduced return (including reasonable calculations and an explanation in
connection therewith), which statement shall, in the absence of manifest error,
be conclusive and binding upon Seller.
SECTION 4.03. Funding Losses. In the event that any Affected Party
shall incur any loss or expense (including any loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Affected Party to make or maintain any funding with respect to the Asset
Interest) as a result of (i) any settlement with respect to any portion of
Capital funded by such Affected Party being made on any day other than the
scheduled last day of an applicable Settlement Period with respect thereto, (ii)
any Purchase not being made in accordance with a request therefor under Section
1.02, or (iii) any reduction in the Capital that was funded on the date of the
initial Purchase prior to the Settlement Date occurring in January of 2002,
then, upon demand by the Administrator to Seller, Seller shall pay to the
Administrator for the account of such Affected Party, the amount of such loss or
expense. Such written notice (which
11
shall include calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding upon Seller.
ARTICLE V
CONDITIONS TO PURCHASES
SECTION 5.01. Conditions Precedent to Initial Purchase. The initial
Purchase hereunder is subject to the condition precedent that the Administrator
shall have received, on or before the date of such Purchase, the following, each
(unless otherwise indicated) dated such date and in form and substance
reasonably satisfactory to the Administrator:
(a) Good standing certificates for each of Parent, each
Originator and Seller issued by the Secretaries of State of the
jurisdiction of its incorporation and its principal place of business;
(b) A certificate of the Secretary or Assistant Secretary of
each of Seller, each Originator and Parent certifying (i) a copy of the
resolutions of its Board of Directors approving the Transaction
Documents to be delivered by it hereunder and the transactions
contemplated hereby; (ii) the names and true signatures of the officers
authorized on its behalf to sign the Transaction Documents to be
delivered by it hereunder (on which certificate the Administrator and
each Purchaser may conclusively rely until such time as the
Administrator shall receive from Seller, such Originator or Parent, as
the case may be, a revised certificate meeting the requirements of this
subsection (b)); (iii) a copy of its by- laws; and (iv) all documents
evidencing other necessary corporate action and governmental approvals,
if any, with respect to the Transaction Documents to which such Person
is a party;
(c) The Certificate of Incorporation or Articles of
Incorporation, as applicable, of each of Seller, each Originator and
Parent, duly certified by the Secretary of State of the jurisdiction of
its incorporation, as of a recent date;
(d) Acknowledgment copies, or time stamped receipt copies, of
proper financing statements (Form UCC-1), filed on or prior to the date
of the initial Purchase, naming (i) each Originator as a debtor and
seller of Receivables, Seller as the secured party and purchaser and
Administrator, for the benefit of Purchasers, as the assignee and (ii)
Seller as the debtor and seller of Receivables or an undivided interest
therein and Administrator, for the benefit of Purchasers, as the
secured party and purchaser, or other, similar instruments or
documents, as may be necessary or, in the opinion of the Administrator,
desirable under the UCC or any comparable law of all appropriate
jurisdictions to perfect Seller's and Purchasers' interests in the Pool
Assets;
(e) A search report provided in writing to and approved by the
Administrator listing all effective financing statements that name any
Originator as debtor or assignor and
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that are filed in the jurisdictions in which filings were made pursuant
to subsection (d) above and in such other jurisdictions that
Administrator shall reasonably request, together with copies of such
financing statements (none of which shall cover any Pool Assets, unless
executed termination statements and/or partial releases with respect
thereto have been delivered to the Administrator), and tax and judgment
lien search reports from a Person satisfactory to Servicer and the
Administrator showing no evidence of such liens filed against any
Originator;
(f) Duly executed copies of the Lock-Box Agreements with the
Lock-Box Banks (other than a Lock-Box Agreement with Royal Bank of
Canada);
(g) Opinions of (i) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to Parent,
the Originator and Seller, in substantially the forms of Exhibits
5.01(g)-1 and 5.01(g)-2, respectively and (ii) special Florida and
Canadian counsel reasonably satisfactory to the Administrator covering
such matters as the Administrator may request;
(h) Such powers of attorney as the Administrator shall
reasonably request to enable the Administrator to collect all amounts
due under any and all Pool Assets;
(i) A pro forma Servicer Report, prepared in respect of the
proposed initial Purchase, assuming a Cut-Off Date of September 30,
2001;
(j) Satisfactory results of a review and audit, conducted by
Fleet Securities, of Parent's collection, operating and reporting
systems, Credit and Collection Policy, historical receivables data and
accounts, including satisfactory results of a review of the Parent's
operating location(s) and satisfactory review and approval of the
Eligible Receivables in existence on the date of the initial Purchase;
(k) Evidence of payment of Seller by all accrued and unpaid
fees (including those contemplated by the Fee Letter), costs and
expenses to the extent then due and payable on the date thereof,
together with attorneys' fees of the Administrator to the extent
invoiced at least two Business Days prior to such date, including any
such costs, fees and expenses arising under or referenced in Section
14.05;
(l) The Liquidity Agreement, duly executed by Purchaser, the
Liquidity Agent and each Liquidity Bank; and
(m) The Purchase Agreement, duly executed by each Originator
and Seller, and a copy of all documents required to be delivered
thereunder.
SECTION 5.02. Conditions Precedent to All Purchases and Reinvestments.
Each Purchase (including the initial Purchase) and each Reinvestment hereunder,
shall be subject to the further conditions precedent that:
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(a) in the case of each Purchase, Servicer shall have
delivered to the Administrator on or prior to such Purchase, in form
and substance reasonably satisfactory to the Administrator, a completed
Servicer Report with respect to the immediately preceding calendar
month, dated within two (2) Business Days prior to the date of such
Purchase, together with such additional information as may be
reasonably requested by the Administrator; and
(b) on the date of such Purchase or Reinvestment the following
statements shall be true (and Seller by accepting the amount of such
Purchase or by receiving the proceeds of such Reinvestment shall be
deemed to have certified that):
(i) the representations and warranties contained in
Article VI are correct on and as of such day in all material
respects as though made on and as of such day and shall be
deemed to have been made on such day (except that any such
representation or warranty that is expressly stated as being
made only as of a specified earlier date shall be true and
correct in all material respects as of such earlier date),
(ii) no event has occurred and is continuing, or
would result from such Purchase or Reinvestment, that
constitutes a Liquidation Event or Unmatured Liquidation
Event,
(iii) after giving effect to each proposed Purchase
or Reinvestment, Capital will not exceed the Purchase Limit
and the Asset Interest will not exceed the Allocation Limit,
and
(iv) the Termination Date shall not have occurred;
provided, however, the absence of the occurrence and continuance of an Unmatured
Liquidation Event shall not be a condition precedent to any Reinvestment.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of Seller. Seller
represents and warrants as follows:
(a) Organization and Good Standing. Seller has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of New York, with power and authority to
own its properties as such properties are presently owned and to
conduct its business as such business is presently conducted, and had
at all relevant times, and now has, all necessary power, authority, and
legal right to acquire and own the Pool Assets.
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(b) Due Qualification. Seller is duly qualified to do business
as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all other jurisdictions in which
the ownership or lease of property or the conduct of its business
requires such qualification, licenses or approvals, except where the
failure to so qualify or have such licenses or approvals has not had,
and could not reasonably be expected to have, a Material Adverse
Effect.
(c) Power and Authority; Due Authorization. Seller (i) has all
necessary corporate power, authority and legal right to (A) execute and
deliver this Agreement and the other Transaction Documents to which it
is a party, (B) carry out the terms of the Transaction Documents to
which it is a party, and (C) sell and assign the Asset Interest on the
terms and conditions herein provided and (ii) has duly authorized by
all necessary corporate action the execution, delivery and performance
of this Agreement and the other Transaction Documents to which it is a
party and the sale and assignment of the Asset Interest on the terms
and conditions herein provided.
(d) Valid Transfer; Binding Obligations. This Agreement
constitutes a valid transfer and assignment of the Asset Interest to
the Administrator, for the benefit of Purchasers; and this Agreement
constitutes, and each other Transaction Document to be signed by Seller
when duly executed and delivered will constitute, a legal, valid and
binding obligation of Seller enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents to
which Seller is a party and the fulfillment of the terms hereof and
thereof will not (i) conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under, Seller's certificate of incorporation
or by-laws, (ii) conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under any Contractual Obligation of Seller
that could reasonably be expected to have a Material Adverse Effect,
(iii) result in the creation or imposition of any Lien upon any of
Seller's properties pursuant to the terms of any such Contractual
Obligation, other than any Lien created pursuant to this Agreement or
any other Transaction Document, or (iv) violate any Applicable Law, the
violation of which could reasonably be expected to have Material
Adverse Effect.
(f) No Proceedings. There is no litigation, proceeding or
investigation pending, or to the best of Seller's knowledge,
threatened, before any Governmental Authority or arbitrator (i)
asserting the invalidity of this Agreement or any other Transaction
Document to which Seller is a party, (ii) seeking to prevent the sale
and assignment of the Asset Interest or the consummation of any of the
other transactions contemplated by this Agreement or any
15
other Transaction Document, or (iii) seeking any determination or
ruling that could reasonably be expected to have a Material Adverse
Effect.
(g) Bulk Sales Act. No transaction contemplated hereby
requires compliance with any bulk sales act or similar law.
(h) Government Approvals. No Governmental Action is required
for the due execution, delivery and performance by Seller of this
Agreement or any other Transaction Document to which Seller is a party,
except for the filing of the UCC financing statements referred to in
Article V, all of which, at the time required in Article V, shall have
been duly made and shall be in full force and effect.
(i) Financial Condition. Since the date of Seller's formation,
there has been no material adverse change in Seller's results of
operations, financial condition or assets.
(j) Margin Regulations. The use of all funds obtained by
Seller under this Agreement will not conflict with or contravene any of
Regulations T, U and X promulgated by the Board of Governors of the
Federal Reserve System from time to time.
(k) Quality of Title. Each Pool Asset is legally and
beneficially owned by Seller free and clear of any Lien (other than any
Lien created hereby or arising solely as the result of any action taken
by a Purchaser or the Administrator); when the Administrator, for the
benefit of Purchasers, makes a Purchase or Reinvestment, it shall
acquire a valid and enforceable perfected first priority undivided
percentage interest to the extent of the Asset Interest in each Pool
Asset, free and clear of any Lien (other than any Lien created hereby
or arising solely as the result of any action taken by a Purchaser or
the Administrator), enforceable against any creditor of, or purchaser
from, Seller or any Originator; and no financing statement or other
instrument similar in effect covering any Pool Asset is on file in any
recording office except such as may be filed (i) in favor of an
Originator in accordance with the Contracts, (ii) in favor of Seller in
accordance with the Purchase Agreement, or (iii) in favor of a
Purchaser or the Administrator in accordance with this Agreement or in
connection with any Lien arising solely as the result of any action
taken by a Purchaser or the Administrator.
(l) Accurate Reports. No information included in any Servicer
Report or Weekly Report to the extent supplied by Seller, or other
information, exhibit, financial statement, document, book, record or
report furnished by or on behalf of Seller to the Administrator or any
Purchaser in connection with this Agreement was inaccurate in any
material respect as of the date it was dated or (except as otherwise
disclosed in writing to the Administrator at such time) as of the date
so furnished, or contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
contained therein, in light of the circumstances under which they were
made, not misleading.
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(m) Offices. The principal place of business and chief
executive office of Seller are located at the address of Seller
referred to in Section 14.02, and the offices where Seller keeps all
its books, records and documents evidencing or relating to Pool
Receivables are located at the addresses specified in Schedule 6.01(m)
(or at such other locations, notified to the Administrator in
accordance with Section 7.01(f), in jurisdictions where all action
required by Section 8.05 has been taken and completed).
(n) Lock-Box Accounts. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the lock-box
accounts of Seller at such Lock-Box Banks, are specified in Schedule
6.01(n) (or have been notified to the Administrator in accordance with
Section 7.03(d)).
(o) Eligible Receivables. Each Receivable included in the Net
Pool Balance as an Eligible Receivable on the date of any Purchase,
Reinvestment or other calculation of Net Pool Balance was an Eligible
Receivable on such date.
(p) Accounting Sale. Seller has accounted for each sale of
undivided percentage ownership interests in Receivables in its books
and financial statements as sales, consistent with GAAP.
(q) Credit and Collection Policy. Seller has complied in all
material respects with the Credit and Collection Policy with regard to
each Receivable.
(r) Corporate Name. Seller's complete corporate name is set
forth in the preamble to this Agreement, and Seller does not use and
has not during the last six years used any other corporate name, trade
name, doing business name or fictitious name.
SECTION 6.02. Representations and Warranties of Parent. Parent
represents and warrants as follows:
(a) Organization and Good Standing. Parent has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of New York, with power and authority to
own its properties as such properties are presently owned and to
conduct its business as such business is presently conducted.
(b) Due Qualification. Parent is duly qualified to do business
as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the
ownership or lease of property or the conduct of its business requires
such qualification, licenses or approvals, except where the failure to
so qualify or have such licenses or approvals has not had, and could
not reasonably be expected to have, a Material Adverse Effect.
(c) Power and Authority; Due Authorization. Parent (i) has all
necessary corporate power, authority and legal right to (A) execute and
deliver this Agreement and the
17
other Transaction Documents to which it is a party and (B) carry out
the terms of the Transaction Documents to which it is a party and (ii)
has duly authorized by all necessary corporate action the execution,
delivery and performance of this Agreement and the other Transaction
Documents to which it is a party.
(d) Binding Obligations. This Agreement constitutes, and each
other Transaction Document to be signed by Parent when duly executed
and delivered will constitute, a legal, valid and binding obligation of
Parent enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents to
which Parent is a party and the fulfillment of the terms hereof and
thereof will not (i) conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under the Parent's articles of incorporation
or by-laws, (ii) conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under any Contractual Obligation of Parent
that could reasonably be expected to have a Material Adverse Effect,
(iii) result in the creation or imposition of any Lien upon any of
Parent's properties pursuant to the terms of any such Contractual
Obligation (other than any Lien created pursuant to the Transaction
Documents), or (iv) violate any Applicable Law, the violation of which
could reasonably be expected to have a Material Adverse Effect.
(f) No Proceedings. Except as set forth on Schedule 6.02(f),
there is no litigation, proceeding or investigation pending or, to the
best of Parent's knowledge, threatened, before any Governmental
Authority or arbitrator (i) asserting the invalidity of this Agreement
or any other Transaction Document to which Parent is a party, (ii)
seeking to prevent the sale and assignment of the Asset Interest or the
consummation of any of the other transactions contemplated by this
Agreement or any other Transaction Document, or (iii) seeking any
determination or ruling that could reasonably be expected to have a
Material Adverse Effect.
(g) Government Approvals. No Governmental Action is required
for the due execution, delivery and performance by Parent of this
Agreement or any other Transaction Document to which it is a party,
other than the filing of the UCC financing statements referred to in
Article V, all of which, at the time required in Article V, shall have
been duly made and shall be in full force and effect.
