41
Exhibit 2.1(h)
RECEIVABLES PURCHASE AND SERVICING AGREEMENT
Dated as of September 1, 1999,
by and among
CONE RECEIVABLES II LLC,
as Seller,
REDWOOD RECEIVABLES CORPORATION,
as Purchaser,
CONE ▇▇▇▇▇ CORPORATION,
as Servicer,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Operating Agent and Collateral Agent
47
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INTERPRETATION.....................................1
SECTION 1.01 Definitions............................................1
SECTION 1.02 Rules of Construction....................................1
ARTICLE II AMOUNTS AND TERMS OF PURCHASES.....................................2
SECTION 2.01 Purchases................................................2
SECTION 2.02 Optional Changes in Maximum Purchase Limit...............2
SECTION 2.03 Notices Relating to Purchases and Reductions in Capital
Investment.................3
SECTION 2.04 Conveyance of Receivables................................4
(a) Purchase Assignment......................................4
(b) Funding of Collection Account; Payment of Purchase
Price...........................4
(c) Vesting of Ownership.....................................4
(d) Repurchases of Transferred Receivables...................4
SECTION 2.05 Facility Termination Date................................5
SECTION 2.06 Daily Yield..............................................5
SECTION 2.07 Fees.....................................................5
SECTION 2.08 Time and Method of Payments..............................5
SECTION 2.09 Capital Requirements; Additional Costs...................6
SECTION 2.10 Breakage Costs...........................................7
SECTION 2.11 Purchase Excess..........................................7
ARTICLE III CONDITIONS PRECEDENT..............................................7
SECTION 3.01 Conditions to Effectiveness of Agreement.................7
(a) Purchase Agreement; Other Related Documents..............8
(b) Governmental and Other Approvals.........................8
(c) Compliance with Laws.....................................8
(d) Payment of Fees..........................................8
SECTION 3.02 Conditions Precedent to All Purchases....................8
ARTICLE IV REPRESENTATIONS AND WARRANTIES.....................................9
SECTION 4.01 Representations and Warranties of the Seller.............9
(a) LegalExistence; Compliance with Law......................9
(b) Executive Offices; Collateral Locations; Seller Names;
FEIN........................9
(c) Power, Authorization, Enforceable Obligations...........10
(d) No Litigation...........................................10
(e) Solvency................................................10
(f) Material Adverse Effect.................................10
(g) Ownership of Property; Liens............................11
(h) Ventures, Subsidiaries and Affiliates; Outstanding Stock
and Indebtedness.........11
(i) Taxes...................................................11
(j) Full Disclosure.........................................12
(k) ERISA...................................................12
(l) Brokers.................................................12
(m) Margin Regulations......................................12
(n) Nonapplicability of Bulk Sales..........................12
(o) Securities Act and Investment Company Act Exemptions....12
(p) Government Regulation...................................13
(q) Nonconsolidation, Etc...................................13
(r) Deposit and Disbursement Accounts.......................15
(s) Transferred Receivables.................................15
(t) Representations & Warranties in Other Related Documents.15
(u) Year 2000 Problems......................................15
SECTION 4.02 Representations and Warranties of the Servicer..........16
ARTICLE V GENERAL COVENANTS OF THE SELLER.....................................16
SECTION 5.01 Affirmative Covenants of the Seller.....................16
(a) Compliance with Agreements and Applicable Laws..........16
(b) Maintenance of Existence and Conduct of Business....... 16
(c) Deposit of Collections..................................16
(d) Use of Proceeds.........................................16
(e) Payment, Performance and Discharge of Obligations.......17
(f) ERISA.................................................. 17
(g) Year 2000 Compliance....................................17
SECTION 5.02 Reporting Requirements of the Seller................... 17
SECTION 5.03 Negative Covenants of the Seller........................17
(a) Sale of Stock and Assets................................18
(b) Liens...................................................18
(c) Modifications of Receivables, Contracts or Transfer
Agreement.....................18
(d) Changes in Instructions to Obligors.....................18
(e) Capital Structure and Business..........................18
(f) Mergers, Subsidiaries, Etc..............................18
(g) Sale Characterization; Transfer Agreement...............18
(h) Restricted Payments.....................................19
(i) Debt 19
(j) Prohibited Transactions.................................19
(k) Investments.............................................19
(l) Commingling.............................................19
(m) ERISA...................................................19
ARTICLE VI COLLECTIONS AND DISBURSEMENTS......................................19
SECTION 6.01 Establishment of Deposit Accounts.......................19
(a) The Lockbox Accounts....................................19
(b) Collection Account......................................21
(c) Retention Account.......................................22
(d) Collateral Account......................................22
SECTION 6.02 Funding of Collection Account...........................22
SECTION 6.03 Daily Disbursements From the Collection Account and
Related Sub-Accounts; Revolving Period 23
SECTION 6.04 Disbursements From the Retention Account; Settlement
Date Procedures; Revolving Period 25
SECTION 6.05 Liquidation Settlement Procedures.......................26
SECTION 6.06 Investment of Funds in Accounts.........................29
SECTION 6.07 Termination Procedures..................................29
ARTICLE VII SERVICER PROVISIONS...............................................29
SECTION 7.01 Appointment of the Servicer.............................30
SECTION 7.02 Duties and Responsibilities of the Service..............30
SECTION 7.03 Collections on Receivables..............................30
SECTION 7.04 Authorization of the Servicer...........................31
SECTION 7.05 Servicing Fees..........................................31
SECTION 7.06 Covenants of the Servicer...............................31
(a) Ownership of Transferred Receivables....................31
(b) Compliance with Credit and Collection Policies..........32
(c) Covenants in Other Related Documents....................32
SECTION 7.07 Reporting Requirements of the Servicer..................32
ARTICLE VIII GRANT OF SECURITY INTERESTS......................................32
SECTION 8.01 Seller's Grant of Security Interest.....................32
SECTION 8.02 Seller's Certification..................................33
SECTION 8.03 Consent to Assignment...................................34
SECTION 8.04 Delivery of Collateral..................................34
SECTION 8.05 Seller Remains Liable...................................34
SECTION 8.06 Covenants of the Seller and the Servicer Regarding
the Seller Collateral..........35
(a) Offices and Records.....................................35
(b) Access..................................................35
(c) Communication with Accountants..........................36
(d) Collection of Transferred Receivables...................36
(e) Performance of Seller Assigned Agreements...............37
ARTICLE IX TERMINATION EVENTS.................................................37
SECTION 9.01 Termination Events......................................37
SECTION 9.02 Events of Servicer Termination..........................40
ARTICLE X REMEDIES............................................................41
SECTION 10.01 Actions Upon Termination Event.........................41
SECTION 10.02 Exercise of Remedies...................................42
SECTION 10.03 Power of Attorney......................................43
SECTION 10.04 Continuing Security Interest...........................43
ARTICLE XI SUCCESSOR SERVICER PROVISIONS......................................43
SECTION 11.01 Servicer Not to Resign.................................43
SECTION 11.02 Appointment of the Successor Servicer..................43
SECTION 11.03 Duties of the Servicer.................................44
SECTION 11.04 Effect of Termination or Resignation...................44
ARTICLE XII INDEMNIFICATION...................................................44
SECTION 12.01 Indemnities by the Seller..............................44
SECTION 12.02 Indemnities by the Servicer............................46
SECTION 12.03 Limitation of Damages; Purchaser Indemnified Persons...47
ARTICLE XIII OPERATING AGENT AND COLLATERAL AGENT.............................47
SECTION 13.01 Authorization and Action...............................47
SECTION 13.02 Reliance...............................................47
SECTION 13.03 GE Capital and Affiliates..............................48
ARTICLE XIV MISCELLANEOUS.....................................................48
SECTION 14.01 Notices................................................48
SECTION 14.02 Binding Effect; Assignability..........................49
SECTION 14.03 Termination; Survival of Seller Secured Obligations
Upon Facility Termination Date. 49
SECTION 14.04 Costs, Expenses and Taxes..............................50
SECTION 14.05 Confidentiality........................................51
SECTION 14.06 No Proceedings.........................................52
SECTION 14.07 Complete Agreement; Modification of Agreement..........53
SECTION 14.08 Amendments and Waivers.................................53
SECTION 14.09 No Waiver; Remedies....................................53
SECTION 14.10 Governing Law; Consent to Jurisdiction; Waiver of
Jury Trial.....................53
SECTION 14.11 Counterparts...........................................55
SECTION 14.12 Severability...........................................55
SECTION 14.13 Section Titles.........................................55
SECTION 14.14 Limited Recourse.......................................55
SECTION 14.15 Further Assurances.....................................55
Exhibit 2.02(a).............................Form of Commitment Reduction Notice
Exhibit 2.02(b)...........................Form of Commitment Termination Notice
Exhibit 2.02(c)..............................Form of Commitment Increase Notice
Exhibit 2.03(a).............................Form of Investment Base Certificate
Exhibit 2.03(b)........................................Form of Purchase Request
Exhibit 2.03(c)........................................Form of Repayment Notice
Exhibit 2.04(a).....................................Form of Purchase Assignment
Exhibit 3.01(a)(i).................................Form of Solvency Certificate
Exhibit 3.01(a)(ii)(A)..................Form of Bringdown Certificate (Closing)
Exhibit 3.01(a)(ii)(B).............Form of Bringdown Certificate (Post-Closing)
Exhibit 3.01(a)(iii)(A)................Form of Servicer's Certificate (Closing)
Exhibit 3.01(a)(iii)(B)...........Form of Servicer's Certificate (Post-Closing)
Exhibit 3.01(a)(iv)......................................Form of Monthly Report
Exhibit 3.01(a)(v).....................Form of Quarterly Compliance Certificate
Exhibit 5.03(b).................................Form of Intercreditor Agreement
Exhibit 10.03........................................Form of Power of Attorney
Schedule 4.01(b)........Executive Offices; Collateral Locations; Seller Names;
............................................................. FEIN
Schedule 4.01(d)..................................................Litigation
Schedule 4.01(h)......Ventures, Subsidiaries and Affiliates; Outstanding Stock
.....................................................and Indebtedness
Schedule 4.01(i)..................................................Tax Matters
Schedule 4.01(r)............................Deposit and Disbursement Accounts
Schedule 5.03(b)...............................................Existing Liens
Annex 1 Concentration Limits
Annex 2 Excluded Obligors
Exhibit A to
Annex 2 Form of Amending Letter
Annex 3 Determination of A Redwood Yield @
Annex 4 Yield Discount Amount
Annex G Financial Covenants
Annex 5.02(a)..............................Reporting Requirements of the Seller
Annex 5.02(b)................................................Investment Reports
Annex 7.07...............................Reporting Requirements of the Servicer
Annex X Definitions
Annex Y Schedule of Documents
115
THIS RECEIVABLES PURCHASE AND SERVICING AGREEMENT ("Agreement") is
entered into as of September 1, 1999, by and among CONE RECEIVABLES II LLC, a
North Carolina limited liability company (the "Seller"), REDWOOD RECEIVABLES
CORPORATION, a Delaware corporation (the "Purchaser"), CONE ▇▇▇▇▇ CORPORATION, a
North Carolina corporation ("Cone ▇▇▇▇▇"), as servicer hereunder (in such
capacity, the "Servicer"), and GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation, as operating agent for the Purchaser hereunder (in such capacity,
the "Operating Agent") and as collateral agent for the Purchaser and the
Purchaser Secured Parties (in such capacity, the "Collateral Agent"). RECITALS
A............................... The Seller is a special purpose limited
liability company owned by the Independent Member, Cone ▇▇▇▇▇, and one or more
of Cone ▇▇▇▇▇'▇ Subsidiaries. B. The Seller has been formed for the purpose of
purchasing, or otherwise acquiring by capital contribution, all or substantially
all of the trade receivables of each Originator pursuant to the Transfer
Agreement. C. ...........................The Seller intends to sell, and the
Purchaser intends to purchase, such trade receivables, from time to time, as
described herein. D. ..............................The Operating Agent has been
requested and is willing to act as operating agent on behalf of the Purchaser in
connection with the making and financing of such purchases. E.
............................In order to effectuate the purposes of this
Agreement, the Seller and the Purchaser desire to appoint Cone ▇▇▇▇▇ to service,
administer and collect the receivables acquired by the Purchaser pursuant to
this Agreement and Cone ▇▇▇▇▇ is willing to act in such capacity as the Servicer
hereunder on the terms and conditions set forth herein. AGREEMENT NOW,
THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows: ARTICLE I DEFINITIONS AND INTERPRETATION SECTION 1.01 Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to them in Annex X. SECTION 1.02 Rules of Construction. For purposes of
this Agreement, the rules of construction set forth in Annex X shall govern. All
Appendices hereto, or expressly identified to this Agreement, are incorporated
herein by reference and, taken together with this Agreement, shall constitute
but a single agreement. ARTICLE II AMOUNTS AND TERMS OF PURCHASES SECTION 2.01
Purchases. On the Closing Date and each Business Day thereafter until the
Facility Termination Date and subject to the terms and conditions hereof, the
Purchaser agrees to purchase from Seller (each such purchase hereunder, a
"Purchase") all Transferred Receivables acquired on such date by Seller from the
Originators under the Transfer Agreement and the Seller agrees to sell such
Transferred Receivables to the Purchaser. Under no circumstances shall the
Purchaser be obligated to make any Purchase if, after giving effect thereto, a
Purchase Excess would exist. The aggregate purchase price for each such Purchase
shall equal the Cash Purchase Price plus the Deferred Purchase Price for the
related Purchase date. SECTION 2.02 Optional Changes in Maximum Purchase Limit.
(a) So long as no Incipient Termination Event or Termination Event shall have
occurred and be continuing, the Seller may, not more than twice during each
calendar year, reduce the Maximum Purchase Limit permanently; provided, that
(i) the Seller shall give ten Business Days' prior written notice of any such
reduction to the Purchaser and the Operating Agent substantially in the form of
Exhibit 2.02(a) (each such notice, a "Commitment Reduction Notice"), (ii) any
partial reduction of the Maximum Purchase Limit shall be in a minimum amount of
$5,000,000 or an integral multiple thereof and (iii)no such reduction shall
reduce the Maximum Purchase Limit below Capital Investment at such time (and
after giving effect to any concurrent reduction in the Capital Investment made
pursuant to Section 2.03(c)). (b) The Seller may at any time on at least 90 days
prior written notice by the Seller to the Purchaser and the Operating Agent
irrevocably terminate the Maximum Purchase Limit; provided, that (i) such notice
of termination shall be substantially in the form of Exhibit 2.02(b) (the
"Commitment Termination Notice")and (ii) the Seller shall reduce the Capital
Investment to zero and make all payments required by Section 2.03(c) or Section
2.07(c) at the time and in the manner specified therein. Upon such termination,
the Seller's right to request that the Purchaser make Purchases hereunder shall
simultaneously terminate and the Facility Termination Date shall automatically
occur. (c) So long as no Incipient Termination Event or Termination Event shall
have occurred and be continuing, the Seller may, on a one-time basis only,
increase the Maximum Purchase Limit to $65,000,000; provided, that (i) the
Seller shall give ten Business Days prior written notice of such increase to the
Purchaser and the Operating Agent substantially in the form of Exhibit 2.02(c)
(such notice, a "Commitment Increase Notice") and (ii) such increase shall not
become effective unless and until the Foreign Receivable Election Date shall
have occurred. (d) Each written notice required to be delivered pursuant to
Sections 2.02(a), (b) or (c) shall be irrevocable and shall be effective (i) on
the day of receipt if received by the Purchaser and the Operating Agent not
later than 5:00 p.m. (New York time) on any Business Day and (ii) on the
immediately succeeding Business Day if received by the Purchaser or the
Operating Agent after such time on such Business Day or if any such notice is
received on a day other than a Business Day (regardless of the time of day such
notice is received). Each such notice of termination or reduction shall specify,
respectively, the amount of, or the amount of the proposed reduction in, the
Maximum Purchase Limit. SECTION 2.03 Notices Relating to Purchases and
Reductions in Capital Investment. (a) Not later than 11:00 a.m. (New York time)
on the third Business Day of each week, the Seller shall deliver to the
Purchaser and the Operating Agent an Officer's Certificate substantially in the
form of Exhibit 2.03(a) (each an "Investment Base Certificate"); provided, that
if (i) an Incipient Termination Event or a Termination Event shall have occurred
and be continuing or (ii) the Operating Agent, in good faith, believes that an
Incipient Termination Event or a Termination Event is imminent or deems the
Purchaser's rights or interests in the Transferred Receivables or the Seller
Collateral insecure, the Seller shall deliver an Investment Base Certificate to
the Purchaser and the Operating Agent at such more frequent intervals as the
Operating Agent may request from time to time. Capital Investment Available
shall be determined by the Operating Agent based on information related to the
Seller Collateral available to it, including (A) any information obtained in
connection with any audit or reflected in the most recent Investment Base
Certificate or any other Investment Report delivered to the Purchaser and the
Operating Agent or (B) any other information that may be available to the
Purchaser and the Operating Agent. (b) Each Purchase resulting in an increase in
Capital Investment shall be made upon the provision of notice by the Seller to
the Purchaser and the Operating Agent in the manner provided herein. Any such
notice must be given in writing so that it is received no later than 4:00 p.m.
(New York time) on the Business Day immediately preceding the proposed Purchase
Date set forth therein. Each such notice (a "Purchase Request") shall (i) be
substantially in the form of Exhibit 2.03(b), (ii) be irrevocable and (iii)
specify the amount by which the Seller wishes the Capital Investment to be
increased and the proposed Purchase Date (which shall be a Business Day), and
shall include such other information as may be required by the Purchaser and the
Operating Agent. (c) The Seller may at any time reduce the Capital Investment;
provided, that (i) the Seller shall give one Business Day's prior written notice
of any such reduction to the Purchaser and the Operating Agent substantially in
the form of Exhibit 2.03(c) (each such notice, a "Repayment Notice"), (ii) each
such notice shall be irrevocable, (iii) each such notice shall specify the
amount by which the Seller wishes the Capital Investment to be reduced and the
proposed date of such reduction (which shall be a Business Day) and (iv) any
such reduction must be accompanied by payment of (A) all Daily Yield accrued on
the Capital Investment being reduced through but excluding the date of such
reduction and (B) the Breakage Costs, if any, required by Section 2.10. Any such
notice of reduction must be received by the Purchaser and the Operating Agent no
later than 4:00 p.m. (New York time) on the Business Day immediately preceding
the date of the proposed reduction in Capital Investment. SECTION 2.04
Conveyance of Receivables. (a) Purchase Assignment. On or prior to the Closing
Date, the Seller shall complete, execute and deliver to the Purchaser an
assignment substantially in the form of Exhibit 2.04(a) (the
"Purchase Assignment") in order to evidence the Purchases. (b) Funding of
Collection Account; Payment of Purchase Price. (i) Funding of Collection Account
by Purchaser. Following receipt of any Purchase Request, and subject to
satisfaction of the conditions set forth in Section 3.02, the Purchaser shall
make available to or on behalf of the Seller on the Purchase Date specified
therein the lesser of the amount specified in such Purchase Request and the
Capital Investment Available by depositing such amount in same day funds to the
Collection Account. (ii) Payment of Purchase Price. The Purchaser shall, or
shall cause the Operating Agent to, make available to or on behalf of the Seller
on each Business Day during the Revolving Period, in same day funds, all amounts
on deposit in the Collection Account that are to be disbursed to or on behalf of
the Seller as payment for the Transferred Receivables pursuant to Section 6.03;
provided that, if and for so long as the Operating Agent and the Collateral
Agent have not taken exclusive dominion and control over the Lockbox Account
pursuant to Section 6.01(a)(i), such payments for the Transferred Receivables
shall be made by way of the Seller's receipt of transfers from the Lockbox
Accounts of proceeds of Collections on the Transferred Receivables as well as
from amounts on deposit in the Collection Account. (c) Vesting of Ownership.
