Exhibit 10.14
RECEIVABLES PURCHASE AGREEMENT
dated as of May 10, 2002
Among
PDC FUNDING COMPANY, LLC, as Seller,
▇▇▇▇▇▇▇▇▇ DENTAL COMPANY, as Servicer,
PREFERRED RECEIVABLES FUNDING CORPORATION,
THE FINANCIAL INSTITUTIONS PARTY HERETO
and
BANK ONE, NA (MAIN OFFICE CHICAGO),
as Agent
RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement, dated as of May 10, 2002, is by and
among PDC Funding Company, LLC, a Minnesota limited liability company
("Seller"), ▇▇▇▇▇▇▇▇▇ Dental Company, a Minnesota corporation (together with its
successors and assigns "PDCo"), as initial Servicer (the Servicer together with
Seller, the "Seller Parties" and each a "Seller Party"), the entities listed on
Schedule A to this Agreement (together with any of their respective successors
and assigns hereunder, the "Financial Institutions"), Preferred Receivables
Funding Corporation ("Conduit") and Bank One, NA (Main Office Chicago), as agent
for the Purchasers hereunder or any successor agent hereunder (together with its
successors and assigns hereunder, the "Agent"). Unless defined elsewhere herein,
capitalized terms used in this Agreement shall have the meanings assigned to
such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Purchaser Interests to the Purchasers
from time to time.
Conduit may, in its absolute and sole discretion, purchase Purchaser
Interests from Seller from time to time.
In the event that Conduit declines to make any purchase, the Financial
Institutions shall, at the request of Seller, purchase Purchaser Interests from
time to time. In addition, the Financial Institutions have agreed to provide a
liquidity facility to Conduit in accordance with the terms hereof.
Bank One, NA (Main Office Chicago) has been requested and is willing to act
as Agent on behalf of Conduit and the Financial Institutions in accordance with
the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
(a) Upon the terms and subject to the conditions hereof,
Seller may, at its option, sell and assign Purchaser Interests to the Agent for
the benefit of one or more of the Purchasers. In accordance with the terms and
conditions set forth herein, Conduit may, at its option, instruct the Agent to
purchase on behalf of Conduit, or if Conduit shall decline to purchase, the
Agent shall purchase, on behalf of the Financial
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Institutions, Purchaser Interests from time to time in an aggregate amount not
to exceed at such time the lesser of (i) the Purchase Limit and (ii) the
aggregate amount of the Commitments during the period from the date hereof to
but not including the Facility Termination Date.
(b) Seller may, upon at least 10 Business Days' prior notice
to the Agent, terminate in whole or reduce in part, ratably among the Financial
Institutions, the unused portion of the Purchase Limit; provided that each
partial reduction of the Purchase Limit shall be in an amount equal to
$5,000,000 or an integral multiple thereof.
Section 1.2 Increases.
Seller shall provide the Agent with at least two Business Days' prior
notice in a form set forth as Exhibit II hereto of each Incremental Purchase (a
"Purchase Notice"). Each Purchase Notice shall be subject to Section 6.2 hereof
and, except as set forth below, shall be irrevocable, shall specify the
requested Purchase Price (which shall not be less than $10,000,000 and in
additional increments of $100,000) and date of purchase (which, in the case of
any Incremental Purchase (after the initial Incremental Purchase hereunder),
shall only be on a Settlement Date) and, in the case of an Incremental Purchase
to be funded by the Financial Institutions, the requested Discount Rate and
Tranche Period and shall be accompanied by a current listing of all Receivables
(including any Receivables to be purchased by Seller under the Receivables Sale
Agreement on the date of purchase specified in such Purchase Notice). Following
receipt of a Purchase Notice, the Agent will determine whether Conduit agrees to
make the purchase. If Conduit declines to make a proposed purchase, Seller may
cancel the Purchase Notice or, in the absence of such a cancellation, the
Incremental Purchase of the Purchaser Interest will be made by the Financial
Institutions. On the date of each Incremental Purchase, upon satisfaction of the
applicable conditions precedent set forth in Article VI, Conduit or the
Financial Institutions, as applicable, shall deposit to the Facility Account, in
immediately available funds, no later than 12:00 noon (Chicago time), an amount
equal to (i) in the case of Conduit, the aggregate Purchase Price of the
Purchaser Interests Conduit is then purchasing or (ii) in the case of a
Financial Institution, such Financial Institution's Pro Rata Share of the
aggregate Purchase Price of the Purchaser Interests the Financial Institutions
are purchasing.
Section 1.3 [Intentionally Omitted].
Section 1.4 Payment Requirements. All amounts to be paid or deposited
by any Seller Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (Chicago
time) on the day when due in immediately available funds, and if not received
before 11:00 a.m. (Chicago time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the Agent, for the account of
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such Purchaser, at ▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ until otherwise
notified by the Agent. Upon notice to Seller, the Agent may debit the Facility
Account for all amounts due and payable hereunder. All computations of Financial
Institution Yield, per annum fees calculated as part of any CP Costs, per annum
fees hereunder and per annum fees under the Fee Letter shall be made on the
basis of a year of 360 days for the actual number of days elapsed. If any amount
hereunder shall be payable on a day which is not a Business Day, such amount
shall be payable on the next succeeding Business Day.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Notwithstanding any limitation on recourse
contained in this Agreement, Seller shall immediately pay to the Agent when due,
for the account of the relevant Purchaser or Purchasers on a full recourse
basis, (i) such fees as set forth in the Fee Letter (which fees shall be
sufficient to pay all fees owing to the Financial Institutions), (ii) all
amounts payable as CP Costs, (iii) all amounts payable as Financial Institution
Yield, (iv) all amounts payable as Deemed Collections (which shall be
immediately due and payable by Seller and applied to reduce outstanding
Aggregate Capital hereunder in accordance with Sections 2.2 and 2.3 hereof), (v)
all amounts required pursuant to Section 2.5 or 2.6, (vi) all amounts payable
pursuant to Article X, if any, (vii) all Servicer costs and expenses, including
the Servicing Fee, in connection with servicing, administering and collecting
the Receivables, (viii) all Broken Funding Costs, (ix) all Hedging Obligations
and (x) all Default Fees (collectively, the "Obligations"). If any Person fails
to pay any of the Obligations when due, such Person agrees to pay, on demand,
the Default Fee in respect thereof until paid. Notwithstanding the foregoing, no
provision of this Agreement or the Fee Letter shall require the payment or
permit the collection of any amounts hereunder in excess of the maximum
permitted by applicable law. If at any ▇▇▇▇ ▇▇▇▇▇▇ receives any Collections or
is deemed to receive any Collections, Seller shall immediately pay such
Collections or Deemed Collections to the Servicer for application in accordance
with the terms and conditions hereof and, at all times prior to such payment,
such Collections or Deemed Collections shall be held in trust by Seller for the
exclusive benefit of the Purchasers and the Agent.
Section 2.2 Collections Prior to Amortization.
(a) Collections Generally. On any day prior to the
Amortization Date that the Servicer receives any Collections and/or Deemed
Collections, such Collections and/or Deemed Collections shall be set aside and
held in trust by the Servicer in the Collection Accounts in the manner set forth
in Sections 7.1(j) and 8.2. Prior to the Amortization Date, all such amounts
shall be applied as set forth in this Section 2.2. The Servicer shall, on each
Settlement Date, determine the portion of Collections set aside in
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accordance with the first sentence of this Section 2.2 during the related
Settlement Period which constitute Principal Collections and the portion of such
Collections which constitute Finance Charge Collections. On each Settlement
Date, the Servicer shall remit the Principal Collections set aside pursuant to
this subsection (a) to an account designated by the Agent (the "Agent's
Account") to be distributed in accordance with subsection (b) below and the
Servicer shall remit the Finance Charge Collections set aside pursuant to this
subsection (a) to the Agent's Account to be distributed in accordance with
subsection (c) below.
(b) Application of Principal Collections. On each
Settlement Date, the Agent will apply the Principal Collections deposited to the
Agent's Account pursuant to Section 2.2(a) to make the following distributions
in the following amounts and order of priority:
first, to each Terminating Financial Institution, an
amount equal to such Terminating Financial Institution's Termination
Percentage of such Principal Collections for the ratable reduction of the
Capital of each such Terminating Financial Institution, and
second, if any Purchase Notice shall have been
delivered in accordance with Section 1.2, to Seller to fund the Purchase
Price of the Incremental Purchase to be made on such date; otherwise, to
the Agent for the account of the Purchasers (other than any Terminating
Financial Institution) as a further reduction of Aggregate Capital.
(c) Application of Finance Charge Collections. On each
Settlement Date, the Agent will apply the Finance Charge Collections deposited
to the Agent's Account pursuant to Section 2.2(a), together with the Hedge
Floating Amount, if any, paid to the Servicer by the Hedge Provider pursuant to
the Hedging Agreement and any net income from Permitted Investments deposited to
the Agent's Account pursuant to Section 2.8, to make the following distributions
in the following amounts and order of priority:
first, if the Hedging Agreement shall be in effect, to the
Hedge Provider, the Hedge Fixed Amount, if any, due to the Hedge Provider
pursuant to the Hedging Agreement as of such Settlement Date,
second, to the reimbursement of the Agent's costs of
collection and enforcement of this Agreement,
third, to the Agent for the account of the Purchasers, all
accrued and unpaid fees under the Fee Letter and all accrued and unpaid CP
Costs and Financial Institution Yield, including any accrued CP Costs and
Financial Institution Yield in
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respect of Capital reduced pursuant to clause second of subsection (b)
above, together with any Broken Funding Costs,
fourth, if the Servicer is not then Seller or an Affiliate of
Seller, to the Servicer in payment of the Servicing Fee,
fifth, to the Agent as a reduction of Aggregate Capital an amount
necessary to pay in full the Outstanding Balance of any Receivables that
became Defaulted Receivables during the related Settlement Period and
Receivables that became Defaulted Receivables during any prior Settlement
Period that have not previously been the subject of payment hereunder,
sixth, if Seller or an Affiliate of Seller is then acting as
Servicer, to the Servicer in payment of the Servicing Fee,
seventh, to the applicable Persons, for the ratable payment in
full of all other unpaid Obligations, and
eighth, the balance, if any, (i) to the Agent for deposit to the
Second-Tier Account if the conditions of Section 7.3 requiring that the
Hedging Agreement be in effect have occurred, but the Hedging Agreement is
not then in effect (such amount to be set aside and held in trust for
application in accordance with this Section 2.2(c) on the next occurring
Settlement Date) and (ii) otherwise, to the Seller.
(d) Each Terminating Financial Institution shall be allocated
a ratable portion of Collections from the date of any assignment by Conduit
pursuant to Section 13.6 (the "Termination Date") until such Terminating
Financial Institution's Capital shall be paid in full. This ratable portion
shall be calculated on the Termination Date of each Terminating Financial
Institution as a percentage equal to (i) Capital of such Terminating Financial
Institution outstanding on its Termination Date, divided by (ii) the Aggregate
Capital outstanding on such Termination Date (the "Termination Percentage").
Each Terminating Financial Institution's Termination Percentage shall remain
constant prior to the Amortization Date. On and after the Amortization Date,
each Termination Percentage shall be disregarded, and each Terminating Financial
Institution's Capital shall be reduced ratably with all Financial Institutions
in accordance with Section 2.3.
Section 2.3 Collections Following Amortization. On the Amortization
Date and on each day thereafter, the Servicer shall set aside and hold in trust
for the Purchasers, in the Collection Accounts in the manner set forth in
Sections 7.1(j) and 8.2, all Collections and/or Deemed Collections received on
such day and any additional amount for the payment of any accrued and unpaid
Obligations owed by Seller and not previously paid
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by Seller in accordance with Section 2.1. On and after the Amortization Date,
the Servicer shall, at any time upon the request from time to time by (or
pursuant to standing instructions from) the Agent (i) remit to the Agent's
Account the amounts set aside pursuant to the preceding sentence, and (ii) apply
such amounts at the Agent's direction to reduce the Aggregate Capital and any
other Aggregate Unpaids. If there shall be insufficient funds on deposit for the
Servicer to distribute funds in payment in full of the aforementioned amounts,
the Servicer shall distribute funds:
first, if the Hedging Agreement shall be in effect, the Hedge Fixed
Amount, if any due to the Hedge Provider pursuant to the Hedging Agreement
as of such Settlement Date,
second, to the reimbursement of the Agent's costs of collection and
enforcement of this Agreement,
third, ratably to the payment of all accrued and unpaid fees under the
Fee Letter and all accrued and unpaid CP Costs and Financial Institution
Yield,
fourth, to the payment of the Servicer's reasonable out-of-pocket
costs and expenses in connection with servicing, administering and
collecting the Receivables, including the Servicing Fee, if Seller, or one
of its Affiliates is not then acting as the Servicer,
fifth, for the ratable payment of all other unpaid Obligations,
provided that to the extent such Obligations relate to the payment of
Servicer costs and expenses, including the Servicing Fee, when Seller or
one of its Affiliates is acting as the Servicer, such costs and expenses
will not be paid until after the payment in full of all other Obligations,
sixth, to the ratable reduction of Aggregate Capital to zero,
seventh, to the ratable payment in full of all other Aggregate
Unpaids, and
eighth, after the Aggregate Unpaids have been indefeasibly reduced to
zero and this Agreement has terminated in accordance with its terms, any
remaining Collections shall be remitted to Seller.
Section 2.4 Ratabe Payments. Collections applied to the payment of
Aggregate Unpaids shall be distrbed in accordance with the aforementioned
provisions, and giving effect to each of the priorities set forth in Sections
2.2 and 2.3 above, shall be shared ratably (within each priority) among the
Agent and the Purchasers in accordance
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with the amount of such Aggregate Unpaids owing to each of them in respect of
each such priority.
Section 2.5 Payment Rescission. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Agent (for application to the Person or Persons who suffered such
rescission, return or refund) the full amount thereof, plus the Default Fee from
the date of any such rescission, return or refunding.
Section 2.6 Maximum Purchaser Interests. Seller shall ensure that the
Purchaser Interests of the Purchasers shall at no time exceed in the aggregate
100%. If the aggregate of the Purchaser Interests of the Purchasers exceeds
100%, Seller shall pay to the Agent within one (1) Business Day an amount to be
applied to reduce the Aggregate Capital (as allocated by the Agent), such that
after giving effect to such payment the aggregate of the Purchaser Interests
equals or is less than 100%.
Section 2.7 Clean Up Call. In addition to Seller's rights pursuant to
Section 1.3, Seller shall have the right (after providing written notice to the
Agent in accordance with the Required Notice Period), at any time following the
reduction of the Aggregate Capital to a level that is less than 10.0% of the
original Purchase Limit, to repurchase from the Purchasers all, but not less
than all, of the then outstanding Purchaser Interests. The purchase price in
respect thereof shall be an amount equal to the Aggregate Unpaids through the
date of such repurchase, payable in immediately available funds. Such repurchase
shall be without representation, warranty or recourse of any kind by, on the
part of, or against any Purchaser or the Agent.