(h) Financial Condition. The audited consolidated balance
sheets of Parent as at December 31, 1988, December 31, 1999 and
December 31, 2000, and the related consolidated statements of income
and cash flows for the fiscal years ended on such dates
18
reported on by and accompanied by an unqualified report from
PricewaterhouseCoopers LLP, present fairly the consolidated financial
position of Parent as at such dates and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal
years then ended. The unaudited consolidated balance sheet of Parent as
at March 31, 2001 and June 31, 2001, and the related unaudited
consolidated statements of income and cash flows for the three-month
and six-month, respectively, periods ended on such dates, present
fairly the consolidated financial position of Parent as at such dates,
and the consolidated results of its operations and its consolidated
cash flows for the three-month and six-month, respectively, periods
then ended (subject to normal year- end audit adjustments). All such
financial statements, including the related schedules and any notes
thereto (except in the case of any notes to the financial statements
dated as of March 31, 2001 or June 30, 2001), have been prepared in
accordance with GAAP applied consistently throughout the periods
involved (except as approved by the aforementioned firm of accountants
and disclosed therein). Since December 31, 2001 there has been no
material adverse change in any such business, results of operations,
assets or financial position.
(i) Accurate Reports. No information included in any Servicer
Report or Weekly Report to the extent supplied by Parent, or other
information, exhibit, financial statement, document, book, record or
report furnished by or on behalf of Parent to the Administrator or any
Purchaser, in connection with this Agreement was inaccurate in any
material respect as of the date it was dated or (except as otherwise
disclosed in writing to the Administrator at such time) as of the date
so furnished, or contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
contained therein, in light of the circumstances under which they were
made, not misleading.
ARTICLE VII
GENERAL COVENANTS
SECTION 7.01. Affirmative Covenants. From the date hereof until the
Final Payout Date:
(a) Compliance with Laws, Etc. Each of Seller and Parent will
comply in all material respects with all Applicable Laws, including
those with respect to the Pool Receivables and the related Contracts,
except where noncompliance could not reasonably be expected to have a
Material Adverse Effect.
(b) Preservation of Corporate Existence. Each of Seller and
Parent will preserve and maintain its corporate existence in the
jurisdiction of its formation, and qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where the
failure to preserve and maintain such existence and qualification could
reasonably be expected to have a Material Adverse Effect.
19
(c) Audits. (i) Each of Parent and Seller will from time to
time during regular business hours and, unless a Liquidation Event has
occurred and is continuing, on reasonable prior written notice, permit
the Administrator or any of its agents or representatives, (A) to
examine and make copies of and abstracts from all books, records and
documents (including, without limitation, computer tapes and disks) in
its possession or under its control relating to Pool Assets, (B) to
visit its offices and properties for the purpose of examining such
materials described in clause (i)(A) above, and to discuss matters
relating to Pool Assets or its performance hereunder with any of its
officers or employees having knowledge of such matters, and (C) to
verify the existence and amount of the Receivables; and (ii) without
limiting the provisions of clause (i) above, from time to time on the
written request of Administrator during regular business hours, permit
certified public accountants or other auditors acceptable to the
Administrator and, unless a Liquidation Event has occurred and is
continuing, reasonably acceptable to Parent to conduct, at Seller's or
Parent's, as the case may be, expense, a review of its books and
records with respect to the Pool Receivables; provided, however that
unless a Liquidation Event has occurred and is continuing, Seller and
Parent shall not be obligated to pay for more than one such review in
each calendar year. Any such certified public accountants or other
auditors shall be obligated to enter into a customary confidentiality
agreement with Parent.
(d) Keeping of Records and Books of Account. Each of Seller
and Parent will maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate
records evidencing Pool Receivables in the event of the destruction of
the originals thereof) and keep and maintain all documents, books,
records and other information reasonably necessary or advisable for the
collection of all Pool Assets (including, without limitation, records
adequate to permit the daily identification of each new Pool Receivable
and all Collections of and adjustments to each existing Pool
Receivable).
(e) Performance and Compliance with Receivables and Contracts.
Seller will timely and fully perform and comply (or cause an Originator
to perform and comply pursuant to the Purchase Agreement) with all
provisions, covenants and other promises required to be observed by it
under the Contracts related to the Pool Receivables and all other
agreements related to such Pool Receivables, except where failure to do
so would not materially adversely affect the validity, enforceability
or collectibility of the related Pool Receivable.
(f) Location of Records. Each of Seller and Parent will keep
its principal place of business and chief executive office, and the
offices where it keeps its records concerning the Pool Receivables and
all related Contracts and all other agreements related to such Pool
Receivables (and all original documents relating thereto), at its
address(es) referred to in Section 14.02 or, upon 30 days' prior
written notice to the Administrator, at such other locations in
jurisdictions where all action required by Section 8.05 shall have been
taken and completed.
20
(g) Credit and Collection Policies. Each of Seller and Parent,
at its own expense, will timely and fully perform and comply in all
material respects with the Credit and Collection Policy in regard to
each Pool Receivable and the related Contracts.
(h) Collections. Each of Seller and Parent will instruct (i)
all Obligors to cause all Collections to be sent to a Lock-Box that is
the subject of a Lock-Box Agreement and (ii) each Lock-Box Bank to
deposit all such Collections directly into a Lock-Box Account that is
the subject of a Lock-Box Agreement. In the event that Parent or Seller
receives Collections directly from any Obligor, Parent or Seller, as
the case may be, shall deposit such Collections into a Lock-Box Account
within two Business Days of receipt thereof.
(i) Net Worth. Seller will maintain a Tangible Net Worth of at
least $2,000,000.
(j) Quality of Title. Each of Seller and Parent will take all
action reasonably necessary or advisable to establish and maintain a
valid and enforceable perfected first priority undivided percentage
interest in favor of the Administrator, for the benefit of the
Purchasers, to the extent of the Asset Interest in each Pool Asset,
free and clear of any Lien (other than any Lien created by this
Agreement or any other Transaction Document or arising solely as a
result of any action taken by a Purchaser or the Administrator),
enforceable against any creditor of, or purchaser from, Seller or
Parent.
(k) Financial Covenants. Parent will not permit Consolidated
Net Worth as of the end of any fiscal quarter during any fiscal year of
Parent to be less than the sum of (i) $223,406,000 plus (ii) 75% of
Consolidated Net Income since June 30, 2001 plus (iii) Net Cash
Proceeds from the sale of Capital Stock of Parent on a cumulative basis
since June 30, 2001.
(l) Availability. Parent will at all times maintain undrawn
commitments under the Credit Agreement that are available to Parent in
an amount not less than an amount equal to (A) the greater of (i)
$5,000,000 and (ii) the aggregate Dilutions for the most recently ended
month, minus (B) the amount of cash and cash equivalents (as determined
pursuant to GAAP) of Parent and its Subsidiaries as of the date of
determination..
SECTION 7.02. Reporting Requirements. From the date hereof until the
Final Payout Date:
(a) Quarterly Financial Statements. As soon as available and
in any event within 45 days after the end of each of the first three
quarterly periods of each fiscal year (i) Seller will furnish to the
Administrator copies of its unaudited financial statements, consisting
of at least a balance sheet of Seller as at the close of such quarter
and the related unaudited statements of income and of cash flows for
such quarter and for the portion of the fiscal year through the end of
such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by the chief financial officer
of Seller as being fairly stated in all material respects (subject to
normal year-end audit adjustments) and (ii) Parent will
21
furnish to the Administrator copies of the unaudited consolidated
financial statements of Parent, consisting of at least an unaudited
consolidated balance sheet of Parent and its Subsidiaries as at the end
of such quarter and the related unaudited statements of income and cash
flows for such quarter and for the portion of the fiscal year through
the end of such quarter, setting forth in each case in comparative form
the figures for the previous year, certified by the principal financial
officer of Parent as being fairly stated in all material respects
(subject to normal year-end audit adjustments); all of the foregoing
financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance
with GAAP applied consistently throughout the periods reflected therein
and with prior periods (except as approved by such officer and
disclosed therein, provided that such financial statements need not
contain footnotes);
(b) Annual Financial Statements. As soon as available and in
any event within 90 days after the end of each fiscal year (i) Seller
will furnish to the Administrator copies of its audited financial
statements, consisting of at least a balance sheet of Seller as at the
end of such year and the related audited consolidated statements of
income and cash flows for such year, setting forth in each case in
comparative form the figures for the previous year reported on without
a "going-concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by PricewaterhouseCoopers LLP or
other independent certified public accountants of nationally recognized
standing; and (ii) Parent will furnish to the Administrator copies of
its audited financial statements, consisting of at least the audited
consolidated balance sheet of Parent and its Subsidiaries as at the end
of such year and a related audited consolidated statements of income
and of cash flow for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without
a "going-concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by PricewaterhouseCoopers LLP or
other independent certified public accountants of national recognized
standing; all of the foregoing financial statements shall be complete
and correct in all material respects and shall be prepared in
reasonable detail and in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior periods (except
as approved by such accountants and disclosed therein);
(c) Compliance Certificate. Together with each quarterly and
annual financial statement delivered in accordance with the preceding
paragraphs, Parent will furnish to the Administrator a compliance
certificate showing a calculation of the financial covenant set forth
in Section 7.01(k) certified by the principal financial officer of
Parent;
(d) Liquidation Events. Each of Seller and Parent will furnish
to the Administrator, as soon as possible and in any event within two
Business Days after an officer of Seller or Parent obtains actual
knowledge of the occurrence of each Liquidation Event and each
Unmatured Liquidation Event, a written statement of the chief financial
officer or chief accounting officer of Seller or Parent, as the case
may be, setting forth details of such event and the action that Seller
or Parent, as the case may be, proposes to take with respect thereto;
22
(e) Litigation. Each of Seller and Parent will furnish to the
Administrator, as soon as possible and in any event within three
Business Days of Seller's or Parent's actual knowledge thereof, notice
of (i) any litigation, investigation or proceeding which may exist at
any time which is not fully covered by insurance and which could be
reasonably expected to have a Material Adverse Effect and (ii) any
material adverse development in previously disclosed litigation;
(f) Change in Credit and Collection Policy. Each of Seller and
Parent will furnish to the Administrator, prior to its effective date,
notice of any material change in the Credit and Collection Policy;
(g) Change in Name. Seller will furnish to the Administrator,
at least thirty days prior to any change in Seller's name, principal
business, location, jurisdiction of organization or any other change
requiring the amendment of UCC financing statements, a notice setting
forth such changes and the effective date thereof; and
(h) Other Information. Each of Seller and Parent will furnish
to the Administrator such other information respecting the Receivables
or the condition or operations, financial or otherwise, of the Parent
or Seller or any of Parent's Subsidiaries as the Administrator may from
time to time reasonably request.
SECTION 7.03. Negative Covenants. From the date hereof until the Final
Payout Date:
(a) Sales, Liens, Etc. Seller will not, except as otherwise
provided herein or in the other Transaction Documents, sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist any Lien upon or with respect to, any Pool Asset or any
interest therein.
(b) Extension or Amendment of Receivables. Neither Parent nor
Seller will, except as otherwise permitted in Section 8.02, extend,
amend or otherwise modify, or permit Servicer to extend, amend or
otherwise modify, the terms of any Pool Receivable; or amend, modify or
waive, or permit Servicer to amend, modify or waive, any term or
condition of any Contract related to a Pool Receivable.
(c) Change in Business or Credit and Collection Policy.
Neither Parent nor Seller will make any change in the character of its
business or in the Credit and Collection Policy, which change could
materially impair the collectibility of any Pool Receivable or
otherwise materially adversely affect the interests or remedies of the
Administrator or any Purchaser under this Agreement or any other
Transaction Document.
(d) Change in Payment Instructions to Obligors. Neither Parent
nor Seller will add or terminate any bank as a Lock-Box Bank or any
Lock-Box Account from those listed in Schedule 6.01(n) or make any
change, or permit Servicer to make any change, in its
23
instructions to Obligors regarding payments to be made to Seller or
Servicer or payments to be made to any Lock-Box Bank, unless the
Administrator shall have received prior notice of such addition,
termination or change and duly executed copies of Lock-Box Agreements
with each new Lock-Box Bank or with respect to each new Lock-Box
Account, as the case may be.
(e) Mergers, Acquisitions, Sales, etc. Neither Parent nor
Seller will (i) be a party to any merger with or acquisition of any
other Person without the consent of the Administrator, unless, in the
case of Parent, Parent is the surviving corporation and no Liquidation
Event has occurred and is continuing or would result therefrom, or (ii)
sell, transfer, convey or lease all or substantially all of its assets,
or sell or assign with or without recourse any Receivables or any
interest therein (other than pursuant hereto or to the Purchase
Agreement). Parent will not sell any of the capital stock of Seller, or
permit any Lien to exist thereon.
(f) Deposits to Special Accounts. Neither Parent nor Seller
will deposit or otherwise credit, or cause or permit to be so deposited
or credited, to any Lock-Box Account cash or cash proceeds other than
Collections of Pool Receivables.
(g) Other Business. Seller will not (i) engage in any business
other than the transactions contemplated by the Transaction Documents;
(ii) incur any indebtedness, obligation, liability or contingent
obligation of any kind other than pursuant to this Agreement or the
Purchase Agreement; or (iii) form any Subsidiary or make any
investments in any other Person.
(h) Certificate of Incorporation; Purchase Agreement. Seller
will not amend, modify, terminate, revoke or waive any provision of its
certificate of incorporation, any Initial Purchaser Note or the
Purchase Agreement.
(i) Restricted Payments. Seller will not declare or make any
dividend or other distributions to any of its shareholders, redeem or
purchase any of its capital stock or make any loan or other payments to
any of its shareholders (other than (1) payments of the purchase price
of Receivables as set forth in the Purchase Agreement, (2) the
turn-over of Collections of Reconveyed Receivables to an Originator as
set forth in the Purchase Agreement, (3) payment of Servicer's Fee so
long as Parent is Servicer and (4) payment of reasonable management
fees and reimbursement of reasonable expenses of Parent incurred in
connection with managing Seller) unless, in each case, no Liquidation
Event or Unmatured Liquidation Event has occurred and is continuing or
would result therefrom.
(j) Change of Name or Location. Seller will not change its
name or the location of its principal place of business or chief
executive office or its corporate structure or its jurisdiction or
organization, unless Seller has given the Administrator at least thirty
(30) days prior notice thereof, and has taken all steps necessary or
advisable under the UCC to
24
continue the perfection and priority of the Administrator's and each
Purchaser's interest in the Pool Assets.