Effective on and as of each Purchase Date, the Purchaser shall own all
Transferred Receivables sold by the Seller hereunder on such Purchase Date. The
Seller shall not take any action inconsistent with such ownership and shall not
claim any ownership interest in such Transferred Receivables. The Seller shall
indicate in its Records that ownership of such Transferred Receivables is vested
in the Purchaser. In addition, the Seller shall respond to any inquiries with
respect to the ownership of any such Transferred Receivable by stating that it
is no longer the owner of such Transferred Receivable and that ownership thereof
is vested in the Purchaser. The Seller and the Servicer shall hold all Contracts
and other documents and incidents relating to such Transferred Receivables in
trust for the benefit of the Purchaser, as the owner thereof, and for the sole
purpose of facilitating the servicing of such Transferred Receivables. The
Seller and the Servicer hereby acknowledge that their retention and possession
of such Contracts and documents shall at all times be at the sole discretion of
the Purchaser and in a custodial capacity for the Purchaser's benefit only. (d)
Repurchases of Transferred Receivables. If any Originator is required to
repurchase Transferred Receivables from the Seller pursuant to Section 4.04 of
the Transfer Agreement, the Purchaser shall sell or reconvey such Transferred
Receivables to the Seller (i) for cash or (ii) in exchange for new Eligible
Receivables, in each case in an amount equal to the Outstanding Balance of such
Transferred Receivables. SECTION 2.05 Facility Termination Date. Notwithstanding
anything to the contrary set forth herein, the Purchaser shall have no
obligation to purchase any additional Transferred Receivables from and after the
Facility Termination Date. SECTION 2.06 Daily Yield. (a) The Seller shall pay
Daily Yield to the Purchaser in the manner and at the times specified in
Sections 6.03, 6.04 and 6.05. (b) Notwithstanding the foregoing, the Seller
shall pay interest at the applicable Daily Yield Rate on unpaid Daily Yield and
on any other amount payable by the Seller hereunder (to the extent permitted by
law) that shall not be paid in full when due (whether at stated maturity, by
acceleration or otherwise) for the period commencing on the due date thereof to
(but excluding) the date the same is indefeasibly paid in full. SECTION 2.07
Fees. (a) The Seller shall pay to the Purchaser the fees set forth in the Fee
Letter. (b) On each Settlement Date, the Seller shall pay to the Servicer or to
the Successor Servicer, as applicable, the Servicing Fee or the Successor
Servicing Fees and Expenses, respectively, in each case to the extent of
available funds therefor as provided in Section 6.04. (c) If the Seller
terminates the Maximum Purchase Limit pursuant to Section 2.02(b) on or prior to
the second anniversary of the Closing Date, the Seller shall pay to the
Operating Agent, for the account of the Purchaser and as liquidated damages and
compensation for the costs of being prepared to make Purchases, on the Facility
Termination Date a prepayment fee (the "Prepayment Fee") in an amount determined
by multiplying the Applicable Percentage (as defined below) by the Maximum
Purchase Limit as in effect immediately prior to such termination. As used
herein, the term "Applicable Percentage" shall mean (i) two percent (2.0%) in
the case of any such termination which occurs on or prior to the first
anniversary of the Closing Date and (ii) one percent (1.0%) in the case of any
such termination which occurs on or prior to the second anniversary of the
Closing Date. The Seller acknowledges and agrees that (x) it would be difficult
or impractical to calculate the Purchaser's actual damages from an early
termination of Purchaser's obligation to make Purchases pursuant to Section
2.02(b), (y) the Prepayment Fee provided above is intended to be a fair and
reasonable approximation of such damages, and (z) the Prepayment Fee provided
above is not intended to be a penalty. SECTION 2.08 Time and Method of Payments.
Subject to the provisions of Sections 6.02, 6.03, 6.04 and 6.05, all payments in
reduction of Capital Investment and all payments of yield, fees and other
amounts payable by the Seller hereunder shall be made in Dollars, in immediately
available funds, to the Purchaser not later than 11:00 a.m. (New York time) on
the due date therefor. Any such payment made on such date but after such time
shall be deemed to have been made on, and Daily Yield shall continue to accrue
and be payable thereon until, the next succeeding Business Day. If any such
payment becomes due on a day other than a Business Day, the maturity thereof
will be extended to the next succeeding Business Day and Daily Yield thereon
shall be payable during such extension. Any and all payments by the Seller
hereunder shall be made in accordance with this Section 2.08 without setoff or
counterclaim and free and clear of and without deduction for any and all present
or future taxes, levies, imposts, deductions, charges or withholdings, excluding
taxes imposed on or measured by the net income of any Affected Party by the
jurisdictions under the laws of which any such Affected Party is organized or by
any political subdivisions thereof. If the Seller shall be required by law to
deduct any taxes from or in respect of any sum payable hereunder, (a) the sum
payable shall be increased as much as shall be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 2.08) the Affected Party entitled to receive any such
payment receives an amount equal to the sum it would have received had no such
deductions been made, (b) the Seller shall make such deductions, and (c) the
Seller shall pay the full amount deducted to the relevant taxing or other
authority in accordance with applicable law. Within 30 days after the date of
any payment of taxes, the Seller shall furnish to the Operating Agent the
original or a certified copy of a receipt evidencing payment thereof. The Seller
shall indemnify any Affected Party from and against, and, within ten days of
demand therefor, pay any Affected Party for, the full amount of taxes (including
any taxes imposed by any jurisdiction on amounts payable under this
Section 2.08) paid by such Affected Party and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such taxes were correctly or legally asserted. SECTION 2.09
Capital Requirements; Additional Costs. (a) If the Operating Agent on behalf of
any Affected Party shall have determined that the adoption after the date hereof
of any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve requirements or similar
requirements or compliance by such Affected Party with any request or directive
regarding capital adequacy, reserve requirements or similar requirements
(whether or not having the force of law) from any central bank or other
Governmental Authority increases or would have the effect of increasing the
amount of capital, reserves or other funds required to be maintained by such
Affected Party against commitments made by it under this Agreement, any other
Related Document or any Program Document and thereby reducing the rate of return
on such Affected Party's capital as a consequence of its commitments hereunder
or thereunder, then the Seller shall from time to time upon demand by the
Operating Agent pay to the Collateral Agent on behalf of such Affected Party
additional amounts sufficient to compensate such Affected Party for the Seller's
Share of such reduction together with interest thereon from the date of any such
demand until payment in full at the Daily Yield Rate. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by the Operating Agent to the Seller shall be final, binding and
conclusive on the parties hereto (absent manifest error) for all purposes. (b)
If, due to any Regulatory Change, there shall be any increase in the cost to any
Affected Party of agreeing to make or making, funding or maintaining any
commitment hereunder, under any other Related Document or under any Program
Document, including with respect to any Purchases, Capital Investment, LOC Draws
or Liquidity Loans, or any reduction in any amount receivable by such Affected
Party hereunder or thereunder, including with respect to any Purchases, Capital
Investment, LOC Draws or Liquidity Loans (any such increase in cost or reduction
in amounts receivable are hereinafter referred to as "Additional Costs"), then
the Seller shall, from time to time upon demand by the Operating Agent, pay to
the Collateral Agent on behalf of such Affected Party additional amounts
sufficient to compensate such Affected Party for the Seller's Share of such
Additional Costs together with interest thereon from the date demanded until
payment in full thereof at the Daily Yield Rate. Such Affected Party agrees
that, as promptly as practicable after it becomes aware of any circumstance
referred to above that would result in any such Additional Costs, it shall, to
the extent not inconsistent with its internal policies of general application,
use reasonable commercial efforts to minimize costs and expenses incurred by it
and payable to it by the Seller pursuant to this Section 2.09(b). (c)
Determinations by any Affected Party for purposes of this Section 2.09 of the
effect of any Regulatory Change on its costs of making, funding or maintaining
any commitments hereunder, under any other Related Document or under any Program
Document or on amounts receivable by it hereunder or thereunder or of the
additional amounts required to compensate such Affected Party in respect of any
Additional Costs shall be set forth in a written notice to the Seller in
reasonable detail and shall be final, binding and conclusive on the Seller
(absent manifest error) for all purposes. SECTION 2.10 Breakage Costs. The
Seller shall pay to the Collateral Agent for the account of the Purchaser, upon
request of the Purchaser, such amount or amounts as shall compensate the
Purchaser for any loss, cost or expense actually incurred by the Purchaser (as
determined by the Purchaser) as a result of any reduction by the Seller in
Capital Investment (and accompanying loss of Daily Yield thereon) other than on
the maturity date of the Commercial Paper (or other financing source) funding
such Capital Investment, which compensation shall include an amount equal to any
loss or expense actually incurred by the Purchaser during the period from the
date of such reduction to (but excluding) the maturity date of such Commercial
Paper (or other financing source) if the rate of interest obtainable by the
Purchaser upon the redeployment of funds in an amount equal to such reduction is
less than the interest rate applicable to such Commercial Paper (or other
financing source) (any such loss, cost or expense referred to collectively
herein as "Breakage Costs"). The determination by the Purchaser of the amount of
any such loss or expense shall be set forth in a written notice to the Seller in
reasonable detail and shall be final, binding and conclusive on the Seller
(absent manifest error) for all purposes. SECTION 2.11 Purchase Excess. On each
Business Day during the Revolving Period and after completion of the
disbursements specified in Section 6.03, the Operating Agent shall notify the
Seller and the Servicer of any Purchase Excess on such day, and the Seller shall
deposit the amount of such Purchase Excess in the Collection Account by 11:00
a.m. (New York time) on the immediately succeeding Business Day. ARTICLE III
CONDITIONS PRECEDENT SECTION 3.01 Conditions to Effectiveness of Agreement. The
Purchaser shall not be obligated to purchase Transferred Receivables hereunder
on the occasion of the initial Purchase, nor shall the Purchaser, the Operating
Agent or the Collateral Agent be obligated to take, fulfill or perform any other
action hereunder, until the following conditions have been satisfied, in the
sole discretion of, or waived in writing by, the Purchaser and the Operating
Agent: (a) Purchase Agreement; Other Related Documents. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to, the
parties hereto and the Purchaser and the Operating Agent shall have received
such other documents, instruments, agreements and legal opinions as the
Purchaser and the Operating Agent shall request in connection with the
transactions contemplated by this Agreement, including all those listed in the
Schedule of Documents, each in form and substance satisfactory to the Purchaser
and the Operating Agent. (b) Governmental and Other Approvals. The Purchaser and
the Operating Agent shall have received (i) satisfactory evidence that the
Seller and the Servicer have obtained all required consents and approvals of all
Persons, including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the other Related Documents and
the consummation of the transactions contemplated hereby or thereby or (ii) an
Officer's Certificate from each of the Seller and the Servicer in form and
substance satisfactory to the Purchaser and the Operating Agent affirming that
no such consents or approvals are required. (c) Compliance with Laws. The Seller
and the Servicer shall be in compliance in all material respects with all
applicable foreign, federal, state and local laws and regulations, including
those specifically referenced in Section 5.01(a). (d) Payment of Fees. The
Seller shall have paid all fees required to be paid by it on the Closing Date,
including all fees required hereunder and under the Fee Letter, and shall have
reimbursed the Purchaser for all fees, costs and expenses of closing the
transactions contemplated hereunder and under the other Related Documents,
including the Purchaser's reasonable legal and other document preparation costs.
SECTION 3.02 Conditions Precedent to All Purchases. The Purchaser shall not be
obligated to purchase Transferred Receivables hereunder on any Purchase Date if,
as of the date thereof: (a) any representation or warranty of the Seller or the
Servicer contained herein or in any of the other Related Documents shall be
untrue or incorrect as of such date, either before or after giving effect to the
Purchase of Transferred Receivables on such date and to the application of the
proceeds therefrom, except to the extent that such representation or warranty
expressly relates to an earlier date and except for changes therein expressly
permitted by this Agreement; (b) any event shall have occurred, or would result
from the Purchase of Transferred Receivables on such Purchase Date or from the
application of the proceeds therefrom, that constitutes an Incipient Termination
Event, a Termination Event, an Incipient Servicer Termination Event or an Event
of Servicer Termination; (c) the Seller shall not be in compliance with any of
its covenants or other agreements set forth herein; (d) the Facility Termination
Date shall have occurred; (e) either before or after giving effect to such
Purchase and to the application of the proceeds therefrom, a Purchase Excess
would exist; (f) any Originator, the Seller or the Servicer shall fail to have
taken such other action, including delivery of approvals, consents, opinions,
documents and instruments to the Purchaser and the Operating Agent, as the
Purchaser or the Operating Agent may reasonably request or a Rating Agency may
request; or (g) the Operating Agent or the Collateral Agent shall have
determined that any event or condition has occurred that has had, or could
reasonably be expected to have or result in, a Material Adverse Effect. The
delivery by the Seller of a Purchase Request and the acceptance by the Seller of
the purchase price for any Transferred Receivables on any Purchase Date shall be
deemed to constitute, as of any such Purchase Date, a representation and
warranty by the Seller that the conditions in this Section 3.02 have been
satisfied. ARTICLE IV REPRESENTATIONS AND WARRANTIES SECTION 4.01
Representations and Warranties of the Seller. To induce the Purchaser to
purchase the Transferred Receivables and each of the Operating Agent and the
Collateral Agent to take any action hereunder, the Seller makes the following
representations and warranties to the Purchaser, the Operating Agent and the
Collateral Agent, each and all of which shall survive the execution and delivery
of this Agreement. (a) Legal Existence; Compliance with Law. The Seller (i) is a
limited liability company duly organized and validly existing under the laws of
its jurisdiction of formation; (ii) is duly qualified to conduct business in
each other jurisdiction where its ownership or lease of property or the conduct
of its business requires such qualification; (iii) has the requisite power and
authority and the legal right to own, pledge, mortgage or otherwise encumber and
operate its properties, to lease the property it operates under lease, and to
conduct its business as now, heretofore and proposed to be conducted; (iv) has
all licenses, permits, consents or approvals from or by, and has made all
filings with, and has given all notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership, operation and conduct;
(v) is in compliance with its articles of organization and operating agreement;
and (vi)subject to specific representations set forth herein regarding ERISA,
tax and other laws, is in compliance with all applicable provisions of law,
except where the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. (b) Executive Offices;
Collateral Locations; Seller Names; FEIN. As of the Closing Date, the current
location of the Seller's chief executive office, principal place of business,
other offices, the warehouses and premises within which any Seller Collateral is
stored or located, and the locations of its records concerning the Seller
Collateral (including originals of the Seller Assigned Agreements) are set forth
in Schedule 4.01(b) and none of such locations has changed within the past 12
months (or such shorter time as the Seller has been in existence). During the
prior five years (or such shorter time as the Seller has been in existence),
except as set forth in Schedule 4.01(b), the Seller has not been known as or
used any name (including without limitation any assumed, fictitious or trade
name or "doing business as" name). In addition, Schedule 4.01(b) lists the
federal employer identification number of the Seller. (c) Power, Authorization,
Enforceable Obligations. The execution, delivery and performance by the Seller
of this Agreement and the other Related Documents to which it is a party, the
creation and perfection of all Liens and ownership interests provided for
therein and, solely with respect to clause (vii) below, the exercise by each of
the Seller, the Purchaser, the Operating Agent or the Collateral Agent of any of
its rights and remedies under any Related Document to which it is a party:
(i) are within the Seller's power; (ii) have been duly authorized by all
necessary or proper manager, member or other action on the Seller's part;
(iii) do not contravene any provision of the Seller's articles of organization
or operating agreement; (iv) do not violate any law or regulation, or any order
or decree of any court or Governmental Authority; (v) do not conflict with or
result in the breach or termination of, constitute a default under or accelerate
or permit the acceleration of any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which the
Seller or any Originator is a party or by which the Seller or any Originator or
any of the property of the Seller or any Originator is bound; (vi) do not result
in the creation or imposition of any Adverse Claim upon any of the property of
the Seller or any Originator; and (vii) do not require the consent or approval
of any Governmental Authority or any other Person, except those referred to in
Section 3.01(b), all of which will have been duly obtained, made or complied
with prior to the Closing Date. On or prior to the Closing Date, each of the
Related Documents to which the Seller is a party shall have been duly executed
and delivered by the Seller and each such Related Document shall then constitute
a legal, valid and binding obligation of the Seller enforceable against it in
accordance with its terms. (d) No Litigation. No Litigation is now pending or,
to the knowledge of the Seller, threatened against the Seller that
(i) challenges the Seller's right or power to enter into or perform any of its
obligations under the Related Documents to which it is a party, or the validity
or enforceability of any Related Document or any action taken thereunder, (ii)
seeks to prevent the transfer, sale, pledge or contribution of any Receivable or
the consummation of any of the transactions contemplated under this Agreement or
the other Related Documents, or (iii) has a reasonable risk of being determined
adversely to the Seller and that, if so determined, could have a Material
Adverse Effect. Except as set forth on Schedule 4.01(d), as of the Closing Date
there is no Litigation pending or threatened that seeks damages in excess of
$500,000 or injunctive relief against, or alleges criminal misconduct by, the
Seller. (e) Solvency. Both before and after giving effect to (i) the
transactions contemplated by this Agreement and the other Related Documents and
(ii) the payment and accrual of all transaction costs in connection with the
foregoing, the Seller is and will be Solvent. (f) Material Adverse Effect.