Section 2.8 Investment of Collections in Second-Tier Account. All
amounts from time to time held in, deposited in or credited to, the Second-Tier
Account shall be invested by the Servicer (as agent for the Agent) in Permitted
Investments selected in writing by the Servicer. All such investments shall at
all times be held by or on behalf of the Agent for the benefit of the Purchasers
and the Hedge Provider (if any), provided, that neither the Agent, any Purchaser
nor the Hedge Provider shall be held liable in any way by reason of any loss
arising from the investment of amounts on deposit in the Second-Tier Account in
Permitted Investments. All income or other gain from investment of monies
deposited in or credited to the Second-Tier Account shall be deposited in or
credited to the Second-Tier Account immediately upon receipt, and any loss
resulting from such investment shall be charged thereto. Any net income from
such investments shall be transferred to the Agent's Account on a monthly basis
on the Business Day preceding each Settlement Date to be applied in accordance
with Section 2.2. Except as permitted in writing by the Agent,
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funds on deposit in the Second-Tier Account shall be invested in Permitted
Investments that will mature no later than the Business Day immediately
preceding the next Settlement Date. No Permitted Investment shall be sold or
otherwise disposed of prior to its scheduled maturity date unless a default
occurs with respect to such Permitted Investment and the Agent directs the
Servicer in writing to dispose of such Permitted Investment.
Section 2.9 PDCo Advances. If, on any Settlement Date occurring when
the Hedging Agreement is required to be in effect pursuant to Section 7.3 but
such Hedging Agreement is not in full force and effect, Finance Charge
Collections are insufficient to pay the amounts set forth in clauses second and
third of Section 2.2(c), PDCo shall advance, by payment to the Agent for the
account of the Purchasers, an amount equal to the lesser of (a) such shortfall
and (b) the product of (i) 5% minus Excess Spread (to the extent that Excess
Spread is less than 5% but greater than zero) and (ii) the aggregate Outstanding
Balance of all Receivables. The obligations of PDCo under the preceding sentence
shall be absolute and irrevocable, and shall not be affected by any termination
of PDCo as Servicer pursuant to Section 8.1 or by any other event.
ARTICLE III
CONDUIT FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with respect to the
Capital associated with each Purchaser Interest of Conduit for each day that any
Capital in respect of such Purchaser Interest is outstanding.
Section 3.2 CP Costs Payments. On each Settlement Date, Seller shall
pay to the Agent (for the benefit of Conduit) an aggregate amount equal to all
accrued and unpaid CP Costs in respect of the Capital associated with all
Purchaser Interests of Conduit for the related Settlement Period in accordance
with Article II.
Section 3.3 Calculation of CP Costs. On the third Business Day
immediately preceding each Settlement Date, Conduit shall calculate the
aggregate amount of CP Costs for the related Settlement Period and shall notify
Seller of such aggregate amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each Purchaser Interest of
the Financial Institutions shall accrue Financial Institution Yield for each day
during its Tranche Period at either the LIBO Rate or the Prime Rate in
accordance with the terms and conditions hereof. Until Seller gives notice to
the Agent of another Discount Rate in
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accordance with Section 4.4, the initial Discount Rate for any Purchaser
Interest transferred to the Financial Institutions pursuant to the terms and
conditions hereof shall be the Prime Rate. If the Financial Institutions acquire
by assignment from Conduit any Purchaser Interest pursuant to Article XIII, each
Purchaser Interest so assigned shall each be deemed to have a new Tranche Period
commencing on the date of any such assignment.
Section 4.2 Financial Institution Yield Payments. On the Settlement
Date for each Purchaser Interest of the Financial Institutions, Seller shall pay
to the Agent (for the benefit of the Financial Institutions) an aggregate amount
equal to the accrued and unpaid Financial Institution Yield for the entire
Tranche Period of each such Purchaser Interest in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche Periods.
(a) With consultation from (and approval by) the Agent, Seller
shall from time to time request Tranche Periods for the Purchaser Interests of
the Financial Institutions, provided that, if at any time the Financial
Institutions shall have a Purchaser Interest, Seller shall always request
Tranche Periods such that at least one Tranche Period shall end on the date
specified in clause (A) of the definition of Settlement Date.
(b) Seller or the Agent, upon notice to and consent by the
other received at least three (3) Business Days prior to the end of a Tranche
Period (the "Terminating Tranche") for any Purchaser Interest, may, effective on
the last day of the Terminating Tranche: (i) divide any such Purchaser Interest
into multiple Purchaser Interests, (ii) combine any such Purchaser Interest with
one or more other Purchaser Interests that have a Terminating Tranche ending on
the same day as such Terminating Tranche or (iii) combine any such Purchaser
Interest with a new Purchaser Interests to be purchased on the day such
Terminating Tranche ends, provided, that in no event may a Purchaser Interest of
Conduit be combined with a Purchaser Interest of the Financial Institutions.
Section 4.4 Financial Institution Discount Rates. Seller may select
the LIBO Rate or the Prime Rate for each Purchaser Interest of the Financial
Institutions. Seller shall by 11:00 a.m. (Chicago time): (i) at least three (3)
Business Days prior to the expiration of any Terminating Tranche with respect to
which the LIBO Rate is being requested as a new Discount Rate and (ii) at least
one (1) Business Day prior to the expiration of any Terminating Tranche with
respect to which the Prime Rate is being requested as a new Discount Rate, give
the Agent irrevocable notice of the new Discount Rate for the Purchaser Interest
associated with such Terminating Tranche. Until Seller gives notice to the Agent
of another Discount Rate, the initial Discount Rate for any Purchaser Interest
transferred to the Financial Institutions pursuant to the terms and conditions
hereof shall be the Prime Rate.
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Section 4.5 Suspension of the LIBO Rate. If any Financial Institution
notifies the Agent that it has determined that funding its Pro Rata Share of the
Purchaser Interests of the Financial Institutions at a LIBO Rate would violate
any applicable law, rule, regulation, or directive of any governmental or
regulatory authority, whether or not having the force of law, or that (i)
deposits of a type and maturity appropriate to match fund its Purchaser
Interests at such LIBO Rate are not available or (ii) such LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Purchaser Interest at
such LIBO Rate, then the Agent shall suspend the availability of such LIBO Rate
and require Seller to select the Prime Rate for any Purchaser Interest accruing
Financial Institution Yield at such LIBO Rate.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Seller Parties. Each
Seller Party hereby represents and warrants to the Agent and the Purchasers, as
to itself, as of the date hereof and as of the date of each Incremental Purchase
that:
(a) Existence and Power. Such Seller Party is a corporation or
limited liability company, as applicable, duly organized, validly existing and
in good standing under the laws of its state of organization. Such Seller Party
is duly qualified to do business and is in good standing as a foreign entity,
and has and holds all power, corporate or otherwise, and all governmental
licenses, authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is conducted, except where
the failure to be so qualified or to have and hold such governmental licenses,
authorization, consents and approvals could not reasonably be expected to have a
Material Adverse Effect.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by such Seller Party of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder and, in the case of Seller, Seller's
use of the proceeds of purchases made hereunder, are within its powers and
authority, corporate or otherwise, and have been duly authorized by all
necessary action, corporate or otherwise, on its part. This Agreement and each
other Transaction Document to which such Seller Party is a party has been duly
executed and delivered by such Seller Party.
(c) No Conflict. The execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party, and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its certificate or articles of incorporation or
organization, by-laws or limited liability company agreement (or equivalent
governing documents), (ii) any law, rule or regulation applicable to it, (iii)
any restrictions under any agreement, contract or instrument to which it is a
party
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or by which it or any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on assets of such Seller Party or its Subsidiaries (except as created
hereunder); and no transaction contemplated hereby requires compliance with any
bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Seller
Party of this Agreement and each other Transaction Document to which it is a
party and the performance of its obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Seller Party's knowledge, threatened, against or
affecting such Seller Party, or any of its properties, in or before any court,
arbitrator or other body, that could reasonably be expected to have a Material
Adverse Effect. Such Seller Party is not in default with respect to any order of
any court, arbitrator or governmental body.
(f) Binding Effect. This Agreement and each other Transaction
Document to which such Seller Party is a party constitute the legal, valid and
binding obligations of such Seller Party enforceable against such Seller Party
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished
by such Seller Party or any of its Affiliates to the Agent or the Purchasers for
purposes of or in connection with this Agreement, any of the other Transaction
Documents or any transaction contemplated hereby or thereby is, and all such
information hereafter furnished by such Seller Party or any of its Affiliates to
the Agent or the Purchasers will be, true and accurate in every material respect
on the date such information is stated or certified and does not and will not
contain any material misstatement of fact or omit to state a material fact or
any fact necessary to make the statements contained therein not materially
misleading.
(h) Use of Proceeds. No proceeds of any purchase hereunder will
be used (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time
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or (ii) to acquire any security in any transaction which is subject to Section
12, 13 or 14 of the Securities Exchange Act of 1934, as amended.
(i) Good Title. Immediately prior to each purchase hereunder,
Seller shall be the legal and beneficial owner of the Receivables and Related
Security with respect thereto, free and clear of any Adverse Claim, except as o
created by the Transaction Documents. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect Seller's
ownership interest in each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to, and shall, upon each
purchase hereunder, transfer to the Agent for the benefit of the relevant
Purchaser or Purchasers (and the Agent for the benefit of such Purchaser or
Purchasers shall acquire from Seller) a valid and perfected first priority
undivided percentage ownership or security interest in each Receivable existing
or hereafter arising and in the Related Security and Collections with respect
thereto, free and clear of any Adverse Claim, except as created by the
Transaction Documents. There have been duly filed all financing statements or
other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect the Agent's (on
behalf of the Purchasers) ownership or security interest in the Receivables, the
Related Security and the Collections.
(k) Jurisdiction of Organization; Places of Business and
Locations of Records. The principal places of business, jurisdiction of
organization and chief executive office of such Seller Party and the offices
where it keeps all of its Records are located at the address(es) listed on
Exhibit III or such other locations of which the Agent has been notified in
accordance with Section 7.2(a) in jurisdictions where all action requ ired by
Section 7.1(h) and/or Section 14.4(a) has been taken and completed. Such Seller
party's organizational number assigned to it by its jurisdiction of organization
and such Seller Party's Federal Employer Identification Number are correctly set
forth on Exhibit III. Such Seller Party has not, within a period of one year
prior to the date hereof, (i) changed the location of its principal place of
business or chief executive office or its organizational structure, (ii) changed
its legal name, (iii) become a "new debtor" (as defined in Section 9-102(a)(56)
of the UCC in effect in the State of Minnesota) or (iv) changed its jurisdiction
of organization. Seller is a Minnesota limited liability company and is a
"registered organization" (within the meaning of Section 9-102 of the UCC in
effect in the State of Minnesota).
(l) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The
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names and addresses of all Collection Banks, together with the account numbers
of the Collection Accounts at each Collection Bank and the post office box
number of each Lock-Box or P.O. Box, are listed on Exhibit IV. Seller has not
granted any Person, other than the Agent as contemplated by this Agreement,
dominion and control or "control" (within the meaning of Section 9-104 of the
UCC of all applicable jurisdictions) of any Lock-Box, P.O. Box or Collection
Account, or the right to take dominion and control or "control" (within the
meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any such
Lock-Box, P.O. Box or Collection Account at a future time or upon the occurrence
of a future event. Each Seller Party has taken all steps necessary to ensure
that the Agent has "control" (within the meaning of Section 9-104 of the UCC of
all applicable jurisdictions) over all Collection Accounts. Such Seller Party
has the ability to identify, within one Business Day of deposit, all amounts
that are deposited to any First Tier Account as constituting Collections or
non-Collections. No funds other than the proceeds of Receivables are deposited
to the Second-Tier Account.
(m) Material Adverse Effect. (i) The initial Servicer represents
and warrants that since January 26, 2002, no event has occurred that would have
a material adverse effect on the financial condition or operations of the
initial Servicer and its Subsidiaries or the ability of the initial Servicer to
perform its obligations under this Agreement, and (ii) Seller represents and
warrants that since the date of this Agreement, no event has occurred that would
have a material adverse effect on (A) the financial condition or operations of
Seller, (B) the ability of Seller to perform its obligations under the
Transaction Documents, or (C) the collectibility of the Receivables generally or
any material portion of the Receivables.
(n) Names. In the past five (5) years, Seller has not used any
corporate or other names, trade names or assumed names other than the name in
which it has executed this Agreement.
(o) Ownership of Seller. PDCo owns, directly or indirectly, 100%
of the issued and outstanding membership units of Seller, free and clear of any
Adverse Claim. Such membership units are validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire
securities of Seller.
(p) Not a Holding Company or an Investment Company. Such Seller
Party is not a "holding company" or a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or any successor statute. Such Seller Party is not and, after giving
effect to the transactions contemplated hereby, will not be required to be
registered as, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or any successor statute.
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(q) Compliance with Law. Such Seller Party has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Averse
Effect. Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation.
(r) Compliance with Credit and Collection Policy. Such Seller
Party has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the related Contract, and has not made
any material change to such Credit and Collection Policy, except such material
change as to which the Agent has been notified in accordance with Section
7.1(a)(vii).
(s) Payments to Originators. With respect to each Receivable
transferred to Seller under the Receivables Sale Agreement, Seller has given
reasonably equivalent value to the applicable Originator in consideration
therefor and such transfer was not made for or on account of an antecedent debt.
No transfer by any Originator of any Receivable under the Receivables Sale
Agreement is or may be voidable under any section of the Federal Bankruptcy
Code.
(t) Enforceability of Contracts. Each Contract with respect to
each Receivable is effective to create, and has created, a legal, valid and
binding obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(u) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable was an Eligible Receivable on the
date of its purchase under the Receivables Sale Agreement.
(v) Net Receivables Balance. Seller has determined that,
immediately after giving effect to each purchase hereunder, the Net Receivables
Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the
Credit Enhancement.
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(w) Accounting. The manner in which such Seller Party accounts
for the transactions contemplated by this Agreement and the Receivables Sale
Agreement does not jeopardize the true sale analysis.
Section 5.2 Financial Institution Representations and Warranties. Each
Financial Institution hereby represents and warrants to the Agent and Conduit
that:
(a) Existence and Power. Such Financial Institution is a
corporation or a banking association duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization, and has all corporate power to perform its obligations hereunder.
(b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any Adverse
Claim on its assets. This Agreement has been duly authorized, executed and
delivered by such Financial Institution.
(c) Governmental Authorization. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder.
(d) Binding Effect. This Agreement constitutes the legal, valid
and binding obligation of such Financial Institution enforceable against such
Financial Institution in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors' rights generally and by general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Incremental Purchase. The
initial Incremental Purchase of a Purchaser Interest under this Agreement is
subject to the conditions precedent that (a) the Agent shall have received on or
before the date of such
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purchase those documents listed on Schedule B, (b) the Agent shall have received
all fees and expenses required to be paid on or prior to such date pursuant to
the terms of this Agreement and the Fee Letter, (c) Seller shall have marked its
books and records with a legend satisfactory to the Agent identifying the
Agent's interest therein, (d) the Agent shall have completed to its satisfaction
a due diligence review of each Originator's and Seller's billing, collection and
reporting systems and other items related to the Receivables and (e) each of the
Purchasers shall have received the approval of its credit committee of the
transactions contemplated hereby.