SECTION 7.04. Separate Existence. Each of Seller and Parent hereby
acknowledges that each Purchaser, the Program Support Providers and the
Administrator are entering into the transactions contemplated by this Agreement
and the other Transaction Documents in reliance upon Seller's identity as a
legal entity separate from Parent. Therefore, from and after the date hereof,
each of Seller and Parent shall take all steps specifically required by this
Agreement or by any Purchaser or the Administrator to continue Seller's identity
as a separate legal entity and to make it apparent to third Persons that Seller
is an entity with assets and liabilities distinct from those of Parent and any
other Person, and is not a division of Parent or any other Person. Without
limiting the generality of the foregoing and in addition to and consistent with
the other covenants set forth herein, each of Seller and Parent shall take such
actions as shall be required in order that:
(a) Seller will be a limited purpose corporation whose primary
activities are restricted in its certificate of incorporation to
purchasing or otherwise acquiring from the Originators, owning,
holding, granting security interests, or selling interests, in Pool
Assets, entering into agreements for the selling and servicing of the
Receivables Pool, and conducting such other activities as it deems
necessary or appropriate to carry out its primary activities;
(b) Seller shall not engage in any business or activity, or
incur any indebtedness or liability other than as expressly permitted
by the Transaction Documents;
(c) Not less than one member of Seller's Board of Directors
shall be an Independent Director. The certificate of incorporation of
Seller shall provide that (i) Seller's Board of Directors shall not
approve, or take any other action to cause the filing of, a voluntary
bankruptcy or insolvency petition or similar proceeding or a merger or
dissolution with respect to Seller unless the Independent Director
shall approve the taking of such action in writing prior to the taking
of such action and (ii) such provision cannot be amended without the
prior written consent of the Independent Director;
(d) The Independent Director shall not at any time serve as a
trustee in bankruptcy for Seller, Parent or any Affiliate thereof;
(e) Any employee, consultant or agent of Seller will be
compensated from Seller's funds for services provided to Seller. Seller
will not engage any agents other than its attorneys, auditors and other
professionals, and a Servicer as contemplated by the Transaction
Documents for the Receivables Pool, which Servicer will be fully
compensated for its services by payment of Servicer's Fee and a
manager, which manager will be fully compensated from Seller's funds;
(f) Seller will not incur any material indirect or overhead
expenses for items shared with Parent (or any other Affiliate thereof)
which are not reflected in Servicer's Fee
25
or the fee to Parent in its role as manager for Seller. To the extent,
if any, that Seller (or any other Affiliate thereof) share items of
expenses not reflected in Servicer's Fee or the manager's fee, such as
legal, auditing and other professional services, such expenses will be
allocated to the extent practical on the basis of actual use or the
value of services rendered, and otherwise on a basis reasonably related
to the actual use or the value of services rendered, it being
understood that Parent shall pay all expenses relating to the
preparation, negotiation, execution and delivery of the Transaction
Documents, including, without limitation, legal and other fees;
(g) Seller's operating expenses will not be paid by Parent or
any other Affiliate thereof;
(h) Seller will have its own stationery;
(i) Seller's books and records will be maintained separately
from those of Parent and any other Affiliate thereof;
(j) All financial statements of Parent or any Affiliate
thereof that are consolidated to include Seller will contain detailed
notes clearly stating that (A) all of Seller's assets are owned by
Seller, and (B) Seller is a separate entity with creditors who have
received security interests in Seller's assets;
(k) Seller's assets will be maintained in a manner that
facilitates their identification and segregation from those of Parent
or any Affiliate thereof;
(l) Seller will strictly observe corporate formalities in its
dealings with Parent or any Affiliate thereof, and funds or other
assets of Seller will not be commingled with those of Parent or any
Affiliate thereof except as permitted by this Agreement in connection
with servicing the Pool Receivables. Seller shall not maintain joint
bank accounts or other depository accounts to which Parent or any
Affiliate thereof (other than Parent in its capacity as Servicer) has
independent access;
(m) Seller will maintain arms'-length relationships with
Parent (and any Affiliate thereof). Any Person that renders or
otherwise furnishes services to Seller will be compensated by Seller at
market rates for such services it renders or otherwise furnishes to
Seller. Neither Seller nor Parent will be or will hold itself out to be
responsible for the debts of the other or the decisions or actions
respecting the daily business and affairs of the other. Seller and
Parent will immediately correct any known misrepresentation with
respect to the foregoing, and they will not operate or purport to
operate as an integrated single economic unit with respect to each
other or in their dealing with any other entity; and
(n) Seller and Parent will take such other actions as may be
necessary to ensure that the facts and assumptions set forth in the
opinion issued by ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ in
26
connection with the initial Purchase and in the certificate
accompanying such opinion remain true and correct.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer.
(a) Parent as Initial Servicer. The servicing, administering and
collection of the Pool Receivables shall be conducted by the Person designated
as servicer hereunder ("Servicer") from time to time in accordance with this
Section 8.01. Until the Administrator gives to Parent a Successor Notice, Parent
is hereby designated as, and hereby agrees to perform the duties and obligations
of, Servicer pursuant to the terms hereof.
(b) Successor Notice; Servicer Transfer Events. Upon Parent's receipt
of notice from the Administrator of the Administrator's designation of a new
Servicer (a "Successor Notice"), Parent agrees that it will terminate its
activities as Servicer hereunder in a manner that the Administrator reasonably
believes will facilitate the transition of the performance of such activities to
the new Servicer, and the new Servicer shall assume each and all of Parent's
obligations to service and administer such Pool Receivables, on the terms and
subject to the conditions herein set forth, and Parent shall use its reasonable
best efforts to assist the new Servicer in assuming such obligations. The
Administrator agrees not to give Parent a Successor Notice until after the
occurrence of a Liquidation Event (any such Liquidation Event being herein
called a "Servicer Transfer Event"), in which case such Successor Notice may be
given at any time in the Administrator's discretion.
(c) Resignation. The Parent acknowledges that the Administrator and
each Purchaser have relied on the Parent's agreement to act as Servicer
hereunder in making their decision to execute and deliver this Agreement.
Accordingly, the Parent agrees that it will not voluntarily resign as Servicer.
(d) Subcontracts. Servicer may, with the prior consent of the
Administrator, subcontract with any other Person for servicing, administering or
collecting the Pool Receivables, provided that (i) such sub-servicer shall agree
in writing to perform its duties and obligations in a manner not inconsistent
with the duties and obligations of Servicer pursuant to the terms hereof; (ii)
Servicer shall remain primarily liable for the performance of the duties and
obligations of Servicer pursuant to the terms hereof, (iii) Seller, the
Administrator and each Purchaser shall have the right to look solely to Servicer
for performance, and (iv) any such subcontract may be terminated at the option
of the Administrator upon the occurrence of a Servicer Transfer Event. The
Administrator and each Purchaser acknowledges that Servicer has appointed each
Originator as a sub-servicer with respect to the Receivables generated by such
Originator, and each of the Administrator and each Purchaser hereby consents
thereto. Servicer may, in its sole and absolute discretion, remove any
subservicer at any time.
27
(e) Servicing Programs. In the event that Servicer uses any software
program in servicing the Pool Receivables that it licenses from a third party,
upon the occurrence of a Servicer Transfer Event, Servicer shall use its
reasonable best efforts to obtain whatever licenses or approvals are necessary
to allow the Administrator or the new Servicer to use such program.
SECTION 8.02. Duties of Servicer.
(a) Appointment; Duties in General. Each of Seller, each Purchaser and
the Administrator hereby appoints Servicer as its agent, as from time to time
designated pursuant to Section 8.01, to enforce its rights and interests in and
under the Pool Assets. Servicer shall take or cause to be taken all such actions
as may be necessary or advisable to collect each Pool Receivable from time to
time, all in accordance with Applicable Law and the Credit and Collection
Policy.
(b) Allocation of Collections; Segregation. Servicer shall set aside
for the account of Seller and Purchasers their respective allocable shares of
the Collections of Pool Receivables in accordance with Section 1.03 but shall
not be required (unless otherwise instructed by the Administrator) to segregate
the funds constituting such portions of such Collections prior to the remittance
thereof in accordance with Section 3.01. If instructed by the Administrator,
Servicer shall segregate and deposit with a bank designated by the
Administrator, Purchasers' Share of Collections, on the second Business Day
following receipt by Servicer of such Collections in immediately available
funds.
(c) Modification of Receivables. So long as no Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing, Servicer may
(i) in accordance with the Credit and Collection Policy, adjust the Unpaid
Balance of any Defaulted Receivable or extend the time for payment of any
Defaulted Receivable (but in no event to a date later than 120 days from the
date of the original invoice), provided that (A) such extension or adjustment
shall not alter the status of such Pool Receivable as an Overdue Receivable or a
Defaulted Receivable or limit the rights of any Purchaser or the Administrator
under this Agreement, and (B) the aggregate amount of all such adjustments made
in any Settlement Period, plus the aggregate Unpaid Balance of all Pool
Receivables that have been extended during such Settlement Period, shall not
exceed 2% of the aggregate Unpaid Balance of all Pool Receivables as at the
Cut-Off Date for such Settlement Period and (ii) adjust the Unpaid Balance of
any Receivable to reflect the reductions or cancellations described in the first
sentence of Section 3.02(a).
(d) Documents and Records. Seller shall deliver to Servicer, and
Servicer shall hold in trust for Seller and Purchasers in accordance with their
respective interests, all documents, instruments and records (including, without
limitation, computer tapes or disks) that evidence Pool Receivables.
(e) Certain Duties to Seller. Servicer shall, as soon as practicable
following receipt, turn over to Seller that portion of Collections of Pool
Receivables representing Seller's undivided interest therein, less Seller's
Share of Servicer's Fee. Seller hereby directs Servicer to pay any Collections
of any Reconveyed Receivable directly to the related Originator to be applied
pursuant to the
28
Purchase Agreement. Servicer shall, as soon as practicable upon demand, deliver
to Seller copies of documents, instruments and records in its possession that
evidence Pool Receivables.
(f) Termination. Servicer's authorization under this Agreement shall
terminate upon the Final Payout Date.
(g) Power of Attorney. Seller hereby grants to Servicer an irrevocable
power of attorney, with full power of substitution, coupled with an interest, to
take in the name of Seller all steps which are necessary or advisable to
endorse, negotiate or otherwise realize on any writing or other right of any
kind held or transmitted by Seller or transmitted or received by a Purchaser
(whether or not from Seller) in connection with any Receivable. Notwithstanding
anything to the contrary contained herein, the Administrator may direct Servicer
to commence or settle any legal action to enforce collection of any Pool
Receivable or to foreclose upon or repossess any Related Security; provided,
however, that no such direction may be given unless either (i) a Liquidation
Event has occurred or (ii) the Administrator believes in good faith that failure
to commence, settle, or effect such legal action, foreclosure or repossession,
could adversely affect Receivables constituting a material portion of the Pool
Receivables, provided that the Administrator has given Servicer at least two
Business Days' notice of its intention to give such direction.
SECTION 8.03. Rights of the Administrator.
(a) Notice to Obligors. At any time after the occurrence of a
Liquidation Event, the Administrator may notify the Obligors of Pool
Receivables, or any of them, of the ownership of the Asset Interest by the
Administrator, for the benefit of Purchasers.
(b) Notice to Lock-Box Banks. At any time following the earlier to
occur of (i) the occurrence of a Liquidation Event, and (ii) the commencement of
the Liquidation Period, the Administrator is hereby authorized to give notice to
the Lock-Box Banks, as provided in the Lock-Box Agreements, of the transfer to
the Administrator of dominion and control over the lock-boxes and Lock-Box
Accounts. Each of Servicer and Seller hereby transfers to the Administrator,
effective when the Administrator shall give notice to the Lock-Box Banks as
provided in the Lock-Box Agreements, the exclusive dominion and control over
such lock-boxes and accounts, and shall take any further action that the
Administrator may reasonably request to effect such transfer. Any proceeds of
Pool Receivables received by Seller or Parent, as Servicer or otherwise,
thereafter shall be sent immediately to the Administrator.
(c) Rights on Servicer Transfer Event. At any time following the
designation of a Servicer other than Parent pursuant to Section 8.01:
(i) The Administrator may direct the Obligors of Pool
Receivables, or any of them, to pay all amounts payable under any Pool
Receivable directly to the Administrator or its designee.
29
(ii) Parent shall, at the Administrator's request and at
Parent's expense, give notice of such ownership to each said Obligor
and direct that payments be made directly to the Administrator or its
designee.
(iii) Parent and Seller shall, at the Administrator's request,
(A) assemble all of the documents, instruments and other records
(including, without limitation, computer programs, tapes and disks)
which evidence the Pool Receivables and the related Contracts and
Related Security, or which are otherwise necessary or desirable to
collect such Pool Receivables and make the same available to the
Administrator at a place selected by the Administrator, and (B)
segregate all cash, checks and other instruments received by it from
time to time constituting Collections in a manner acceptable to the
Administrator and promptly upon receipt, remit all such cash, checks
and instruments, duly endorsed or with duly executed instruments of
transfer, to the Administrator.
(iv) Each of Seller and each Purchaser hereby authorizes the
Administrator, and grants to the Administrator an irrevocable power of
attorney, to take any and all steps in Seller's name and on behalf of
Seller and any Purchaser which are necessary or desirable, in the
reasonable determination of the Administrator, to collect all amounts
due under any and all Pool Receivables including, without limitation,
endorsing Seller's name on checks and other instruments representing
Collections and enforcing such Pool Receivables and the related
Contracts, provided that, notwithstanding anything to the contrary set
forth herein, in the Purchase and Sale Agreement or in any separate
power of attorney granted by Seller or any Originator in connection
herewith, the Administrator shall not exercise such power of attorney
unless and until a Servicer other than Parent has been appointed
pursuant to Section 8.01.
SECTION 8.04. Responsibilities of Seller. Anything herein to the
contrary notwithstanding:
(a) Contracts. Seller shall perform, or cause an Originator to
perform under the Purchase Agreement, all of its material obligations
under the Contracts related to the Pool Receivables and under the other
agreements related thereto to the same extent as if the Asset Interest
had not been sold hereunder, and the exercise by the Administrator or
its designee of its rights hereunder shall not relieve Seller from any
obligations under such Contracts and other agreements.
(b) Limitation of Liability. Neither the Administrator nor any
Purchaser shall have any obligation or liability with respect to any
Pool Receivables, the related Contracts or any other related
agreements, nor shall any of them be obligated to perform any of the
obligations of Seller or any Originator thereunder.
SECTION 8.05. Further Action Evidencing Purchases and Reinvestments.
30
(a) Further Assurances. Seller shall, at its expense, take all action
necessary or advisable to establish and maintain a valid and enforceable first
priority perfected undivided ownership interest, to the extent of the Asset
Interest, in the Pool Assets, free and clear of any Lien, in favor of the
Administrator, for the benefit of Purchasers. Without limiting the generality of
the foregoing, Seller will upon the request of the Administrator or its designee
execute and file such financing or continuation statements, or amendments
thereto or assignments thereof, and such other instruments or notices, as may be
necessary or appropriate to evidence or perfect the interest described in the
previous sentence.
(b) Data Processing Records. Each of Parent and Seller will ▇▇▇▇ its
master data processing records evidencing the Pool Receivables with the legend
set forth below evidencing that the Asset Interest has been sold in accordance
with this Agreement.
AN OWNERSHIP AND SECURITY INTEREST IN THE RECEIVABLES
DESCRIBED HEREIN HAS BEEN GRANTED AND ASSIGNED TO FLEET
SECURITIES, INC., AS ADMINISTRATOR, PURSUANT TO A RECEIVABLES
PURCHASE AGREEMENT, DATED AS OF NOVEMBER 1, 2001, AMONG CONMED
CORPORATION, CONMED RECEIVABLES CORPORATION, BLUE KEEL
FUNDING, LLC, FLEET NATIONAL BANK AND FLEET SECURITIES, INC.,
AS THE ADMINISTRATOR.