Between January 3, 1999 and the Closing Date, (i) the Seller has not incurred
any obligations, contingent or non-contingent liabilities, liabilities for
charges, long-term leases or unusual forward or long-term commitments that,
alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (ii) no contract, lease or other agreement or instrument has
been entered into by the Seller or has become binding upon the Seller's assets
and no law or regulation applicable to the Seller has been adopted that has had
or could reasonably be expected to have a Material Adverse Effect and (iii) the
Seller is not in default and no third party is in default under any material
contract, lease or other agreement or instrument to which the Seller is a party
that alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect. Between January 3, 1999 and the Closing Date no event has
occurred that alone or together with other events could reasonably be expected
to have a Material Adverse Effect. (g) Ownership of Property; Liens. As of the
Closing Date, no Transferred Receivable is subject to any Adverse Claim, none of
the other properties and assets of the Seller are subject to any Adverse Claims
other than Permitted Encumbrances, and there are no facts, circumstances or
conditions known to the Seller that may result in (i) with respect to the
Transferred Receivables, any Adverse Claims (including Adverse Claims arising
under Environmental Laws) and (ii) with respect to its other properties and
assets, any Adverse Claims (including Adverse Claims arising under Environmental
Laws) other than Permitted Encumbrances. The Seller has received all
assignments, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect the Seller's right, title and interest in and to the Transferred
Receivables and its other properties and assets. The Liens granted to the
Purchaser pursuant to Section 8.01 will at all times be fully perfected first
priority Liens in and to the Seller Collateral. (h) Ventures, Subsidiaries and
Affiliates; Outstanding Stock and Indebtedness. Except as set forth in Schedule
4.01(h), the Seller has no Subsidiaries, is not engaged in any joint venture or
partnership with any other Person, and is not an Affiliate of any other Person.
All of the issued and outstanding Stock of the Seller is owned by each of the
Stockholders in the amounts set forth on Schedule 4.01(h). There are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which the Seller may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Subsidiaries. All outstanding Debt of the Seller
as of the Closing Date is described in Section 5.03(i). (i) Taxes. All tax
returns, reports and statements, including information returns, required by any
Governmental Authority to be filed by the Seller have been filed with the
appropriate Governmental Authority and all charges have been paid prior to the
date on which any fine, penalty, interest or late charge may be added thereto
for nonpayment thereof (or any such fine, penalty, interest, late charge or loss
has been paid), excluding charges or other amounts being contested in accordance
with Section 5.01(e). Proper and accurate amounts have been withheld by the
Seller from its respective employees for all periods in full and complete
compliance with all applicable federal, state, local and foreign laws and such
withholdings have been timely paid to the respective Governmental Authorities.
Schedule 4.01(i) sets forth as of the Closing Date (i) those taxable years for
which the Seller's tax returns are currently being audited by the IRS or any
other applicable Governmental Authority and (ii) any assessments or threatened
assessments in connection with any such audit or otherwise currently
outstanding. Except as described on Schedule 4.01(i), the Seller has not
executed or filed with the IRS or any other Governmental Authority any agreement
or other document extending, or having the effect of extending, the period for
assessment or collection of any charges. The Seller is not liable for any
charges: (A) under any agreement (including any tax sharing agreements) or
(B) to the best of the Seller's knowledge, as a transferee. As of the Closing
Date, the Seller has not agreed or been requested to make any adjustment under
IRC Section 481(a), by reason of a change in accounting method or otherwise,
that would have a Material Adverse Effect. (j) Full Disclosure. No information
contained in this Agreement, any Investment Base Certificate or any of the other
Related Documents, or any written statement furnished by or on behalf of the
Seller to the Purchaser, the Operating Agent or the Collateral Agent pursuant to
the terms of this Agreement or any of the other Related Documents (other than
the Projections) contains any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein not misleading in light of the circumstances under which they
were made. The Projections are based on the estimates and assumptions stated
therein, all of which the Seller believes to be reasonable and fair in light of
current conditions and current facts known to Seller and, as of the Closing
Date, reflect Cone Mill's good faith and reasonable estimate of the future
financial condition and performance of Cone ▇▇▇▇▇ and its Subsidiaries and of
the other information projected therein for the period covered thereby. (k)
ERISA. The Seller is in compliance with ERISA and has not incurred and does not
expect to incur any liabilities (except for premium payments arising in the
ordinary course of business) payable to the PBGC under ERISA. (l) Brokers. No
broker or finder acting on behalf of the Seller was employed or utilized in
connection with this Agreement or the other Related Documents or the
transactions contemplated hereby or thereby and the Seller has no obligation to
any Person in respect of any finder's or brokerage fees in connection therewith.
(m) Margin Regulations. The Seller is not engaged in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin security," as
such terms are defined in Regulation U of the Federal Reserve Board as now and
from time to time hereafter in effect (such securities being referred to herein
as "Margin Stock"). The Seller owns no Margin Stock, and no portion of the
proceeds of the purchase price for Transferred Receivables sold hereunder will
be used, directly or indirectly, for the purpose of purchasing or carrying any
Margin Stock, for the purpose of reducing or retiring any Debt that was
originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any portion of such proceeds to be considered a
"purpose credit" within the meaning of Regulations T, U or X of the Federal
Reserve Board. The Seller will not take or permit to be taken any action that
might cause any Related Document to violate any regulation of the Federal
Reserve Board. (n) Nonapplicability of Bulk Sales Laws. No transaction
contemplated by this Agreement or any of the Related Documents requires
compliance with any bulk sales act or similar law. (o) Securities Act and
Investment Company Act Exemptions. Each purchase of Transferred Receivables
under this Agreement will constitute (i) a "current transaction" within the
meaning of Section 3(a)(3) of the Securities Act and (ii) a purchase or other
acquisition of notes, drafts, acceptances, open accounts receivable or other
obligations representing part or all of the sales price of merchandise,
insurance or services within the meaning of Section 3(c)(5) of the Investment
Company Act. (p) Government Regulation. The Seller is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act. The Purchase of the Transferred Receivables by the Purchaser
hereunder, the application of the proceeds thereof and the consummation of the
transactions contemplated by this Agreement and the other Related Documents will
not violate any provision of any such statute or any rule, regulation or order
issued by the Securities and Exchange Commission. (q) Nonconsolidation, Etc. The
Seller is operated in such a manner that the separate legal existence of the
Seller and each member of the Cone ▇▇▇▇▇ Group would not be disregarded in the
event of the bankruptcy or insolvency of any member of the Cone ▇▇▇▇▇ Group and,
without limiting the generality of the foregoing: (i) the Seller is a limited
purpose, limited liability company whose activities are restricted in its
articles of organization to those activities expressly permitted hereunder and
under the other Related Documents and the Seller has not engaged, and does not
presently engage, in any activity other than those activities expressly
permitted hereunder and under the other Related Documents, nor has the Seller
entered into any agreement other than this Agreement, the Management Agreement,
the other Related Documents to which it is a party and, with the prior written
consent of the Purchaser, the Operating Agent and the Collateral Agent, any
other agreement necessary to carry out more effectively the provisions and
purposes hereof or thereof; (ii) no member of the Cone ▇▇▇▇▇ Group or any
individual at the time he or she is acting as an officer or employee of any such
member is or has been involved in the day-to-day management of the Seller; (iii)
other than the purchase and acceptance through capital contribution of
Transferred Receivables, the payment of dividends and the return of capital to
any Stockholder Originator, any lease or sub-lease of office space or equipment
and the payment of Servicing Fees to the Servicer under this Agreement, the
Seller engages and has engaged in no inter-company transactions with any member
of the Cone ▇▇▇▇▇ Group; (iv) the Seller maintains company records and books of
account, holds regular company meetings and otherwise observes company
formalities and has a business office, in each case separate from that of each
member of the Cone ▇▇▇▇▇ Group. (v) the financial statements and books and
records of the Seller and each Originator reflect the separate legal existence
of the Seller; (vi) (A) the Seller maintains its assets separately from the
assets of each member of the Cone ▇▇▇▇▇ Group (including through the maintenance
of separate bank accounts and except for any Records to the extent necessary to
assist the Servicer in connection with the servicing of the Transferred
Receivables), (B) the Seller's funds (including all money, checks and other cash
proceeds) and assets, and records relating thereto, have not been and are not
commingled with those of any member of the Cone ▇▇▇▇▇ Group and (C) the separate
creditors of the Seller will be entitled to be satisfied out of the Seller's
assets prior to any value in the Seller becoming available to the Seller's
Stockholders; (vii) except as otherwise expressly permitted hereunder, under the
other Related Documents and under the Seller's organizational documents, no
member of the Cone ▇▇▇▇▇ Group (A) pays the Seller's expenses, (B) guarantees
the Seller's obligations, or (C) advances funds to the Seller for the payment of
expenses or otherwise; (viii) all business correspondence and other
communications of the Seller are conducted in the Seller's own name, on its own
stationery and business forms and through a separately-listed telephone number;
(ix) the Seller does not act as agent for any member of the Cone ▇▇▇▇▇ Group,
but instead presents itself to the public as a limited liability company
separate from each such member and independently engaged in the business of
purchasing and financing Receivables; (x) if and for so long as Cone ▇▇▇▇▇ is
obligated to comply with Section 3.9 of the Indenture, the Seller is not a
Subsidiary (as defined in the Indenture) of Cone ▇▇▇▇▇ and the Independent
Member owns and controls, directly or indirectly, a majority of the total voting
power of outstanding securities or other interests entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees of the Seller; (xi) the Seller maintains at least two
independent managers each of whom (A) is not a Stockholder, director, officer,
employee or associate, or any relative of the foregoing, of any member of the
Cone ▇▇▇▇▇ Group (other than being a manager of Seller), all as provided in its
articles of organization, and (B) is otherwise acceptable to the Purchaser, the
Operating Agent and the Collateral Agent; (xii) the Seller complies with the
factual assumptions pertaining to it contained in the opinions of ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ P.L.L.C. pursuant to the Schedule of Documents; and
(xiii) the articles of organization and the operating agreement of the Seller
requires (A) the affirmative vote of (1) a supermajority of all managers and (2)
each independent manager before a voluntary petition under Section 301 of the
Bankruptcy Code may be filed by the Seller, (B) the Seller to maintain (1)
correct and complete books and records of account and (2) minutes of the
meetings and other proceedings of its Stockholders and board of managers. (r)
Deposit and Disbursement Accounts. Schedule 4.01(r) lists all banks and other
financial institutions at which the Seller maintains deposit or other bank
accounts as of the Closing Date, including any Lockbox Accounts, and such
schedule correctly identifies the name, address and telephone number of each
depository, the name in which the account is held, a description of the purpose
of the account, and the complete account number therefor. (s) Transferred
Receivables. (i) Transfers. Each Transferred Receivable was purchased by or
contributed to the Seller on the relevant Transfer Date pursuant to the Transfer
Agreement. (ii) Eligibility. Each Transferred Receivable designated as an
Eligible Receivable in each Investment Base Certificate constitutes an Eligible
Receivable as of the date of such Investment Base Certificate. (iii) No Material
Adverse Effect. The Seller has no knowledge of any fact (including any defaults
by the Obligor thereunder on any other Receivable) that would cause it or should
have caused it to expect that any payments on each Transferred Receivable
designated as an Eligible Receivable in any Investment Base Certificate will not
be paid in full when due or to expect any other Material Adverse Effect. (iv)
Nonavoidability of Transfers. The Seller shall (A) have received each
Contributed Receivable as a contribution to the capital of the Seller by the
Originator thereof and (B) (1) have purchased each Sold Receivable from the
Originator thereof for cash consideration and (2) have accepted assignment of
any Eligible Receivables transferred pursuant to clause (b) of Section 4.04 of
the Transfer Agreement, in each case in an amount that constitutes fair
consideration and reasonably equivalent value therefor. Each Sale of a Sold
Receivable effected pursuant to the terms of the Transfer Agreement shall not
have been made for or on account of an antecedent debt owed by the Originator
thereof to the Seller and no such Sale is or may be avoidable or subject to
avoidance under any bankruptcy laws, rules or regulations. (t) Representations
and Warranties in Other Related Documents. Each of the representations and
warranties of the Seller contained in the Related Documents (other than this
Agreement) is true and correct in all respects and the Seller hereby makes each
such representation and warranty to, and for the benefit of, the Purchaser, the
Operating Agent and the Collateral Agent as if the same were set forth in full
herein. (u) Year 2000 Problems. The Seller has no Year 2000 Problems except any
such problems that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. SECTION 4.02 Representations and
Warranties of the Servicer. To induce the Purchaser to purchase the Transferred
Receivables and each of the Operating Agent and the Collateral Agent to take any
action required to be performed by it hereunder, the Servicer represents and
warrants to the Purchaser, the Operating Agent and the Collateral Agent, which
representation and warranty shall survive the execution and delivery of this
Agreement, that each of the representations and warranties of the Servicer
(whether made by the Servicer in its capacity as an Originator or as the
Servicer) contained in any Related Document is true and correct and, if made by
the Servicer in its capacity as an Originator, applies with equal force to the
Servicer in its capacity as the Servicer, and the Servicer hereby makes each
such representation and warranty to, and for the benefit of, the Purchaser, the
Operating Agent and the Collateral Agent as if the same were set forth in full
herein. ARTICLE V GENERAL COVENANTS OF THE SELLER SECTION 5.01 Affirmative
Covenants of the Seller. The Seller covenants and agrees that from and after the
Closing Date and until the Termination Date: (a) Compliance with Agreements and
Applicable Laws. The Seller shall perform each of its obligations under this
Agreement and the other Related Documents and comply with all federal, state and
local laws and regulations applicable to it and the Transferred Receivables,
including those relating to truth in lending, retail installment sales, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices, privacy, licensing, taxation, ERISA and labor matters and
Environmental Laws and Environmental Permits, except to the extent that the
failure to so comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. (b) Maintenance of Existence and
Conduct of Business. The Seller shall: (i) do or cause to be done all things
necessary to preserve and keep in full force and effect its limited liability
company existence and its rights and franchises; (ii) continue to conduct its
business substantially as now conducted or as otherwise permitted hereunder and
in accordance with the terms of its articles of organization and operating
agreement and Sections 4.01(q) and (r); (iii) at all times maintain, preserve
and protect all of its assets and properties used or useful in the conduct of
its business, including all licenses, permits, charters and registrations, and
keep the same in good repair, working order and condition in all material
respects (taking into consideration ordinary wear and tear) and from time to
time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices; and
(iv) transact business only in such names as are set forth in Schedule 4.01(b).
(c) Deposit of Collections. The Seller shall deposit or cause to be deposited
promptly into a Lockbox Account, and in any event no later than the first
Business Day after receipt thereof, all Collections it may receive with respect
to any Transferred Receivable. (d) Use of Proceeds. The Seller shall utilize the
proceeds of the Purchases made hereunder solely for (i) the purchase of
Receivables from an Originator pursuant to the Transfer Agreement, (ii) the
payment of dividends to the Seller's direct Stockholders, and (iii) the payment
of administrative fees or Servicing Fees or expenses to the Servicer or routine
administrative or operating expenses, in each case only as expressly permitted
by and in accordance with the terms of this Agreement and the other Related
Documents. (e) Payment, Performance and Discharge of Obligations. (i) Subject to
Section 5.01(e)(ii), the Seller shall pay, perform and discharge or cause to be
paid, performed and discharged promptly all charges payable by it, including
(A) charges imposed upon it, its income and profits, or any of its property
(real, personal or mixed) and all charges with respect to tax, social security
and unemployment withholding with respect to its employees (if any), and
(B) lawful claims for labor, materials, supplies and services or otherwise
before any thereof shall become past due. (ii) The Seller may in good faith
contest, by appropriate proceedings, the validity or amount of any charges or
claims described in Section 5.01(e)(i); provided, that (A) adequate reserves
with respect to such contest are maintained on the books of the Seller, in
accordance with GAAP, of and to the extent determined to be material under GAAP,
(B) such contest is maintained and prosecuted continuously and with diligence,
(C) none of the Seller Collateral becomes subject to forfeiture or loss as a
result of such contest, (D) no Lien shall be imposed to secure payment of such
charges or claims other than inchoate tax liens and (E) the Purchaser, the
Operating Agent or the Collateral Agent has not advised the Seller in writing
that such Affected Party reasonably believes that nonpayment or nondischarge
thereof could have or result in a Material Adverse Effect. (f) ERISA. The Seller
shall give the Operating Agent prompt written notice of any event that could
result in the imposition of a Lien under Section 412 of the IRC or Section 302
or 4068 of ERISA. (g) Year 2000 Compliance. The Seller will have no Year 2000
Problems, except any such problems that individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect. SECTION 5.02
Reporting Requirements of the Seller. (a) The Seller hereby agrees that, from
and after the Closing Date and until the Termination Date, it shall deliver or
cause to be delivered to the Purchaser, the Operating Agent, the Collateral
Agent and, in the case of paragraph (f) therein only, to the Rating Agencies,
the financial statements, notices and other information at the times, to the
Persons and in the manner set forth in Annex 5.02(a). (b) The Seller hereby
agrees that, from and after the Closing Date and until the Termination Date, it
shall deliver or cause to be delivered to the Purchaser, the Operating Agent and
the Collateral Agent the Investment Reports (including Investment Base
Certificates) at the times, to the Persons and in the manner set forth in Annex
5.02(b) SECTION 5.03 Negative Covenants of the Seller. The Seller covenants and
agrees that, without the prior written consent of the Purchaser, the Operating
Agent and the Collateral Agent, from and after the Closing Date until the
Termination Date: (a) Sale of Stock and Assets. The Seller shall not sell,
transfer, convey, assign or otherwise dispose of, or assign any right to receive
income in respect of, any of its properties or other assets, including its
capital Stock (whether in a public or a private offering or otherwise), any
Transferred Receivable or Contract therefor or any of its rights with respect to
any Lockbox or any Lockbox Account, the Collection Account, the Retention
Account or any other deposit account in which any Collections of any Transferred
Receivable are deposited except as otherwise expressly permitted by this
Agreement or any of the other Related Documents. (b) Liens. The Seller shall not
create, incur, assume or permit to exist (i) any Adverse Claim on or with
respect to its Transferred Receivables or (ii) any Adverse Claim on or with
respect to its other properties or assets (whether now owned or hereafter
acquired) except for the Liens set forth in Schedule 5.03(b) and other Permitted
Encumbrances. In addition, the Seller shall not become a party to any agreement,
note, indenture or instrument or take any other action that would prohibit the
creation of a Lien on any of its properties or other assets in favor of the
Purchaser as additional collateral for the Seller Secured Obligations, except as
otherwise expressly permitted by this Agreement or any of the other Related
Documents. (c) Modifications of Receivables, Contracts or Transfer Agreement.