Section 6.2 Conditions Precedent to All Purchases. Each purchase
of a Purchaser Interest (other than pursuant to Section 13.1) shall be subject
to the further conditions precedent that (a) in the case of each such purchase:
(i) the Servicer shall have delivered to the Agent on or prior to the date of
such purchase, in form and substance satisfactory to the Agent, all Monthly
Reports as and when due under Section 8.5 and (ii) upon the Agent's request, the
Servicer shall have delivered to the Agent at least three (3) days prior to such
purchase an interim Monthly Report showing the amount of Eligible Receivables;
(b) the Facility Termination Date shall not have occurred; (c) the Agent shall
have received a duly executed Purchase Notice and such other approvals, opinions
or documents as it may reasonably request, (d) if required to be in effect
pursuant to Section 7.3, the Hedging Agreement shall be in full force and effect
and (e) on the date of each such Incremental Purchase, the following statements
shall be true (and acceptance of the proceeds of such Incremental Purchase shall
be deemed a representation and warranty by Seller that such statements are then
true):
(i) the representations and warranties set forth in
Section 5.1 are true and correct on and as of the date of such Incremental
Purchase as though made on and as of such date;
(ii) no event has occurred and is continuing, or would
result from such Incremental Purchase, that will constitute an Amortization
Event, and no event has occurred and is continuing, or would result from such
Incremental Purchase, that would constitute a Potential Amortization Event; and
(iii) the Aggregate Capital does not exceed the Purchase
Limit and the aggregate Purchaser Interests do not exceed 100%.
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ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of The Seller Parties. Until
the date on which the Aggregate Unpaids have been indefeasibly paid in full and
this Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:
(a) Financial Reporting. Such Seller Party will maintain,
for itself and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Agent:
(i) Annual Reporting. Within 90 days after
the close of each of its respective fiscal years, (x) audited,
unqualified consolidated financial statements (which shall include
balance sheets, statements of income and retained earnings and a
statement of cash flows) for PDCo and its consolidated Subsidiaries for
such fiscal year certified in a manner acceptable to the Agent by
independent public accountants acceptable to the Agent and (y)
unaudited balance sheets of Seller as at the close of such fiscal year
and statements of income and retained earnings and a statement of cash
flows for Seller for such fiscal year, all certified by its chief
financial officer. Delivery within the time period specified above of
PDCo's annual report on Form 10-K for such fiscal year (together with
PDCo's annual report to shareholders, if any, prepared pursuant to Rule
14a-3 under the Securities Exchange Act of 1934, as amended) prepared
in accordance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of clause (x) of this Section 7.1(a)(i), provided that the
report of the independent public accountants contained therein is
acceptable to the Agent.
(ii) Quarterly Reporting. Within 45 days
after the close of the first three (3) quarterly periods of each of its
respective fiscal years, unaudited balance sheets of PDCo as at the
close of each such period and statements of income and retained
earnings and a statement of cash flows for PDCo for the period from the
beginning of such fiscal year to the end of such quarter, all certified
by its chief financial officer. Delivery within the time period
specified above of copies of PDCo's quarterly report Form 10-Q for such
fiscal quarter prepared in accordance with the requirements therefor
and filed with the Securities and Exchange Commission shall be deemed
to satisfy the foregoing requirements of this Section 7.1(a)(ii).
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(iii) Compliance Certificate. Together with
the financial statements required hereunder, a compliance certificate
in substantially the form of Exhibit V signed by such Seller Party's
Authorized Officer and dated the date of such annual financial
statement or such quarterly financial statement, as the case may be.
(iv) Shareholders Statements and Reports.
Promptly upon the furnishing thereof to the shareholders of such Seller
Party copies of all financial statements, reports and proxy statements
so furnished.
(v) S.E.C. Filings. Promptly upon the
filing thereof, copies of all registration statements and annual,
quarterly, monthly or other regular reports which PDCo, any Originator
or any of their respective Subsidiaries files with the Securities and
Exchange Commission.
(vi) Copies of Notices. Promptly upon its
receipt of any notice, request for consent, financial statements,
certification, report or other communication under or in connection
with any Transaction Document from any Person other than the Agent or
Conduit, copies of the same.
(vii) Change in Credit and Collection
Policy. At least thirty (30) days prior to the effectiveness of any
material change in or material amendment to the Credit and Collection
Policy, a copy of the Credit and Collection Policy then in effect and a
notice (A) indicating such change or amendment, and (B) if such
proposed change or amendment would be reasonably likely to adversely
affect the collectibility of the Receivables or decrease the credit
quality of any newly created Receivables, requesting the Agent's
consent thereto.
(viii) Sale Assignments. Promptly upon its
receipt of any Sale Assignment under and as defined in the Receivables
Sale Agreement, copies of the same.
(ix) Other Information. Promptly, from
time to time, such other information, documents, records or reports
relating to the Receivables or the condition or operations, financial
or otherwise, of such Seller Party as the Agent may from time to time
reasonably request in
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order to protect the interests of the Agent and the Purchasers under or
as contemplated by this Agreement.
(b) Notices. Such Seller Party will notify the Agent in
writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
(i) Amortization Events or Potential
Amortization Events. The occurrence of each Amortization Event and each
Potential Amortization Event, by a statement of an Authorized Officer
of such Seller Party.
(ii) Judgment and Proceedings. (A) (1) The
entry of any judgment or decree against the Servicer or any of its
respective Subsidiaries if the aggregate amount of all judgments and
decrees then outstanding against the Servicer and its Subsidiaries
exceeds $1,000,000 and (2) the institution of any litigation,
arbitration proceeding or governmental proceeding against the Servicer
that could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; and (B) the entry of any judgment or
decree or the institution of any litigation, arbitration proceeding or
governmental proceeding against Seller.
(iii) Material Adverse Effect. The
occurrence of any event or condition that has had, or could reasonably
be expected to have, a Material Adverse Effect.
(iv) Termination Date. The occurrence of
the "Termination Date" under and as defined in the Receivables Sale
Agreement.
(v) Defaults Under Other Agreements. The
occurrence of a default or an event of default under any other
financing arrangement pursuant to which such Seller Party is a debtor
or an obligor.
(vi) Downgrade of PDCo or any Originator.
Any downgrade in the rating of any Indebtedness of PDCo or any
Originator by Standard & Poor's Ratings Services or by ▇▇▇▇▇'▇
Investors Service, Inc., setting forth the Indebtedness affected and
the nature of such change.
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(c) Compliance with Laws and Preservation of Existence.
Such Seller Party will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Such Seller Party will preserve and
maintain its legal existence, rights, franchises and privileges in the
jurisdiction of its organization, and qualify and remain qualified in good
standing as a foreign entity in each jurisdiction where its business is
conducted, except where the failure to so preserve and maintain any such rights,
franchises or privileges or to so qualify could not reasonably be expected to
have a Material Adverse Effect.
(d) Audits. Such Seller Party will furnish to the Agent
from time to time such information with respect to it and the Receivables as the
Agent may reasonably request. Such Seller Party will, from time to time during
regular business hours as requested by the Agent upon reasonable notice and at
the sole cost of such Seller Party, permit the Agent, or its agents or
representatives, (i) to examine and make copies of and abstracts from all
Records in the possession or under the control of such Person relating to the
Receivables and the Related Security, including, without limitation, the related
Contracts, and (ii) to visit the offices and properties of such Person for the
purpose of examining such materials described in clause (i) above, and to
discuss matters relating to such Person's financial condition or the Receivables
and the Related Security or any Person's performance under any of the
Transaction Documents or any Person's performance under the Contracts and, in
each case, with any of the officers or employees of Seller or the Servicer
having knowledge of such matters. Without limiting the foregoing, such Seller
Party will, annually and prior to any Financial Institution renewing its
Commitment hereunder, during regular business hours as requested by the Agent
upon reasonable notice and at the sole cost of such Seller Party, permit the
Agent, or its agents or representatives, to conduct a follow-up audit.
(e) Keeping and Marking of Records and Books.
(i) The Servicer will maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables in
the event of the destruction of the originals thereof), and keep and
maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Receivables
(including, without limitation, records adequate to permit the
immediate identification of each new Receivable and all Collections of
and adjustments to each existing Receivable). The Servicer will give
the Agent notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
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(ii) Such Seller Party will (A) on or prior
to the date hereof, ▇▇▇▇ its master data processing records and other
books and records relating to the Purchaser Interests with a legend,
acceptable to the Agent, describing the Purchaser Interests and (B)
upon the request of the Agent (x) ▇▇▇▇ each Contract with a legend
describing the Purchaser Interests and (y) deliver to the Agent all
Contracts (including, without limitation, all multiple originals of any
such Contract) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection
Policy. Such Seller Party will timely and fully (i) perform and comply with all
provisions, covenants and other promises required to be observed by it under the
Contracts related to the Receivables, and (ii) comply in all respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contract.
(g) Performance and Enforcement of Receivables Sale
Agreement. Seller will, and will require each Originator to, perform each of
their respective obligations and undertakings under and pursuant to the
Receivables Sale Agreement, will purchase Receivables thereunder in strict
compliance with the terms thereof and will vigorously enforce the rights and
remedies accorded to Seller under the Receivables Sale Agreement. Seller will
take all actions to perfect and enforce its rights and interests (and the rights
and interests of the Agent and the Purchasers as assignees of Seller) under the
Receivables Sale Agreement as the Agent may from time to time reasonably
request, including, without limitation, making claims to which it may be
entitled under any indemnity, reimbursement or similar provision contained in
the Receivables Sale Agreement.
(h) Ownership. Seller will take all necessary action to (i)
vest legal and equitable title to the Receivables, the Related Security and the
Collections purchased under the Receivables Sale Agreement irrevocably in
Seller, free and clear of any Adverse Claims other than Adverse Claims in favor
of the Agent and the Purchasers (including, without limitation, the filing of
all financing statements or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate jurisdictions to
perfect Seller's interest in such Receivables, Related Security and Collections
and such other action to perfect, protect or more fully evidence the interest of
Seller therein as the Agent may reasonably request), and (ii) establish and
maintain, in favor of the Agent, for the benefit of the Purchasers, a valid and
perfected first priority undivided percentage ownership interest (and/or a valid
and perfected first priority security interest) in all Receivables, Related
Security and Collections to the full extent contemplated herein, free and clear
of any Adverse Claims other than Adverse Claims in favor of the
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Agent for the benefit of the Purchasers (including, without limitation, the
filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect the Agent's (for the benefit of the Purchasers) interest in such
Receivables, Related Security and Collections and such other action to perfect,
protect or more fully evidence the interest of the Agent for the benefit of the
Purchasers as the Agent may reasonably request).
(i) Purchasers' Reliance. Seller acknowledges that the
Purchasers are entering into the transactions contemplated by this Agreement in
reliance upon Seller's identity as a legal entity that is separate from each
▇▇▇▇▇▇▇▇▇ Entity and their respective Affiliates. Therefore, from and after the
date of execution and delivery of this Agreement, Seller will take all
reasonable steps, including, without limitation, all steps that the Agent or any
Purchaser may from time to time reasonably request, to maintain Seller's
identity as a separate legal entity and to make it manifest to third parties
that Seller is an entity with assets and liabilities distinct from those of each
▇▇▇▇▇▇▇▇▇ Entity and any Affiliates thereof and not just a division of any
▇▇▇▇▇▇▇▇▇ Entity. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, Seller will:
(A) conduct its own business in its own
name and require that all full-time employees of Seller, if any, identify
themselves as such and not as employees of any ▇▇▇▇▇▇▇▇▇ Entity (including,
without limitation, by means of providing appropriate employees with business or
identification cards identifying such employees as Seller's employees);
(B) compensate all employees, consultants
and agents directly, from Seller's own funds, for services provided to Seller by
such employees, consultants and agents and, to the extent any employee,
consultant or agent of Seller is also an employee, consultant or agent of any
▇▇▇▇▇▇▇▇▇ Entity or any Affiliate thereof, allocate the compensation of such
employee, consultant or agent between Seller and such ▇▇▇▇▇▇▇▇▇ Entity or such
Affiliate, as applicable on a basis that reflects the services rendered to
Seller and such ▇▇▇▇▇▇▇▇▇ Entity or such Affiliate, as applicable;
(C) clearly identify its offices (by
signage or otherwise) as its offices and, if such office is located in the
offices of any ▇▇▇▇▇▇▇▇▇ Entity or an Affiliate thereof, Seller will lease such
office at a fair market rent;
(D) have a separate telephone number,
which will be answered only in its name and separate stationery, invoices and
checks in its own name;
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(E) conduct all transactions with each
▇▇▇▇▇▇▇▇▇ Entity and the Servicer and their respective Affiliates strictly on an
arm's-length basis, allocate all overhead expenses (including, without
limitation, telephone and other utility charges) for items shared between Seller
and any ▇▇▇▇▇▇▇▇▇ Entity or any Affiliate thereof on the basis of actual use to
the extent practicable and, to the extent such allocation is not practicable, on
a basis reasonably related to actual use;
(F) at all times have a Board of Governors
consisting of three members, at least one member of which is an Independent
Governor;
(G) observe all limited liability company
formalities as a distinct entity, and ensure that all limited liability company
actions relating to (1) the selection, maintenance or replacement of the
Independent Governor, (2) the dissolution or liquidation of Seller or (3) the
initiation of, participation in, acquiescence in or consent to any bankruptcy,
insolvency, reorganization or similar proceeding involving Seller, are duly
authorized by unanimous vote of its Board of Governors (including the
Independent Governor);
(H) maintain Seller's books and records
separate from those of each ▇▇▇▇▇▇▇▇▇ Entity and any Affiliate thereof and
otherwise readily identifiable as its own assets rather than assets of any
▇▇▇▇▇▇▇▇▇ Entity and any Affiliate thereof;
(I) prepare its financial statements
separately from those of each ▇▇▇▇▇▇▇▇▇ Entity and insure that any consolidated
financial statements of any ▇▇▇▇▇▇▇▇▇ Entity or any Affiliate thereof that
include Seller, including any that are filed with the Securities and Exchange
Commission or any other governmental agency have notes clearly stating that
Seller is a separate legal entity and that its assets will be available first
and foremost to satisfy the claims of the creditors of Seller;
(J) except as herein specifically otherwise
provided, maintain the funds or other assets of Seller separate from, and not
commingled with, those of any ▇▇▇▇▇▇▇▇▇ Entity or any Affiliate thereof and only
maintain bank accounts or other depository accounts to which Seller alone (or
the Servicer in the performance of its duties hereunder) is the account party
and from which Seller alone (or the Servicer in the performance of its duties
hereunder or the Agent hereunder) has the power to make withdrawals;
(K) pay all of Seller's operating expenses
from Seller's own assets (except for certain payments by any ▇▇▇▇▇▇▇▇▇ Entity or
other Persons
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▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
pursuant to allocation arrangements that comply with the requirements of this
Section 7.1(i));
(L) operate its business and activities such
that: it does not engage in any business or activity of any kind, or enter into
any transaction or indenture, mortgage, instrument, agreement, contract, lease
or other undertaking, other than the transactions contemplated and authorized by
this Agreement and the Receivables Sale Agreement; and does not create, incur,
guarantee, assume or suffer to exist any Indebtedness or other liabilities,
whether direct or contingent, other than (1) as a result of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (2) the incurrence of obligations under this
Agreement, (3) the incurrence of obligations, as expressly contemplated in the
Receivables Sale Agreement, to make payment to the Originators thereunder for
the purchase of Receivables from the Originators under the Receivables Sale
Agreement, and (4) the incurrence of operating expenses in the ordinary course
of business of the type otherwise contemplated by this Agreement;
(M) maintain its articles of organization and
bylaws in conformity with this Agreement, such that it does not amend, restate,
supplement or otherwise modify its articles of organization or bylaws in any
respect that would impair its ability to comply with the terms or provisions of
any of the Transaction Documents, including, without limitation, Section 7.1(i)
of this Agreement;
(N) maintain the effectiveness of, and
continue to perform under the Receivables Sale Agreement, the Performance
Undertaking and the other Transaction Documents, such that it does not amend,
restate, supplement, cancel, terminate or otherwise modify the Receivables Sale
Agreement, the Performance Undertaking or any other Transaction Document, or
give any consent, waiver, directive or approval thereunder or waive any default,
action, omission or breach under the Receivables Sale Agreement, the Performance
Undertaking, or any other Transaction Document, or otherwise grant any
indulgence thereunder, without (in each case) the prior written consent of the
Agent;
(O) maintain its legal separateness such that
it does not merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions,
and except as otherwise contemplated herein) all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets of, any Person, nor at any time create, have,
acquire, maintain or hold any interest in any Subsidiary;
(P) maintain at all times the Required
Capital Amount (as defined in the Receivables Sale Agreement) and refrain from
making any
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dividend, distribution, redemption of membership units or payment of any
subordinated Indebtedness or other liabilities which would cause the Required
Capital Amount to cease to be so maintained; and
(Q) take such other actions as are
necessary on its part to ensure that the facts and assumptions set forth in the
opinion issued by ▇▇▇▇▇▇ and ▇▇▇▇▇▇, Professional Association, as counsel for
Seller, in connection with the closing or initial Incremental Purchase under
this Agreement and relating to substantive consolidation issues, and in the
certificates accompanying such opinion, remain true and correct in all material
respects at all times.