(c) Additional Financing Statements; Performance by Administrator.
Seller hereby authorizes the Administrator or its designee to file one or more
financing or continuation statements, and amendments thereto and assignments
thereof, relative to all or any portion of the Asset Interest now existing or
hereafter arising in the name of Seller. If Seller or Parent fails to perform
any of its agreements or obligations under this Agreement, the Administrator or
its designee may (but shall not be required to), after notice to Seller or
Parent (unless immediate action is reasonably required to protect the interests
of the Administrator or Purchasers), itself perform, or cause performance of,
such agreement or obligation, and the expenses of the Administrator or its
designee incurred in connection therewith shall be payable by Seller or Parent,
as the case may be.
(d) Continuation Statements; Opinion. Without limiting the generality
of subsection (a), Seller will, not earlier than six (6) months and not later
than three (3) months prior to the fifth anniversary of the date of filing of
the financing statement referred to in Section 5.01(d) or any other financing
statement filed pursuant to this Agreement or in connection with any Purchase
hereunder, unless the Final Payout Date shall have occurred, execute, if
required, and deliver and file or cause to be filed an appropriate continuation
statement with respect to such financing statement.
(e) Lock-Box Agreement. On or before December 26, 2001, Servicer shall
cause a Lock-Box Agreement in form and substance reasonably satisfactory to the
Administrator to be executed by Servicer, Seller and Royal Bank of Canada and
delivered to the Administrator.
31
SECTION 8.06. Application of Collections. Any payment by an Obligor in
respect of any indebtedness owed by it to Seller shall, (i) except as otherwise
specified by such Obligor, (ii) except as otherwise required by the underlying
Contract or law or (iii) unless the Administrator instructs otherwise, be
applied, first, as a Collection of any Pool Receivable or Receivables then
outstanding of such Obligor in the order of the age of such Pool Receivables,
starting with the oldest of such Pool Receivable and, second, to any other
indebtedness of such Obligor.
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest. To secure all obligations of
Seller arising in connection with this Agreement and each other Transaction
Document, whether now or hereafter existing, due or to become due, direct or
indirect, or absolute or contingent, including, without limitation, all
Indemnified Amounts, payments on account of Collections of Pool Receivables
received or deemed to be received and fees, Seller hereby assigns and grants to
Administrator, for the benefit of the Secured Parties, a security interest in
all of Seller's right, title and interest (including specifically any undivided
interest retained by Seller hereunder) now or hereafter existing in, to and
under all of the Pool Assets.
SECTION 9.02. Further Assurances. The provisions of Section 8.05 shall
apply to the security interest granted under Section 9.01 as well as to the
Purchases, Reinvestments and the Asset Interest hereunder.
SECTION 9.03. Remedies. Upon the occurrence of a Liquidation Event, the
Administrator and Purchaser shall have, with respect to the collateral granted
pursuant to Section 9.01, and in addition to all other rights and remedies
available to Purchaser or the Administrator under this Agreement or other
applicable law, all the rights and remedies of a secured party upon default
under the UCC.
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.01. Liquidation Events. The following events shall be
"Liquidation Events" hereunder:
(a) (i) Servicer (if Parent or an Affiliate of Parent is
Servicer) shall fail to perform or observe any obligation of Servicer
to provide any Servicer Report or Weekly Report when due hereunder or
any obligation of Servicer pursuant to Section 8.02 and such failure
shall remain unremedied for more than three Business Days after written
notice thereof shall have been given by the Administrator to Servicer
(provided that no notice shall
32
be required in the case of the failure to provide any Servicer Report
when due) or (ii) Seller or Servicer (if Parent or its Affiliate is
Servicer) shall fail to make any payment or deposit to be made by it
hereunder within two (2) Business Days of when due; or
(b) Any representation or warranty made or deemed to be made
by Seller, Parent or any Originator under or in connection with this
Agreement, any other Transaction Document, any Weekly Report or any
Servicer Report or other information or report delivered pursuant
hereto shall prove to have been inaccurate in any material respect when
made; or
(c) Seller, Parent or any Originator shall fail to perform or
observe any other term, covenant or agreement contained in this
Agreement (other than the covenant set forth in Section 8.05(e)) or any
of the other Transaction Documents on its part to be performed or
observed and any such failure shall continue unremedied for ten (10)
Business Days after written notice thereof shall have been given by the
Administrator to Seller or Parent, as the case may be; or
(d) A default shall have occurred and be continuing under any
instrument or agreement evidencing, securing or relating to
Indebtedness in excess of $20,000,000 of, or guaranteed by, Parent or
any Subsidiary thereof, which default is a payment default or if
unremedied, uncured, or unwaived (with or without the passage of time
or the giving of notice or both) would permit acceleration of the
maturity of such indebtedness and such default shall have continued
unremedied, uncured or unwaived for a period long enough to permit such
acceleration; or
(e) This Agreement or any Purchase or any Reinvestment
pursuant to this Agreement shall for any reason (other than pursuant to
the terms hereof) (i) cease to create, or the Asset Interest shall for
any reason cease to be, a valid and enforceable perfected undivided
percentage interest to the extent of the Asset Interest in each Pool
Asset, free and clear of any other Lien (other than a Lien arising
solely as the result of any action taken by a Purchaser or the
Administrator) or (ii) cease to create with respect to the items
described in Section 9.01, or the interest of the Administrator (for
the benefit of Purchasers) with respect to such items shall cease to
be, a valid and enforceable first priority perfected security interest,
free and clear of any other Lien (other than a Lien arising solely as
the result of any action taken by a Purchaser or the Administrator); or
(f) An Event of Bankruptcy shall have occurred and remain
continuing with respect to Seller, Parent or any Originator; or
(g) The average of the Sales-Based Dilution Ratios for any
three successive Cut-Off Dates exceeds 20%; or
(h) The average of the Default Ratios for any three successive
Cut-Off Dates exceeds 5%; or
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(i) On any Settlement Date, after giving effect to the
payments made under Section 3.01(c), the Asset Interest exceeds the
Allocation Limit; or
(j) The average of the Delinquency Ratios for any three
successive Cut-Off Dates is greater than 10%; or
(k) There shall exist any event or occurrence that has caused
a Material Adverse Effect; or
(l) Seller or Parent is subject to a Change-in-Control; or
(m) The Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Internal Revenue Code with regard to
any of the assets of Seller or Parent and such lien shall not have been
released within 5 Business Days, or the Pension Benefit Guaranty
Corporation shall file notice of a lien pursuant to Section 4068 of the
Employee Retirement Income Security Act of 1974 with regard to any of
the assets of Seller or Parent and such lien shall not have been
released within 5 Business Days.
SECTION 10.02. Remedies.
(a) Optional Liquidation. Upon the occurrence of a Liquidation Event
(other than a Liquidation Event described in subsection (f) of Section 10.01),
the Administrator shall, at the request, or may with the consent, of Purchasers,
by notice to Seller declare the Purchase Termination Date to have occurred and
the Liquidation Period to have commenced.
(b) Automatic Liquidation. Upon the occurrence of a Liquidation Event
described in subsection (f) of Section 10.01 with respect to Parent or Seller,
the Purchase Termination Date shall occur and the Liquidation Period shall
commence automatically.
(c) Additional Remedies. Upon any Purchase Termination Date occurring
pursuant to this Section 10.02, no Purchases or Reinvestments thereafter will be
made, and the Administrator and each Purchaser shall have, in addition to all
other rights and remedies under this Agreement or otherwise, all other rights
and remedies provided under the UCC of each applicable jurisdiction and other
Applicable Law, which rights shall be cumulative.
ARTICLE XI
THE ADMINISTRATOR
SECTION 11.01. Authorization and Action. Pursuant to the Program
Agreements, each Purchaser has appointed and authorized the Administrator (or
its designees) to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Administrator by the terms
hereof, together with such powers as are reasonably incidental thereto.
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SECTION 11.02. Administrator's Reliance, Etc. The Administrator and its
directors, officers, agents or employees shall not be liable for any action
taken or omitted to be taken by it or them under or in connection with the
Transaction Documents (including, without limitation, the servicing,
administering or collecting of Pool Receivables as Servicer pursuant to Section
8.01), except for its or their own gross negligence, bad faith or willful
misconduct. Without limiting the generality of the foregoing, the Administrator:
(a) may consult with legal counsel, independent certified public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (b) makes no warranty or representation to
Purchaser or any other holder of any interest in Pool Receivables and shall not
be responsible to any Purchaser or any such other holder for any statements,
warranties or representations made in or in connection with any Transaction
Document; (c) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Transaction Document on the part of Seller or Parent or to inspect the property
(including the books and records) of Seller, any Originator or Parent; (d) shall
not be responsible to Purchaser or any other holder of any interest in Pool
Receivables for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Transaction Document or any Receivable;
and (e) shall incur no liability under or in respect of this Agreement by acting
upon any notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by facsimile) believed by it in good faith
to be genuine and signed or sent by the proper party or parties.
SECTION 11.03. Fleet and Affiliates. Fleet and any of its Affiliates
may generally engage in any kind of business with Seller, Parent, any Originator
or any Obligor, any of their respective Affiliates and any Person who may do
business with or own securities of Seller, Parent, any Originator or any Obligor
or any of their respective Affiliates, all as if Fleet were not the
Administrator, and without any duty to account therefor to Purchaser or any
other holder of an interest in Pool Receivables.
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01. Restrictions on Assignments.
(a) Neither Seller nor Parent may assign its rights, or delegate its
duties, hereunder or any interest herein without the prior written consent of
the Administrator. No Purchaser may assign its rights hereunder (although it may
delegate its duties hereunder as expressly indicated herein) or the Asset
Interest (or any portion thereof) to any Person without the prior written
consent of Seller, which consent shall not be unreasonably withheld; provided,
however, that, without such consent, Conduit Purchaser may assign all of its
rights and interests in the Transaction Documents, together with all its
interest in the Asset Interest, to (i) Fleet or any Subsidiary thereof, or (ii)
to any "bankruptcy remote" special purpose entity the business of which is
administered by Fleet or any Subsidiary thereof, so long as such entity has the
ability to issue commercial paper notes, or to cause
35
the issuance of commercial paper notes, to fund the Asset Interest or (iii) to
any Liquidity Bank (or agent on behalf of the Liquidity Banks). If Conduit
Purchaser notifies Seller and Parent that it has decided to assign its rights
and delegate its duties hereunder to the Liquidity Banks (or an agent therefor)
and the Liquidity Banks agree to assume the obligations of the Conduit Purchaser
hereunder, Seller and Parent agree to enter into such amendments hereto and to
the other Transaction Documents as the Administrator may reasonably request to
reflect such assignment and delegation.
(b) Seller agrees to advise the Administrator within ten (10) Business
Days after notice to Seller of any proposed assignment by a Purchaser of the
Asset Interest (or any portion thereof), not otherwise permitted under
subsection (a), of Seller's consent or non-consent to such assignment. All of
the aforementioned assignments shall be upon such terms and conditions as the
assigning Purchaser and the assignee may mutually agree.
SECTION 12.02. Rights of Assignee. Upon the assignment by a Purchaser
in accordance with this Article XII, the assignee receiving such assignment
shall have all of the rights and shall assume in writing all of the obligations
of the assigning Purchaser with respect to the Transaction Documents and the
Asset Interest (or such portion thereof as has been assigned), and the assigning
Purchaser shall be released from such obligations.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities.
(a) General Indemnity by Seller. Without limiting any other rights
which any such Person may have hereunder or under Applicable Law, Seller hereby
agrees to indemnify each of the Administrator, each Purchaser, each Program
Support Provider, each of their respective Affiliates, and all successors,
permitted transferees, participants and permitted assigns and all officers,
directors, shareholders, members, controlling persons, employees and agents of
any of the foregoing (each an "Indemnified Party"), within ten (10) Business
Days of demand, from and against any and all damages, losses, claims,
liabilities and related costs and expenses, including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or relating to the Transaction Documents or the ownership or funding of the
Asset Interest or in respect of any Receivable or any Contract, excluding,
however, (a) Indemnified Amounts to the extent resulting from gross negligence,
bad faith or willful misconduct on the part of such Indemnified Party or (b)
Indemnified Amounts which have the effect of recourse for non-payment of the
Pool Receivables due to credit problems of the Obligors (except as otherwise
specifically provided in this Agreement). Without limiting the foregoing, Seller
shall indemnify each Indemnified Party for Indemnified Amounts arising out of or
relating to:
36
(i) the transfer by Seller of any interest in any Pool
Receivable other than the transfer of an Asset Interest to the
Administrator, for the benefit of Purchasers, pursuant to this
Agreement and the grant of a security interest to the Administrator
pursuant to Section 9.01;
(ii) any representation or warranty made by Seller under or in
connection with any Transaction Document, any Servicer Report, any
Weekly Report or any other information or report delivered by or on
behalf of Seller pursuant hereto, which shall have been false,
incorrect or misleading in any respect when made;
(iii) the failure by Seller to comply with any Applicable Law,
or the nonconformity of any Pool Receivable or the related Contract
with any Applicable Law;
(iv) the failure to vest and maintain vested in the
Administrator, for the benefit of Purchasers, an undivided percentage
ownership interest, to the extent of the Asset Interest, in the Pool
Assets, free and clear of any Lien, other than a Lien created pursuant
to this Agreement or any other Transaction Document or arising solely
as a result of an act of a Purchaser or the Administrator, whether
existing at the time of any Purchase or Reinvestment of such Asset
Interest or at any time thereafter;
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to
any Pool Assets, whether at the time of any Purchase or Reinvestment or
at any time thereafter;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy or payment) of the Obligor to the payment of
any Receivable included in the Net Pool Balance (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 services related to
such Receivable or the furnishing or failure to furnish such
merchandise or services;
(vii) any breach by Seller of any of its covenants or
agreements under this Agreement or any other Transaction Document;
(viii) any products liability claim arising out of or in
connection with merchandise or services that are the subject of any
Pool Receivable;
(ix) any litigation, proceeding or investigation against
Seller; or
(x) any tax or governmental fee or charge (but not including
taxes upon or measured by net income or representing a franchise or
unincorporated business tax of such Person), all interest and penalties
thereon or with respect thereto, and all out-of-pocket costs
37
and expenses, including the reasonable fees and expenses of counsel in
defending against the same, which may arise by reason of the purchase
or ownership of any Asset Interest, or any other interest in the Pool
Receivables or in any goods which secure any such Pool Receivables.
(b) Indemnity by Servicer. Without limiting any other rights which any
such Person may have hereunder or under applicable law, Servicer hereby agrees
to indemnify each Indemnified Party, within five (5) Business Days of demand,
from and against any and all Indemnified Amounts awarded against or incurred by
any of them arising out of or relating to (i) any representation or warranty
made by Servicer under or in connection with any Transaction Document, any
Servicer Report, any Weekly Report or any other information or report delivered
by or on behalf of Servicer pursuant hereto, which shall have been false,
incorrect or misleading when made, (ii) the failure by Servicer to comply with
any Applicable Law, (iii) any breach by Servicer of any of its covenants or
agreements under this Agreement or any other Transaction Document or (iv) the
commingling of any Collections with other funds.