The Seller shall not extend, amend, forgive, discharge, compromise, waive,
cancel or otherwise modify the terms of any Transferred Receivable or amend,
modify or waive any term or condition of any Contract related thereto or amend,
modify, waive or terminate any term or condition of the Transfer Agreement, any
Receivables Assignment, or the Parent Agreement; provided, that the Seller may
authorize the Servicer to take such actions as are expressly permitted by the
terms of any Related Document or the Credit and Collection Policies. (d) Changes
in Instructions to Obligors. The Seller shall not make any change in its
instructions to Obligors regarding the deposit of Collections with respect to
the Transferred Receivables. (e) Capital Structure and Business. The Seller
shall not (i) make any changes in any of its business objectives, purposes or
operations that could have or result in a Material Adverse Effect, (ii) make any
change in its capital structure as described on Schedule 4.01(h), including the
issuance of any shares of Stock, warrants or other securities convertible into
Stock or any revision of the terms of its outstanding Stock, (iii) amend its
articles of organization or its operating agreement or be operated in violation
of its articles of organization or operating agreement, or (iv) if and for so
long as Cone ▇▇▇▇▇ is obligated to comply with Section 3.9 of the Indenture, be
or become a Subsidiary (as defined in the Indenture) of Cone ▇▇▇▇▇. The Seller
shall not engage in any business other than the businesses currently engaged in
by it. (f) Mergers, Subsidiaries, Etc. The Seller shall not directly or
indirectly, by operation of law or otherwise, (i) form or acquire any
Subsidiary, or (ii) merge with, consolidate with, acquire all or substantially
all of the assets or capital Stock of, or otherwise combine with or acquire, any
Person. (g) Sale Characterization; Transfer Agreement. The Seller shall not make
statements or disclosures, prepare any financial statements or in any other
respect account for or treat the transactions contemplated by the Transfer
Agreement (including for accounting, tax and reporting purposes) in any manner
other than (i) with respect to each Sale of each Sold Receivable effected
pursuant to the Transfer Agreement, as a true sale and absolute assignment of
the title to and sole record and beneficial ownership interest of the
Transferred Receivables by the Originators thereof to the Seller and (ii) with
respect to each contribution of Contributed Receivables thereunder, as an
increase in the stated capital of the Seller. (h) Restricted Payments. The
Seller shall not enter into any lending transaction with any other Person. The
Seller shall not at any time (i) advance credit to any Person or (ii) declare
any dividends, repurchase any Stock, return any capital, or make any other
payment or distribution of cash or other property or assets in respect of the
Seller's Stock if, after giving effect to any such advance or distribution, a
Purchase Excess would exist. (i) Debt. The Seller shall not create, incur,
assume or permit to exist any Debt, except (i) Debt of the Seller to any
Affected Party, Purchaser Indemnified Person, the Servicer or any other Person
expressly permitted by this Agreement or any other Related Document,
(ii) deferred taxes, (iii) unfunded pension fund and other employee benefit plan
obligations and liabilities to the extent they are permitted to remain unfunded
under applicable law, and (iv) endorser liability in connection with the
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business. (j) Prohibited Transactions. The Seller shall not enter
into, or be a party to, any transaction with any Person except as expressly
permitted hereunder or under any other Related Document. (k) Investments. Except
as otherwise expressly permitted hereunder or under the other Related Documents,
the Seller shall not make any investment in, or make or accrue loans or advances
of money to, any Person, including any Stockholder, manager, officer or employee
of the Seller or any of Cone Mill's other Subsidiaries, through the direct or
indirect lending of money, holding of securities or otherwise, except with
respect to Transferred Receivables and Permitted Investments. (l) Commingling.
The Seller shall not deposit or permit the deposit of any funds that do not
constitute Collections of Transferred Receivables into any Lockbox Account. (m)
ERISA. The Seller shall not, and shall not cause or permit any of its ERISA
Affiliates to, cause or permit to occur an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA. ARTICLE VI COLLECTIONS AND DISBURSEMENTS SECTION 6.01 Establishment of
Deposit Accounts. (a) The Lockbox Accounts. (i) The Seller has established with
each Lockbox Bank one or more Lockbox Accounts. If (i) an Incipient Termination
Event or a Termination Event shall have occurred and be continuing or (ii) the
Operating Agent, in good faith, believes that a Termination Event is imminent,
the Operating Agent (and from and after the Facility Termination Date, the
Collateral Agent) may, without prior notice to the Seller, take exclusive
dominion and control of each Lockbox Account and all monies, instruments and
other property then or thereafter on deposit therein, and the Seller thereafter
shall not make or cause to be made, nor shall the Seller thereafter have any
ability to make or cause to be made, any withdrawals from any Lockbox Account
except as provided in Section 6.01(b)(ii). (ii) The Seller and the Servicer have
instructed all existing Obligors of Transferred Receivables, and shall instruct
all future Obligors of such Receivables, to make payments in respect thereof
only (A) by check or money order mailed to one or more lockboxes or post office
boxes under the control of the Operating Agent (each a "Lockbox" and
collectively the "Lockboxes") or (B) by wire transfer or moneygram directly to a
Lockbox Account. Schedule 4.01(r) lists all Lockboxes and all Lockbox Banks at
which the Seller maintains Lockbox Accounts as of the Closing Date, and such
schedule correctly identifies (1) with respect to each such Lockbox Bank, the
name, address and telephone number thereof, (2) with respect to each Lockbox
Account, the name in which such account is held and the complete account number
therefor, and (3) with respect to each Lockbox, the lockbox number and address
thereof. The Seller and the Servicer shall endorse, to the extent necessary, all
checks or other instruments received in any Lockbox so that the same can be
deposited in the Lockbox Account, in the form so received (with all necessary
endorsements), on the first Business Day after the date of receipt thereof. In
addition, each of the Seller and the Servicer shall deposit or cause to be
deposited into a Lockbox Account all cash, checks, money orders or other
proceeds of Transferred Receivables or Seller Collateral received by it other
than in a Lockbox or a Lockbox Account, in the form so received (with all
necessary endorsements), not later than the close of business on the first
Business Day following the date of receipt thereof, and until so deposited all
such items or other proceeds shall be held in trust for the benefit of the
Collateral Agent. Neither the Seller nor the Servicer shall make any deposits
into a Lockbox or any Lockbox Account except in accordance with the terms of
this Agreement or any other Related Document. (iii) If, for any reason, a
Lockbox Agreement terminates or any Lockbox Bank fails to comply with its
obligations under the Lockbox Agreement to which it is a party, then the Seller
shall promptly notify all Obligors of Transferred Receivables who had previously
been instructed to make wire payments to a Lockbox Account maintained at any
such Lockbox Bank to make all future payments to a new Lockbox Account in
accordance with this Section 6.01(a)(iii). The Seller shall not close any such
Lockbox Account unless it shall have (A) received the prior written consent of
the Operating Agent and the Collateral Agent, (B) established a new account with
the same Lockbox Bank or with a new depositary institution satisfactory to the
Operating Agent and the Collateral Agent, (C) entered into an agreement covering
such new account with such Lockbox Bank or with such new depositary institution
substantially in the form of such Lockbox Agreement or that is satisfactory in
all respects to the Operating Agent and the Collateral Agent (whereupon, for all
purposes of this Agreement and the other Related Documents, such new account
shall become a Lockbox Account, such new agreement shall become a Lockbox
Agreement and any new depositary institution shall become a Lockbox Bank), and
(D) taken all such action as the Collateral Agent shall require to grant and
perfect a first priority Lien in such new Lockbox Account to the Purchaser under
Section 8.01 of this Agreement. Except as permitted by this Section 6.01(a),
neither the Seller nor the Servicer shall open any new Lockbox or Lockbox
Account without the prior written consent of the Operating Agent and the
Collateral Agent. (b) Collection Account. (i) The Purchaser has established and
shall maintain the Collection Account with the Depositary. The Seller and the
Purchaser agree that prior to the Facility Termination Date the Operating Agent,
and from and after the Facility Termination Date the Collateral Agent, shall
have exclusive dominion and control of the Collection Account and all monies,
instruments and other property from time to time on deposit therein. (ii) From
and after the Operating Agents or the Collateral Agents taking exclusive
dominion and control over the Lockbox Accounts pursuant to Section 6.01(a)(i),
the Operating Agent or the Collateral Agent (as the case may be) shall instruct
each Lockbox Bank to transfer, on each Business Day and in same day funds, all
available funds in each Lockbox Account to the Collection Account, and the
Seller shall cause each Lockbox Bank to make such transfer. The Purchaser, the
Operating Agent and the Collateral Agent may deposit into the Collection Account
from time to time all monies, instruments and other property received by any of
them as proceeds of the Transferred Receivables. On each Business Day prior to
the Facility Termination Date the Operating Agent shall instruct and cause the
Depositary (which instruction may be in writing or by telephone confirmed
promptly thereafter in writing) to release funds on deposit in the Collection
Account in the order of priority set forth in Section 6.03. On each Business Day
from and after the Facility Termination Date the Collateral Agent shall apply
all amounts when received in the Collection Account in the order of priority set
forth in Section 6.05. (iii) If, for any reason, the Depositary wishes to resign
as depositary of the Collection Account or fails to carry out the instructions
of the Operating Agent or the Collateral Agent, then the Operating Agent or the
Collateral Agent shall promptly notify the Purchaser Secured Parties. The
Purchaser shall not close the Collection Account unless it shall have (A)
received the prior written consent of the Operating Agent and the Collateral
Agent, (B) established a new deposit account with the Depositary or with a new
depositary institution satisfactory to the Operating Agent and the Collateral
Agent, (C) entered into an agreement covering such new account with such new
depositary institution satisfactory in all respects to the Operating Agent and
the Collateral Agent (whereupon such new account shall become the Collection
Account for all purposes of this Agreement and the other Related Documents), and
(D) taken all such action as the Collateral Agent shall require to grant and
perfect a first priority Lien in such new Collection Account to the Collateral
Agent under the Collateral Agent Agreement. (c) Retention Account. The Purchaser
has established and shall maintain the Retention Account with the Depositary.
The Seller and the Purchaser agree that prior to the Facility Termination Date
the Operating Agent, and from and after the Facility Termination Date the
Collateral Agent, shall have exclusive dominion and control of the Retention
Account and all monies, instruments and other property from time to time on
deposit therein. (d) Collateral Account. The Purchaser has established and shall
maintain the Collateral Account with the Depositary. The Seller and the
Purchaser agree that the Operating Agent shall have exclusive dominion and
control of the Collateral Account and all monies, instruments and other property
from time to time on deposit therein. SECTION 6.02 Funding of Collection
Account. (a) As soon as practicable, and in any event no later than 11:00 a.m.
(New York time) on each Business Day: (i) if the Operating Agent or the
Collateral Agent has taken exclusive dominion and control over the Lockbox
Accounts pursuant to Section 6.01(a)(i), the Operating Agent, the Collateral
Agent, the Seller and the Servicer shall cause the Lockbox Bank to make the
transfer to the Collection Account required to be made on such Business Day
pursuant to Section 6.01(b)(ii); (ii) the Purchaser or the Operating Agent
shall, or shall cause the Collateral Agent to, deposit in the Collection Account
the amount, if any, required pursuant to Section 2.04(b)(i); (iii) the Purchaser
or the Operating Agent shall, or shall cause the Collateral Agent to, deposit in
the Collection Account any Seller LOC Draws or Insurance Draws made on such
Business Day; (iv) if, on the immediately preceding Business Day, the Operating
Agent shall have notified the Seller of any Purchase Excess pursuant to Section
2.11, then the Seller shall deposit cash in the amount of such Purchase Excess
in the Collection Account; (v) if on such Business Day the Seller is required to
make other payments under this Agreement not previously retained out of
Collections (including Additional Amounts and Indemnified Amounts not previously
paid), then the Seller shall deposit an amount equal to such payments in the
Collection Account; (vi) if, on the immediately preceding Business Day, any
Originator made a capital contribution or repurchased a Transferred Receivable
pursuant to Section 4.04 of the Transfer Agreement, or made a payment as a
result of any Dilution Factors pursuant to Section 4.02(o) of the Transfer
Agreement, then the Seller shall deposit cash in the amount so received from
such Originator for such contribution, repurchase or payment in the Collection
Account; (vii) the Servicer shall deposit in the Collection Account the
Outstanding Balance of any Transferred Receivable it elects to pay pursuant to
Section 7.04; and (viii) if the Operating Agent and the Collateral Agent have
not taken dominion and control over the Lockbox Account Agreement pursuant to
Section 6.01(a)(i), the Seller shall deposit in the Collection Account an amount
equal to the following for such Business Day and any immediately preceding
non-Business Days; (A) the Daily Yield (B) the Servicing Fee; and (C) the Unused
Facility Fee. (b) If, on or before the second Business Day immediately preceding
any Settlement Date, the Operating Agent shall have notified the Seller of any
Retention Account Deficiency pursuant to Section 6.04(b), then the Seller shall
deposit cash in the amount of such deficiency in the Collection Account no later
than 11:00 a.m. (New York time) on such Settlement Date. (c) From and after the
Facility Termination Date, the Collateral Agent shall transfer all amounts on
deposit in the Retention Account as of that date to the Collection Account.
SECTION 6.03 Daily Disbursements From the Collection Account and Related
Sub-Accounts; Revolving Period. On each Business Day during the Revolving
Period, and following the transfers made pursuant to Section 6.02, the Operating
Agent shall disburse all amounts then on deposit in the Collection Account and
its related subaccounts in the following priority: (a) with respect to amounts
on deposit in the Collection Account: (i) to the Retention Account for the
account of the Purchaser, the amount of any Retention Account Deficiency
deposited pursuant to Section 6.02(b); (ii) to the Deferred Purchase Price
Sub-Account, the amount of all Deferred Purchase Price Collections deposited in
the Collection Account on that day; (iii) to the Capital Investment Sub-Account,
the balance of any amounts remaining after making the foregoing disbursements;
(b) with respect to amounts on deposit in the Deferred Purchase Price
Sub-Account after making the transfers required by Section 6.03(a): (i) to the
Retention Account for the account of the Purchaser, an amount equal to the sum
of (A) Daily Yield; (B) the Yield Shortfall as of the immediately preceding
Business Day; (C) the Servicing Fee; (D) the Servicing Fee Shortfall as of the
immediately preceding Business Day; (E) the Unused Facility Fee; and (F) the
Unused Facility Fee Shortfall as of the immediately preceding Business Day; (ii)
to the Capital Investment Sub-Account, an amount equal to the Dilution Funded
Amount; (iii) if the Deferred Purchase Price Adjustment is less than zero, then
to the Capital Investment Sub-Account an amount equal to the absolute value of
the Deferred Purchase Price Adjustment; (iv) to an account previously designated
by the Seller, in partial payment of the Deferred Purchase Price, the balance of
any amounts remaining after making the foregoing disbursements; and (c) with
respect to amounts on deposit in the Capital Investment Sub-Account after making
the transfers required by Section 6.03(a): (i) to the Retention Account for the
account of the Purchaser, an amount equal to the sum of any Yield Shortfall, any
Servicing Fee Shortfall and any Unused Facility Fee Shortfall following the
transfer made pursuant to Section 6.03(b)(i); (ii) to the Collateral Account for
the account of the Purchaser (or, in the case of Indemnified Amounts or
Additional Amounts for the account of the applicable Purchaser Indemnified
Person or Affected Party, respectively), an amount equal to the deposits made in
the Collection Account pursuant to Section 6.02(a)(v) and not otherwise
disbursed pursuant to Section 6.03(a)(i); (iii) to the Collateral Account for
the account of the Purchaser, an amount equal to any Purchase Excess; (iv) if
the Deferred Purchase Price Adjustment is greater than zero, then to the Seller
an amount equal to the Deferred Purchase Price Adjustment as partial payment of
the Deferred Purchase Price; and (v) the balance of any amounts remaining after
making the foregoing disbursements, at the Seller's option, (A) to an account
previously designated by the Seller as payment of the Cash Purchase Price for
Purchases made on such day or (B) if, pursuant to a Repayment Notice, the Seller
has requested to reduce the Capital Investment of the Purchaser, then to the
Collateral Account for the account of the Purchaser, the lesser of (1) the
amount of such requested reduction of Capital Investment and (2) such balance.