(j) Collections. Such Seller Party will cause (1)
all items from all P.O. Boxes to be processed and deposited into a Collection
Account within 1 Business Day after receipt in a P.O. Box, all ACH Receipts to
be deposited immediately to a Collection Account and all proceeds from all
Lock-Boxes to be directly deposited by a Collection Bank into a Collection
Account, (2) all Collections deposited to any First-Tier Account to be
electronically swept or otherwise transferred to the Second-Tier Account within
1 Business Day of being deposited to such First-Tier Account, and (3) each
Lock-Box, P.O. Box and Collection Account to be subject at all times to a
Collection Account Agreement that is in full force and effect. In the event any
payments relating to Receivables are remitted directly to any Seller Party or
any Affiliate of any Seller Party, such Seller Party will remit (or will cause
all such payments to be remitted) directly to a Collection Bank and deposited
into a Collection Account within 1 Business Day following receipt thereof, and,
at all times prior to such remittance, such Seller Party or Affiliate will
itself hold or, if applicable, will cause such payments to be held in trust for
the exclusive benefit of the Agent and the Purchasers. Seller will maintain
exclusive ownership, dominion and control (subject to the terms of this
Agreement) of each Lock-Box, P.O. Box and Collection Account and shall not grant
the right to take dominion and control or establish "control" (within the
meaning of Section 9-104 of the UCC of all applicable jurisdictions) of any
Lock-Box, P.O. Box or Collection Account at a future time or upon the occurrence
of a future event to any Person, except to the Agent as contemplated by this
Agreement. With respect to each Collection Account, each Seller Party shall take
all steps necessary to ensure that the Agent has "control" (within the meaning
of Section 9-104 of the UCC of all applicable jurisdictions) over each such
Collection Account.
(k) Taxes. Such Seller Party will file all tax
returns and reports required by law to be filed by it and will promptly pay all
taxes and governmental charges at any time owing. Seller will pay when due any
taxes payable in connection with the Receivables, exclusive of taxes on or
measured by income or gross receipts of Conduit, the Agent or any Financial
Institution.
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(l) Insurance. Seller will maintain in effect, or cause to
be maintained in effect, at Seller's own expense, such casualty and liability
insurance as Seller shall deem appropriate in its good faith business judgment.
The Agent, for the benefit of the Purchasers, shall be named as an additional
insured with respect to all such liability insurance maintained by Seller.
Seller will pay or cause to be paid, the premiums therefor and deliver to the
Agent evidence satisfactory to the Agent of such insurance coverage. Copies of
each policy shall be furnished to the Agent and any Purchaser in certificated
form upon the Agent's or such Purchaser's request. The foregoing requirements
shall not be construed to negate, reduce or modify, and are in addition to,
Seller's obligations hereunder.
(m) Payments to Originators. With respect to any Receivable
purchased by Seller from any Originator, such sale shall be effected under, and
in strict compliance with the terms of, the Receivables Sale Agreement,
including, without limitation, the terms relating to the amount and timing of
payments to be made to such Originator in respect of the purchase price for such
Receivable.
Section 7.2 Negative Covenants of The Seller Parties. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
(a) Name Change, Offices and Records. Such Seller Party will
not change its name, jurisdiction of organization, identity or organizational
structure (within the meaning of Sections 9-503 and/or 9-507 of the UCC of all
applicable jurisdictions) or relocate its chief executive office, principal
place of business or any office where Records are kept unless it shall have: (i)
given the Agent at least forty-five (45) days' prior written notice thereof and
(ii) delivered to the Agent all financing statements, instruments and other
documents requested by the Agent in connection with such change or relocation.
(b) Change in Payment Instructions to Obligors. Except as
may be required by the Agent pursuant to Section 8.2(b), such Seller Party will
not add or terminate any bank as a Collection Bank, or make any change in the
instructions to Obligors regarding payments to be made to any Lock-Box, P.O. Box
or Collection Account, unless the Agent shall have received, at least ten (10)
days before the proposed effective date therefor, (i) written notice of such
addition, termination or change and (ii) with respect to the addition of a
Collection Bank or a Collection Account, P.O. Box or Lock-Box, an executed
Collection Account Agreement with respect to the new Collection Account or
Lock-Box or P.O. Box; provided, however, that the Servicer may make changes in
instructions to Obligors regarding payments if such new instructions require
such Obligor to make payments to another existing Collection Account.
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(c) Modifications to Contracts and Credit and Collection
Policy. Such Seller Party will not make any change to the Credit and Collection
Policy that could adversely affect the collectibility of the Receivables or
decrease the credit quality of any newly created Receivables. Except as provided
in Section 8.2(d), the Servicer will not extend, amend or otherwise modify the
terms of any Receivable or any Contract related thereto other than in accordance
with the Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with respect
to, or create or suffer to exist any Adverse Claim upon (including, without
limitation, the filing of any financing statement) or with respect to, any
Receivable, Related Security or Collections, or upon or with respect to any
Contract under which any Receivable arises, or any Lock-Box, P.O. Box or
Collection Account, or assign any right to receive income with respect thereto
(other than, in each case, the creation of the interests therein in favor of the
Agent and the Purchasers provided for herein), and Seller will defend the right,
title and interest of the Agent and the Purchasers in, to and under any of the
foregoing property, against all claims of third parties claiming through or
under Seller or any Originator. Seller will not create or suffer to exist any
mortgage, pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory, the financing or lease of which gives rise
to any Receivable.
(e) Net Receivables Balance. At no time prior to the
Amortization Date shall Seller permit the Net Receivables Balance to be less
than an amount equal to the sum of (i) the Aggregate Capital plus (ii) the
Credit Enhancement.
(f) Termination Date Determination. Seller will not
designate the Termination Date (as defined in the Receivables Sale Agreement),
or send any written notice to any Originator in respect thereof, without the
prior written consent of the Agent, except with respect to the occurrence of
such Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale
Agreement.
(g) Restricted Junior Payments. From and after the
occurrence of any Amortization Event, Seller will not make any Restricted Junior
Payment if, after giving effect thereto, Seller would fail to meet its
obligations set forth in Section 7.2(e).
(h) Collections. No Seller Party will deposit or otherwise
credit, or cause or permit to be so deposited or credited, to the Second-Tier
Account cash or cash proceeds other than Collections. Except as may be required
by the Agent pursuant to the last sentence of Section 8.2(b), no Seller Party
will deposit or otherwise credit, or cause or permit to be so deposited or
credited, any Collections or proceeds thereof to any lock-box account or to any
other account not covered by a Collection Account Agreement.
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Section 7.3 Hedging Agreement. If at any time, Excess Spread
shall be less than 5% and PDCo shall have an unsecured, unguaranteed, long-term
debt rating of less than A- as rated and determined by Bank One in accordance
with its internal credit standards, the Conduit shall enter into an interest
rate hedge agreement with the Hedge Provider pursuant to which Conduit shall
have the fixed rate obligation and the Hedge Provider shall have the floating
rate obligation (such hedge agreement, together with the related confirmations
and schedules thereunder, the "Hedging Agreement"). The obligations under the
Hedging Agreement shall be based upon a schedule of notional amounts that shall
initially equal the Aggregate Capital of all Purchaser Interests outstanding at
the time such Hedging Agreement is entered into and shall decline over time. On
the date of each Incremental Purchase occurring thereafter, such notional
amounts shall be amended to reflect a future anticipated amount of Aggregate
Capital, based upon scheduled payments and an anticipated level of defaults on
the Receivables and, on the Settlement Date occurring after each such
Incremental Purchase, the Hedge Fixed Rate shall be re-set to an interest rate
agreed to by the Conduit and the Hedge Provider, and if Bank One is then acting
as Hedge Provider, the Agent shall notify Seller of such interest rate. After
the Hedging Agreement has been entered into in accordance with the terms of this
Section 7.3, on each Settlement Date, the Hedge Provider shall be obligated to
pay the Hedge Floating Amount to the Agent, for the account of the Purchasers
and distribution pursuant to Article II and the Hedge Provider shall be entitled
to receive out of Finance Charge Collections, the Hedge Fixed Amount. If a Hedge
Provider Downgrade shall occur, within 10 days thereof, the then current Hedge
Provider shall transfer its obligations under this Agreement and the Hedging
Agreement, at the Hedge Provider's cost and expense, to a bank or other
financial institution acceptable to the Agent and consented to by Seller (such
consent not to be unreasonably withheld) which possesses an unsecured,
unguaranteed, long-term debt rating of A- or better by Standard & Poor's Ratings
Service and A3 or better by ▇▇▇▇▇'▇ Investors Service.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer. (a) The servicing,
administration and collection of the Receivables shall be conducted by such
Person (the "Servicer") so designated from time to time in accordance with this
Section 8.1. PDCo is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Servicer pursuant to the terms of this Agreement.
The Agent may at any time following the occurrence of an Amortization Event
designate as Servicer any Person to succeed PDCo or any successor Servicer.
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(b) Without the prior written consent of the Agent and the
Required Financial Institutions, PDCo shall not be permitted to delegate any of
its duties or responsibilities as Servicer to any Person other than (i) an
Originator (with respect to Receivables originated by such Originator), (ii)
Seller and (iii) with respect to certain Charged-Off Receivables, outside
collection agencies and lawyers in accordance with its customary practices. None
of Seller or any Originator shall be permitted to further delegate to any other
Person any of the duties or responsibilities of the Servicer delegated to it by
PDCo. If at any time the Agent shall designate as Servicer any Person other than
PDCo, all duties and responsibilities theretofore delegated by PDCo to Seller
and any Originator may, at the discretion of the Agent, be terminated forthwith
on notice given by the Agent to PDCo and to Seller.
(c) Notwithstanding the foregoing subsection (b), (i) PDCo
shall be and remain primarily liable to the Agent and the Purchasers and the
Hedge Provider (if any) for the full and prompt performance of all duties and
responsibilities of the Servicer hereunder and (ii) the Agent and the Purchasers
shall be entitled to deal exclusively with PDCo in matters relating to the
discharge by the Servicer of its duties and responsibilities hereunder. The
Agent and the Purchasers shall not be required to give notice, demand or other
communication to any Person other than PDCo in order for communication to the
Servicer and its sub-servicer or other delegate with respect thereto to be
accomplished. PDCo, at all times that it is the Servicer, shall be responsible
for providing any sub-servicer or other delegate of the Servicer with any notice
given to the Servicer under this Agreement.
Section 8.2 Duties of Servicer. (a) The Servicer shall take or cause
to be taken all such actions as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.
(b) The Servicer will instruct all Obligors to pay all
Collections either (i) directly to a Collection Account by means of an automatic
electronic funds transfer, wire transfer or otherwise or (ii) directly to a
Lock-Box or P.O. Box. The Servicer shall cause any payments made by means of
automatic electronic funds transfer to be deposited directly into a Collection
Account from each Obligor's relevant account. The Servicer shall effect a
Collection Account Agreement substantially in the form of Exhibit VI with each
bank party to a Collection Account at any time. In the case of any remittances
received in any Lock-Box, P.O. Box or Collection Account that shall have been
identified, to the satisfaction of the Servicer, to not constitute Collections
or other proceeds of the Receivables or the Related Security, the Servicer shall
promptly remit such items to the Person identified to it as being the owner of
such remittances. From and after the date the Agent delivers a Collection Notice
to any Collection Bank or a Postal Notice to any post office pursuant to Section
8.3, the Agent may request that the Servicer, and the Servicer
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thereupon promptly shall instruct all Obligors with respect to the Receivables,
to remit all payments thereon to a new lock-box, post office box or depositary
account specified by the Agent and, at all times thereafter, Seller and the
Servicer shall not deposit or otherwise credit, and shall not permit any other
Person to deposit or otherwise credit to such new lock-box, post office box or
depositary account any cash or payment item other than Collections.
(c) The Servicer shall administer the Collections in
accordance with the procedures described herein and in Article II. The Servicer
shall set aside and hold in trust for the account of Seller, the Purchasers and
the Hedge Provider (if any) their respective shares of the Collections in
accordance with Article II. The Servicer shall, upon the request of the Agent,
segregate, in a manner acceptable to the Agent, all cash, checks and other
instruments received by it from time to time constituting Collections from the
general funds of the Servicer or Seller prior to the remittance thereof in
accordance with Article II. If the Servicer shall be required to segregate
Collections pursuant to the preceding sentence, the Servicer shall segregate and
deposit with a bank designated by the Agent such allocable share of Collections
of Receivables set aside for the Purchasers on the first Business Day following
receipt by the Servicer of such Collections, duly endorsed or with duly executed
instruments of transfer.
(d) The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; provided, however, that such
extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable, Defaulted Receivable or Charged-Off Receivable or limit
the rights of the Agent or the Purchasers under this Agreement. Notwithstanding
anything to the contrary contained herein, the Agent shall have the absolute and
unlimited right to direct the Servicer to commence or settle any legal action
with respect to any Receivable or to foreclose upon or repossess any Related
Security.
(e) The Servicer shall hold in trust for Seller and the
Purchasers all Records that (i) evidence or relate to the Receivables, the
related Contracts and Related Security or (ii) are otherwise necessary or
desirable to collect the Receivables and shall, as soon as practicable upon
demand of the Agent, deliver or make available to the Agent all such Records, at
a place selected by the Agent. The Servicer shall, as soon as practicable
following receipt thereof turn over to Seller any cash collections or other cash
proceeds received with respect to Indebtedness not constituting Receivables. The
Servicer shall, from time to time at the request of any Purchaser, furnish to
the Purchasers (promptly after any such request) a calculation of the amounts
set aside for the Purchasers pursuant to Article II.