(c) After-Tax Basis. Indemnification hereunder shall be in an amount
necessary to make the Indemnified Party whole after taking into account any tax
consequences to the Indemnified Party of the receipt of the indemnity provided
hereunder, including the effect of such tax or refund on the amount of tax
measured by net income or profits which is or was payable by the Indemnified
Party.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement nor consent to any departure by any party therefrom shall in
any event be effective unless the same shall be in writing and signed by (a)
Seller, the Administrator, Parent and each Purchaser (with respect to an
amendment) or (b) the Administrator and each Purchaser (with respect to a waiver
or consent by them) or Seller or Parent (with respect to a waiver or consent by
it), as the case may be, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given. The
parties acknowledge that, before entering into such an amendment or granting
such a waiver or consent, Conduit Purchaser may also be required to obtain the
approval of some or all of the Program Support Providers or to obtain
confirmation from certain rating agencies that such amendment, waiver or consent
will not result in a withdrawal or reduction of the ratings of the Commercial
Paper Notes.
SECTION 14.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
express mail or courier or by certified mail, postage prepaid, or by facsimile,
to the intended party at the address or facsimile number of such party set forth
under its name on Schedule 14.02 or at such other address or facsimile number as
shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall be effective, (a) if
personally delivered or sent by express mail or courier or
38
if sent by certified mail, when received, and (b) if transmitted by facsimile,
when sent, receipt confirmed by telephone or electronic means, if sent during
business hours on a Business Day or on the next Business Day in all other cases.
SECTION 14.03. No Waiver; Remedies. No failure on the part of the
Administrator, any Affected Party, any Indemnified Party, any Purchaser or any
other holder of the Asset Interest (or any portion thereof) to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 14.04. Binding Effect; Survival. This Agreement shall be
binding upon and inure to the benefit of Seller, Parent, the Administrator, each
Purchaser and their respective successors and assigns, and the provisions of
Section 4.02 and Article XIII shall inure to the benefit of the Affected Parties
and the Indemnified Parties, respectively, and their respective successors and
assigns; provided, however, nothing in the foregoing shall be deemed to
authorize any assignment not permitted by Section 12.01. This Agreement shall
create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until the
Final Payout Date. The rights and remedies with respect to any breach of any
representation and warranty made by Seller or Parent pursuant to Article VI and
the provisions of Article XIII and Sections 4.02, 14.05, 14.06, 14.07, 14.08 and
14.15 shall be continuing and shall survive any termination of this Agreement.
SECTION 14.05. Costs, Expenses and Taxes. In addition to its
obligations under Article XIII, Seller or Parent, as the case may be, agrees to
pay within five Business Days of demand;
(a) all costs and expenses incurred by the Administrator, any
Program Support Provider and any Purchaser and their respective
Affiliates, in connection with the enforcement after the occurrence of
a Liquidation Event against Seller or Parent, as the case may be, of,
or any actual or claimed breach by Seller or Parent, as the case may
be, of, this Agreement and the other Transaction Documents, including,
without limitation (A) the reasonable fees and expenses of counsel to
any of such Persons incurred in connection with any of the foregoing or
in advising such Persons as to their respective rights and remedies
under any of the Transaction Documents, and (B) all reasonable
out-of-pocket expenses (including reasonable fees and expenses of
independent accountants incurred in connection with any review of
Seller's or Parent's, as the case may be, books and records either
prior to the execution and delivery hereof or pursuant to Section
7.01(c) or otherwise); and
(b) all stamp and other taxes and fees payable or determined
to be payable in connection with the execution, delivery, filing and
recording of this Agreement or the other Transaction Documents, and
agrees to indemnify each Indemnified Party against any liabilities with
respect to or resulting from any delay in paying or omission to pay
such taxes and fees.
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SECTION 14.06. No Proceedings; Limitations on Recourse. Seller, Parent,
Servicer and Fleet Securities (individually and as Administrator) each hereby
agrees that it will not institute against Conduit Purchaser, or join any other
Person in instituting against Conduit Purchaser, any insolvency proceeding
(namely, any proceeding of the type referred to in the definition of Event of
Bankruptcy) so long as any Commercial Paper Notes shall be outstanding or there
shall not have elapsed one year plus one day since the last day on which any
such Commercial Paper Notes shall have been outstanding. The parties hereto
agree that Conduit Purchaser shall have no obligations to make any payments
hereunder (collectively, "Purchaser Payments"), and that such Purchaser Payments
shall not constitute a claim against Conduit Purchaser as defined in ss.101 of
the Bankruptcy Code, unless and until Conduit Purchaser has amounts sufficient
to pay such Purchaser Payments from the Asset Interest or pursuant to the
Liquidity Agreement and such amounts are not required to repay Commercial Paper
Notes of Conduit Purchaser or loans to Conduit Purchaser funded by Commercial
Paper Notes. Conduit Purchaser shall not have any obligation to pay any amounts
owing hereunder unless and until Conduit Purchaser has received such amounts.
SECTION 14.07. Confidentiality of Program Information.
(a) Confidential Information. Each party hereto acknowledges that Fleet
Securities regards the structure of the transactions contemplated by this
Agreement to be proprietary, and each such party severally agrees that:
(i) it will not disclose without the prior consent of Fleet
Securities or as is required or authorized by the Transaction Documents
(other than to the directors, employees, agents, auditors, counsel or
affiliates (collectively, "representatives") of such party, each of
whom shall be informed by such party of the confidential nature of the
Program Information (as defined below) and of the terms of this Section
14.07), (A) any information regarding the pricing in, or copies of,
this Agreement or any transaction contemplated hereby, (B) any
information regarding the organization, business or operations of
Purchaser generally or the services performed by the Administrator for
Purchaser, or (C) any information which is furnished by Fleet
Securities to such party and which is designated by Fleet Securities to
such party in writing as confidential or not otherwise available to the
general public (the information referred to in clauses (A), (B) and (C)
is collectively referred to as the "Program Information"); provided,
however, that such party may disclose any such Program Information (I)
to any other party to this Agreement for the purposes contemplated
hereby, (II) as may be required by any Governmental Authority having or
claiming to have jurisdiction over such party, (III) in order to comply
with Applicable Law, including, without limitation, by filing the
Transaction Documents with the Securities and Exchange Commission
(provided that neither Seller nor Parent shall file the Fee Letter, or,
if required by Applicable Law to file the Fee Letter, Parent or Seller,
as the case may be, shall request confidential treatment therefor) or
(IV) subject to subsection (c), in the event such party is legally
compelled (by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to disclose
any such Program Information, unless legally compelled not to do so;
40
(ii) it will use the Program Information solely for the
purposes of evaluating, administering and enforcing the transactions
contemplated by this Agreement and making any necessary business
judgments with respect thereto; and
(iii) it will, upon demand, return (and cause each of its
representatives to return) to Fleet Securities, all documents or other
written material (other than documents executed by such party) received
from Fleet Securities, as the case may be, in connection with (a)(i)(B)
or (C) above and all copies thereof made by such party which contain
the Program Information.
(b) Availability of Confidential Information. This Section 14.07 shall
be inoperative as to such portions of the Program Information which are or
become generally available to the public or such party on a nonconfidential
basis from a source other than Fleet Securities or were known to such party on a
nonconfidential basis prior to its disclosure by Fleet Securities.
(c) Legal Compulsion to Disclose. In the event that any party or anyone
to whom such party or its representatives transmits the Program Information is
requested or becomes legally compelled (by interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any of the Program Information, such party will, to the
extent that it may legally do so,
(i) provide Fleet Securities with prompt written notice so
that Fleet Securities may seek a protective order or other appropriate
remedy and/or waive compliance with the provisions of this Section
14.07; and
(ii) unless Fleet Securities waives compliance by such party
with the provisions of this Section 14.07, make a timely objection to
the request or confirmation to provide such Program Information on the
basis that such Program Information is confidential and subject to the
agreements contained in this Section 14.07.
In the event that such protective order or other remedy is not obtained, or
Fleet Securities waives compliance with the provisions of this Section 14.07,
such party will furnish only that portion of the Program Information which (in
such party's good faith judgment) is legally required to be furnished and will
exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Program Information.
(d) Survival. This Section 14.07 shall survive termination of this
Agreement.
SECTION 14.08. Confidentiality of Parent Information.
(a) Confidential Information. Each party hereto acknowledges that each
of Seller and Parent regards certain information to be proprietary, and each
such party severally agrees that:
41
(i) it will not disclose without the prior consent of Parent
or as is required or authorized by the Transaction Documents (other
than to the directors, employees, agents, auditors, counsel or
affiliates (collectively, "representatives") of such party, each of
whom shall be informed by such party of the confidential nature of the
Parent Information (as defined below) and of the terms of this Section
14.08), any information which is furnished by Parent to such party and
which is designated by Parent or Seller to such party in writing as
confidential or not otherwise available to the general public ("Parent
Information"); provided, however, that such party may disclose any such
Parent Information (I) to any other party to this Agreement for the
purposes contemplated hereby, (II) as may be required by any
Governmental Authority having or claiming to have jurisdiction over
such party, (III) in order to comply with any Applicable Law, (IV)
subject to subsection (c), in the event such party is legally compelled
(by interrogatories, requests for information or copies, subpoena,
civil investigative demand or similar process) to disclose any such
Parent Information, (V) to any Affected Party (provided such Person has
agreed to be bound by the terms of this Section 14.08), (VI) to the
Rating Agencies, or (VII) to any potential Liquidity Bank or any
potential assignee or participant of any Liquidity Bank (provided such
Person has agreed to be bound by the terms of this Section 14.08), and
any placement agent for, or investor or potential investor in, the
Commercial Paper Notes; and
(ii) it will use the Parent Information solely for the
purposes of evaluating, administering and enforcing the transactions
contemplated by this Agreement and making any necessary business
judgments with respect thereto.
(b) Availability of Confidential Information. This Section 14.08 shall
be inoperative as to such portions of the Parent Information which are or become
generally available to the public or such party on a nonconfidential basis from
a source other than Parent or were known to such party on a nonconfidential
basis prior to its disclosure by Parent.
(c) Legal Compulsion to Disclose. In the event that any party or anyone
to whom such party or its representatives transmits the Parent Information is
requested or becomes legally compelled (by interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any of the Parent Information, such party will, to the
extent that it may legally do so,
(i) provide Parent with prompt written notice so that Parent
may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 14.08; and
(ii) unless Parent waives compliance by such party with the
provisions of this Section 14.08, make a timely objection to the
request or confirmation to provide such Parent Information on the basis
that such Parent Information is confidential and subject to the
agreements contained in this Section 14.08.
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In the event that such protective order or other remedy is not obtained, or
Parent waives compliance with the provisions of this Section 14.08, such party
will furnish only that portion of the Parent Information which (in such party's
good faith judgment) is legally required to be furnished and will exercise
reasonable efforts to obtain reliable assurance that confidential treatment will
be accorded the Parent Information.
(d) Survival. This Section 14.08 shall survive termination of this
Agreement.
SECTION 14.09. Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise indicated,
references in this Agreement to any Section, Appendix, Schedule or Exhibit are
to such Section of or Appendix, Schedule or Exhibit to this Agreement, as the
case may be, and references in any Section, subsection, or clause to any
subsection, clause or subclause are to such subsection, clause or subclause of
such Section, subsection or clause.
SECTION 14.10. Integration. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and shall
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof, superseding all prior oral or written understandings.
SECTION 14.11. Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE
PERFECTION OF THE INTERESTS OF THE ADMINISTRATOR IN THE POOL ASSETS IS GOVERNED
BY THE LAWS OF THE JURISDICTION OTHER THAN THE STATE OF NEW YORK.
SECTION 14.12. Waiver Of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
BE IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT A JURY TRIAL.
SECTION 14.13. Consent To Jurisdiction; Waiver Of Immunities. EACH
PARTY HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT HEREBY IRREVOCABLY (i) SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR UNITED
STATES FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN,
43
STATE OF NEW YORK, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY TRANSACTION DOCUMENT; (ii) AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH STATE OR UNITED STATES FEDERAL COURT; (iii) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING;
(iv) CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION
OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON
AT ITS ADDRESS SPECIFIED IN SECTION 14.02; AND (v) TO THE EXTENT
ALLOWED BY LAW, AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY LAW. NOTHING IN THIS SECTION 14.13 SHALL AFFECT THE ADMINISTRATOR'S
OR ANY PURCHASER'S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING ANY ACTION OR PROCEEDING AGAINST ANY OF
SELLER OR PARENT OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTIONS.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
SECTION 14.14. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.
SECTION 14.15. No Recourse Against Other Parties. No recourse under any
obligation, covenant or agreement of Conduit Purchaser contained in this
Agreement shall be had against any stockholder (solely in its capacity as
stockholder), employee, officer, director, member or incorporator of Conduit
Purchaser, provided, however, that nothing in this Section 14.15 shall relieve
any of the foregoing Persons from any liability which such Person may otherwise
have for his/her or its gross negligence, bad faith or willful misconduct.
44
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
CONMED RECEIVABLES CORPORATION,
as Seller
By:
-------------------------------------------
Name Printed:
-------------------------------
Title:
----------------------------------------
CONMED CORPORATION, as initial Servicer
By:
-------------------------------------------
Name Printed:
-------------------------------
Title:
----------------------------------------
BLUE KEEL FUNDING, LLC,
as Conduit Purchaser
By:
-------------------------------------------
Name Printed:
-------------------------------
Title:
----------------------------------------
FLEET NATIONAL BANK,
as Committed Purchaser
Commitment: $50,000,000
By:
-------------------------------------------
Name Printed:
-------------------------------
Title:
----------------------------------------
FLEET SECURITIES, INC., as Administrator
By:
-------------------------------------------
Name Printed:
-------------------------------
Title:
----------------------------------------
S-1
SCHEDULE 6.01(m)
LIST OF OFFICES OF SELLER WHERE RECORDS ARE KEPT
1. Parent and Seller currently have the following business locations, and no
others:
Parent: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(for Linvatec Corporation)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
(for Linvatec Canada ULC)
Seller: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Parent and Seller maintain their books and records relating to Accounts
and General Intangibles at:
The addresses set forth above.