SECTION 6.04 Disbursements From the Retention Account; Settlement Date
Procedures; Revolving Period. (a) On each Settlement Date during the Revolving
Period, the amounts on deposit in the Retention Account shall be disbursed or
retained by the Operating Agent in the following priority: (i) to the Collateral
Account for the account of the Purchaser (or, if applicable, any Purchaser
Indemnified Person), an amount equal to: (A) the accrued and unpaid Daily Yield
minus the Margin as of the end of the immediately preceding Settlement Period;
(B) all Additional Amounts incurred and payable to any Affected Party as of the
end of the immediately preceding Settlement Period; (C) all other amounts
accrued and payable under this Agreement (including Indemnified Amounts incurred
and payable to any Purchaser Indemnified Person) as of the end of the
immediately preceding Settlement Period to the extent not already transferred
pursuant to Section 6.03(c)(ii); and (D) if a Purchase Excess exists on such
date, an amount equal to such excess; (ii) to the Operating Agent, the accrued
and unpaid Margin as of the end of the immediately preceding Settlement Period
for distribution to the applicable parties; (iii) to the Servicer on behalf of
the Seller, an amount equal to its accrued and unpaid Servicing Fee as of the
end of the immediately preceding Settlement Period; (iv) retained in the
Retention Account, an amount equal to the Accrued Monthly Yield, Accrued Unused
Facility Fee and Accrued Servicing Fee as of such date; and (v) the balance
remaining after retaining or disbursing the foregoing amounts to an account
previously designated by the Seller. (b) No later than the second Business Day
immediately preceding each Settlement Date, the Operating Agent shall determine
and notify the Seller of any Retention Account Deficiency for the preceding
Settlement Period, and the Seller shall deposit cash in the amount of such
Retention Account Deficiency to the Collection Account pursuant to
Section 6.02(b). SECTION 6.05 Liquidation Settlement Procedures. On each
Business Day from and after the Facility Termination Date until the Termination
Date, the Collateral Agent shall: (a) as soon as practicable, transfer all
amounts then on deposit in the Retention Account to the Collection Account; (b)
transfer all amounts in the Collection Account (including amounts transferred
from the Retention Account pursuant to Section 6.02(c)) in the following
priority: (i) to the Deferred Purchase Price Sub-Account, an amount equal to all
Deferred Purchase Price Collections deposited in the Collection Account on such
day; and (ii) to the Capital Investment Sub-Account, the balance of any amounts
remaining after making the foregoing disbursement; (c) transfer all amounts in
the Deferred Purchase Price Sub-Account (after making the transfers required by
Section 6.05(b)), in the following priority: (i) if an Event of Servicer
Termination has occurred and a Successor Servicer has assumed the
responsibilities and obligations of the Servicer in accordance with Section
11.02, then to the Successor Servicer an amount equal to its accrued and unpaid
Successor Servicing Fees and Expenses; (ii) if on such Business Day Capital
Investment is being maintained through the issuance of Commercial Paper (to the
extent such Capital Investment exceeds Liquidity Loans then outstanding), to the
Collateral Account for the account of the Purchaser, an amount equal to accrued
and unpaid CP Interest Amount through and including the date of maturity of the
Commercial Paper maintaining such Capital Investment; (iii) to the Insurer, an
amount equal to any unpaid premiums then owing to the Insurer under the
Insurance Agreement (but only to the extent that the Seller is responsible for
paying such premiums under the Fee Letter); (iv) if there are Insurance Draws
then outstanding, to the Insurer an amount equal to accrued and unpaid interest
on the Insurance Draws to the extent amounts on deposit in the Deferred Purchase
Price Sub-Account are allocated to this subparagraph (c)(iv) pursuant to the
terms of the Insurance Agreement; (v) if Liquidity Loans are then outstanding,
to the Liquidity Agent on behalf of the Liquidity Lenders, an amount equal to
accrued and unpaid interest on the Liquidity Loans; (vi) to the Capital
Investment Sub-Account: (A) an amount equal to the Dilution Funded Amount; and
(B) if Liquidity Loans or Seller LOC Draws are then outstanding or if Capital
Investment is being maintained through the issuance of Commercial Paper, the
balance of any amounts remaining after making the disbursements set forth in
Sections 6.05(c)(i)-(vi)(A); (vii) to the Letter of Credit Agent, an amount
equal to any accrued and unpaid interest on Seller LOC Draws; (viii) to the
Collateral Account, an amount equal to (A) accrued and unpaid Daily Yield plus
any Prepayment Fee then due and unpaid minus (B) the aggregate amounts paid
pursuant to Sections 6.05(c)(ii), (iv), (v) and (vii); (ix) if an Event of
Servicer Termination shall not have occurred, to the Servicer in an amount equal
to its accrued and unpaid Servicing Fee; and (x) upon payment in full of all
amounts set forth in Sections 6.05(d)(i) through (d)(viii) below, the balance of
any amounts remaining to an account previously designated by the Seller as
partial payment of the Deferred Purchase Price; and (d) transfer all amounts in
the Capital Investment Sub-Account, in the following priority: (i) to the
Collateral Account for the account of the Purchaser, an amount equal to: (A) if
on such Business Day Capital Investment is being maintained through the issuance
of Commercial Paper (to the extent such Capital Investment exceeds Liquidity
Loans then outstanding), accrued and unpaid CP Interest Amount through and
including such date to the extent not paid under Sections 6.05(c)(ii) and
6.05(c)(viii); and (B) if on such Business Day Capital Investment is being
maintained through the issuance of Commercial Paper (to the extent such Capital
Investment exceeds Liquidity Loans then outstanding), the principal of all
Capital Investment in excess of such Liquidity Loans; (ii) to the Insurer, to
the extent amounts on deposit in the Capital Investment Sub-Account are
allocated to this subparagraph (d)(ii) pursuant to the terms of the Insurance
Agreement, an amount equal to any unpaid premiums of the Insurer under the
Insurance Agreement to the extent not paid under Section 6.05(c)(iii) (but only
to the extent that the Seller is responsible for paying such premiums under the
Fee Letter); (iii) if Insurance Draws are then outstanding, to the Insurer, to
the extent amounts on deposit in the Capital Investment Sub-Account are
allocated to this subparagraph (d)(iii) pursuant to the terms of the Insurance
Agreement, an amount equal to: (A) accrued and unpaid interest on the Insurance
Draws to the extent not paid under Section 6.05(c)(iv); (B) the outstanding
amount of Insurance Draws; and (C) any other amounts owing to the Insurer
pursuant to the Insurance Policy or the Insurance Agreement, including, without
limitation, any fees and expenses of the Insurer other than Additional Amounts
and Indemnified Amounts; (iv) if Liquidity Loans are then outstanding, to the
Liquidity Agent on behalf of the Liquidity Lenders, an amount equal to: (A)
accrued and unpaid interest on the Liquidity Loans to the extent not paid under
Section 6.05(c)(v); (B) the principal of outstanding Liquidity Loans; and (C)
any other unpaid amounts, including any fees, owing to the Liquidity Agent or
Liquidity Lenders in connection with the Liquidity Loans; (v) to the Collateral
Account for the account of the Purchaser, an amount equal to: (A) all Additional
Amounts incurred and payable to any Affected Party; and (B) all Indemnified
Amounts incurred and payable to any Purchaser Indemnified Person; (vi) to the
Letter of Credit Agent, if there are any outstanding Seller LOC Draws, an amount
equal to: (A) accrued and unpaid interest on such outstanding Seller LOC Draws
to the extent not paid pursuant to Section 6.05(c)(vii); (B) the principal of
such outstanding Seller LOC Draws; and (C) any other amounts, including fees,
owing to the Letter of Credit Agent in connection with such outstanding Seller
LOC Draws; and (vii) to the Collateral Account, an amount equal to (A) accrued
and unpaid Daily Yield plus any Prepayment Fee then due and unpaid, minus (B)
the aggregate amounts paid pursuant to Sections 6.05(c)(ii), 6.05(c)(iv),
6.05(c)(v), 6.05(c)(vii), 6.05(c)(viii), 6.05(d)(i)(A), 6.05(d)(iii)(A),
6.05(d)(iv)(A) and 6.05(d)(vi)(A); (viii) If an Event of Servicer Termination
shall not have occurred, to the Servicer in an amount equal to its accrued and
unpaid Servicing Fee; and (ix) to an account previously designated by the
Seller, the balance of any funds remaining after payment in full of all amounts
set forth in Sections 6.05(d)(i)-(d)(viii). SECTION 6.06 Investment of Funds in
Accounts. To the extent uninvested amounts are on deposit in the Collateral
Account or the Retention Account on any given day during the Revolving Period,
the Operating Agent shall invest all such amounts in Permitted Investments
selected by the Operating Agent that mature no later than (a) the immediately
succeeding Business Day, in the case of the Collateral Account, and (b) the
immediately succeeding Settlement Date, in the case of the Retention Account.
From and after the Facility Termination Date, any investment of such amounts
shall be solely at the discretion of the Operating Agent, subject to the
restrictions described above. SECTION 6.07 Termination Procedures. (a) On the
earlier of (i) the first Business Day after the Facility Termination Date on
which the Capital Investment has been reduced to zero or (ii) the Final Purchase
Date, if the obligations to be paid pursuant to Section 6.05 have not been paid
in full, the Seller shall immediately deposit in the Collection Account an
amount sufficient to make such payments in full. (b) On the Termination Date,
all amounts on deposit in the Collection Account and the Retention Account shall
be disbursed to the Seller. Such disbursement shall constitute the final payment
to which the Seller is entitled pursuant to the terms of this Agreement. ARTICLE
VII SERVICER PROVISIONS SECTION 7.01 Appointment of the Servicer. Each of the
Seller and the Purchaser hereby appoints the Servicer as its agent to service
the Transferred Receivables and enforce its rights and interests in and under
each Transferred Receivable and Contract therefor and to serve in such capacity
until the termination of its responsibilities pursuant to Sections 9.02 or
11.01. In connection therewith, the Servicer hereby accepts such appointment and
agrees to perform the duties and obligations set forth herein. If and for so
long as Cone ▇▇▇▇▇ is the Servicer, Cone ▇▇▇▇▇ may delegate its duties as
Servicer in respect of any Transferred Receivables to the Originator of such
Transferred Receivables and, to the extent of such delegation, all references to
the Servicer in any Related Document shall be deemed to include such Originator
in such capacity, but Cone ▇▇▇▇▇ shall remain liable for the performance by such
Originator of such delegated duties. The Servicer may, with the prior written
consent of the Purchaser, the Operating Agent and the Collateral Agent,
subcontract with a Sub-Servicer (other than another Originator as provided
above) for the collection, servicing or administration of the Transferred
Receivables; provided, that (a) the Servicer shall remain liable for the
performance of the duties and obligations of the Sub-Servicer pursuant to the
terms hereof and (b) any Sub-Servicing Agreement that may be entered into and
any other transactions or services relating to the Transferred Receivables
involving a Sub-Servicer shall be deemed to be between the Sub-Servicer and the
Servicer alone, and the Purchaser, the Operating Agent and the Collateral Agent
shall not be deemed parties thereto and shall have no obligations, duties or
liabilities with respect to the Sub-Servicer. SECTION 7.02 Duties and
Responsibilities of the Servicer. Subject to the provisions of this Agreement,
the Servicer shall conduct the servicing, administration and collection of the
Transferred Receivables and shall take, or cause to be taken, all actions that
(i) may be necessary or advisable to service, administer and collect each
Transferred Receivable from time to time, (ii) the Servicer would take if the
Transferred Receivables were owned by the Servicer, and (iii) are consistent
with industry practice for the servicing of such Transferred Receivables.
SECTION 7.03 Collections on Receivables. (a) In the event that the Servicer is
unable to determine the specific Transferred Receivables on which Collections
have been received from the Obligor thereunder, the parties agree for purposes
of this Agreement only that such Collections shall be deemed to have been
received on such Receivables in the order in which they were originated with
respect to such Obligor. In the event that the Servicer is unable to determine
the specific Transferred Receivables on which discounts, offsets or other
non-cash reductions have been granted or made with respect to the Obligor
thereunder, the parties agree for purposes of this Agreement only that such
reductions shall be deemed to have been granted or made on such Receivables (i)
prior to the occurrence of a Termination Event, as determined by the Servicer
and (ii) from and after the occurrence of a Termination Event, in the reverse
order in which they were originated with respect to such Obligor. (b) If the
Servicer determines that amounts unrelated to the Transferred Receivables (the
"Unrelated Amounts") have been deposited in the Collection Account, then the
Servicer shall provide written evidence thereof to the Purchaser, the Operating
Agent and the Collateral Agent no later than the first Business Day following
the day on which the Servicer had actual knowledge thereof, which evidence shall
be provided in writing and shall be otherwise satisfactory to each such Affected
Party. Upon receipt of any such notice, the Seller, the Servicer and Operating
Agent shall segregate the Unrelated Amounts and return the same to the
appropriate Originator and the same shall not be deemed to constitute
Collections on Transferred Receivables and shall not be subject to the
provisions of Article VI. SECTION 7.04 Authorization of the Servicer. Each of
the Seller and the Purchaser hereby authorizes the Servicer to take any and all
reasonable steps in its name and on its behalf necessary or desirable and not
inconsistent with the ownership of the Transferred Receivables purchased by the
Purchaser hereunder and the pledge thereof by the Purchaser to the Collateral
Agent pursuant to the Collateral Agent Agreement, in the determination of the
Servicer, to (a) collect all amounts due under any Transferred Receivable,
including endorsing its name on checks and other instruments representing
Collections on such Receivable, and execute and deliver any and all instruments
of satisfaction or cancellation or of partial or full release or discharge and
all other comparable instruments with respect to any such Receivable and (b)
after any Transferred Receivable becomes a Delinquent Receivable and to the
extent permitted under and in compliance with applicable law and regulations,
commence proceedings with respect to the enforcement of payment of any such
Receivable and the Contract therefor and adjust, settle or compromise any
payments due thereunder, in each case to the same extent as the Originator
thereof could have done if it had continued to own such Receivable. Each
Originator, the Seller and the Purchaser shall furnish the Servicer with any
powers of attorney and other documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties hereunder, and
shall cooperate with the Servicer to the fullest extent to collect the
Transferred Receivables and to assist the Servicer in the discharge of its
duties hereunder and under the other Related Documents. Notwithstanding anything
to the contrary contained herein, the Purchaser, the Operating Agent and the
Collateral Agent shall have the absolute and unlimited right to direct the
Servicer (whether the Servicer is Cone ▇▇▇▇▇ or otherwise) to commence or settle
any legal action to enforce collection of any Transferred Receivable or to
foreclose upon, repossess or take any other action that the Operating Agent or
the Collateral Agent deems necessary or advisable with respect thereto;
provided, that in lieu of commencing any such action or taking other enforcement
action, the Servicer may, at its option, elect to pay to the Purchaser the
Outstanding Balance of such Transferred Receivable. In no event shall the
Servicer be entitled to make any Affected Party a party to any Litigation
without such Affected Party's express prior written consent, or to make the
Seller a party to any Litigation without the Operating Agent's consent. SECTION
7.05 Servicing Fees. As compensation for its servicing activities and as
reimbursement for its reasonable expenses in connection therewith, the Servicer
shall be entitled to receive the Servicing Fees in accordance with Sections 6.04
and 6.05. The Servicer shall be required to pay for all expenses incurred by it
in connection with its activities hereunder (including any payments to
accountants, counsel or any other Person) and shall not be entitled to any
payment therefor other than the Servicing Fees. SECTION 7.06 Covenants of the
Servicer. The Servicer covenants and agrees that from and after the Closing Date
and until the Termination Date: (a) Ownership of Transferred Receivables. The
Servicer shall identify the Transferred Receivables clearly and unambiguously in
its Servicing Records to reflect that such Transferred Receivables have been
sold or contributed to the Seller and, following the Purchase thereof under this
Agreement, are owned by the Purchaser. (b) Compliance with Credit and Collection
Policies. The Servicer shall comply in all respects with the Credit and
Collection Policies with respect to each Transferred Receivable and the Contract
therefor. (c) Covenants in Other Related Documents. The Servicer shall perform,
keep and observe all covenants applicable to it in its capacity as an Originator
under the Transfer Agreement and the other Related Documents (including those
covenants set forth in Sections 4.02 and 4.03 of the Transfer Agreement) and the
Servicer hereby agrees to be bound by such covenants in its capacity as the
Servicer hereunder for the benefit of the Purchaser, the Operating Agent and the
Collateral Agent as if the same were set forth in full herein. SECTION 7.07
Reporting Requirements of the Servicer. The Servicer hereby agrees that, from
and after the Closing Date and until the Termination Date, it shall deliver or
cause to be delivered to the Purchaser, the Operating Agent and the Collateral
Agent the financial statements, notices, Projections and other information at
the times, to the Persons and in the manner set forth in Annex 7.07 (except if
the Servicer is Cone ▇▇▇▇▇, in which case the Servicer shall not be required to
furnish the information required in paragraphs (a) and (b) therein). ARTICLE
VIII GRANT OF SECURITY INTERESTS SECTION 8.01 Seller's Grant of Security
Interest. The parties hereto intend that each Purchase of Transferred
Receivables to be made hereunder shall constitute a purchase and sale of such
Transferred Receivables and not a loan. If, however, a court of competent
jurisdiction determines that any transaction provided for herein constitutes a
loan and not a purchase and sale, then the parties hereto intend that this
Agreement shall constitute a security agreement under applicable law. In such
regard and, in any event, to secure the prompt and complete payment, performance
and observance of all Seller Secured Obligations, and to induce the Purchaser to
enter into this Agreement and perform the obligations required to be performed
by it hereunder in accordance with the terms and conditions thereof, the Seller
hereby grants, assigns, conveys, pledges, hypothecates and transfers to the
Purchaser a Lien upon all of its right, title and interest in, to and under the
following property, whether now owned by or owing to, or hereafter acquired by
or arising in favor of, the Seller (including under any trade names, styles or
derivations of the Seller), and regardless of where located (all of which being
hereinafter collectively referred to as the "Seller Collateral"): (a) all
Transferred Receivables, Contracts therefor and Collections thereon; (b) this
Agreement, the Transfer Agreement, all Lockbox Agreements and all other Related
Documents now or hereafter in effect relating to the purchase, servicing or
processing of Transferred Receivables (collectively, the "Seller Assigned
Agreements"), including (i) all rights of the Seller to receive moneys due and
to become due thereunder or pursuant thereto, (ii) all rights of the Seller to
receive proceeds of any insurance, indemnity, warranty or guaranty with respect
thereto, (iii) all claims of the Seller for damages or breach with respect
thereto or for default thereunder and (iv) the right of the Seller to amend,
waive or terminate the same and to perform and to compel performance and
otherwise exercise all remedies thereunder; (c) all of the following
(collectively, the "Seller Deposit Account Collateral"): (i) the Lockbox
Accounts, the Lockboxes and all funds on deposit therein and all certificates
and instruments, if any, from time to time representing or evidencing the
Lockbox Accounts, the Lockboxes or such funds, (ii) the Collection Account, the
Retention Account and all funds on deposit therein and all certificates and
instruments, if any, from time to time representing or evidencing the Collection
Account, the Retention Account or such funds, (iii) all Investments from time to
time of amounts in the Collection Account and the Retention Account, and all
certificates, instruments and investment property, if any, from time to time
representing or evidencing such Investments, (iv) all notes, certificates of
deposit and other instruments from time to time delivered to or otherwise
possessed by the Purchaser or any assignee or agent on behalf of the Purchaser
in substitution for or in addition to any of the then existing Seller Deposit
Account Collateral, and (v) all interest, dividends, cash, instruments,
investment property and other property from time to time received, receivable or
otherwise distributed with respect to or in exchange for any or all of the then
existing Seller Deposit Account Collateral; (d) all other property that may from
time to time hereafter be granted and pledged by the Seller or by any Person on
its behalf under this Agreement, including any deposit with the Purchaser, the
Operating Agent or the Collateral Agent of additional funds by the Seller; and
(e) to the extent not otherwise included, all proceeds and products of the
foregoing and all accessions to, substitutions and replacements for, and profits
of, each of the foregoing Seller Collateral (including proceeds that constitute
property of the types described in Sections 8.01(a) through (d). SECTION 8.02
Seller's Certification. The Seller hereby certifies that (a) the benefits of the
representations and warranties of each Originator made to the Seller under the
Transfer Agreement have been assigned by the Seller to the Purchaser hereunder
and by the Purchaser to the Collateral Agent under the Collateral Agent
Agreement; (b) the rights of the Seller under the Transfer Agreement to require
a capital contribution or payment of a Rejected Amount from an Originator may be
enforced by the Purchaser and the Collateral Agent; and (c) the Transfer
Agreement provides that the representations, warranties and covenants described
in Sections 4.01 and 4.02 and 4.03 thereof, the indemnification and payment
provisions of Article V thereof and the provisions of Sections 4.03(j), 8.03 and
8.14 thereof shall survive the sale of the Transferred Receivables and the
termination of the Transfer Agreement and this Agreement. SECTION 8.03 Consent
to Assignment. Each of the Seller and the Servicer acknowledges and consents to