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(f) Any payment by an Obligor in respect of any Indebtedness
or other liability owed by it to the applicable Originator or Seller shall,
except as otherwise specified by such Obligor or otherwise required by contract
or law and unless otherwise instructed by the Agent, be applied as a Collection
of any Receivable of such Obligor (starting with the oldest such Receivable) to
the extent of any amounts then due and payable thereunder before being applied
to any other receivable or other obligation of such Obligor.
Section 8.3 Collection Notices. The Agent is authorized at any time
after the occurrence of an Amortization Event to date and to deliver to the
Collection Banks the Collection Notices and to date and deliver the Postal
Notices to the applicable post offices. Seller hereby transfers to the Agent for
the benefit of the Purchasers, effective when the Agent delivers such notices,
the dominion and control and "control" (within the meaning of Section 9-104 of
the UCC of all applicable jurisdictions) of each Lock-Box, P. O. Box, each
Collection Account and the amounts on deposit therein. In case any authorized
signatory of Seller whose signature appears on a Collection Account Agreement
shall cease to have such authority before the delivery of such notice, such
Collection Notice or Postal Notice shall nevertheless be valid as if such
authority had remained in force. Seller hereby authorizes the Agent, and agrees
that the Agent shall be entitled to (i) endorse Seller's name on checks and
other instruments representing Collections, (ii) enforce the Receivables, the
related Contracts and the Related Security and (iii) take such action as shall
be necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of the Agent
rather than Seller.
Section 8.4 Responsibilities of Seller. Anything herein to the
contrary notwithstanding, the exercise by the Agent and the Purchasers of their
rights hereunder shall not release the Servicer, any Originator or Seller from
any of their duties or obligations with respect to any Receivables or under the
related Contracts. The Purchasers shall have no obligation or liability with
respect to any Receivables or related Contracts, nor shall any of them be
obligated to perform the obligations of Seller.
Section 8.5 Reports. The Servicer shall prepare and forward to the
Agent (i) three Business Days prior to each Settlement Date and at such times as
the Agent shall request, a Monthly Report and (ii) at such times as the Agent
shall request, a listing by Obligor of all Receivables together with an aging of
such Receivables. Unless otherwise requested by the Agent, all computations in
such Monthly Report shall be made as of the close of business on the last day of
the Accrual Period preceding the date on which such Monthly Report is delivered.
Section 8.6 Servicing Fees. In consideration of PDCo's agreement to
act as Servicer hereunder, the Purchasers hereby agree that, so long as PDCo
shall continue to perform as Servicer hereunder, Seller shall pay over to PDCo a
fee (the "Servicing Fee")
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on the 19/th/ calendar day of each month (or, if such day is not a Business Day,
then the next Business Day thereafter), in arrears for the immediately preceding
Fiscal Month, equal to 1% per annum of the average Net Receivables Balance
during such period, as compensation for its servicing activities.
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more of
the following events shall constitute an "Amortization Event":
(a) Any Seller Party shall fail (i) to make any payment or
deposit required hereunder when due, or (ii) to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clause (i) of this
paragraph (a) and Section 9.1(e)) or any other Transaction Document and such
failure shall continue for seven (7) consecutive Business Days.
(b) Any representation, warranty, certification or statement
made by any Seller Party in this Agreement, any other Transaction Document or in
any other document delivered pursuant hereto or thereto shall prove to have been
incorrect in any material respect when made or deemed made.
(c) Failure of Seller to pay any Indebtedness when due or the
failure of any other Seller Party to pay Indebtedness when due in excess of
$1,000,000; or the default by any Seller Party in the performance of any term,
provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any such Indebtedness of any Seller
Party shall be declared to be due and payable or required to be prepaid (other
than by a regularly scheduled payment) prior to the date of maturity thereof.
(d) (i) Any Seller Party, the Hedge Provider (if any), the
Performance Provider or any of their respective Subsidiaries shall generally not
pay its debts as such debts become due or shall admit in writing its inability
to pay its debts generally or shall make a general assignment for the benefit of
creditors; or (ii) any proceeding shall be instituted by or against any Seller
Party, the Hedge Provider (if any), the Performance Provider or any of their
respective Subsidiaries seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or
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the appointment of a receiver, trustee or other similar official for it or any
substantial part of its property, and solely in the case of the Servicer and the
Performance Provider and a proceeding instituted against (and not by) such
Person, such proceeding is not dismissed within 60 days or (iii) any Seller
Party, the Hedge Provider (if any), the Performance Provider or any of their
respective Subsidiaries shall take any corporate or other action to authorize
any of the actions set forth in clauses (i) or (ii) above in this subsection
(d).
(e) Seller shall fail to comply with the terms of Section 2.6
hereof.
(f) As at the end of any Fiscal Month:
(i) the average of the Delinquency Ratio for such
Fiscal Month and each of the two immediately preceding Fiscal Months shall
exceed 8.25%, or
(ii) the average of the Default Ratio for such Fiscal
Month and each of the two immediately preceding Fiscal Months shall exceed
3.30%, or
(iii) Excess Spread is less than 4.0%.
(g) A Change of Control shall occur.
(h) A Hedge Provider Downgrade shall occur and a replacement
Hedge Provider meeting the requirements of Section 7.3 fails to assume the then
current Hedge Provider's obligations under this Agreement and the Hedging
Agreement as provided in Section 7.3 after such occurrence.
(i) One or more final judgments for the payment of money shall
be entered against Seller or (ii) one or more final judgments for the payment of
money in an amount in excess of $1,000,000, individually or in the aggregate,
shall be entered against the Servicer on claims not covered by insurance or as
to which the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for fifteen (15) consecutive days
without a stay of execution.
(j) The "Termination Date" under and as defined in the
Receivables Sale Agreement shall occur under the Receivables Sale Agreement or
any Originator shall for any reason cease to transfer, or cease to have the
legal capacity to transfer, or otherwise be incapable of transferring
Receivables to Seller under the
33
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Receivables Sale Agreement; or Seller shall for any reason cease to purchase, or
cease to have the legal capacity to purchase, or otherwise be incapable of
accepting Receivables from any Originator under the Receivables Sale Agreement.
(k) This Agreement shall terminate in whole or in part (except
in accordance with its terms), or shall cease to be effective or to be the
legally valid, binding and enforceable obligation of Seller, or any Obligor
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or the Agent for the benefit of the Purchasers
shall cease to have a valid and perfected first priority security interest in
the Receivables, the Related Security and the Collections with respect thereto
and the Collection Accounts.
(l) If required to be in effect pursuant to Section 7.3, the
Hedging Agreement shall for any reason not be in full force and effect.
(m) The Intercreditor Agreement shall terminate in whole or in
part or shall cease to be in full force and effect or US Bank shall directly or
indirectly contest in any manner the effectiveness or enforceability thereof.
(n) The Consolidated Tangible Net Worth of PDCo shall at any
time be less than the sum of (i) $300,000,000, plus (ii) 50% of the cumulative
positive quarterly Consolidated Net Income for all fiscal quarters of PDCo
following the fiscal quarter of PDCo ending April 27, 2002 (without taking into
account any net loss in any such fiscal quarter), plus (iii) 100% of the amount,
if any, by which stockholder's equity of PDCo is, in accordance with GAAP,
increased for all fiscal quarters of PDCo following the fiscal quarter of PDCo
ending April 27, 2002 as a result of (A) the issuance of any capital stock of
PDCo or (B) any Acquisition.
(o) The ratio of Consolidated Total Debt to Consolidated
Adjusted EBITDA shall at any time be greater than 2.0 to 1.0.
(p) Performance Provider shall fail to perform or observe any
term, covenant or agreement required to be performed by it under the Performance
Undertaking, or the Performance Undertaking shall cease to be effective or to be
the legally valid, binding and enforceable obligation of Performance Provider,
or Performance Provider shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability.
Section 9.2 Remedies. Upon the occurrence and during the continuation
of an Amortization Event, the Agent may, or upon the direction of the Required
Financial Institutions shall, take any of the following actions: (i) replace the
Person then acting as
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Servicer, (ii) declare the Amortization Date to have occurred, whereupon the
Amortization Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Seller
Party; provided, however, that upon the occurrence of an Amortization Event
described in Section 9.1(d), or of an actual or deemed entry of an order for
relief with respect to any Seller Party under the Federal Bankruptcy Code or
under any other applicable bankruptcy, insolvency, arrangement, moratorium or
similar laws of any other jurisdiction (foreign or domestic), the Amortization
Date shall automatically occur, without demand, protest or any notice of any
kind, all of which are hereby expressly waived by each Seller Party, (iii) to
the fullest extent permitted by applicable law, declare that the Default Fee
shall accrue with respect to any of the Aggregate Unpaids outstanding at such
time, (iv) deliver the Collection Notices to the Collection Banks and the Postal
Notices to any post office where a P.O. Box is located, and (v) notify Obligors
of the Purchasers' interest in the Receivables. The aforementioned rights and
remedies shall be without limitation, and shall be in addition to all other
rights and remedies of the Agent and the Purchasers otherwise available under
any other provision of this Agreement, by operation of law, at equity or
otherwise, all of which are hereby expressly preserved, including, without
limitation, all rights and remedies provided under the UCC, all of which rights
shall be cumulative.
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnities by The Seller Parties. Without limiting any
other rights that the Agent or any Purchaser may have hereunder or under
applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to)
the Agent, each Purchaser and the Hedge Provider (if any) and their respective
assigns, officers, directors, agents and employees (each an "Indemnified Party")
from and against any and all damages, losses, claims, taxes, liabilities, costs,
expenses and for all other amounts payable, including reasonable attorneys' fees
(which attorneys may be employees of the Agent or such Purchaser) and
disbursements (all of the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by any of them arising out of
or as a result of this Agreement or the Hedging Agreement or the acquisition,
either directly or indirectly, by a Purchaser of an interest in the Receivables,
and (B) the Servicer hereby agrees to indemnify (and pay upon demand to) each
Indemnified Party for Indemnified Amounts awarded against or incurred by any of
them arising out of the Servicer's activities as Servicer hereunder excluding,
however, in all of the foregoing instances under the preceding clauses (A) and
(B):
(x) Indemnified Amounts to the extent a final judgment
of a court of competent jurisdiction holds that such Indemnified Amounts
resulted
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from gross negligence or willful misconduct on the part of the Indemnified
Party seeking indemnification;
(y) Indemnified Amounts to the extent the same includes losses
in respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor;
or
(z) taxes imposed by the jurisdiction in which such
Indemnified Party's principal executive office is located, on or measured
by the overall net income of such Indemnified Party to the extent that the
computation of such taxes is consistent with the characterization for
income tax purposes of the acquisition by the Purchasers of Purchaser
Interests as a loan or loans by the Purchasers to Seller secured by the
Receivables, the Related Security, the Collection Accounts and the
Collections;
provided, however, that nothing contained in this sentence shall limit the
liability of any Seller Party or limit the recourse of the Purchasers to any
Seller Party for amounts otherwise specifically provided to be paid by such
Seller Party under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, Seller shall indemnify each Indemnified Party
for Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would
constitute recourse to Seller or the Servicer) relating to or resulting from:
(i) any representation or warranty made by any Seller
Party, any Originator or Performance Provider (or any officers of any such
Person) under or in connection with this Agreement, any other Transaction
Document or any other information or report delivered by any such Person
pursuant hereto or thereto, which shall have been false or incorrect when
made or deemed made;
(ii) the failure by Seller, the Servicer or any Originator
to comply with any applicable law, rule or regulation with respect to any
Receivable or Contract related thereto, or the nonconformity of any
Receivable or Contract included therein with any such applicable law, rule
or regulation or any failure of any Originator to keep or perform any of
its obligations, express or implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer, any Originator or
Performance Provider to perform its duties, covenants or other obligations
in accordance with the provisions of this Agreement or any other
Transaction Document;
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(iv) any products liability, personal injury or damage
suit, or other similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of any Contract or
any Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of
any Receivable (including, without limitation, a defense based on such
Receivable or the related Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its
terms), or any other claim resulting from the sale of the merchandise or
service related to such Receivable or the furnishing or failure to furnish
such merchandise or services;
(vi) the commingling of Collections of Receivables at any
time with other funds;
(vii) any investigation, litigation or proceeding related
to or arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, the use of the proceeds of an Incremental
Purchase or a Reinvestment, the ownership of the Purchaser Interests or any
other investigation, litigation or proceeding relating to Seller, the
Servicer or any Originator in which any Indemnified Party becomes involved
as a result of any of the transactions contemplated hereby;
(Viii) any inability to litigate any claim against any
Obligor in respect of any Receivable as a result of such Obligor being
immune from civil and commercial law and suit on the grounds of sovereignty
or otherwise from any legal action, suit or proceeding;
(ix) any Amortization Event described in Section 9.1(d);
(x) any failure of Seller to acquire and maintain legal
and equitable title to, and ownership of, any Receivable and the Related
Security and Collections with respect thereto from any Originator, free and
clear of any Adverse Claim (other than as created hereunder); or any
failure of Seller to give reasonably equivalent value to any Originator
under the Receivables Sale Agreement in consideration of
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the transfer by such Originator of any Receivable, or any attempt by any
Person to void such transfer under statutory provisions or common law or
equitable action;
(xi) any failure to vest and maintain vested in the Agent
for the benefit of the Purchasers, or to transfer to the Agent for the
benefit of the Purchasers, legal and equitable title to, and ownership of,
a first priority perfected undivided percentage ownership interest (to the
extent of the Purchaser Interests contemplated hereunder) or security
interest in the Receivables, the Related Security and the Collections, free
and clear of any Adverse Claim (except as created by the Transaction
Documents);
(xii) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws with respect to
any Receivable, the Related Security and Collections with respect thereto,
and the proceeds of any thereof, whether at the time of any Incremental
Purchase or Reinvestment or at any subsequent time;
(xiii) any action or omission by any Seller Party which
reduces or impairs the rights of the Agent or the Purchasers with respect
to any Receivable or the value of any such Receivable;
(xiv) any attempt by any Person to void any Incremental
Purchase under statutory provisions or common law or equitable action; and
(xv) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible Receivable to be
an Eligible Receivable at the time so included.
Section 10.2 Increased Cost and Reduced Return.
If after the date hereof, any Funding Source shall be charged any fee,
expense or increased cost on account of the adoption of any applicable law, rule
or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
with any request or directive (whether or not
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having the force of law) of any such authority, central bank or comparable
agency: (i) that subjects any Funding Source to any charge or withholding on or
with respect to any Funding Agreement or a Funding Source's obligations under a
Funding Agreement, or on or with respect to the Receivables, or changes the
basis of taxation of payments to any Funding Source of any amounts payable under
any Funding Agreement (except for changes in the rate of tax on the overall net
income of a Funding Source or taxes excluded by Section 10.1) or (ii) that
imposes, modifies or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for
the account of a Funding Source, or credit extended by a Funding Source pursuant
to a Funding Agreement or (iii) that imposes any other condition the result of
which is to increase the cost to a Funding Source of performing its obligations
under a Funding Agreement, or to reduce the rate of return on a Funding Source's
capital as a consequence of its obligations under a Funding Agreement, or to
reduce the amount of any sum received or receivable by a Funding Source under a
Funding Agreement or to require any payment calculated by reference to the
amount of interests or loans held or interest received by it, then, upon demand
by the Agent, Seller shall pay to the Agent, for the benefit of the relevant
Funding Source, such amounts charged to such Funding Source or such amounts to
otherwise compensate such Funding Source for such increased cost or such
reduction.