SCHEDULE 6.01(n)
LIST OF LOCK-BOX AGREEMENTS
The Chase Manhattan Bank
Account No.: 550123571 (Linvatec Corporation)
Account No.: 550129383 (CONMED Corporation)
Fleet National Bank
Account No.: 7015046907
SCHEDULE 7.01(g)
DESCRIPTION OF CREDIT AND COLLECTION POLICY
(see attached)
SCHEDULE 14.02
NOTICE ADDRESSES
Conduit Purchaser:
Blue Keel Funding, LLC
c/o Global Securitization Services, LLC
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: 212/▇▇▇-▇▇▇▇
Facsimile: 212/302-8767
with a copy to the Administrator
Administrator:
Fleet Securities, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: 617/▇▇▇-▇▇▇▇
Facsimile: 617/434-5719
Committed Purchaser:
Fleet National Bank
Mail Stop: NY-UT-36105C
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇. ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: 315/▇▇▇-▇▇▇▇
Facsimile: 315/426-4374
Seller:
CONMED Receivables Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President, with copies to
Chief Financial Officer and
General Counsel
Telephone: 315/▇▇▇-▇▇▇▇
Facsimile: 315/793-8929
Parent:
CONMED Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President, with copies to
Chief Financial Officer and
General Counsel
Telephone: 315/▇▇▇-▇▇▇▇
Facsimile: 315/793-8929
EXHIBIT 5.01(f)
FORM OF LOCK-BOX AGREEMENT
[Letterhead of Seller]
LOCK-BOX AGREEMENT
___________, 20___
[Name and Address of
Lock-Box Bank]
Ladies and Gentlemen:
1
Reference is made to our [lock-box]*/ account[s] no[s]. maintained with
you (the "Account[s]"). Pursuant to a Receivables Purchase Agreement dated as of
November 1, 2001 among us, as Seller, Blue Keel Funding, LLC ("Blue Keel"), as
Conduit Purchaser, CONMED Corporation, as Servicer, Fleet National Bank, as
Committed Purchaser, and Fleet Securities, Inc., as administrator (the
"Administrator"), we have assigned and/or may hereafter assign to the
Administrator, for the benefit of Blue Keel and its assigns, one or more
undivided percentage interests in accounts, chattel paper, instruments or
general intangibles (collectively, "Receivables") with respect to which payments
are or may hereafter be made to the Account[s], and have granted to the
Administrator, for the benefit of Blue Keel and its assigns, a security interest
in such Receivables, the Account[s], amounts on deposit therein and related
property. Your execution of this letter agreement is a condition precedent to
our continued maintenance of the Account[s] with you.
We hereby transfer exclusive ownership and control of the Account[s] to
the Administrator on behalf of Blue Keel and its assigns, subject only to the
condition subsequent that the Administrator shall have given you notice of its
election to assume such ownership and control, which notice may be in the form
attached hereto as Exhibit A or in any other form that gives you reasonable
notice of such election. Prior to the giving of such notice, you shall continue
to act on our instructions.
We hereby irrevocably instruct you, at all times from and after the
date of your receipt of notice from the Administrator as described above, to
make all payments to be made by you out of or in connection with the Account[s]
directly to the Administrator, at its address set forth below its signature
hereto or as the Administrator otherwise notifies you, for the account of Blue
Keel (account #__________, ABA #_________), or otherwise in accordance with the
instructions of the Administrator.
We also hereby notify you that, at all times from and after the date of
your receipt of notice from the Administrator as described above, the
Administrator shall be irrevocably entitled to exercise in our place and stead
any and all rights in respect of or in connection with the Account[s],
including, without limitation, (a) the right to specify when payments are to be
made out of or in connection with the Account[s] and (b) the right to require
preparation of duplicate monthly bank statements on the Account[s] for the
Administrator's audit purposes and mailing of such statements directly to an
address specified by the Administrator.
Notice from the Administrator may be personally served or sent by
facsimile or U.S. mail, certified return receipt requested, to the address or
facsimile number set forth under your signature to this letter agreement (or to
such other address or facsimile number as to which you shall notify the
Administrator in writing). If notice is given by facsimile, it will be deemed to
have been received when the notice is sent and the receipt is confirmed by
telephone or other electronic means. All other notices will be deemed to have
been received when actually received or, in the case of personal delivery,
delivered.
--------
*/ Delete in the case of direct wire transfer accounts.
2
By executing this letter agreement, you acknowledge and consent to the
existence of the Administrator's right to ownership and control of the
Account[s] and the Administrator's security interest in the Account[s] and
amounts from time to time on deposit therein and agree that from the date hereof
the Account[s] shall be maintained by you for the benefit of, and amounts from
time to time therein held by you as agent for, the Administrator on the terms
provided herein. The Account[s] [is/are] to be titled "CONMED Receivables
Corporation and Fleet Securities, Inc. as the Administrator for Blue Keel, Fleet
National Bank and their respective assigns, as their interests may appear".
Except as otherwise provided in this letter agreement, payments to the
Account[s] are to be processed in accordance with the standard procedures
currently in effect. All service charges and fees with respect to the Account[s]
shall continue to be payable by us as under the arrangements currently in
effect.
By executing this letter agreement, you irrevocably waive and agree not
to assert, claim or endeavor to exercise, irrevocably bar and estop yourself
from asserting, claiming or exercising, and acknowledge that you have not
heretofore received a notice, writ, order or any form of legal process from any
other person or entity asserting, claiming or exercising, any right of set-off,
banker's lien or other purported form of claim with respect to [any of] the
Account[s] or any funds from time to time therein. Except for your right to
payment of your service charges and fees and to make deductions for returned
items, you shall have no rights in the Account[s] or funds therein. To the
extent you may ever have such rights, you hereby expressly subordinate all such
rights to all rights of the Administrator.
You may terminate this letter agreement by canceling the Account[s]
maintained with you, which cancellation and termination shall become effective
only upon thirty days' prior written notice thereof from you to the
Administrator. Incoming [mail addressed to] [wire transfers to] the Account[s]
received after such cancellation shall be forwarded in accordance with the
Administrator's instructions. This letter agreement may also be terminated upon
written notice to you by the Administrator stating that the Receivables Purchase
Agreement pursuant to which this letter agreement was obtained is no longer in
effect. Except as otherwise provided in this paragraph, this letter agreement
may not be terminated or amended without the prior written consent of the
Administrator. This letter agreement may be executed in any number of
counterparts, and by the parties hereto on 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.
3
Please acknowledge your agreement to the terms set forth in this letter
agreement by signing the two copies of this letter agreement enclosed herewith
in the space provided below, sending one such signed copy to the Administrator
at its address provided above and returning the other signed copy to us.
Very truly yours,
CONMED RECEIVABLES CORPORATION
By:
----------------------------------------------
Name Printed:
-------------------------------
Title:
-------------------------------------------
Acknowledged and agreed to
as of the date first
written above:
BLUE KEEL FUNDING, LLC
By:
----------------------------------------------
Name Printed:
-------------------------------
Title:
-------------------------------------------
FLEET SECURITIES, INC., as Administrator
By:
----------------------------------------------
Name Printed:
-------------------------------
Title:
-------------------------------------------
Address for notice:
Fleet Corporate Finance
Mail Stop MA-DE-100-11F
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel. No. 617/▇▇▇-▇▇▇▇
Facsimile No. 617/434-5719
4
[NAME OF LOCK-BOX BANK]
By:
----------------------------------------------
Name Printed:
-------------------------------
Title:
-------------------------------------------
Address for notice:
By:
----------------------------------------------
Name Printed:
-------------------------------
Title:
-------------------------------------------
5
EXHIBIT A to
Lock-Box Agreement
[Letterhead of Fleet National Bank]
[Name and Address
of Lock-Box Bank]
Re: CONMED Receivables Corporation
[Lock-Box]**/ Account No[s]. [and ]
------------ ---------------------------------
Ladies and Gentlemen:
Reference is made to the letter agreement dated , 20___(the "Letter
Agreement") among CONMED Receivables Corporation, Blue Keel Funding, LLC ("Blue
Keel"), the undersigned, as Administrator and you concerning the above described
[lock-box]* account[s] (the "Account[s]"). We hereby give you notice of our
assumption of ownership and control of the Account[s] as provided in the Letter
Agreement.
We hereby instruct you to make all payments to be made by you out of or in
connection with the Account[s] [directly to the undersigned, at [our address set
forth above], for the account of Blue Keel (account no. )].
[other instructions]
Very truly yours,
FLEET SECURITIES, INC., as Administrator
By:
---------------------------------------
Name Printed:
-----------------------------
Title:
------------------------------------
cc: CONMED Receivables Corporation
--------
**/ Delete in the case of direct wire transfer accounts.
APPENDIX A
DEFINITIONS
This is Appendix A to the Receivables Purchase Agreement dated as of
November 1, 2001 among CONMED Receivables Corporation, as Seller, Blue Keel
Funding, LLC, as Conduit Purchaser, CONMED Corporation, as initial Servicer,
Fleet National Bank, as Committed Purchaser, and Fleet Securities, Inc., as
Administrator (as amended, supplemented or otherwise modified from time to time,
the "Agreement"). Unless otherwise indicated, all Section, Exhibit and schedule
references in this Appendix are to Sections of and Exhibits and Schedules to the
Agreement.
A. Defined Terms. As used in the Agreement, unless the context requires
a different meaning, the following terms have the meanings indicated
hereinbelow:
"Accounts" means all accounts, contract rights, chattel paper,
instruments and documents, whether now owned or hereafter created or acquired by
Parent or in which Parent now has or hereafter acquires any interest.
"Administrator" has the meaning set forth in the preamble.
"Administrator's Office" means the office of the Administrator at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other
address as shall be designated by the Administrator in writing to Seller, Parent
and each Purchaser.
"Affected Party" means each of each Purchaser, each Program Support
Provider, any assignee or participant of any Purchaser or any Program Support
Provider, Fleet Securities, any successor to Fleet Securities as Administrator,
and any sub-agent of the Administrator.
"Affiliate" when used with respect to a Person means any other Person,
directly or indirectly, controlling, controlled by, or under common control with
such Person, except, when used with respect to the Conduit Purchaser, Affiliate
shall mean the holder(s) of its limited liability company interests.
"Allocation Limit" has the meaning set forth in Section 1.01.
"Alternate Base Rate" means, on any date, a fluctuating rate of
interest per annum equal to the higher of
(a) the rate of interest most recently announced by the
Liquidity Agent in Boston, Massachusetts, as its prime rate; and
-1-
(b) the Federal Funds Rate most recently determined by the
Liquidity Agent plus 0.50% per annum.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Liquidity Agent in connection with extensions of
credit.
"Applicable Law" means all applicable laws, rules, regulations
(including temporary and final income tax regulations), statutes, treaties,
codes, ordinances, permits, certificates, orders and licenses of and
interpretations by any Governmental Authority, and applicable judgments,
decrees, injunctions, writs, orders or like action of any court, arbitrator or
other administrative, judicial or quasi-judicial tribunal or agency of competent
jurisdiction.
"Asset Interest" means an undivided ownership interest determined from
time to time as provided in Section 1.04(b) in all Pool Assets.
"Business Day" means a day other than a Saturday or a Sunday on which
both (a) the Administrator at its principal office in Boston, Massachusetts is
open for business and (b) commercial banks in New York City and Chicago,
Illinois are not authorized or required to be closed for business.
"Capital" means at any time with respect to the Asset Interest an
amount equal to (a) the aggregate of the amounts theretofore paid to Seller for
Purchases pursuant to Section 1.01, less (b) the aggregate amount of Collections
theretofore received and actually distributed to, and received by, a Purchaser
on account of the Capital pursuant to Section 3.01.
"Capital Lease Obligations" means as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and, for the purposes of the Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Change in Control" means any of the following:
(a) in relation to Parent, the acquisition following the date
hereof by any person or group of persons (within the meaning of Section
13 or 14 of the Exchange Act) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Exchange Act) of issued and outstanding shares of
the capital stock of Parent entitled (without regard to the
-2-
occurrence of any contingency) to vote for the election of members of
the board of directors of Parent and having a then present right to
exercise 51% or more of the voting power for the election of members of
the board of directors of Parent attached to all such outstanding
shares of capital stock of Parent, unless otherwise agreed in writing
by the Liquidity Banks and the Administrator; or
(b) the creation or imposition of any Lien on any shares of
capital stock of Seller; or
(c) the failure by Parent to own all of the issued and
outstanding capital stock of Seller and each Originator (other than
Parent).
"Collections" means, with respect to any Receivable, all funds which
either (a) are received by Seller, Servicer, an Originator or any other Person
from or on behalf of the related Obligors in payment of any amounts owed
(including, without limitation, purchase prices, finance charges, interest and
all other charges) in respect of such Receivable, or applied to such amounts
owed by such Obligors (including, without limitation, insurance payments that
Seller, an Originator or Servicer applies in the ordinary course of its business
to amounts owed in respect of such Receivable and net proceeds of sale or other
disposition of repossessed goods or other collateral or property of the Obligor
or any other party directly or indirectly liable for payment of such Receivable
and available to be applied thereon), or (b) are deemed to have been received by
Seller or any other Person as a Collection pursuant to Section 3.02.
"Commercial Paper Holders" means the holders from time to time of the
Commercial Paper Notes.
"Commercial Paper Notes" means short-term promissory notes issued or to
be issued by Conduit Purchaser, or the proceeds of which are loaned to Conduit
Purchaser, to fund its investments in accounts receivable or other financial
assets.
"Committed Purchaser" has the meaning set forth in the preamble.
"Commitment" means with respect to any Committed Purchaser, the amount
listed opposite such Committed Purchaser's name on the signature page to the
Agreement.
"Commitment Fee" means, for each day, the amount equal to the product
of (x) the unused Liquidity Commitment Amount on such day, times (y) the
Commitment Fee Rate, times (z) 1/360.
"Commitment Fee Rate" has the meaning set forth in the Fee Letter.
"Concentration Limit" for any Obligor at any time means an amount equal
to (i) the aggregate Unpaid Balance of all Eligible Receivables at such time
times (ii) the applicable percentage as set forth below opposite the appropriate
ratings of such Obligor's long-term and short-term unsecured debt,
-3-
or, in the case of any Obligor listed on Exhibit A hereto, the percentage set
forth opposite such Obligor's name on such Exhibit A, until such time as the
Administrator notifies the Servicer that any such Obligor listed on Exhibit A is
no longer eligible for such special percentage. Any Obligor that has a split
rating shall be deemed to be in the lower rating category.
Applicable
Long Term Rating Short-Term Rating Percentage
---------------- ----------------- ----------
S&P ▇▇▇▇▇'▇ S&P ▇▇▇▇▇'▇
--- ------- --- -------
A+ or better A+ or better A-1 P-1 12.0%
BBB+ to A Baa1 to A2 A-2 P-2 9.0%
BBB- to BBB Baa3 to ▇▇▇▇ ▇-▇ P-3 6.0%
Lower than Lower than 3.0%
BBB-/Baa3 BBB-/Baa3
or Not Rated or Not Rated
"Conduit" means any entity that issues Commercial Paper Notes the
proceeds of which are loaned to Conduit Purchaser to fund its investments in
accounts receivable or other financial assets.
"Conduit Purchaser" has the meaning set forth in the preamble.
"Consolidated Net Income" means for any period, the consolidated net
income (or loss) of the Parent and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Parent or is merged into or consolidated with the
Parent or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Parent) in which the Parent or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Parent or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Parent to the extent that the declaration or payment of
dividends or similar distribution by such Subsidiary is prohibited by the terms
of any Contractual Obligation (other than under any Loan Document (as defined in
the Credit Agreement)) or Requirement of Law applicable to such Subsidiary.
"Consolidated Net Worth" means at any date, all amounts which would, in
accordance with GAAP, be included on a consolidated balance sheet of the Parent
and its Subsidiaries under stockholders' equity at such date; provided that any
net non-cash adjustments to such amounts after August 11, 1999 resulting from
foreign currency transactions, unfunded pension liabilities or unrealized gains
or losses in respect of securities shall be included to the extent such
adjustments exceed $2,000,000 as of the end of any fiscal quarter.