the grant by the Purchaser to the Collateral Agent pursuant to the Collateral
Agent Agreement of a Lien upon all of the Purchaser's right, title and interest
in, to and under the Seller Collateral and acknowledges the rights of the
Collateral Agent thereunder and the covenants made by the Purchaser in favor of
the Collateral Agent set forth therein, and further acknowledges and consents
that, upon the occurrence and during the continuance of an Incipient Termination
Event or a Termination Event, the Collateral Agent shall be entitled to enforce
the provisions of the Seller Assigned Agreements and shall be entitled to all
the rights and remedies of the Purchaser thereunder. In addition, each of the
Seller and the Servicer hereby authorizes the Collateral Agent to rely on the
representations and warranties made by it in the Seller Assigned Agreements to
which it is a party and in any other certificates or documents furnished by it
to any party in connection therewith. SECTION 8.04 Delivery of Collateral. All
certificates or instruments representing or evidencing the Seller Collateral
shall be delivered to and held by or on behalf of the Collateral Agent pursuant
to the terms of the Collateral Agent Agreement and shall be in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Collateral Agent. The Collateral Agent shall have the right, at any time in its
discretion following the occurrence and during the continuation of a Termination
Event and without notice to the Seller or the Purchaser, to transfer to or to
register in the name of the Collateral Agent or any of its nominees any or all
of the Seller Collateral. In addition, the Collateral Agent shall have the right
at any time to exchange certificates or instruments representing or evidencing
Seller Collateral for certificates or instruments of smaller or larger
denominations. SECTION 8.05 Seller Remains Liable. It is expressly agreed by the
Seller that, anything herein to the contrary notwithstanding, the Seller shall
remain liable under any and all of the Transferred Receivables, the Contracts
therefor, the Seller Assigned Agreements and any other agreements constituting
the Seller Collateral to which it is a party to observe and perform all the
conditions and obligations to be observed and performed by it thereunder. The
Purchaser, the Operating Agent, the Collateral Agent and the other Purchaser
Secured Parties shall not have any obligation or liability under any such
Receivables, Contracts or agreements by reason of or arising out of this
Agreement or the Collateral Agent Agreement or the granting herein or therein of
a Lien thereon or the receipt by the Purchaser, the Collateral Agent or any
Purchaser Secured Party of any payment relating thereto pursuant hereto or
thereto. The exercise by the Purchaser or the Collateral Agent of any of its
respective rights under this Agreement or the Collateral Agent Agreement shall
not release any Originator, the Seller or the Servicer from any of their
respective duties or obligations under any such Receivables, Contracts or
agreements. None of the Purchaser, the Operating Agent, the Collateral Agent or
any of the Purchaser Secured Parties shall be required or obligated in any
manner to perform or fulfill any of the obligations of any Originator, the
Seller or the Servicer under or pursuant to any such Receivable, Contract or
agreement, or to make any payment, or to make any inquiry as to the nature or
the sufficiency of any payment received by it or the sufficiency of any
performance by any party under any such Receivable, Contract or agreement, or to
present or file any claims, or to take any action to collect or enforce any
performance or the payment of any amounts that may have been assigned to it or
to which it may be entitled at any time or times. SECTION 8.06 Covenants of the
Seller and the Servicer Regarding the Seller Collateral. (a) Offices and
Records. The Seller shall maintain its principal place of business and chief
executive office and the office at which it stores its Records at the respective
locations specified in Schedule 4.01(b) or, upon 30 days prior written notice to
the Purchaser, the Operating Agent and the Collateral Agent, at such other
location in a jurisdiction where all action requested by the Purchaser, the
Operating Agent or the Collateral Agent pursuant to Section 14.15 shall have
been taken with respect to the Seller Collateral. Each of the Seller and the
Servicer shall, at its own cost and expense, maintain adequate and complete
records of the Transferred Receivables and the Seller Collateral, including
records of any and all payments received, credits granted and merchandise
returned with respect thereto and all other dealings therewith. Each of the
Seller and the Servicer shall ▇▇▇▇ conspicuously with a legend, in form and
substance satisfactory to the Collateral Agent, its books and records, computer
tapes, computer disks and credit files pertaining to the Seller Collateral, and
its file cabinets or other storage facilities where it maintains information
pertaining thereto, to evidence this Agreement and the assignment and Liens
granted pursuant to this Article VIII. Upon the occurrence and during the
continuance of a Termination Event, the Seller and Servicer shall deliver and
turn over such books and records to the Collateral Agent or its representatives
at any time on demand of the Collateral Agent. Prior to the occurrence of a
Termination Event and upon notice from the Collateral Agent, the Seller and the
Servicer shall permit any representative of the Operating Agent or the
Collateral Agent to inspect such books and records and shall provide photocopies
thereof to the Operating Agent and the Collateral Agent as more specifically set
forth in Section 8.06(b). (b) Access. Each of the Seller and the Servicer shall,
during normal business hours, from time to time upon five Business Day's prior
notice as frequently as the Operating Agent or the Collateral Agent determines
to be appropriate: (i) provide the Purchaser, the Operating Agent or the
Collateral Agent and any of their respective officers, employees and agents
access to its properties (including properties utilized in connection with the
collection, processing or servicing of the Transferred Receivables), facilities,
advisors and employees (including officers) and to the Seller Collateral,
(ii) permit the Purchaser, the Operating Agent or the Collateral Agent and any
of their respective officers, employees and agents to inspect, audit and make
extracts from its books and records, including all Records, (iii) permit the
Purchaser, the Operating Agent or the Collateral Agent and their respective
officers, employees and agents to inspect, review and evaluate the Transferred
Receivables and the Seller Collateral and (iv) permit the Purchaser, the
Operating Agent or the Collateral Agent and their respective officers, employees
and agents to discuss matters relating to the Transferred Receivables or its
performance under this Agreement or the other Related Documents or its affairs,
finances and accounts with any of its officers, directors, managers, employees,
representatives or agents (in each case, with those persons having knowledge of
such matters) and with its independent certified public accountants. If (A) an
Incipient Termination Event or a Termination Event shall have occurred and be
continuing or (B) the Operating Agent, in good faith, believes that an Incipient
Termination Event or a Termination Event is imminent or deems the Purchaser's
rights or interests in the Transferred Receivables, the Seller Assigned
Agreements or any other Seller Collateral insecure, then each of the Seller and
the Servicer shall provide such access at all times and without advance notice
and shall provide the Purchaser, the Operating Agent or the Collateral Agent
with access to its suppliers and customers. Each of the Seller and the Servicer
shall make available to the Operating Agent or the Collateral Agent and their
respective counsel, as quickly as is possible under the circumstances, originals
or copies of all books and records, including Records, that the Operating Agent
or the Collateral Agent may request. Each of the Seller and the Servicer shall
deliver any document or instrument necessary for the Operating Agent or the
Collateral Agent, as they may from time to time request, to obtain records from
any service bureau or other Person that maintains records for the Seller or the
Servicer, and shall maintain duplicate records or supporting documentation on
media, including computer tapes and discs owned by the Seller or the Servicer.
(c) Communication with Accountants. Each of the Seller and the Servicer
authorizes the Purchaser, the Operating Agent and the Collateral Agent to
communicate directly with its independent certified public accountants and
authorizes and shall instruct those accountants and advisors to disclose and
make available to the Purchaser, the Operating Agent and the Collateral Agent
any and all financial statements and other supporting financial documents,
schedules and information relating to the Seller or the Servicer (including
copies of any issued management letters) with respect to its business, financial
condition and other affairs. (d) Collection of Transferred Receivables. Except
as otherwise provided in this Section 8.06(d), the Seller shall continue to
collect or cause to be collected, at its sole cost and expense, all amounts due
or to become due to the Seller under the Transferred Receivables, the Seller
Assigned Agreements and any other Seller Collateral. In connection therewith,
the Seller shall take such action as it, and from and after the occurrence and
during the continuance of a Termination Event, the Collateral Agent, may deem
necessary or desirable to enforce collection of the Transferred Receivables, the
Seller Assigned Agreements and the other Seller Collateral; provided, that the
Seller may, rather than commencing any such action or taking any other
enforcement action, at its option, elect to pay to the Purchaser the Outstanding
Balance of any such Transferred Receivable; provided further, that if (i) an
Incipient Termination Event or a Termination Event shall have occurred and be
continuing or (ii) the Operating Agent, in good faith, believes that an
Incipient Termination Event or a Termination Event is imminent or deems the
Purchaser's rights or interests in the Transferred Receivables, the Seller
Assigned Agreements or any other Seller Collateral insecure, then the Collateral
Agent may, without prior notice to the Seller, (x) exercise its rights and
remedies with respect to the Lockbox Accounts under Section 6.01 and Section
6.02 and/or (y) notify any Obligor under any Transferred Receivable or obligors
under the Seller Assigned Agreements of the assignment of such Transferred
Receivables or Seller Assigned Agreements, as the case may be, to the Purchaser
hereunder and direct that payments of all amounts due or to become due to the
Seller thereunder be made directly to the Collateral Agent or any servicer,
collection agent or lockbox or other account designated by the Collateral Agent
and, upon such notification and at the sole cost and expense of the Seller, the
Collateral Agent may enforce collection of any such Transferred Receivable or
the Seller Assigned Agreements and adjust, settle or compromise the amount or
payment thereof. (e) Performance of Seller Assigned Agreements. Each of the
Seller and the Servicer shall (i) perform and observe all the terms and
provisions of the Seller Assigned Agreements to be performed or observed by it,
maintain the Seller Assigned Agreements in full force and effect, enforce the
Seller Assigned Agreements in accordance with their terms and take all action as
may from time to time be requested by the Collateral Agent in order to
accomplish the foregoing, and (ii) upon the request of and as directed by the
Operating Agent or the Collateral Agent, make such demands and requests to any
other party to the Seller Assigned Agreements as are permitted to be made by the
Seller or the Servicer thereunder. ARTICLE IX TERMINATION EVENTS SECTION 9.01
Termination Events. If any of the following events (each, a "Termination Event")
shall occur (regardless of the reason therefor): (a) the Seller shall (i) fail
to make any payment of any Seller Secured Obligation when due and payable and
the same shall remain unremedied for one Business Day or more, or (ii) fail or
neglect to perform, keep or observe any other provision of this Agreement or the
other Related Documents (other than any provision embodied in or covered by any
other clause of this Section 9.01) and the same shall remain unremedied for
three Business Days or more after written notice thereof shall have been given
by the Operating Agent or the Collateral Agent to the Seller; (b) any other
agreement, document or instrument to which any Originator, any Originator's
Subsidiary, the Seller or the Servicer is a party or by which any such Person or
its property is bound that involves the failure to make any payment when due in
respect of any Debt (other than the Seller Secured Obligations) of any such
Person in excess of $1,000,000 in the aggregate, or (ii) any other default or
breach shall occur with respect to any such Debt in excess of $1,000,000 in the
aggregate and such default or breach causes, or permits any holder of such Debt
or a trustee or agent to cause, such Debt or a portion thereof to become due
prior to its stated maturity or prior to its regularly scheduled dates of
payment, regardless of whether such default is waived, or such right is
exercised, by such holder, trustee or agent, and such default or breach remains
uncured and unwaived for 15 days; (c) a case or proceeding shall have been
commenced against any Originator, the Seller or the Servicer seeking a decree or
order in respect of any such Person (i) under the Bankruptcy Code or any other
applicable federal, state or foreign bankruptcy or other similar law,
(ii) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for any such Person or for any substantial
part of such Person's assets, or (iii) ordering the winding-up or liquidation of
the affairs of any such Person; (d) Servicer shall (i) file a petition seeking
relief under the Bankruptcy Code or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) consent or fail to object in a
timely and appropriate manner to the institution of proceedings thereunder or to
the filing of any such petition or to the appointment of or taking possession by
a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for any such Person or for any substantial part of such Person's
assets, (iii) make an assignment for the benefit of creditors, or (iv) take any
corporate action in furtherance of any of the foregoing; (e) any Originator, the
Seller or the Servicer is not Solvent or admits in writing its inability to, or
is generally unable to, pay its Debts as such Debts become due; (f) final
judgment or judgments in excess f $5,000,000 (less the amount, if any, of any
such judgment which is covered by insurance as to which the insurer has
confirmed coverage in writing) in the aggregate at any time outstanding shall be
rendered against any Originator or the Servicer and the same shall not, within
60 days after the entry thereof, have been discharged or execution thereof
stayed or bonded pending appeal, or shall not have been discharged prior to the
expiration of any such stay; (g) a final judgment shall be rendered against the
Seller; (h) any information contained in any Investment Base Certificate is
untrue or incorrect in any respect or any representation or warranty of any
Originator or the Seller herein or in any other Related Document or in any
written statement, report, financial statement or certificate (other than an
Investment Base Certificate) made or delivered by any Originator or the Seller
to any Affected Party is untrue or incorrect in any material respect as of the
date when made or deemed made; (i) any Governmental Authority (including the IRS
or the PBGC) shall file notice of a Lien with regard to any assets of any
Originator (other than a Lien (i) limited by its terms to assets other than
Receivables and (ii) not materially adversely affecting the financial condition
of such Originator or Cone Mill's ability to perform as Servicer hereunder); (j)
any Governmental Authority (including the IRS or the PBGC) shall file notice of
a Lien with regard to any of the assets of the Seller; (k) the Operating Agent
or the Collateral Agent shall have determined that any event or condition that
has had or could reasonably be expected to have or result in a Material Adverse
Effect has occurred; (l) (i) a default or breach shall occur under any provision
of Sections 4.02(o), 4.04, 5.01 or 8.14 of the Transfer Agreement and the same
shall remain unremedied for one Business Day or more after the occurrence
thereof, (ii) a default or breach shall occur under any other provision of the
Transfer Agreement and the same shall remain unremedied for five Business Days
or more after written notice thereof shall have been given by the Operating
Agent or the Collateral Agent to the Seller or (iii) the Transfer Agreement
shall for any reason cease to evidence the transfer to the Seller of the legal
and equitable title to, and ownership of, the Transferred Receivables; (m)
except as otherwise expressly provided herein, any Lockbox Agreement or the
Transfer Agreement shall have been modified, amended or terminated without the
prior written consent of the Purchaser, the Operating Agent and the Collateral
Agent; (n) an Event of Servicer Termination shall have occurred; (o) the
Operating Agent shall have determined that the funding of Transferred
Receivables hereunder is impracticable for any reason whatsoever, including as a
result of (i) a drop in or withdrawal of any of the ratings assigned to the
Commercial Paper, (ii) the imposition of Additional Amounts, (iii) restrictions
on the amount of Transferred Receivables the Purchaser may finance or (iv) the
inability of Redwood to issue Commercial Paper; (p) (i) with respect to the
Transferred Receivables, (A) prior to their Purchase hereunder, (1) the Seller
shall cease to hold valid and properly perfected title to and sole record and
beneficial ownership in such Transferred Receivables or (2) the Purchaser shall
cease to hold a first priority, perfected Lien in such Transferred Receivables
or (B) after their Purchase hereunder, (1) the Purchaser shall cease to hold
either (a) valid and properly perfected title to and sole record and beneficial
ownership in such Transferred Receivables or (b) a first priority, perfected
Lien in such Transferred Receivables; or (ii) the Purchaser and the Collateral
Agent shall cease to hold a first priority, perfected Lien in the Seller
Collateral; (q) a Seller LOC Draw shall have occurred; (r) the obligations of
the Liquidity Lenders to make Liquidity Loans shall have terminated and not
otherwise been replaced; (s) a default or breach of any of the covenants set
forth in Annex G shall have occurred; (t) an event of default under the
Collateral Agent Agreement or any other Program Document shall have occurred;
(u) the short term debt rating of a Liquidity Lender shall have been downgraded
by a Rating Agency and such Liquidity Lender shall not have been replaced in
accordance with the terms of the Liquidity Agreement within 30 days thereafter;
(v) the Purchase Discount Rate shall be less than 50% for two consecutive
Settlement Periods; (w) the Seller shall amend its articles of organization or
operating agreement without the express prior written consent of the Purchaser,
the Operating Agent and the Collateral Agent; (x) CRLLC shall have received an
Election Notice pursuant to Section 2.01(d) of the Transfer Agreement; (y) the
Credit Facility shall be terminated or an event of default shall have occurred
thereunder; (z) a Change of Control shall have occurred; or (aa)a material
adverse change shall occur after the Closing Originator, the Seller or the
Servicer or in the collectibility of the Transferred Receivables. then, and in
any such event, the Operating Agent shall, at the request of, or may, with the
consent of, the Purchaser or the Collateral Agent, by notice to the Seller,
declare the Facility Termination Date to have occurred without demand, protest
or further notice of any kind, all of which are hereby expressly waived by the
Seller; provided, that the Facility Termination Date shall automatically occur
(i) upon the occurrence of any of the Termination Events described in Sections
9.01(c), (d), (e), (q), (r), (t), (u) or (x) or (ii) four days after the
occurrence of the Termination Event described in Section 9.01(a)(i) if the same
shall not have been remedied by such time, in each case without demand, protest
or any notice of any kind, all of which are hereby expressly waived by the
Seller. SECTION 9.02 Events of Servicer Termination. If any of the following
events (each, an "Event of Servicer Termination") shall occur (regardless of the
reason therefor): (a) the Servicer shall fail or neglect to perform, keep or
observe any provision of this Agreement or the other Related Documents (whether
in its capacity as an Originator or the Servicer) and the same shall remain
unremedied for five Business Days or more after written notice thereof shall
have been given by the Purchaser, the Operating Agent or the Collateral Agent to
the Servicer; (b) any representation or warranty of the Servicer herein or in
any other Related Document or in any written statement, report, financial
statement or certificate made or delivered by the Servicer to the Purchaser, the
Operating Agent or the Collateral Agent hereto or thereto is untrue or incorrect
in any material respect as of the date when made or deemed made; (c) a default
or breach of any of the covenants set forth in Annex G shall have occurred; (d)
the Operating Agent or the Collateral Agent shall have determined that any event
or condition that materially adversely affects the ability of the Servicer to
collect the Transferred Receivables or to otherwise perform hereunder has
occurred; (e) a Termination Event shall have occurred or this Agreement shall
have been terminated; (f) a deterioration has taken place in the quality of
servicing of Transferred Receivables or other Receivables serviced by the
Servicer that either the Operating Agent or the Collateral Agent, each in its
sole discretion, determines to be material, and such material deterioration has
not been remedied to the satisfaction of the Operating Agent and the Collateral
Agent within 30 days after written notice thereof shall have been given by the
Operating Agent or the Collateral Agent to the Servicer; (g) the Servicer shall
assign or purport to assign any of its obligations hereunder or under the
Transfer Agreement without the prior written consent of the Operating Agent and
the Collateral Agent; or (h) the Seller's board of managers shall have
determined that it is in the best interests of the Seller to terminate the
duties of the Servicer hereunder and shall have given the Servicer, the
Purchaser, the Operating Agent and the Collateral Agent at least 30 days written
notice thereof; then, and in any such event, the Operating Agent shall, at the
request of, or may, with the consent of, the Purchaser or the Collateral Agent,
by delivery of a Servicer Termination Notice to the Seller and the Servicer,
terminate the servicing responsibilities of the Servicer hereunder, without
demand, protest or further notice of any kind, all of which are hereby waived by
the Servicer. Upon the delivery of any such notice, all authority and power of
the Servicer under this Agreement and the Transfer Agreement shall pass to and
be vested in the Successor Servicer acting pursuant to Section 11.02; provided,
that notwithstanding anything to the contrary herein, the Servicer agrees to
continue to follow the procedures set forth in Section 7.02 with respect to
Collections on the Transferred Receivables until a Successor Servicer has
assumed the responsibilities and obligations of the Servicer in accordance with
Section 11.02. ARTICLE X REMEDIES SECTION 10.01 Actions Upon Termination Event.