Section 10.3 Other Costs and Expenses. Seller shall reimburse the
Agent and Conduit on demand for all costs and out-of-pocket expenses in
connection with the preparation, negotiation, arrangement, execution, delivery,
enforcement and administration of this Agreement, the transactions contemplated
hereby and the other documents to be delivered hereunder, including without
limitation, the cost of Conduit's auditors auditing the books, records and
procedures of Seller, reasonable fees and out-of-pocket expenses of legal
counsel for Conduit and the Agent (which such counsel may be employees of
Conduit or the Agent) with respect thereto and with respect to advising Conduit
and the Agent as to their respective rights and remedies under this Agreement.
Seller shall reimburse the Agent on demand for any and all costs and expenses of
the Agent and the Purchasers, if any, including reasonable counsel fees and
expenses in connection with the enforcement of this Agreement and the other
documents delivered hereunder and in connection with any restructuring or
workout of this Agreement or such documents, or the administration of this
Agreement following an Amortization Event. Seller shall reimburse Conduit on
demand for all other costs and expenses incurred by Conduit ("Other Costs"),
including, without limitation, the cost of auditing Conduit's books by certified
public accountants, the cost of rating the Commercial Paper by independent
financial rating agencies, and the reasonable fees and out-of-pocket expenses of
counsel for Conduit or any counsel for any shareholder of Conduit with respect
to advising Conduit or such shareholder as to matters relating to Conduit's
operations.
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Section 10.4 Allocations. Conduit shall allocate the liability for
Other Costs among Seller and other Persons with whom Conduit has entered into
agreements to purchase interests in receivables ("Other Sellers"). If any Other
Costs are attributable to Seller and not attributable to any Other Seller,
Seller shall be solely liable for such Other Costs. However, if Other Costs are
attributable to Other Sellers and not attributable to Seller, such Other Sellers
shall be solely liable for such Other Costs. All allocations to be made pursuant
to the foregoing provisions of this Article X shall be made by Conduit in its
sole and absolute discretion and shall be binding on Seller and the Servicer.
ARTICLE XI
THE AGENT
Section 11.1 Authorization and Action. Each Purchaser hereby
designates and appoints Bank One to act as its agent hereunder and under each
other Transaction Document, and authorizes the Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the Agent by
the terms of this Agreement and the other Transaction Documents together with
such powers as are reasonably incidental thereto. The Agent shall not have any
duties or responsibilities, except those expressly set forth herein or in any
other Transaction Document, or any fiduciary relationship with any Purchaser,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.
Each Purchaser hereby authorizes the Agent to authorize each of the Uniform
Commercial Code financing or continuations statements (and amendments thereto
and assignments or terminations thereof) on behalf of such Purchaser (the terms
of which shall be binding on such Purchaser).
Section 11.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
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Section 11.3 Exculpatory Provisions. Neither the Agent nor any of
its directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Document (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of any Seller Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith. The Agent shall
not be under any obligation to any Purchaser to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect the properties, books or records of the Seller Parties. The Agent shall
not be deemed to have knowledge of any Amortization Event or Potential
Amortization Event unless the Agent has received notice from Seller or a
Purchaser.
Section 11.4 Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to any Seller Party),
independent accountants and other experts selected by the Agent. The Agent shall
in all cases be fully justified in failing or refusing to take any action under
this Agreement or any other Transaction Document unless it shall first receive
such advice or concurrence of Conduit or the Required Financial Institutions or
all of the Purchasers, as applicable, as it deems appropriate and it shall first
be indemnified to its satisfaction by the Purchasers, provided that unless and
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Conduit or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
Section 11.5 Non-Reliance on Agent and Other Purchasers. Each
Purchaser expressly acknowledges that neither the Agent, nor any of its
officers, directors,
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employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Agent hereafter taken, including,
without limitation, any review of the affairs of any Seller Party, shall be
deemed to constitute any representation or warranty by the Agent. Each Purchaser
represents and warrants to the Agent that it has and will, independently and
without reliance upon the Agent or any other Purchaser and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of each Seller Party and
made its own decision to enter into this Agreement, the other Transaction
Documents and all other documents related hereto or thereto.
Section 11.6 Reimbursement and Indemnification. The Financial
Institutions agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller Parties (i) for
any amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Seller Parties hereunder and (ii) for any other expenses
incurred by the Agent, in its capacity as Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.
Section 11.7 Agent in its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Seller Party or any Affiliate of any Seller Party as
though the Agent were not the Agent hereunder. With respect to the acquisition
of Purchaser Interests pursuant to this Agreement, the Agent shall have the same
rights and powers under this Agreement in its individual capacity as any
Purchaser and may exercise the same as though it were not the Agent, and the
terms "Financial Institution," "Purchaser," "Financial Institutions" and
"Purchasers" shall include the Agent in its individual capacity.
Section 11.8 Successor Agent. The Agent may, upon 10 Business
Days' notice to Seller and the Purchasers, and the Agent will, upon the
direction of all of the Purchasers (other than the Agent, in its individual
capacity) resign as Agent. If the Agent shall resign, then the Required
Financial Institutions during such five-day period shall appoint from among the
Purchasers a successor agent. If for any reason no successor Agent is appointed
by the Required Financial Institutions during such five-day period, then
effective upon the termination of such five-day period, the Purchasers shall
perform all of the duties of the Agent hereunder and under the other Transaction
Documents and Seller and the Servicer (as applicable) shall make all payments in
respect of the Aggregate Unpaids directly to the applicable Purchasers and for
all purposes shall deal directly with the Purchasers. After the effectiveness of
any retiring Agent's resignation hereunder as Agent, the retiring Agent shall be
discharged from its duties and obligations hereunder and
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under the other Transaction Documents and the provisions of this Article XI and
Article X shall continue in effect for its benefit with respect to any actions
taken or omitted to be taken by it while it was Agent under this Agreement and
under the other Transaction Documents.
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments. (a) Seller, the Servicer, the Agent and
each Financial Institution hereby agree and consent to the complete or partial
assignment by Conduit of all or any portion of its rights under, interest in,
title to and obligations under this Agreement to the Financial Institutions
pursuant to Section 13.1 or to any other Person, and upon such assignment,
Conduit shall be released from its obligations so assigned. Further, Seller, the
Servicer, the Agent and each Financial Institution hereby agree that any
assignee of Conduit of this Agreement or of all or any of the Purchaser
Interests of Conduit shall have all of the rights and benefits under this
Agreement as if the term "Conduit" explicitly referred to such party (provided
that the Purchaser Interests of any such assignee shall accrue Financial
Institution Yield pursuant to Article IV as if such assignee were a Financial
Institution hereunder), and no such assignment shall in any way impair the
rights and benefits of Conduit hereunder. Neither Seller nor the Servicer shall
have the right to assign its rights or obligations under this Agreement.
(b) Any Financial Institution may at any time and from
time to time assign to one or more Persons ("Purchasing Financial Institutions")
all or any part of its rights and obligations under this Agreement pursuant to
an assignment agreement, substantially in the form set forth in Exhibit VII
hereto (the "Assignment Agreement") executed by such Purchasing Financial
Institution and such selling Financial Institution. The consent of Conduit shall
be required prior to the effectiveness of any such assignment. Each assignee of
a Financial Institution must (i) have a short-term debt rating of A-1 or better
by Standard & Poor's Ratings Services and P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.
and (ii) agree to deliver to the Agent, promptly following any request therefor
by the Agent or Conduit, an enforceability opinion in form and substance
satisfactory to the Agent and Conduit. Upon delivery of the executed Assignment
Agreement to the Agent, such selling Financial Institution shall be released
from its obligations hereunder to the extent of such assignment. Thereafter the
Purchasing Financial Institution shall for all purposes be a Financial
Institution party to this Agreement and shall have all the rights and
obligations of a Financial Institution under this Agreement to the same extent
as if it were an original party hereto and no further consent or action by
Seller, the Purchasers or the Agent shall be required.
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(c) Each of the Financial Institutions agrees that in
the event that it shall cease to have a short-term debt rating of A-1 or better
by Standard & Poor's Ratings Services and P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.
(an "Affected Financial Institution"), such Affected Financial Institution shall
be obliged, at the request of Conduit or the Agent, to assign all of its rights
and obligations hereunder to (x) another Financial Institution or (y) another
funding entity nominated by the Agent and acceptable to Conduit, and willing to
participate in this Agreement through the Liquidity Termination Date in the
place of such Affected Financial Institution; provided that the Affected
Financial Institution receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such Financial Institution's Pro Rata Share of
the Aggregate Capital and Financial Institution Yield owing to the Financial
Institutions and all accrued but unpaid fees and other costs and expenses
payable in respect of its Pro Rata Share of the Purchaser Interests of the
Financial Institutions.
Section 12.2 Participations. Any Financial Institution may, in
the ordinary course of its business at any time sell to one or more Persons
(each a "Participant") participating interests in its Pro Rata Share of the
Purchaser Interests of the Financial Institutions, its obligation to pay Conduit
its Acquisition Amounts or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution's rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Conduit and the Agent shall continue to deal
solely and directly with such Financial Institution in connection with such
Financial Institution's rights and obligations under this Agreement. Each
Financial Institution agrees that any agreement between such Financial
Institution and any such Participant in respect of such participating interest
shall not restrict such Financial Institution's right to agree to any amendment,
supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in Section 14.1(b)(i).
ARTICLE XIII
LIQUIDITY FACILITY
Section 13.1 Transfer to Financial Institutions. Each Financial
Institution hereby agrees, subject to Section 13.4, that immediately upon
written notice from Conduit delivered on or prior to the Liquidity Termination
Date, it shall acquire by assignment from Conduit, without recourse or warranty,
its Pro Rata Share of one or more of the Purchaser Interests of Conduit as
specified by Conduit. Each such assignment by Conduit shall be made pro rata
among all of the Financial Institutions, except for pro rata assignments to one
or more Terminating Financial Institutions pursuant to Section 13.6.
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Each such Financial Institution shall, no later than 1:00 p.m. (Chicago time) on
the date of such assignment, pay in immediately available funds (unless another
form of payment is otherwise agreed between Conduit and any Financial
Institution) to the Agent at an account designated by the Agent, for the benefit
of Conduit, its Acquisition Amount. Unless a Financial Institution has notified
the Agent that it does not intend to pay its Acquisition Amount, the Agent may
assume that such payment has been made and may, but shall not be obligated to,
make the amount of such payment available to Conduit in reliance upon such
assumption. Conduit hereby sells and assigns to the Agent for the ratable
benefit of the Financial Institutions, and the Agent hereby purchases and
assumes from Conduit, effective upon the receipt by Conduit of the Conduit
Transfer Price, the Purchaser Interests of Conduit which are the subject of any
transfer pursuant to this Article XIII.
Section 13.2 Transfer Price Reduction Financial Institution
Yield. If the Adjusted Funded Amount is included in the calculation of the
Conduit Transfer Price for any Purchaser Interest, each Financial Institution
agrees that the Agent shall pay to Conduit the Reduction Percentage of any
Financial Institution Yield received by the Agent with respect to such Purchaser
Interest.
Section 13.3 Payments to Conduit. In consideration for the
reduction of the Conduit Transfer Prices by the Conduit Transfer Price
Reductions, effective only at such time as the aggregate amount of the Capital
of the Purchaser Interests of the Financial Institutions equals the Conduit
Residual, each Financial Institution hereby agrees that the Agent shall not
distribute to the Financial Institutions and shall immediately remit to Conduit
any Financial Institution Yield, Collections or other payments received by it to
be applied pursuant to the terms hereof or otherwise to reduce the Capital of
the Purchaser Interests of the Financial Institutions.
Section 13.4 Limitation on Commitment to Purchase from Conduit.
Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have any obligation to purchase any Purchaser Interest from
Conduit, pursuant to Section 13.1 or otherwise, if:
(i) Conduit shall have voluntarily commenced
any proceeding or filed any petition under any bankruptcy, insolvency
or similar law seeking the dissolution, liquidation or reorganization
of Conduit or taken any corporate action for the purpose of
effectuating any of the foregoing; or
(ii) involuntary proceedings or an involuntary
petition shall have been commenced or filed against Conduit by any
Person under any bankruptcy, insolvency or similar law seeking the
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dissolution, liquidation or reorganization of Conduit and such proceeding
or petition shall have not been dismissed.
Section 13.5 Defaulting Financial Institutions. If one or more
Financial Institutions defaults in its obligation to pay its Acquisition Amount
pursuant to Section 13.1 (each such Financial Institution shall be called a
"Defaulting Financial Institution" and the aggregate amount of such defaulted
obligations being herein called the "Conduit Transfer Price Deficit"), then upon
notice from the Agent, each Financial Institution other than the Defaulting
Financial Institutions (a "Non-Defaulting Financial Institution") shall promptly
pay to the Agent, in immediately available funds, an amount equal to the lesser
of (x) such Non-Defaulting Financial Institution's proportionate share (based
upon the relative Commitments of the Non-Defaulting Financial Institutions,
after excluding the Commitment of any Approved Unconditional Liquidity
Providers) of the Conduit Transfer Price Deficit and (y) the unused portion of
such Non-Defaulting Financial Institution's Commitment; provided, however, that
if an Approved Unconditional Liquidity Provider is the Defaulting Financial
Institution, the Non-Defaulting Financial Institutions shall have no obligation
to pay any amount to the Agent pursuant to this Section 13.5 as a result of a
default by such Approved Unconditional Liquidity Provider; provided, further,
that in no event shall any Approved Unconditional Liquidity Provider be required
to make any payment as a Non-Defaulting Financial Institution pursuant to this
Section 13.5. A Defaulting Financial Institution shall forthwith upon demand pay
to the Agent for the account of the Non-Defaulting Financial Institutions all
amounts paid by each Non-Defaulting Financial Institution on behalf of such
Defaulting Financial Institution, together with interest thereon, for each day
from the date a payment was made by a Non-Defaulting Financial Institution until
the date such Non-Defaulting Financial Institution has been paid such amounts in
full, at a rate per annum equal to the Federal Funds Effective Rate plus two
percent (2%). In addition, without prejudice to any other rights that Conduit
may have under applicable law, each Defaulting Financial Institution shall pay
to Conduit forthwith upon demand, the difference between such Defaulting
Financial Institution's unpaid Acquisition Amount and the amount paid with
respect thereto by the Non-Defaulting Financial Institutions, together with
interest thereon, for each day from the date of the Agent's request for such
Defaulting Financial Institution's Acquisition Amount pursuant to Section 13.1
until the date the requisite amount is paid to Conduit in full, at a rate per
annum equal to the Federal Funds Effective Rate plus two percent (2%).
Section 13.6 Terminating Financial Institutions.