"Contract" means a contract between an Originator and any Person, or an
invoice from an Originator to any Person, or any purchase order from any Person
to an Originator pursuant to or
-4-
under which such Person shall be obligated to make payments for products or
services to an Originator. A "related" Contract with respect to the Receivables
means a Contract under which Receivables in the Receivables Pool arise, which
evidence such Receivables, or which is relevant to the collection or enforcement
of such Receivables.
"Contractual Obligation" with respect to any Person, means any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is party or by which it or any of its
Property is bound.
"Cost of Funds Rate" means with respect to any Settlement Period (or
portion thereof), the per annum rate equivalent to the weighted average of the
per annum rates which may be paid or payable by such Conduit Purchaser from time
to time as interest on or otherwise (by means of Hedge Agreements or otherwise)
in respect of those commercial paper notes issued by or on behalf of such
Conduit Purchaser that are allocated in whole or in part by or on behalf of such
Conduit Purchaser to fund or maintain Purchases during such Settlement Period as
determined by or on behalf of such Conduit Purchaser, which rates shall reflect
and give effect to the commissions of placement agents and dealers in respect of
such commercial paper notes and to net payments owed or received by such Conduit
Purchaser under any Hedge Agreements entered into by such Conduit Purchaser in
connection with such allocated commercial paper; provided, however, that if any
component of such rate is a discount rate, in calculating the "Cost of Funds
Rate" for such Settlement Period for the purposes of this definition, the
Conduit Purchaser shall for such component use the rate resulting from
converting such discount rate into an interest bearing equivalent rate per
annum.
"Credit Agreement" means the Amended and Restated Credit Agreement
among Parent, as Borrower, the several lenders from time to time party thereto,
Chase Securities, Inc., as Sole Book-Manager, Lead Arranger and as Syndication
Agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Inc., as Documentation Agent, and The Chase
Manhattan Bank, as Administrative Agent, dated as of August 11, 1999.
"Credit and Collection Policy" means those credit and collection
policies and practices relating to Contracts and Receivables described in
Schedule 7.01(g), as modified in accordance with Section 7.03(c).
"Cut-Off Date" means the last day of each calendar month.
"Deemed Collection" has the meaning set forth in the Purchase
Agreement.
"Default Ratio" means the ratio (expressed as a percentage) computed as
of a Cut-Off Date by dividing (x) the Gross Write-off for the month ending on
such Cut-Off Date by (y) the aggregate Unpaid Balance of all Receivables as to
which any payment, or part thereof, remains unpaid for more than 120, but less
than 151, days from the original invoice date for such Receivable as of the
Cut-Off Date for the immediately preceding month.
-5-
"Defaulted Receivable" means a Receivable: (a) as to which any payment,
or part thereof, remains unpaid for more than 120 days from the original invoice
date for such Receivable, (b) as to which the Obligor thereof is the subject of
an Event of Bankruptcy, or (c) which, consistent with the Credit and Collection
Policy, would be written off the Seller's books as uncollectible.
"Delinquency Ratio" means, for any Cut-Off Date, the ratio (expressed
as a percentage) computed as of such Cut-Off Date by dividing (x) the aggregate
Unpaid Balance of all Receivables that remain unpaid for more than 90, but less
than 120 days, from the original invoice date therefor by (y) the aggregate
Unpaid Balance of all Pool Receivables on such Cut-Off Date.
"Dilution" means any credit, adjustment, rebate, refund or setoff with
respect to any Receivable granted or allowed by Seller or any Affiliate of
Seller.
"Dollars" means dollars in lawful money of the United States of
America.
"Earned Discount" means for any Settlement Period:
C x ER x ED + LF
-----------
360
where:
C = the daily average (calculated at the close of business each
day) of the Capital during such Settlement Period,
ER = the Earned Discount Rate for such Settlement Period,
ED = the actual number of days elapsed during such Settlement Period,
and
LF = the Liquidation Fee, if any, during such Settlement Period.
"Earned Discount Rate" means for any Settlement Period:
(a) in the case of any portion of the Capital funded by a
Liquidity Funding, the greater of (1) the sum of (i) the Eurodollar
Rate (Reserve Adjusted) for such Settlement Period, plus (ii) 1.25% per
annum and (2) the then applicable interest rate pursuant to the Credit
Agreement; and
(b) in the case of any portion of the Capital funded by any
Commercial Paper Notes, the Cost of Funds Rate for such Settlement
Period;
provided, however, that on any day during a Settlement Period when any
Liquidation Event or Unmatured Liquidation Event shall have occurred and be
continuing, the Earned Discount Rate for the Capital shall mean the higher of
(i) the Alternate Base Rate in effect on such day plus 2% per
-6-
annum and (ii) the Eurodollar Rate (Reserve Adjusted) for such Settlement Period
plus 3.25% per annum.
"Eligible Receivable" means, at any time, a Receivable:
(a) which is originated by an Originator in the ordinary
course of its business for the sale or service of medical devices,
equipment and related products, provided that if the Servicer fails to
perform its obligation pursuant to Section 8.05(e) of the Agreement, no
Receivables originated by Linvatec Canada ULC will be Eligible
Receivables until the Servicer has delivered to the Administrator the
Lock-Box Agreement described therein;
(b) which constitutes an "account" or a "general intangible"
as defined in the UCC;
(c) the Obligor of which is (1) not an Affiliate of Seller,
(2) is not a Governmental Authority (unless the assignment thereof is
not subject to the Assignment of Claims Act (41 U.S.C.ss.15) or a
similar state assignment of claims act) and (3) is a resident of the
United States, Canada or a Permitted Country;
(d) which was purchased or otherwise acquired by Seller
pursuant to the Purchase Agreement and which was designated by the
related Originator as an "Eligible Receivable" pursuant to the Purchase
Agreement;
(e) which is not an Overdue Receivable or a Defaulted
Receivable;
(f) with respect to which the warranty of Seller in Section
6.01(k) is true and correct;
(g) the sale of which, or of an undivided interest in which,
does not contravene or conflict with Applicable Law, or require the
consent of the Obligor or any other Person;
(h) which is denominated and payable only in Dollars in the
United States, provided that not more than 10% of the Net Pool Balance
may be denominated in Canadian Dollars;
(i) which arises under a Contract, which contract has been
duly authorized by the parties thereto and that, together with such
Receivable, is in full force and effect and constitutes the legal,
valid and binding obligation of the Obligor of such Receivable
enforceable against such Obligor in accordance with its terms and is
not subject to any defense whatsoever (other than discharge in
bankruptcy and payment);
(j) which, together with the Contract related thereto, does
not contravene in any material respect any Applicable Law and with
respect to which no party to the Contract related thereto is in
violation of any Applicable Law in any material respect;
-7-
(k) which (i) satisfies all material applicable requirements
of the Credit and Collection Policy and (ii) complies with such other
criteria and requirements (other than those relating to the
collectibility of such Receivable) as the Administrator may from time
to time specify to Seller in writing in the exercise of reasonable
business judgment;
(l) as to which the payment terms have not been altered or
extended so as to materially affect the collectibility of such
Receivable;
(m) the Unpaid Balance of which, when combined with the Unpaid
Balance of all other Eligible Receivables, results in the Eligible
Receivables being payable, on average (based on Dollar amount), within
45 days or less from the invoice date therefor;
(n) which are not Receivables owed by an Obligor for which
more than 20% of the aggregate Unpaid Balance of Receivables of such
Obligor constitute Defaulted Receivables;
(o) which arise from the completion of the sale and delivery
of goods and services performed, and which do not represent an invoice
in advance of such completion; and
(p) which are not subject to any contingent performance
requirements of the Seller or the related Originator unless such
requirements are guaranteed or insured by third parties acceptable to
the Administrator.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Business Day" means a day of the year on which dealings are
carried on in the eurodollar interbank market and banks are open for business in
London and are not required or authorized to close in New York City.
"Eurodollar Rate (Reserve Adjusted)" means, with respect to any
Settlement Period and any portion of the Capital, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined pursuant to the
following formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) 1 - Eurodollar
Reserve Percentage
where:
"Eurodollar Rate" means, with respect to any Settlement Period and any
portion of the Capital, the rate per annum at which Dollar deposits in
immediately available funds are offered to the Eurodollar Office of the
Administrator two Eurodollar Business Days prior to the beginning of such period
by prime banks in the interbank eurodollar market at or about 11:00 a.m., New
York City time
-8-
for delivery on the first day of such Settlement Period, for the number of days
comprised therein and in an amount equal or comparable to the applicable portion
of the Capital for such Settlement Period.
"Eurodollar Reserve Percentage" means, with respect to any Settlement
Period, the then maximum reserve percentage (expressed as a decimal, rounded
upward to the nearest 1/100th of 1%) prescribed by the Federal Reserve Board for
determining the maximum reserve requirements applicable to "Eurocurrency
Liabilities" pursuant to Regulation D having a term comparable to such
Settlement Period.
"Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:
(a) any case or other proceeding shall be commenced, without
the application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up,
or composition or readjustment of debts of such Person, the appointment
of a trustee, receiver, custodian, liquidator, assignee, sequestrator
or the like for such Person or all or substantially all of its assets,
or any similar action with respect to such Person under any law
relating to bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall
continue undismissed, or unstayed and in effect, for a period of 60
consecutive days; or an order for relief in respect of such Person
shall be entered in an involuntary case under the federal bankruptcy
laws or other similar laws now or hereafter in effect and shall either
not be contested or shall remain undismissed for 60 consecutive days;
or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization,
debt arrangement, dissolution or other similar law now or hereafter in
effect, or shall consent to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian, sequestrator (or
other similar official) for such Person or for any substantial part of
its property, or shall make any general assignment for the benefit of
creditors, or shall fail to, or admit in writing its inability to, pay
its debts generally as they become due, or, if a corporation or similar
entity, its board of directors shall vote to implement any of the
foregoing.
"Excess Amount" as of any date, means the amount, if any, by which the
sum of the Capital, plus the Required Reserves on such date exceeds the Net Pool
Balance, as most recently calculated.
"Excess Default Ratio" means the ratio (expressed as a percentage)
computed as of a Cut-Off Date by dividing (x) the aggregate Unpaid Balance of
all Defaulted Receivables as of such Cut-Off Date by (y) the aggregate Unpaid
Balance of all Eligible Receivables as of such Cut-Off Date.
"Excess Default Reserve Percentage" means the amount, if any, by which
the Excess Default Ratio exceeds 10%.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
-9-
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal (for each day during such period) to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Fleet Securities from three federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"Fee Letter" has the meaning set forth in Section 4.01.
"Fees" means the Commitment Fee and the Program Fee.
"Final Payout Date" means the date following the Termination Date on
which the Capital shall have been reduced to zero and all other amounts payable
by Seller to Purchasers, the Administrator, the Affected Parties and the
Indemnified Parties under the Transaction Documents shall have been paid in
full.
"Fleet Securities" has the meaning set forth in the preamble.
"Foreign Obligor" means an Obligor that is a resident of (i) a
Permitted Country or (ii) a province of Canada that has not enacted legislation
similar to the UCC pursuant to which a secured creditor may perfect its interest
in accounts and general intangibles by making a central filing.
"Funded Percentage" with respect to any Purchaser as of any date means
the ratio (expressed as a percentage) of (i) the portion of the then outstanding
Capital funded by such Purchaser divided by (ii) the entire then outstanding
Capital.
"GAAP" means generally accepted accounting principles applicable in the
United States for reporting entities domiciled in the United States as in effect
from time to time, except that for purposes of Section 7.01(k) of the Agreement,
GAAP shall be determined on the basis of such principles in effect on the date
of the Agreement and consistent with those used in the preparation of the most
recent audited financial statements delivered pursuant to Section 7.02(b) of the
Agreement.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgements,
decrees, licenses, exemptions, publications,
-10-
filings, notices to and declaration of or with, or required by, any Governmental
Authority, or required by any Applicable Law.
"Governmental Authority" means any foreign or domestic federal, state,
county, municipal or other governmental or regulatory authority, agency, board,
body, commission, instrumentality, court or any political subdivision thereof.
"Gross Writeoffs" means for any period the aggregate Unpaid Balance of
all Receivables that are deemed to be uncollectible in accordance with the
Credit and Collection Policy during such period, or that are owed by an Obligor
that is the subject of an Event of Bankruptcy, or that should be written off
during such period in accordance with GAAP.
"Guarantee Obligation" means as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counter indemnity or similar obligation, in either case guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or other obligations
(the "primary obligations") of any other third Person (the "primary obligor") in
any manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (ii) to purchase Property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by Parent in good faith.
"Hedge Agreements" means any financial futures contract, option,
forward contract, warrant, swap, swaption, collar, floor, cap and other
agreement, instrument and derivative and other transactions of a similar nature
(whether currency linked, rate linked, index linked, insurance risk linked,
credit risk linked or otherwise) entered into by or on behalf of a Conduit
Purchaser.
"Indebtedness" means of any person at any date, without duplication,
(a) all indebtedness of such person for borrowed money, (b) all obligations of
such Person for the deferred purchase price
-11-
of Property or services (other than current trade payables incurred in the
ordinary course of such Person's business, and overdue trade payables incurred
in the ordinary course of such Person's business to the extent the amount or
validity thereof is currently being contested in good faith by appropriate
procedures and reserves in conformity with GAAP with respect thereto have been
provided on the books of Parent or its Subsidiaries, as the case may be), (c)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such Property), (e) all Capital Lease Obligations of such Person (the
amount of which shall be calculated without regard to imputed interest), (f) all
obligations of such Person, contingent or otherwise, as an account party under
acceptance, letter of credit or similar facilities, (g) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock (other than common stock) of such Person,
(h) all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (g) above to the extent quantified as
liabilities, contingent obligations or like term in accordance with GAAP on the
balance sheet (including notes thereto) of such Person, (i) all obligations of
the kind referred to in clause (a) through (h) above secured by (or for which
the holder of such obligation has an existing right, contingent or otherwise, to
be secured by) any Lien on Property (including, without limitation, accords and
contract rights) owned by such Person, whether or not such Person has assumed or
become liable for the payment of such obligation (but only to the extent of the
fair market value of such Property), (j) for purposes of Section 10.01(d) of the
Agreement, all obligations of such Person in respect of Interest Rate Protection
Agreements and (k) the liquidation value of any preferred Capital Stock of such
Person or its Subsidiaries held by any Person other than such Person and its
Wholly Owned Subsidiaries.
"Indemnified Amounts" has the meaning set forth in Section 13.01.
"Indemnified Party" has the meaning set forth in Section 13.01.
"Independent Director" shall mean an individual who is not, and never
was, (1) a member, stockholder, director, officer, employee, Affiliate, customer
or supplier of, or an individual that has received any benefit (excluding,
however, any compensation received in such individual's capacity as Independent
Director) in any form whatever from, or an individual who has provided any
service (excluding, however, any service provided by such individual in such
individual's capacity as Independent Director) in any form whatever to, the
Parent or any of its subsidiaries or Affiliates, or (2) an individual owning
beneficially, directly or indirectly, any interest in the Parent, or (3) an
individual who is a relative or spouse of an individual described in clause (1)
or (2) above.