If any Termination Event shall have occurred and be continuing and the Operating
Agent shall have declared the Facility Termination Date to have occurred or the
Facility Termination Date shall be deemed to have occurred pursuant to Section
9.01, then the Collateral Agent may exercise in respect of the Seller
Collateral, in addition to any and all other rights and remedies granted to it
hereunder, under any other Related Document or under any other instrument or
agreement securing, evidencing or relating to the Seller Secured Obligations or
otherwise available to it, all of the rights and remedies of a secured party
upon default under the UCC (such rights and remedies to be cumulative and
nonexclusive), and, in addition, may take the following actions: (a) The
Collateral Agent may, without notice to the Seller except as required by law and
at any time or from time to time, charge, offset or otherwise apply amounts
payable to the Seller from the Collection Account, any Lockbox Account, the
Retention Account or any part of such accounts in accordance with the priorities
set forth in Sections 6.05 and 6.07 against all or any part of the Seller
Secured Obligations. (b) The Collateral Agent may, without notice except as
specified below, solicit and accept bids for and sell the Seller Collateral or
any part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or any of the Purchaser's, Operating Agent's or
Collateral Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Collateral Agent shall have the right to conduct
such sales on the Seller's premises or elsewhere and shall have the right to use
any of the Seller's premises without charge for such sales at such time or times
as the Collateral Agent deems necessary or advisable. The Seller agrees that, to
the extent notice of sale shall be required by law, at least ten Business Days
notice to the Seller of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
The Collateral Agent shall not be obligated to make any sale of Seller
Collateral regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed for such sale, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Every such sale
shall operate to divest all right, title, interest, claim and demand whatsoever
of the Seller in and to the Seller Collateral so sold, and shall be a perpetual
bar, both at law and in equity, against any Originator, the Seller, any Person
claiming the Seller Collateral sold through any Originator or the Seller, and
their respective successors or assigns. The Collateral Agent shall deposit the
net proceeds of any such sale in the Collection Account and such proceeds shall
be disbursed in accordance with Section 6.05. (c) Upon the completion of any
sale under Section 10.01(b), the Seller or the Servicer shall deliver or cause
to be delivered to the purchaser or purchasers at such sale on the date thereof,
or within a reasonable time thereafter if it shall be impracticable to make
immediate delivery, all of the Seller Collateral sold on such date, but in any
event full title and right of possession to such property shall vest in such
purchaser or purchasers upon the completion of such sale. Nevertheless, if so
requested by the Collateral Agent or by any such purchaser, the Seller shall
confirm any such sale or transfer by executing and delivering to such purchaser
all proper instruments of conveyance and transfer and releases as may be
designated in any such request. (d) At any sale under Section 10.01(b), the
Purchaser, the Operating Agent, the Collateral Agent or any other Purchaser
Secured Party may bid for and purchase the property offered for sale and, upon
compliance with the terms of sale, may hold, retain and dispose of such property
without further accountability therefor. (e) The Collateral Agent may exercise,
at the sole cost and expense of the Seller, any and all rights and remedies of
the Seller under or in connection with the Seller Assigned Agreements or the
other Seller Collateral, including any and all rights of the Seller to demand or
otherwise require payment of any amount under, or performance of any provisions
of, the Seller Assigned Agreements. SECTION 10.02 Exercise of Remedies. No
failure or delay on the part of the Collateral Agent in exercising any right,
power or privilege under this Agreement and no course of dealing between any
Originator, the Seller, the Servicer or the Operating Agent, on the one hand,
and the Collateral Agent, on the other hand, shall operate as a waiver of such
right, power or privilege, nor shall any single or partial exercise of any
right, power or privilege under this Agreement preclude any other or further
exercise of such right, power or privilege or the exercise of any other right,
power or privilege. The rights and remedies under this Agreement are cumulative,
may be exercised singly or concurrently, and are not exclusive of any rights or
remedies that the Collateral Agent would otherwise have at law or in equity. No
notice to or demand on any party hereto shall entitle such party to any other or
further notice or demand in similar or other circumstances, or constitute a
waiver of the right of the party providing such notice or making such demand to
any other or further action in any circumstances without notice or demand.
SECTION 10.03 Power of Attorney. On the Closing Date, each of the Seller and the
Servicer shall execute and deliver a power of attorney substantially in the form
attached hereto as Exhibit 10.03 (each, a "Power of Attorney"). The power of
attorney granted pursuant to each Power of Attorney is a power coupled with an
interest and shall be irrevocable until all of the Seller Secured Obligations
are indefeasibly paid or otherwise satisfied in full. The powers conferred on
the Collateral Agent under each Power of Attorney are solely to protect the
Purchaser's Liens upon and interests in the Seller Collateral and shall not
impose any duty upon the Collateral Agent to exercise any such powers. The
Collateral Agent shall not be accountable for any amount other than amounts that
it actually receives as a result of the exercise of such powers and none of the
Collateral Agent's officers, directors, employees, agents or representatives
shall be responsible to the Seller or the Servicer for any act or failure to
act, except in respect of damages to the extent attributable to their own gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction. SECTION 10.04 Continuing Security Interest. This Agreement shall
create a continuing Lien in the Seller Collateral until the conditions to the
release of the Liens of the Purchaser and the Collateral Agent thereon set forth
in Section 6.07(b) have been satisfied. ARTICLE XI SUCCESSOR SERVICER PROVISIONS
SECTION 11.01 Servicer Not to Resign. The Servicer shall not resign from the
obligations and duties hereby imposed on it except upon a determination that (a)
the performance of its duties hereunder has become impermissible under
applicable law or regulation and (b) there is no reasonable action that the
Servicer could take to make the performance of its duties hereunder become
permissible under applicable law. Any such determination shall (i) with respect
to clause (a) above, be evidenced by an opinion of counsel to such effect and
(ii) with respect to clause (b) above, be evidenced by an Officer's Certificate
to such effect, in each case delivered to the Purchaser, the Collateral Agent
and the Operating Agent. No such resignation shall become effective until a
Successor Servicer shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 11.02. SECTION 11.02 Appointment of the
Successor Servicer. In connection with the termination of the Servicer's
responsibilities or the resignation by the Servicer under this Agreement
pursuant to Sections 9.02 or 11.01, the Operating Agent shall (a) succeed to and
assume all of the Servicer's responsibilities, rights, duties and obligations as
Servicer (but not in any other capacity, including specifically not the
obligations of the Servicer set forth in Section 12.02) under this Agreement
(and except that the Operating Agent makes no representations and warranties
pursuant to Section 4.02) and (b) may at any time appoint a successor servicer
to the Servicer that shall be acceptable to the Collateral Agent and shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement (the Operating Agent, in such
capacity, or such successor servicer being referred to as the "Successor
Servicer"); provided, that the Successor Servicer shall have no responsibility
for any actions of the Servicer prior to the date of its appointment or
assumption of duties as Successor Servicer. In selecting a Successor Servicer,
the Operating Agent may obtain bids from any potential Successor Servicer and
may agree to any bid it deems appropriate. The Successor Servicer shall accept
its appointment by executing, acknowledging and delivering to the Operating
Agent and the Collateral Agent an instrument in form and substance acceptable to
the Operating Agent and the Collateral Agent. SECTION 11.03 Duties of the
Servicer. The Servicer covenants and agrees that, following the appointment of,
or assumption of duties by, a Successor Servicer: (a) The Servicer shall
terminate its activities as Servicer hereunder in a manner that facilitates the
transfer of servicing duties to the Successor Servicer and is otherwise
acceptable to the Purchaser and the Collateral Agent and, without limiting the
generality of the foregoing, shall timely deliver (i) any funds to the
Collateral Agent that were required to be remitted to the Collateral Agent for
deposit in the Collection Account and (ii) all Servicing Records and other
information with respect to the Transferred Receivables to the Successor
Servicer at a place selected by the Successor Servicer. The Servicer shall
account for all funds and shall execute and deliver such instruments and do such
other things as may be required to vest and confirm in the Successor Servicer
all rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer. (b) The Servicer shall terminate each existing Sub-Servicing Agreement
and the Successor Servicer shall not be deemed to have assumed any of the
Servicer's interests therein or to have replaced the Servicer as a party
thereto. SECTION 11.04 Effect of Termination or Resignation. Any termination of
or resignation by the Servicer hereunder shall not affect any claims that the
Seller, the Purchaser, the Operating Agent or the Collateral Agent may have
against the Servicer for events or actions taken or not taken by the Servicer
arising prior to any such termination or resignation. ARTICLE XII
INDEMNIFICATION SECTION 12.01 Indemnities by the Seller. (a) Without limiting
any other rights that the Purchaser, the Operating Agent, the Collateral Agent,
the Liquidity Agent, any Liquidity Lender, the Letter of Credit Agent, the
Insurer or any Letter of Credit Provider or any of their respective officers,
directors, employees, attorneys, agents or representatives (each, a "Purchaser
Indemnified Person") may have hereunder or under applicable law, the Seller
hereby agrees to indemnify and hold harmless each Purchaser Indemnified Person
from and against any and all Indemnified Amounts that may be claimed or asserted
against or incurred by any such Purchaser Indemnified Person in connection with
or arising out of the transactions contemplated under this Agreement or under
any other Related Document or any actions or failures to act in connection
therewith, including any and all reasonable legal costs and expenses arising out
of or incurred in connection with disputes between or among any parties to any
of the Related Documents; provided, that the Seller shall not be liable for any
indemnification to a Purchaser Indemnified Person to the extent that any such
Indemnified Amount results from (i) with respect to any Purchaser Indemnified
Person other than the Purchaser, such Purchaser Indemnified Person's gross
negligence or (ii) with respect to any Purchaser Indemnified Person, such
Purchaser Indemnified Person's willful misconduct, in each case as finally
determined by a court of competent jurisdiction. Without limiting the generality
of the foregoing, the Seller shall pay on demand to each Purchaser Indemnified
Person any and all Indemnified Amounts relating to or resulting from: (A)
reliance on any representation or warranty made or deemed made by the Seller (or
any of its officers) under or in connection with this Agreement or any other
Related Document or on any other information delivered by the Seller pursuant
hereto or thereto that shall have been incorrect in any material respect when
made or deemed made or delivered; (B) the failure by the Seller to comply with
any term, provision or covenant contained in this Agreement, any other Related
Document or any agreement executed in connection herewith or therewith, any
applicable law, rule or regulation with respect to any Transferred Receivable or
the Contract therefor, or the nonconformity of any Transferred Receivable or the
Contract therefor with any such applicable law, rule or regulation; or (C)(1)
the failure to vest and maintain vested in the Seller or the Purchaser valid and
properly perfected title to and sole record and beneficial ownership of the
Receivables that constitute Transferred Receivables, together with all
Collections in respect thereof, free and clear of any Adverse Claim, (2) the
failure to maintain or transfer to the Purchaser a first priority and perfected
Lien in the Seller Collateral and (3) the failure to maintain or transfer to the
Collateral Agent a first priority, perfected Lien therein; (D) any dispute,
claim, offset or defense of any Obligor (other than its discharge in bankruptcy)
to the payment of any Transferred Receivable that is the subject of a Purchase
hereunder (including a defense based on such Receivable or the Contract therefor
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 giving rise to such Receivable or the
furnishing of or failure to furnish such merchandise or services or relating to
collection activities with respect to such Receivable (if such collection
activities were performed by Cone ▇▇▇▇▇ or any of its Affiliates acting as the
Servicer), except to the extent that such dispute, claim, offset or defense
results solely from any action or inaction on the part of any Purchaser
Indemnified Person; (E) any products liability claim or other claim arising out
of or in connection with merchandise, insurance or services that is the subject
of any Contract with respect to any Transferred Receivable; (F) the commingling
of Collections with respect to Transferred Receivables by the Seller at any time
with its other funds or the funds of any other Person; or (G) any failure by the
Seller to cause the filing of, or any delay in filing, financing statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or any other applicable laws with respect to any Transferred
Receivable that is the subject of a Purchase hereunder, whether at the time of
any such Purchase or at any subsequent time. (b) Any Indemnified Amounts subject
to the indemnification provisions of this Section 12.01 not paid in accordance
with Article VI shall be paid by the Seller to the Purchaser Indemnified Person
entitled thereto within five Business Days following demand therefor. SECTION
12.02 Indemnities by the Servicer. (a) Without limiting any other rights that a
Purchaser Indemnified Person may have hereunder or under applicable law, the
Servicer hereby agrees to indemnify and hold harmless each Purchaser Indemnified
Person from and against any and all Indemnified Amounts that may be claimed or
asserted against or incurred by any such Purchaser Indemnified Person in
connection with or arising out of any breach by the Servicer of its obligations
hereunder or under any other Related Document; provided, that the Servicer shall
not be liable for any indemnification to a Purchaser Indemnified Person to the
extent that any such Indemnified Amount results from (i) such Purchaser
Indemnified Person's gross negligence or willful misconduct, in each case as
finally determined by a court of competent jurisdiction, or (ii) recourse for
uncollectible or uncollected Transferred Receivables. Without limiting the
generality of the foregoing, the Servicer shall pay on demand to each Purchaser
Indemnified Person any and all Indemnified Amounts relating to or resulting
from: (A) reliance on any representation or warranty made or deemed made by the
Servicer (or any of its officers) under or in connection with this Agreement or
any other Related Document or on any other information delivered by the Servicer
pursuant hereto or thereto that shall have been incorrect in any material
respect when made or deemed made or delivered; (B) the failure by the Servicer
to comply with any term, provision or covenant contained in this Agreement, any
other Related Document or any agreement executed in connection herewith or
therewith, any applicable law, rule or regulation with respect to any
Transferred Receivable or the Contract therefor, or the nonconformity of any
Transferred Receivable or the Contract therefor with any such applicable law,
rule or regulation; (C) the imposition of any Adverse Claim with respect to any
Transferred Receivable or the Seller Collateral as a result of any action taken
by the Servicer hereunder; or (D) the commingling of Collections with respect to
Transferred Receivables by the Servicer at any time with its other funds or the
funds of any other Person. (b) Any Indemnified Amounts subject to the
indemnification provisions of this Section 12.02 not paid in accordance with
Article VI shall be paid by the Servicer to the Purchaser Indemnified Person
entitled thereto within five Business Days following demand therefor. SECTION
12.03 Limitation of Damages; Purchaser Indemnified Persons. NO PURCHASER
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO THIS
AGREEMENT OR ANY OTHER RELATED DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION CONTEMPLATED HEREUNDER OR
THEREUNDER. ARTICLE XIII OPERATING AGENT AND COLLATERAL AGENT SECTION 13.01
Authorization and Action. (a) The Operating Agent may take such action and carry
out such functions under this Agreement as are authorized to be performed by it
pursuant to the terms of this Agreement, any other Related Document or the
Operating Agent Agreement or otherwise contemplated hereby or thereby or are
reasonably incidental thereto; provided, that the duties of the Operating Agent
hereunder shall be determined solely by the express provisions of this
Agreement, and, other than the duties set forth in Section 13.02, any permissive
right of the Operating Agent hereunder shall not be construed as a duty.(b)The
Collateral Agent may take such action and carry out such functions under this
Agreement as are authorized to be performed by it pursuant to the terms of this
Agreement, any other Related Document or the Collateral Agent Agreement or
otherwise contemplated hereby or thereby or are reasonably incidental thereto;
provided, that the duties of the Collateral Agent hereunder shall be determined
solely by the express provisions of this Agreement, and, other than the duties
set forth in Section 13.02, any permissive right of the Collateral Agent
hereunder shall not be construed as a duty. SECTION 13.02 Reliance. None of the
Operating Agent, the Collateral Agent, any of their respective Affiliates or any
of their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by any of them under or in connection
with this Agreement, the other Related Documents or the Program Documents,
except for damages to the extent caused by its or their own gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
Without limiting the generality of the foregoing, and notwithstanding any term
or provision hereof to the contrary, the Seller, the Servicer and the Purchaser
hereby acknowledge and agree that each of the Operating Agent and the Collateral
Agent (a) acts as agent hereunder for the Purchaser (and, with respect to the
Collateral Agent, the Affected Parties) and has no duties or obligations to,
shall incur no liabilities or obligations to, and does not act as an agent in
any capacity for, the Seller (other than, with respect to the Collateral Agent,
under the Power of Attorney with respect to remedial actions) or any Originator,
(b) may consult with legal counsel, independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the advice of such counsel,
accountants or experts, (c) makes no representation or warranty hereunder to any
Affected Party and shall not be responsible to any such Person for any
statements, representations or warranties made in or in connection with this
Agreement, the other Related Documents or the Program Documents, (d) 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 this Agreement, the other Related
Documents or the Program Documents on the part of the Seller, the Servicer or
the Purchaser or to inspect the property (including the books and records) of
the Seller, the Servicer or the Purchaser, (e) shall not be responsible to the
Seller, the Servicer or the Purchaser for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Related Documents or any other instrument or document furnished pursuant hereto
or thereto, (f) shall incur no liability under or in respect of this Agreement,
the other Related Documents or the Program Documents by acting upon any notice,
consent, certificate or other instrument or writing believed by it to be genuine
and signed, sent or communicated by the proper party or parties and (g) shall
not be bound to make any investigation into the facts or matters stated in any
notice or other communication hereunder and may rely on the accuracy of such
facts or matters. Notwithstanding the foregoing, each of the Operating Agent and
the Collateral Agent acknowledges that it has a duty to transfer funds between
and among the Lockbox Accounts and the Collection Account, and make investments
of funds on deposit in the Retention Account and the Collateral Account, in
accordance with Article VI and the instructions of the Servicer. SECTION 13.03
GE Capital and Affiliates. GE Capital and its Affiliates may generally engage in
any kind of business with any Obligor, any Originator, the Seller, the Servicer
or the Purchaser, any of their respective Affiliates and any Person who may do
business with or own securities of such Persons or any of their respective
Affiliates, all as if GE Capital were not the Operating Agent or the Collateral
Agent and without the duty to account therefor to any Obligor, any Originator,
the Seller, the Servicer, the Purchaser or any other Person. ARTICLE XIV
MISCELLANEOUS SECTION 14.01 Notices. Except as otherwise provided herein,
whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served
upon any of the parties by any other parties, or whenever any of the parties
desires to give or serve upon any other parties any communication with respect
to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be deemed to
have been validly served, given or delivered (a) upon the earlier of actual
receipt and three Business Days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (b)upon transmission, when sent by telecopy or other similar facsimile
transmission (with such telecopy or facsimile promptly confirmed by delivery of
a copy by personal delivery or United States Mail as otherwise provided in this
Section 14.01), (c) one Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number set forth under its name on the signature
page hereof or to such other address (or facsimile number) as may be substituted
by notice given as herein provided; provided, that each such declaration or
other communication shall be deemed to have been validly delivered to the
Collateral Agent hereunder upon delivery to the Operating Agent in accordance
with the terms of this Section 14.01. The giving of any notice required
hereunder may be waived in writing by the party entitled to receive such notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to any Person (other than the
Purchaser, the Operating Agent and the Collateral Agent) designated in any
written notice provided hereunder to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request, consent, approval,
declaration or other communication. Notwithstanding the foregoing, whenever it
is provided herein that a notice is to be given to any other party hereto by a
specific time, such notice shall only be effective if actually received by such
party prior to such time, and if such notice is received after such time or on a
day other than a Business Day, such notice shall only be effective on the
immediately succeeding Business Day. SECTION 14.02 Binding Effect; Assignability
This Agreement shall be binding upon and inure to the benefit of the Seller, the
Servicer, the Purchaser, the Operating Agent and the Collateral Agent and their
respective successors and permitted assigns. Neither the Seller nor the Servicer
may assign, transfer, hypothecate or otherwise convey any of their respective
rights or obligations hereunder or interests herein without the express prior
written consent of the Purchaser, the Operating Agent and the Collateral Agent
and unless the Rating Agency Condition shall have been satisfied with respect to
any such assignment. Any such purported assignment, transfer, hypothecation or
other conveyance by the Seller or the Servicer without the prior express written
consent of the Purchaser, the Operating Agent and the Collateral Agent shall be
void. The Purchaser, the Operating Agent or the Collateral Agent may, at any
time, assign any of its rights and obligations hereunder or interests herein to
any Eligible Assignee and any such assignee may further assign at any time its
rights and obligations hereunder or interests herein (including any rights it
may have in and to the Transferred Receivables and the Seller Collateral and any
rights it may have to exercise remedies hereunder), in each case without the
consent of any Originator, the Seller or the Servicer. The Seller acknowledges
and agrees that, upon any such assignment, the assignee thereof may enforce
directly, without joinder of the Purchaser, all of the obligations of the Seller
hereunder. SECTION 14.03 Termination; Survival of Seller Secured Obligations
Upon Facility Termination Date. (a) 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 Termination Date. (b) Except
as otherwise expressly provided herein or in any other Related Document, no
termination or cancellation (regardless of cause or procedure) of any commitment
made by any Affected Party under this Agreement shall in any way affect or
impair the obligations, duties and liabilities of the Seller or the rights of
any Affected Party relating to any unpaid portion of the Seller Secured
Obligations, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Facility Termination Date.