(a) Each Financial Institution hereby agrees to deliver
written notice to the Agent not more than 30 Business Days and not less than 5
Business Days prior to the Liquidity Termination Date indicating whether such
Financial Institution, in its sole and absolute discretion, intends to renew its
Commitment hereunder. If any Financial
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Institution fails to deliver such notice on or prior to the date that is 5
Business Days prior to the Liquidity Termination Date, such Financial
Institution will be deemed to have declined to renew its Commitment (each
Financial Institution which has declined or has been deemed to have declined to
renew its Commitment hereunder, a "Non-Renewing Financial Institution"). The
Agent shall promptly notify Conduit of each Non-Renewing Financial Institution
and Conduit, in its sole and absolute discretion, may (A) to the extent of
Commitment Availability, declare that such Non-Renewing Financial Institution's
Commitment shall, to such extent, automatically terminate on a date specified by
Conduit on or before the Liquidity Termination Date or (B) upon one (1) Business
Days' notice to such Non-Renewing Financial Institution assign to such
Non-Renewing Financial Institution on a date specified by Conduit its Pro Rata
Share of the aggregate Purchaser Interests then held by Conduit, subject to, and
in accordance with, Section 13.1. In addition, Conduit may, in its sole and
absolute discretion, at any time (x) to the extent of Commitment Availability,
declare that any Affected Financial Institution's Commitment shall automatically
terminate on a date specified by Conduit or (y) assign to any Affected Financial
Institution on a date specified by Conduit its Pro Rata Share of the aggregate
Purchaser Interests then held by Conduit, subject to, and in accordance with,
Section 13.1 (each Affected Financial Institution or each Non-Renewing Financial
Institution is hereinafter referred to as a "Terminating Financial
Institution"). The parties hereto expressly acknowledge that any declaration of
the termination of any Commitment, any assignment pursuant to this Section 13.6
and the order of priority of any such termination or assignment among
Terminating Financial Institutions shall be made by Conduit in its sole and
absolute discretion.
(b) Upon any assignment to a Terminating Financial
Institution as provided in this Section 13.6, any remaining Commitment of such
Terminating Financial Institution shall automatically terminate. Upon reduction
to zero of the Capital of all of the Purchaser Interests of a Terminating
Financial Institution (after application of Collections thereto pursuant to
Sections 2.2 and 2.3) all rights and obligations of such Terminating Financial
Institution hereunder shall be terminated and such Terminating Financial
Institution shall no longer be a "Financial Institution" hereunder; provided,
however, that the provisions of Article X shall continue in effect for its
benefit with respect to Purchaser Interests held by such Terminating Financial
Institution prior to its termination as a Financial Institution.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Waivers and Amendments. (a) No failure or delay on the
part of the Agent or any Purchaser in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any
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▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
such power, right or remedy preclude any other further exercise thereof or the
exercise of any other power, right or remedy. The rights and remedies herein
provided shall be cumulative and nonexclusive of any rights or remedies provided
by law. Any waiver of this Agreement shall be effective only in the specific
instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with the provisions of this
Section 14.1(b). Conduit, Seller and the Agent, at the direction of the Required
Financial Institutions, may enter into written modifications or waivers of any
provisions of this Agreement, provided, however, that no such modification or
waiver shall:
(i) without the consent of each affected Purchaser,
(A) extend the Liquidity Termination Date or the date of any payment or
deposit of Collections by Seller or the Servicer, (B) reduce the rate or
extend the time of payment of Financial Institution Yield or any CP Costs
(or any component of Financial Institution Yield or CP Costs), (C) reduce
any fee payable to the Agent for the benefit of the Purchasers, (D) except
pursuant to Article XII hereof, change the amount of the Capital of any
Purchaser, any Financial Institution's Pro Rata Share (except pursuant to
Sections 13.1 or 13.5) or any Financial Institution's Commitment, (E)
amend, modify or waive any provision of the definition of Required
Financial Institutions or this Section 14.1(b), (F) consent to or permit
the assignment or transfer by Seller of any of its rights and obligations
under this Agreement, (G) change the definition of "Eligible Receivable,"
"Credit Enhancement," "Hedging Agreement" or "Hedge Provider" or (H) amend
or modify any defined term (or any defined term used directly or indirectly
in such defined term) used in clauses (A) through (G) above in a manner
that would circumvent the intention of the restrictions set forth in such
clauses; or
(ii) without the written consent of the then Agent,
amend, modify or waive any provision of this Agreement if the effect
thereof is to affect the rights or duties of such Agent.
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Seller, the Agent may amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and Conduit may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII,
Section 14.13 or any other provision of this Agreement without the consent of
any Seller Party, provided that such amendment has no negative impact upon such
Seller
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▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
Party. Any modification or waiver made in accordance with this Section
14.1 shall apply to each of the Purchasers equally and shall be binding upon
each Seller Party, the Purchasers and the Agent.
Section 14.2 Notices. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other means, when received at the address specified in this
Section 14.2. Seller hereby authorizes the Agent to effect purchases and Tranche
Period and Discount Rate selections based on telephonic notices made by any
Person whom the Agent in good faith believes to be acting on behalf of Seller.
Seller agrees to deliver promptly to the Agent a written confirmation of each
telephonic notice signed by an authorized officer of Seller; provided, however,
the absence of such confirmation shall not affect the validity of such notice.
If the written confirmation differs from the action taken by the Agent, the
records of the Agent shall govern absent manifest error.
Section 14.3 Ratable Payments. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.2 or 10.3) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 14.4 Protection of Ownership Interests of the Purchasers. (a)
Seller agrees that from time to time, at its expense, it will promptly execute
and deliver all instruments and documents, and take all actions, that may be
necessary or desirable, or that the Agent may request, to perfect, protect or
more fully evidence the Purchaser Interests, or to enable the Agent or the
Purchasers to exercise and enforce their rights and remedies hereunder. Without
limiting the foregoing, Seller will, upon the request of the Agent, file such
financing or continuation statements, or amendments thereto or assignments
thereof, and execute and file such other instruments and documents, that may be
necessary or
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▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
desirable, or that the Agent may reasonably request, to perfect, protect or
evidence such Purchaser Interests. At any time following the occurrence of an
Amortization Event, the Agent may, or the Agent may direct Seller or the
Servicer to, notify the Obligors of Receivables, at Seller's expense, of the
ownership or security interests of the Purchasers under this Agreement and may
also direct that payments of all amounts due or that become due under any or all
Receivables be made directly to the Agent or its designee. Seller or the
Servicer (as applicable) shall, at any Purchaser's request, withhold the
identity of such Purchaser in any such notification.
(b) If any Seller Party fails to perform any of its
obligations hereunder, the Agent or any Purchaser may (but shall not be required
to) perform, or cause performance of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes
the Agent at any time and from time to time in the sole and absolute discretion
of the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf
of such Seller Party (i) to authorize and/or execute on behalf of such Seller
Party as debtor and to file financing or continuation statements (and amendments
thereto and assignments thereof) necessary or desirable in the Agent's sole and
absolute discretion to perfect and to maintain the perfection and priority of
the interest of the Purchasers in the Receivables and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Receivables as a financing statement in such offices as the
Agent in its sole and absolute discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the interests of the
Purchasers in the Receivables. This appointment is coupled with an interest and
is irrevocable. The authorization by each Seller Party set forth in the second
sentence of this Section 14.4(b) is intended to meet all requirements for
authorization by a debtor under Article 9 of any applicable enactment of the
UCC, including, without limitation, Section 9-509 thereof.
Section 14.5 Confidentiality. (a) Each Seller Party and each Purchaser
shall maintain and shall cause each of its employees and officers to maintain
the confidentiality of this Agreement and the other confidential or proprietary
information with respect to the Agent and Conduit and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
such Seller Party and such Purchaser and its officers and employees may disclose
such information to such Seller Party's and such Purchaser's external
accountants and attorneys and as required by any applicable law or order of any
judicial or administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each
Seller Party hereby consents to the disclosure of any nonpublic information with
respect to it (i) to the Agent, the Financial Institutions or Conduit by each
other, (ii) by the Agent or
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▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
the Purchasers to any prospective or actual assignee or participant of any of
them and (iii) by the Agent to any rating agency, Commercial Paper dealer or
provider of a surety, guaranty or credit or liquidity enhancement to Conduit or
any entity organized for the purpose of purchasing, or making loans secured by,
financial assets for which Bank One acts as the administrative agent and to any
officers, directors, employees, outside accountants and attorneys of any of the
foregoing, provided each such Person is informed of and agrees to maintain the
confidential nature of such information. In addition, the Purchasers and the
Agent may disclose any such nonpublic information pursuant to any law, rule,
regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings (whether or not having the force or effect
of law).
Section 14.6 Bankruptcy Petition. Seller, the Servicer, the Agent
and each Financial Institution hereby covenants and agrees that, prior to the
date that is one year and one day after the payment in full of all outstanding
senior indebtedness of Conduit or any Unconditional Liquidity Provider, it will
not institute against, or join any other Person in instituting against, Conduit
or any such entity any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
Section 14.7 Limitation of Liability. Except with respect to any
claim arising out of the willful misconduct or gross negligence of Conduit, the
Agent or any Financial Institution, no claim may be made by any Seller Party or
any other Person against Conduit, the Agent or any Financial Institution or
their respective Affiliates, directors, officers, employees, attorneys or agents
for any special, indirect, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and each Seller Party hereby waives,
releases, and agrees not to ▇▇▇ upon any claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.
Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
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▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE
AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY
PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.
Section 14.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT
EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.
Section 14.11 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document
contain the final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof superseding all prior oral or written understandings.
(b) This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns (including any trustee in bankruptcy) and shall inure to the benefit of
the Hedge Provider (if any) and its successors and permitted assigns (including
any trustee in bankruptcy). 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 terminated in accordance with its
terms; provided, however, that the rights and remedies with respect to (i) any
breach of any representation and warranty made by any Seller Party pursuant to
Article V, (ii) the indemnification and payment provisions of Article X, and
Sections 14.5 and 14.6 shall be continuing and shall survive any termination of
this Agreement.
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▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
Section 14.12 Counterparts; Severability; Section References.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same Agreement. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to "Article," "Section," "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits to,
this Agreement.
Section 14.13 Bank One Roles. Each of the Financial Institutions
acknowledges that Bank One acts, or may in the future act, (i) as administrative
agent for Conduit or any Financial Institution, (ii) as issuing and paying agent
for the Commercial Paper, (iii) to provide credit or liquidity enhancement for
the timely payment for the Commercial Paper and (iv) to provide other services
from time to time for Conduit or any Financial Institution (collectively, the
"Bank One Roles"). Without limiting the generality of this Section 14.13, each
Financial Institution hereby acknowledges and consents to any and all Bank One
Roles and agrees that in connection with any Bank One Role, Bank One may take,
or refrain from taking, any action that it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Conduit, and the giving of notice to the Agent of a mandatory purchase
pursuant to Section 13.1.
Section 14.14 Characterization. (a) It is the intention of the
parties hereto that each purchase hereunder shall constitute and be treated as
an absolute and irrevocable sale, which purchase shall provide the applicable
Purchaser with the full benefits of ownership of the applicable Purchaser
Interest. Except as specifically provided in this Agreement, each sale of a
Purchaser Interest hereunder is made without recourse to Seller; provided,
however, that (i) Seller shall be liable to each Purchaser and the Agent for all
representations, warranties, covenants and indemnities made by Seller pursuant
to the terms of this Agreement, and (ii) such sale does not constitute and is
not intended to result in an assumption by any Purchaser or the Agent or any
assignee thereof of any obligation of Seller or any Originator or any other
person arising in connection with the Receivables, the Related Security, or the
related Contracts, or any other obligations of Seller or any Originator.
(b) In addition to any ownership interest which the
Agent may from time to time acquire pursuant hereto, Seller hereby grants to the
Agent for the ratable benefit of the Purchasers a valid and perfected security
interest in all of Seller's right, title and interest in, to and under all
Receivables now existing or hereafter arising, the
53
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
Collections, each Lock-Box, each P.O. Box, each Collection Account, all Related
Security, all other rights and payments relating to such Receivables, and all
proceeds of any thereof prior to all other liens on and security interests
therein to secure the prompt and complete payment of the Aggregate Unpaids. The
Agent and the Purchasers shall have, in addition to the rights and remedies that
they may have under this Agreement, all other rights and remedies provided to a
secured creditor under the UCC and other applicable law, which rights and
remedies shall be cumulative.
Section 14.15 Excess Funds. Each of Seller, the Servicer, each
Purchaser and the Agent agrees that Conduit shall be liable for any claims that
such party may have against Conduit only to the extent that Conduit has funds in
excess of those funds necessary to pay matured and maturing Commercial Paper and
to the extent such excess funds are insufficient to satisfy the obligations of
Conduit hereunder, Conduit shall have no liability with respect to any amount of
such obligations remaining unpaid and such unpaid amount shall not constitute a
claim against Conduit. Any and all claims against Conduit shall be subordinate
to the claims against Conduit of the holders of Commercial Paper and any Person
providing liquidity support to Conduit.
(Signature Pages Follow)
54
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date hereof.
PDC FUNDING COMPANY, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Treasurer
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇ DENTAL COMPANY,
as Servicer
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President, Treasurer
and Chief Financial Officer
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
PREFERRED RECEIVABLES FUNDING
CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. Power
Authorized Signatory
Address: c/o Bank One, NA (Main Office Chicago),
as Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANK ONE, NA (MAIN OFFICE CHICAGO),
as a Financial Institution and as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. Power
Name: ▇▇▇▇▇▇▇ ▇. Power
Title: Authorized Signatory
Address: Bank One, NA (Main Office Chicago)
Asset Backed Finance
Suite IL1-0612, 1-19
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Accrual Period" means each Fiscal Month, provided that the initial
Accrual Period hereunder means the period from (and including) the date of the
initial purchase hereunder to (and including) the last day of the Fiscal Month
thereafter.
"ACH Receipts" means funds received in respect of Automatic Debit
Collections.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which PDCo
or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company or other business entity.
"Acquisition Amount" means, on the date of any purchase from Conduit of
one or more Purchaser Interests pursuant to Section 13.1, (a) with respect to
each Financial Institution (other than any Unconditional Liquidity Provider),
the lesser of (i) such Financial Institution's Pro Rata Share of the sum of (A)
the lesser of (1) the Adjusted Liquidity Price of each such Purchaser Interest
and (2) the Capital of each such Purchaser Interest and (B) all accrued and
unpaid CP Costs for each such Purchaser Interest and (ii) such Financial
Institution's unused Commitment and (b) with respect to each Unconditional
Liquidity Provider, the lesser of (x) such Unconditional Liquidity Provider's
Pro Rata Share of the sum of (1) the Capital of each such Purchaser Interest and
(2) all accrued and unpaid CP Costs for each such Purchaser Interest and (y)
such Unconditional Liquidity Provider's unused Commitment.
"Adjusted Funded Amount" means, in determining the Conduit Transfer
Price for any Purchaser Interest, an amount equal to the sum of (a) the Adjusted
Liquidity Price of each such Purchaser Interest and (b) an amount equal to each
Unconditional Liquidity
Exh. I-1
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
Provider's Pro Rata Share of the difference between (i) the Adjusted Liquidity
Price of each such Purchaser Interest and (ii) the Capital of each such
Purchaser Interest.
"Adjusted Liquidity Price" means an amount equal to:
NDR
RI [ (i) DC + (ii) [---------------] ]
1 + (.50 x .10)
where:
RI = the undivided percentage interest evidenced by
such Purchaser Interest.
DC = the Deemed Collections.
NDR = the Outstanding Balance of all Receivables that
are not Defaulted Receivables.
Each of the foregoing shall be determined from the most recent Monthly Report
received from the Servicer.
"Adverse Claim" means a lien, security interest, charge or encumbrance,
or other right or claim in, of or on any Person's assets or properties in favor
of any other Person.