"Interest Rate Protection Agreement" means any interest rate protection
agreement, interest rate futures contract, interest rate option, interest rate
cap or other interest rate hedge arrangement to or under which Parent or any of
its Subsidiaries is a party or a beneficiary on the date of the Agreement or
becomes a party or a beneficiary after the date of the Agreement.
-12-
"Lien" means any mortgage, lien, pledge, encumbrance, charge, title
retention or other security interest of any kind, whether arising under a
security agreement, mortgage, deed of trust, assignment, pledge or financing
statement or arising as a matter of law, judicial process or otherwise.
"Liquidation Event" has the meaning set forth in Section 10.01.
"Liquidation Fee" means, for each day in any Settlement Period during
the Liquidation Period following the occurrence of a Liquidation Event, the
amount, if any, by which:
(a) the additional Earned Discount (calculated without taking
into account any Liquidation Fee) which would have accrued on the
reductions of the Capital during such Settlement Period (as so
computed) if such reductions had not been made, exceeds
(b) the income, if any, received by the related Purchaser from
investing the proceeds of such reductions of the Capital.
"Liquidation Period" means the period commencing on the Termination
Date and ending on the Final Payout Date.
"Liquidity Agent" means Fleet National Bank, as agent for the Liquidity
Banks under the Liquidity Agreement, or any successor to Fleet National Bank in
such capacity.
"Liquidity Agreement" means and includes the Liquidity Agreement dated
as of November 1, 2001 among Conduit Purchaser, Fleet National Bank, as
Liquidity Agent, and certain financial institutions, party thereto as liquidity
providers, and any other agreement hereafter entered into by Conduit Purchaser
providing for the making of loans, purchases or undivided interests or other
extensions of credit to Conduit Purchaser to support all or part of Conduit
Purchaser's payment obligations with respect to the Commercial Paper Notes or to
provide an alternate means of funding Purchaser's investments in accounts
receivable or other financial assets.
"Liquidity Bank" means any one of, and "Liquidity Banks" means all of,
Fleet National Bank and the other financial institutions that are at any time
parties to a Liquidity Agreement as liquidity providers.
"Liquidity Commitment Amount" means, at any time, the then aggregate
amount of the Liquidity Banks' commitments under the Liquidity Agreement.
"Liquidity Funding" means a loan or purchase made by the Liquidity Bank
(or simultaneous loans or purchases made by the Liquidity Banks) pursuant to a
Liquidity Agreement.
"Lock-Box" means any post office box to which Collections of Pool
Receivables are sent.
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"Lock-Box Account" means any bank account to which Collections of Pool
Receivables are sent or deposited.
"Lock-Box Agreement" means a letter agreement, in substantially the
form of Exhibit 5.01(f), among Seller, Parent and any Lock-Box Bank.
"Lock-Box Bank" means any of the banks holding one or more Lock-Box
Accounts for receiving Collections from Pool Receivables.
"Material Adverse Effect" with respect to any event or circumstance,
means a material adverse effect on:
(i) the results of operation, financial condition or assets of
Seller or Parent;
(ii) the ability of Servicer, any Originator or Parent to
perform its obligations under this Agreement or any other Transaction
Document;
(iii) the validity, enforceability or collectibility of this
Agreement or any other Transaction Document or the validity,
enforceability or collectibility of a material portion of the
Receivables; or
(iv) the status, existence, perfection, priority or
enforceability of the Administrator's or any Purchaser's interest in
the Pool Assets.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Pool Balance" at any time means an amount equal to (i) the
aggregate Unpaid Balance of the Eligible Receivables in the Receivables Pool at
such time, minus (ii) the aggregate amount by which the aggregate Unpaid Balance
of the Eligible Receivables of each Obligor and its Affiliates exceeds the
Concentration Limit for such Obligor at such time (the amount equal to clause
(i) minus clause (ii) called the "Unadjusted Net Pool Balance"), minus (iii) the
aggregate amount by which the aggregate Unpaid Balance of those Eligible
Receivables the Obligor of which is a Foreign Obligor exceeds 10% of the
Unadjusted Net Pool Balance.
"Obligor" means a Person obligated to make payments with respect to a
Receivable, including any guarantor thereof.
"Originator" means the Parent in its capacity as originator of
Receivables, together with the other originators party to the Purchase
Agreement.
"Overdue Receivable" means a Receivable that remains unpaid for more
than 90 (or, in the case of a Receivable owed by an Obligor that is not a
resident of the United States, 120) days from the original invoice date for such
Receivable, or that has been charged off before it has become 91
-14-
(or, in the case of a Receivable owed by an Obligor that is not a resident of
the United States, 121) days past due.
"Parent" has the meaning set forth in the preamble.
"Percentage" means, with respect to any Committed Purchaser, the ratio,
expressed as a percentage, of (i) such Committed Purchaser's Commitment divided
by (ii) the aggregate Commitments of all of the Committed Purchasers.
"Permitted Country" means a country that satisfies all of the following
criteria: (i) it has a long-term foreign currency rating of at least A by S&P
and A2 by Moody's, (ii) it has a short-term foreign currency rating of at least
A-1 by S&P and P-1 by Moody's, (iii) it is listed in Part I or Part II of
Exhibit B hereto and (iv) the Administrator has not notified the Servicer that
such country shall no longer be a Permitted Country.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company, government or any agency or political
subdivision thereof or any other entity.
"Pool Assets" has the meaning set forth in Section 1.04(a).
"Pool Receivable" means a Receivable in the Receivables Pool.
"Program Agreement" means each Liquidity Agreement, each agreement
pursuant to which Conduit Purchaser obtains funding, through the issuance of
Commercial Paper Notes or otherwise, and each other agreement entered into by
Conduit Purchaser in connection with its securitization program.
"Program Fee" means, for each day, the amount equal to the product of
(x) the Capital on such day, times (y) the Program Fee Rate, times (z) 1/360.
"Program Fee Rate" has the meaning set forth in the Fee Letter.
"Program Information" has the meaning set forth in Section 14.07.
"Program Support Provider" means each of each entity that issues
Commercial Paper Notes, each Liquidity Bank and the Administrator.
"Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed, and whether tangible or intangible,
including, without limitation, Capital Stock.
"Purchase" has the meaning set forth in Section 1.01.
-15-
"Purchase Agreement" means the Purchase and Sale Agreement, dated as of
November 1, 2001, among Seller and the Originators.
"Purchase Limit" has the meaning set forth in Section 1.01.
"Purchase Termination Date" means that day
(a) the Administrator declares a Purchase Termination Date in
a notice to Seller in accordance with Section 10.02(a); or
(b) in accordance with Section 10.02(b), becomes the Purchase
Termination Date automatically.
"Purchaser" means any of Conduit Purchaser and any Committed Purchaser.
"Purchasers' Share" of any amount means the then Asset Interest,
expressed as a percentage (but not greater than 100%), times such amount.
"Rating Agencies" at any time means those rating agencies then rating
the Commercial Paper Notes.
"Receivable" means any right to payment from a Person, whether
constituting an account, chattel paper, instrument or general intangible,
arising under a Contract and includes the right to payment of any interest or
finance charges and other obligations of such Person with respect thereto.
Indebtedness and other obligations arising from any one transaction, including,
without limitation, indebtedness and other obligations represented by an
individual invoice or agreement, shall constitute a Receivable separate from a
Receivable consisting of the indebtedness and other obligations arising from any
other transaction.
"Receivables Pool" means at any time all then outstanding Receivables,
other than Reconveyed Receivables.
"Reconveyed Receivable" means a Receivable for which an Originator has
paid the full Unpaid Balance pursuant to the Purchase Agreement.
"Regulation D" means Regulation D of the Federal Reserve Board, or any
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.
-16-
"Regulatory Change" means, relative to any Affected Party
(a) any change in (or the adoption, implementation, change in
phase-in or commencement of effectiveness of) any
(i) United States federal or state law or foreign law
applicable to such Affected Party;
(ii) regulation, interpretation, directive,
requirement or request (whether or not having the force of
law) applicable to such Affected Party of (A) any court,
government authority charged with the interpretation or
administration of any law referred to in clause (a)(i) or of
(B) any fiscal, monetary or other authority having
jurisdiction over such Affected Party; or
(iii) GAAP or regulatory accounting principles
applicable to such Affected Party and affecting the
application to such Affected Party of any law, regulation,
interpretation, directive, requirement or request referred to
in clause (a)(i) or (a)(ii) above; or
(b) any change in the application to such Affected Party of
any existing law, regulation, interpretation, directive, requirement,
request or accounting principles referred to in clause (a)(i), (a)(ii)
or (a)(iii) above.
"Reinvestment" has the meaning set forth in Section 1.03.
"Related Security" means, with respect to any Pool Receivable: (a) all
of Seller's or the related Originator's right, title and interest in and to all
Contracts that relate to such Pool Receivable; (b) all security interests or
liens and property subject thereto from time to time purporting to secure
payment of such Pool Receivable, whether pursuant to the Contract related to
such Pool Receivable or otherwise; (c) all UCC financing statements covering any
collateral securing payment of such Pool Receivable; (d) all guarantees and
other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Pool Receivable whether pursuant to the
Contract related to such Pool Receivable or otherwise; and (e) all of Seller's
and the related Originator's interest in the merchandise (including returned
merchandise), if any, relating to the sale that gave rise to such Pool
Receivable.
"Reporting Date" has the meaning set forth in Section 3.01(a).
"Required Reserve Percentage" means, on any day, an amount equal to the
sum of (1) 15% plus (2) the most recently calculated Excess Default Reserve
Percentage.
"Requirement of Law" means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or
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regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such person or any of its
Property or to which such Person or any of its Property is subject.
"S&P" means Standard & Poor's Ratings Services.
"Sales" means sales of the Originators which generate trade
receivables.
"Sales-Based Dilution Ratio" as of any Cut-Off Date means (a) the
aggregate reduction attributable to Dilutions occurring in the Unpaid Balance of
Pool Receivables which Dilutions were granted during the month ending on such
Cut-Off Date; divided by (b) the aggregate amount of Sales for the month
immediately preceding the month ending as of such Cut-Off Date.
"Secured Parties" means Purchasers, the Administrator, the Indemnified
Parties and the Affected Parties.
"Selected Country" means a country listed on Part II of Exhibit B
hereto.
"Seller" has the meaning set forth in the preamble.
"Seller's Share" of any amount means (x) 100% minus the Asset Interest
(but such Asset Interest shall not be greater than 100%) times (y) such amount.
"Servicer" has the meaning set forth in Section 8.01(a).
"Servicer Report" has the meaning set forth in Section 3.01.
"Servicer Transfer Event" has the meaning set forth in Section 8.01(b).
"Servicer's Fee" means, for each day, an amount equal to (x) the
Servicer's Fee Rate, times (y) the aggregate Unpaid Balance of all Pool
Receivables at the close of business on such day, times (z) 1/360.
"Servicer's Fee Rate" means 0.50% per annum or, in the event that
Parent is no longer the Servicer, such higher rate as may be charged by the
successor Servicer.
"Settlement Date" has the meaning set forth in Section 3.01(c).
"Settlement Period" means the period (i) in the case of the first
Settlement Period, from, and including, the date of the initial Purchase to, but
excluding the next Settlement Date and (ii) thereafter, from, and including,
each Settlement Date to, but excluding, the next Settlement Date.
-18-
"Subsidiary" means a corporation of which Parent and/or its other
Subsidiaries own, directly or indirectly, such number of outstanding shares as
have more than 50% of the ordinary voting power for the election of directors.
"Successor Notice" has the meaning set forth in Section 8.01(b).
"Tangible Net Worth" at any date means a sum equal to: (i) the net book
value (after deducting related depreciation, obsolescence, amortization,
valuation, and other proper reserves) at which the tangible assets (which for
purposes of this definition shall include Receivables owned by such Person) of a
Person would be shown on a balance sheet at such date in accordance with GAAP
minus (ii) the amount at which such Person's liabilities (other than capital
stock and surplus) would be shown on such balance sheet in accordance with GAAP,
and including as liabilities all reserves for contingencies and other potential
liabilities.
"Termination Date" means the earliest of
(a) the date of termination (whether by scheduled expiration,
termination on default or otherwise) of any Liquidity Bank's Commitment
under the Liquidity Agreement;
(b) the Purchase Termination Date;
(c) with respect to Conduit Purchaser, November 1, 2006, and
with respect to each Committed Purchaser, the date of the termination
of such Committed Purchaser's commitment under the Liquidity Agreement;
and
(d) the date on which Seller terminates Purchasers' right to
make Purchases and Reinvestments pursuant to Section 1.05.
"Transaction Documents" means this Agreement, the Lock-Box Agreements,
the Purchase Agreement, the Fee Letter and the Initial Purchaser Notes.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.
"Unmatured Liquidation Event" means any event which, with the giving of
notice or lapse of time, or both, would become a Liquidation Event.
"Unpaid Balance" of any Receivable means at any time the unpaid
principal amount thereof; provided that, if such Receivable is denominated in
Canadian Dollars, the unpaid principal amount thereof shall be converted to
Dollars using the applicable conversion rate published on such day in The Wall
Street Journal as the conversion rate; provided, further that if such Receivable
is owed by an Obligor that is a resident of a Selected Country, the Unpaid
Balance of such Receivable shall mean 50% of the unpaid principal amount
thereof.
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"Weekly Report" has the meaning set forth in Section 3.01(a).
"Wholly Owned Subsidiary" mean, as to any Person, any other Person all
of the Capital Stock of which (other than (i) a nominal number of shares held by
foreign nationals to the extent required by local law or (ii) directors'
qualifying shares required by law) is owned by such person directly and/or
through other Wholly Owned Subsidiaries.
B. Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. All terms used in Article 9 of the
UCC in the State of New York, and not specifically defined herein, are used
herein as defined in such Article 9.
C. Computation of Time Periods. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding".
D. Interpretation. In each Transaction Document, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by the Transaction Documents, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Transaction
Document), document or instrument means such agreement, document or
instrument as amended, supplemented or modified and in effect from time
to time in accordance with the terms thereof and, if applicable, the
terms of the other Transaction Documents and reference to any
promissory note includes any promissory note which is an extension or
renewal thereof or a substitute or replacement therefor; and
(v) reference to any Applicable Law means such Applicable Law
as amended, modified, codified, replaced or reenacted, in whole or in
part, and in effect from time to time, including rules and regulations
promulgated thereunder and reference to any section or other provision
of any Applicable Law means that provision of such Applicable Law from
time to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such section
or other provision.
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Exhibit A
Applicable
Obligor Percentage
------- ----------
▇▇▇▇▇ & Minor 6%
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Exhibit B
Permitted Countries
PART I:
England
France
Italy
Germany
Japan
PART II:
Australia Hong Kong Sweden
Austria Iceland Switzerland
Belgium Ireland Taiwan
Bermuda Luxembourg
Denmark New Zealand
Finland Norway
Greece Portugal
The Netherlands Singapore
Spain
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