Except as otherwise expressly provided herein or in any other Related Document,
all undertakings, agreements, covenants, warranties and representations of or
binding upon the Seller or the Servicer, and all rights of any Affected Party
hereunder, all as contained in the Related Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date. On the Termination
Date, this Agreement and the other Related Documents shall terminate (except to
the extent otherwise expressly provided herein or therein), all ownership
interests or Liens of the Purchaser in and to all Transferred Receivables and
all Liens of the Purchaser and the Collateral Agent in and to the Seller
Collateral shall be released by the Purchaser and the Collateral Agent and the
Purchaser and the Collateral Agent shall promptly return any and all of the
Seller Collateral then in their possession to Seller and shall execute such
documents (including without limitation UCC-3=s) as the Seller may reasonably
request to evidence such releases and terminations (provided that such documents
shall be prepared and recorded at the Seller's expenses); provided, that the
rights and remedies provided for herein with respect to any breach of any
representation or warranty made by the Seller or the Servicer pursuant to
Article IV, the indemnification and payment provisions of Article XII and
Sections 14.04, 14.05 and 14.06 shall be continuing and shall survive the
Termination Date and any termination of this Agreement. SECTION 14.04 Costs,
Expenses and Taxes. (a) The Seller shall reimburse the Purchaser, the Operating
Agent and the Collateral Agent for all out-of-pocket expenses incurred in
connection with the negotiation and preparation of this Agreement and the other
Related Documents (including the reasonable fees and expenses of all of its
special counsel, advisors, consultants and auditors retained in connection with
the transactions contemplated thereby and advice in connection therewith). The
Seller shall reimburse the Purchaser, the Operating Agent and the Collateral
Agent for all reasonable fees, costs and expenses, including the fees, costs and
expenses of counsel or other advisors (including environmental and management
consultants and appraisers) for advice, assistance, or other representation in
connection with: (i) the forwarding to the Seller or any other Person on behalf
of the Seller by the Purchaser of any payments for Purchases made by it
hereunder; (ii) any amendment, modification or waiver of, consent with respect
to, or termination of this Agreement or any of the other Related Documents or
advice in connection with the administration thereof or their respective rights
hereunder or thereunder; (iii) any Litigation, contest or dispute (whether
instituted by the Seller, the Purchaser, the Operating Agent, the Collateral
Agent or any other Person as a party, witness, or otherwise) in any way relating
to the Seller Collateral, any of the Related Documents or any other agreement to
be executed or delivered in connection herewith or therewith, including any
Litigation, contest, dispute, suit, case, proceeding or action, and any appeal
or review thereof, in connection with a case commenced by or against the Seller
or any other Person that may be obligated to the Purchaser, the Operating Agent
or the Collateral Agent by virtue of the Related Documents, including any such
Litigation, contest, dispute, suit, proceeding or action arising in connection
with any work-out or restructuring of the transactions contemplated hereby
during the pendency of one or more Termination Events; (iv) any attempt to
enforce any remedies of the Purchaser, the Operating Agent or the Collateral
Agent against the Seller or any other Person that may be obligated to them by
virtue of any of the Related Documents, including any such attempt to enforce
any such remedies in the course of any work-out or restructuring of the
transactions contemplated hereby during the pendency of one or more Termination
Events; (v) any work-out or restructuring of the transactions contemplated
hereby during the pendency of one or more Termination Events; and (vi) efforts
to (A) monitor the Purchases or any of the Seller Secured Obligations,
(B) evaluate, observe or assess any Originator, the Seller or the Servicer or
their respective affairs, and (C) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Seller Collateral;
including all reasonable attorneys and other professional and service providers
fees arising from such services, including those in connection with any
appellate proceedings, and all reasonable expenses, costs, charges and other
fees incurred by such counsel and others in connection with or relating to any
of the events or actions described in this Section 14.04, all of which shall be
payable, on demand, by the Seller to the Purchaser, the Operating Agent or the
Collateral Agent, as applicable. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include: fees, costs and
expenses of accountants, environmental advisors, appraisers, investment bankers,
management and other consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram or telecopy
charges; secretarial overtime charges; and expenses for travel, lodging and food
paid or incurred in connection with the performance of such legal or other
advisory services. (b) In addition, the Seller shall pay on demand any and all
stamp, sales, excise and other taxes (excluding income taxes) and fees payable
or determined to be payable in connection with the execution, delivery, filing
or recording of this Agreement or any other Related Document, and the Seller
agrees to indemnify and save each Purchaser Indemnified Person harmless from and
against any and all liabilities with respect to or resulting from any delay or
failure to pay such taxes and fees. SECTION 14.05 Confidentiality. (a) Except to
the extent otherwise required by applicable law, as required to be filed
publicly with the Securities and Exchange Commission, or unless the Operating
Agent shall otherwise consent in writing, the Seller and the Servicer agree to
maintain the confidentiality of this Agreement (and all drafts hereof and
documents ancillary hereto) in its communications with third parties other than
any Affected Party or any Purchaser Indemnified Person and otherwise and not to
disclose, deliver or otherwise make available to any third party (other than its
directors, managers, officers, employees, accountants or counsel) the original
or any copy of all or any part of this Agreement (or any draft hereof and
documents ancillary hereto) except to an Affected Party or a Purchaser
Indemnified Person. (b) The Seller and the Servicer each agree that it shall not
(and shall not permit any of its Subsidiaries to) issue any news release or make
any public announcement pertaining to the transactions contemplated by this
Agreement and the other Related Documents without the prior written consent of
the Purchaser and the Operating Agent (which consent shall not be unreasonably
withheld) unless such news release or public announcement is required by law, in
which case the Seller or the Servicer, as applicable, shall consult with the
Purchaser and the Operating Agent prior to the issuance of such news release or
public announcement. The Seller may, however, disclose the general terms of the
transactions contemplated by this Agreement and the other Related Documents to
trade creditors, suppliers and other similarly-situated Persons so long as such
disclosure is not in the form of a news release or public announcement. (c) The
Purchaser, the Operating Agent and the Collateral Agent each agrees to use
commercially reasonable efforts (equivalent to the efforts such Person applies
to maintaining the confidentiality of its own confidential information) to
maintain as confidential for a period of two (2) years following receipt thereof
all confidential information provided to them by the Seller or the Servicer and
designated by the Seller or the Servicer (as the case may be) as confidential
except, that the Purchaser, the Operating Agent and the Collateral Agent may
disclose such information (a) to Persons employed or engaged by the Purchaser,
the Operating Agent or the Collateral Agent in evaluating, approving,
structuring or administering the Purchases and the other transactions
contemplated by the Related Documents; (b) to any bona fide assignee or
participant or potential assignee or participant of the Purchaser that has
agreed to comply with the covenant contained in this paragraph (c) (and any such
bona fide assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described in
clause (a) above); (c) as required or requested by any Governmental Authority or
reasonably believed by the Purchaser, the Operating Agent or the Collateral
Agent to be compelled by any court decree, subpoena or legal or administrative
order or process; (d) as, on the advice of the Purchaser's, the Operating Agents
or the Collateral Agent's counsel, required by law; (e) in connection with the
exercise of any right or remedy under the Related Documents or in connection
with any Litigation to which the Purchaser, the Operating Agent or the
Collateral Agent is a party; or (f) which ceases to be confidential through no
fault of the Purchaser, the Operating Agent or the Collateral Agent. SECTION
14.06 No Proceedings. Each of the Seller and the Servicer hereby agrees that,
from and after the Closing Date and until the date one year plus one day
following the date on which the Commercial Paper with the latest maturity has
been indefeasibly paid in full in cash, it will not, directly or indirectly,
institute or cause to be instituted against the Seller or the Purchaser any
proceeding of the type referred to in Sections 9.01(c) and 9.01(d). SECTION
14.07 Complete Agreement; Modification of Agreement. This Agreement and the
other Related Documents constitute the complete agreement among the parties
hereto with respect to the subject matter hereof and thereof, supersede all
prior agreements and understandings relating to the subject matter hereof and
thereof, and may not be modified, altered or amended except as set forth in
Section 14.08. SECTION 14.08 Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Agreement or any of the other
Related Documents, or any consent to any departure by the Seller or the Servicer
therefrom, shall in any event be effective unless the same shall be in writing
and signed by each of the parties hereto or thereto. SECTION 14.09 No Waiver;
Remedies. The failure by the Purchaser, the Operating Agent or the Collateral
Agent, at any time or times, to require strict performance by the Seller or the
Servicer of any provision of this Agreement or the Purchase Assignment shall not
waive, affect or diminish any right of the Purchaser, the Operating Agent or the
Collateral Agent thereafter to demand strict compliance and performance herewith
or therewith. Any suspension or waiver of any breach or default hereunder shall
not suspend, waive or affect any other breach or default whether the same is
prior or subsequent thereto and whether the same or of a different type. None of
the undertakings, agreements, warranties, covenants and representations of the
Seller or the Servicer contained in this Agreement or any Purchase Assignment,
and no breach or default by the Seller or the Servicer hereunder or thereunder,
shall be deemed to have been suspended or waived by the Purchaser, the Operating
Agent or the Collateral Agent unless such waiver or suspension is by an
instrument in writing signed by an officer of or other duly authorized signatory
of the Purchaser, the Operating Agent and the Collateral Agent and directed to
the Seller or the Servicer, as applicable, specifying such suspension or waiver.
The rights and remedies of the Purchaser, the Operating Agent and the Collateral
Agent under this Agreement shall be cumulative and nonexclusive of any other
rights and remedies that the Purchaser, the Operating Agent and the Collateral
Agent may have under any other agreement, including the other Related Documents,
by operation of law or otherwise. Recourse to the Seller Collateral shall not be
required. SECTION 14.10 Governing Law; Consent to Jurisdiction; Waiver of Jury
Trial. (a) this agreement and each other related document (except to the extent
that any related document expressly provides to the contrary) and the
obligations arising hereunder and thereunder shall in all respects, including
all matters of construction, validity and performance, be governed by, and
construed and enforced in accordance with, the internal laws of the state of New
York (without regard to the conflict of law provisions thereof) and any
applicable laws of the United States of America. (b) each party hereto hereby
consents and agrees that the state or federal courts located in the borough of
Manhattan in New York city shall have exclusive jurisdiction to hear and
determine any claims or disputes between them pertaining to this agreement or to
any matter arising out of or relating to this agreement or any other related
document; provided, that each party hereto acknowledges that any appeals from
those courts may have to be heard by a court located outside of the borough of
Manhattan in New York city; provided further, that nothing in this agreement
shall be deemed or operate to preclude the purchaser, the operating agent or the
collateral agent from bringing suit or taking other legal action in any other
jurisdiction to realize on the seller collateral or any other security for the
seller secured obligations, or to enforce a judgment or other court order in
favor of the purchaser, the operating agent or the collateral agent. Each party
hereto submits and consents in advance to such jurisdiction in any action or
suit commenced in any such court, and each party hereto hereby waives any
objection that such party may have based upon lack of personal jurisdiction,
improper venue or forum non conveniens and hereby consents to the granting of
such legal or equitable relief as is deemed appropriate by such court. Each
party hereto hereby waives personal service of the summons, complaint and other
process issued in any such action or suit and agrees that service of such
summons, complaint and other process may be made by registered or certified mail
addressed to such party at the address set forth beneath its name on the
signature pages hereof and that service so made shall be deemed completed upon
the earlier of such party's actual receipt thereof or three days after deposit
in the United States mail, proper postage prepaid. Nothing in this section shall
affect the right of any party hereto to serve legal process in any other manner
permitted by law. (c) because disputes arising in connection with complex
financial transactions are most quickly and economically resolved by an
experienced and expert person and the parties wish applicable state and federal
laws to apply (rather than arbitration rules), the parties desire that their
disputes be resolved by a judge applying such applicable laws. Therefore, to
achieve the best combination of the benefits of the judicial system and of
arbitration, the parties hereto waive all right to trial by jury in any action,
suit, or proceeding brought to resolve any dispute, whether sounding in
contract, tort or otherwise, arising out of, connected with, related to, or
incidental to the relationship established among them in connection with this
agreement or any other related document or the transactions contemplated hereby
or thereby. SECTION 14.11 Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which shall collectively and separately
constitute one agreement. SECTION 14.12 Severability. Wherever possible, each
provision of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. SECTION 14.13 Section Titles. The section titles and table of
contents contained in this Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of the agreement
between the parties hereto. SECTION 14.14 Limited Recourse. The obligations of
the Purchaser under this Agreement and all Related Documents are solely the
corporate obligations of the Purchaser. No recourse shall be had for the payment
of any amount owing in respect of Purchases or for the payment of any fee
hereunder or any other obligation or claim arising out of or based upon this
Agreement or any other Related Document against any Stockholder, employee,
officer, director, agent or incorporator of the Purchaser. Any accrued
obligations owing by the Purchaser under this Agreement shall be payable by the
Purchaser solely to the extent that funds are available therefor from time to
time in accordance with the provisions of Article VI of the Collateral Agent
Agreement and Article VI of this Agreement (and such accrued obligations shall
not be extinguished until paid in full). SECTION 14.15 Further Assurances. (a)
Each of the Seller and the Servicer shall, at its sole cost and expense, upon
request of the Purchaser, the Operating Agent or the Collateral Agent, promptly
and duly execute and deliver any and all further instruments and documents and
take such further action that may be necessary or desirable or that the
Purchaser, the Operating Agent or the Collateral Agent may request to (i)
perfect, protect, preserve, continue and maintain fully the Purchases made and
the right, title and interests (including Liens) granted to the Purchaser under
this Agreement, (ii) enable the Purchaser, the Operating Agent or the Collateral
Agent to exercise and enforce its rights under this Agreement, any of the other
Related Documents or the Collateral Agent Agreement or (iii) otherwise carry out
more effectively the provisions and purposes of this Agreement or any other
Related Document. Without limiting the generality of the foregoing, the Seller
shall, upon request of the Purchaser, the Operating Agent or the Collateral
Agent, (A) execute and file such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or notices
that may be necessary or desirable or that the Purchaser, the Operating Agent or
the Collateral Agent may request to perfect, protect and preserve the Purchases
made and the Liens granted pursuant to this Agreement, free and clear of all
Adverse Claims, (B) ▇▇▇▇, or cause the Servicer to ▇▇▇▇, each Contract
evidencing each Transferred Receivable with a legend, acceptable to the
Purchaser, the Operating Agent and the Collateral Agent evidencing that the
Purchaser has purchased all right and title thereto and interest therein as
provided herein, (C) ▇▇▇▇, or cause the Servicer to ▇▇▇▇, its master data
processing records evidencing such Transferred Receivables with such a legend
and (D) notify or cause the Servicer to notify Obligors of the transfer of
Transferred Receivables effected hereunder. (b) Without limiting the generality
of the foregoing, the Seller hereby authorizes the Purchaser and the Collateral
Agent, and the Purchaser hereby authorizes the Collateral Agent, to file one or
more financing or continuation statements, or amendments thereto or assignments
thereof, relating to all or any part of the Transferred Receivables, including
Collections with respect thereto, or the Seller Collateral without the signature
of the Seller or, as applicable, the Purchaser to the extent permitted by
applicable law. A carbon, photographic or other reproduction of this Agreement
or of any notice or financing statement covering the Transferred Receivables,
the Seller Collateral or any part thereof shall be sufficient as a notice or
financing statement where permitted by law.
IN WITNESS WHEREOF, the parties have caused this Receivables Purchase and
Servicing Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
CONE RECEIVABLES II LLC
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
c/o AMACAR Group, L.L.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
REDWOOD RECEIVABLES CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Secretary
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Redwood Administrator
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
CONE ▇▇▇▇▇ CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Treasurer
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
GENERAL ELECTRIC CAPITAL CORPORATION
As Operating Agent&Collateral Agent
By /s/s ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Duly Authorized Signatory
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: VP-Portfolio/Cone
Receivables II LLC
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