"Affected Financial Institution" has the meaning specified in Section
12.1(c).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or any Subsidiary of such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the
Exh. I-2
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
direction of the management or policies of the controlled Person, whether
through ownership of stock, by contract or otherwise.
"Agent" has the meaning set forth in the preamble to this Agreement.
"Agent's Account" has the meaning set forth in Section 2.2(a).
"Aggregate Capital" means, on any date of determination, the aggregate
amount of Capital of all Purchaser Interests outstanding on such date.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of
all accrued and unpaid fees under the Fee Letter, CP Costs, Financial
Institution Yield, Aggregate Capital, Hedging Obligations and all other unpaid
Obligations (whether due or accrued) at such time.
"Agreement" means this Receivables Purchase Agreement, as it may be
amended, restated, supplemented or otherwise modified and in effect from time to
time.
"Amortization Date" means the earliest to occur of (i) the day on which
any of the conditions precedent set forth in Section 6.2 are not satisfied, (ii)
the Business Day immediately prior to the occurrence of an Amortization Event
set forth in Section 9.1(d)(ii), (iii) the Business Day specified in a written
notice from the Agent following the occurrence of any other Amortization Event
and, (iv) the date which is 5 Business Days after the Agent's receipt of written
notice from Seller that it wishes to terminate the facility evidenced by this
Agreement.
"Amortization Event" has the meaning specified in Article IX.
"Approved Unconditional Liquidity Provider" means an Unconditional
Liquidity Provider which has received approval from Standard & Poor's Ratings
Services and ▇▇▇▇▇'▇ Investors Service, Inc. to be relieved from any obligation
to pay amounts as a Non-Defaulting Financial Institution pursuant to Section
13.5 hereof.
"Assignment Agreement" has the meaning set forth in Section 12.1(b).
"Authorized Officer" means, with respect to any Person, its president,
corporate controller, treasurer or chief financial officer.
"Automatic Debit Collection" means the payment of Collections by an
Obligor by means of automatic electronic funds transfer from the Obligor's bank
account.
Exh. I-3
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Balloon Payment Receivable" means a Receivable that arises under a
Contract that requires the final payment to be in an amount equal to 35% of the
initial balance of such Receivable.
"Bank One" means Bank One, NA (Main Office Chicago) in its individual
capacity and its successors.
"Broken Funding Costs" means for any Purchaser Interest which: (i) has
its Capital reduced without compliance by Seller with the notice requirements
hereunder or (ii) is assigned under Article XIII or terminated prior to the date
on which it was originally scheduled to end; an amount equal to the excess, if
any, of (A) the CP Costs or Financial Institution Yield (as applicable) that
would have accrued during the remainder of the Tranche Periods or the tranche
periods for Commercial Paper determined by the Agent to relate to such Purchaser
Interest (as applicable) subsequent to the date of such reduction, assignment or
termination of the Capital of such Purchaser Interest if such reduction,
assignment or termination had not occurred or such Reduction Notice had not been
delivered, over (B) the sum of (x) to the extent all or a portion of such
Capital is allocated to another Purchaser Interest, the amount of CP Costs or
Financial Institution Yield actually accrued during the remainder of such period
on such Capital for the new Purchaser Interest, and (y) to the extent such
Capital is not allocated to another Purchaser Interest, the income, if any,
actually received during the remainder of such period by the holder of such
Purchaser Interest from investing the portion of such Capital not so allocated.
In the event that the amount referred to in clause (B) exceeds the amount
referred to in clause (A), the relevant Purchaser or Purchasers agree to pay to
Seller the amount of such excess. All Broken Funding Costs shall be due and
payable hereunder upon demand.
"Business Day" means any day on which banks are not authorized or
required to close in New York, New York or Chicago, Illinois and The Depository
Trust Company of New York is open for business, and, if the applicable Business
Day relates to any computation or payment to be made with respect to the LIBO
Rate, any day on which dealings in dollar deposits are carried on in the London
interbank market.
"Capital" of any Purchaser Interest means, at any time, (A) the
Purchase Price of such Purchaser Interest, minus (B) the sum of the aggregate
amount of Collections and other payments received by the Agent which in each
case are applied to reduce such Capital in accordance with the terms and
conditions of this Agreement; provided that such Capital shall be restored (in
accordance with Section 2.5) in the amount of any Collections or other payments
so received and applied if at any time the distribution of such Collections or
payments are rescinded, returned or refunded for any reason.
Exh. I-4
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Change of Control" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock
of Servicer or (ii) PDCo ceases to own, directly or indirectly, 100% of the
outstanding membership units of Seller or 100% of the outstanding capital stock
of any Originator.
"Charged-Off Receivable" means a Receivable: (i) as to which the
Obligor thereof has taken any action, or suffered any event to occur, of the
type described in Section 9.1(d) (as if references to Seller Party therein refer
to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) which, consistent with the Credit and Collection Policy, would
be written off Seller's books as uncollectible, (iv) which has been identified
by Seller as uncollectible or (v) as to which any payment, or part thereof,
remains unpaid for 180 days or more from the original due date for such payment.
"Collection Account" means, collectively, each First-Tier Account and
the Second-Tier Account.
"Collection Account Agreement" means (i) with respect to each Lock-Box
or Collection Account, an agreement, substantially in the form of Exhibit VI,
among an Originator (if applicable), Seller, the Agent and a Collection Bank, or
any similar or analogous agreement among an Originator, Seller, the Agent and a
Collection Bank and (ii) with respect to each P.O. Box, a Postal Notice.
"Collection Bank" means, at any time, any of the banks holding one or
more Collection Accounts.
"Collection Notice" means a notice, in substantially the form of Annex
A to Exhibit VI, from the Agent to a Collection Bank, or any similar or
analogous notice from the Agent to a Collection Bank.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all scheduled payments, prepayments, yield, Finance Charges
or other related amounts accruing in respect thereof, all cash proceeds of
Related Security with respect to such Receivable and all payments received
pursuant to the Hedging Agreement.
"Commercial Paper" means promissory notes of Conduit issued by Conduit
in the commercial paper market.
Exh. I-5
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Commitment" means, for each Financial Institution, the commitment of
such Financial Institution to purchase Purchaser Interests from (i) Seller and
(ii) Conduit, in an amount not to exceed (i) in the aggregate, the amount set
forth opposite such Financial Institution's name on Schedule A to this
Agreement, as such amount may be modified in accordance with the terms hereof
(including, without limitation, any termination of Commitments pursuant to
Section 13.6 hereof) and (ii) with respect to any individual purchase hereunder,
its Pro Rata Share of the Purchase Price therefor.
"Commitment Availability" means at any time the positive difference (if
any) between (a) an amount equal to the aggregate amount of the Commitments
minus an amount equal to 2% of such aggregate Commitments at such time minus (b)
the Aggregate Capital at such time.
"Concentration Limit" means, at any time, for any Obligor, 2% of the
aggregate Outstanding Balance of all Eligible Receivables, or such other amount
(a "Special Concentration Limit") for such Obligor designated by the Agent;
provided, that in the case of an Obligor and any Affiliate of such Obligor, the
Concentration Limit shall be calculated as if such Obligor and such Affiliate
are one Obligor; and provided, further, that Conduit or the Required Financial
Institutions may, upon not less than three Business Days' notice to Seller,
cancel any Special Concentration Limit.
"Conduit" has the meaning set forth in the preamble to this Agreement.
"Conduit Residual" means the sum of the Conduit Transfer Price
Reductions.
"Conduit Transfer Price" means, with respect to the assignment by
Conduit of one or more Purchaser Interests to the Agent for the benefit of one
or more of the Financial Institutions pursuant to Section 13.1, the sum of (i)
the lesser of (a) the Capital of each such Purchaser Interest and (b) the
Adjusted Funded Amount of each such Purchaser Interest and (ii) all accrued and
unpaid CP Costs for each such Purchaser Interest.
"Conduit Transfer Price Deficit" has the meaning set forth in Section
13.5.
"Conduit Transfer Price Reduction" means in connection with the
assignment of a Purchaser Interest by Conduit to the Agent for the benefit of
the Financial Institutions, the positive difference (if any) between (i) the
Capital of such Purchaser Interest and (ii) the Adjusted Funded Amount for such
Purchaser Interest.
Exh. I-6
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Consolidated Adjusted EBITDA" means, as to any Person for any period,
the sum of Consolidated EBIT for such period (i) plus consolidated depreciation
and amortization for such period, (ii) plus extraordinary losses incurred other
than in the ordinary course of business, (iii) minus extraordinary gains
realized other than in the ordinary course of business. For Persons acquired by
PDCo during the relevant measurement period, their EBITDA results will be
included in the calculation of Consolidated Adjusted EBITDA as if those Persons
were owned by PDCo for the entire reporting period. Consolidated Adjusted EBITDA
will be calculated on a rolling four-quarter basis.
"Consolidated EBIT" means, as to any Person and with reference to any
period, Consolidated Net Income plus, to the extent deducted from revenues in
determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii)
expense for federal, state, local and foreign income and franchise taxes paid or
accrued and (iii) extraordinary losses incurred other than in the ordinary
course of business, minus, to the extent included in Consolidated Net Income,
extraordinary gains realized other than in the ordinary course of business, all
calculated for such Person and its Subsidiaries on a consolidated basis.
"Consolidated Interest Expense" means, as to any Person and with
reference to any period, the interest expense of such Person and its
Subsidiaries calculated on a consolidated basis for such period including,
without limitation, such interest expense as may be attributable to capitalized
leases, receivables transaction financing costs, the discount or implied
interest component of off-balance sheet liabilities, all commissions, discounts
and other fees and charges owed with respect to letters of credit and net
▇▇▇▇-to-market exposure.
"Consolidated Net Income" means as to any Person and with reference to
any period, the net income (or loss) of such Person and its Subsidiaries
calculated on a consolidated basis for such period, excluding any non-cash
charges or gains which are unusual, non-recurring or extraordinary.
"Consolidated Tangible Net Worth" means, as of any date of
determination, the consolidated total stockholders' equity (including capital
stock, additional paid-in capital and retained earnings) of PDCo and its
Subsidiaries determined in accordance with GAAP, less goodwill and other
intangible assets.
"Consolidated Total Debt" means (a) all Indebtedness of PDCo and its
Subsidiaries, on a consolidated basis, reflected on a balance sheet prepared in
accordance with GAAP, plus, without duplication (b) the face amount of all
outstanding letters of credit in respect of which PDCo or any Subsidiary has any
reimbursement obligation and the principal amount of all contingent obligations
of PDCo and its Subsidiaries, plus obligations associated with capitalized
leases, plus obligations arising from the sale of accounts
Exh. I-7
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
receivable and other forms of off-balance sheet financing, including receivables
transaction attributed indebtedness.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.
"Contract" means, with respect to any Receivable, any and all
instruments, agreements, invoices or other writings pursuant to which such
Receivable arises or which evidences such Receivable.
"CP Costs" means for any day during which a Purchaser Interest is held
by the Conduit, an amount equal to the Capital of such Purchaser Interest
multiplied by a per annum rate equivalent to the "weighted average cost" (as
defined below) related to the issuance of indexed Commercial Paper of the
Conduit that is allocated, in whole or in part, to fund such Capital (and which
may also be allocated in part to the funding of other assets of the Conduit);
provided, however, that if any component of such rate is a discount rate, in
calculating such rate for such Capital for such date, the rate used to calculate
such component of such rate shall be a rate resulting from converting such
discount rate to an interest bearing equivalent rate per annum. As used in this
definition, the "weighted average cost" shall consist of (x) the actual interest
rate paid to purchasers of indexed Commercial Paper issued by the Conduit, (y)
the costs associated with the issuance of such Commercial Paper (including
dealer fees and commissions to placement agents), and (z) interest on other
borrowing or funding sources by the Conduit, including to fund small or odd
dollar amounts that are not easily accommodated in the commercial paper market.
"Credit and Collection Policy" means Seller's and/or the applicable
Originator's credit and collection policies and practices relating to Contracts
and Receivables existing on the date hereof and summarized in Exhibit VIII
hereto, as modified from time to time in accordance with this Agreement.
"Credit Enhancement" means, on any date, an amount equal to (i) the Net
Receivables Balance as of the close of business of the Servicer on such date,
multiplied by the greater of (x) 10% and (y) 3 times the Default Ratio.
"Deemed Collections" means the aggregate of all amounts Seller shall
have been deemed to have received as a Collection of a Receivable. If at any
time, (i) the Outstanding
Exh. I-8
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
Balance of any Receivable is either (x) reduced as a result of any defective or
rejected goods or services, any discount or any adjustment or otherwise by
Seller or any Originator (other than cash Collections on account of the
Receivables) or (y) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction), (ii) any of the representations or
warranties in Article V are no longer true with respect to any Receivable or
(iii) the Related Equipment for any Receivable is Repossessed and sold for less
than the fair market value of such Related Equipment, Seller shall be deemed to
have received a Collection of such Receivable in the amount of (A) such
reduction or cancellation in the case of clause (i) above, (B) the entire
Outstanding Balance in the case of clause (ii) above and (C) the difference
between the fair market value of the Repossessed Related Equipment and the gross
proceeds received upon the sale of such Repossessed Related Equipment in the
case of clause (c) above.
"Default Fee" means with respect to any amount due and payable by
Seller in respect of any Aggregate Unpaids, an amount equal to the greater of
(i) $1000 and (ii) interest on any such unpaid Aggregate Unpaids at a rate per
annum equal to 2% above the Prime Rate.
"Default Ratio" means, as of the last day of each Fiscal Month, a
percentage equal to: (i) the aggregate Outstanding Balance of all Defaulted
Receivables on such day, divided by (ii) the aggregate Outstanding Balance of
all Receivables on such day.
"Defaulted Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 121 days or more from the original due date for
such payment.
"Defaulting Financial Institution" has the meaning set forth in Section
13.5.
"Delinquency Ratio" means, at any time, a percentage equal to (i) the
aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables at such time divided by (ii) the aggregate Outstanding Balance of
all Receivables at such time.
"Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for 61 days or more from the original due date for
such payment.
"Designated Obligor" means an Obligor indicated by the Agent to Seller
in writing.
"Dilutions" means, at any time, the aggregate amount of reductions or
cancellations described in clause (i) of the definition of "Deemed Collections".
Exh. I-9
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Discount Rate" means, the LIBO Rate or the Prime Rate, as applicable,
with respect to each Purchaser Interest of the Financial Institutions.
"Discounted Receivable" means a Receivable that arises under a Contract
that does not contain a stated rate of interest applicable to the Outstanding
Balance of such Receivable.
"Discounted Receivable Discounted Balance" means, at any time, with
respect to any Discounted Receivable, the discounted Outstanding Balance of such
Receivable, which Outstanding Balance shall be discounted using a discount rate
of 10%.
"EagleSoft Computer Receivable" means a Receivable originated by PDSI
that arises from the sale or financing of computer hardware equipment by PDSI.
"EagleSoft Software Receivable" means a Receivable originated by PDSI
that arises from the sale, licensing or financing of computer software by PDSI.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a
resident of the United States or, if a corporation or other business
organization, is organized under the laws of the United States or any
political subdivision thereof and has its chief executive office in the
United States; (b) is not an Affiliate of any of the parties hereto;
(c) is not a Designated Obligor; and (d) is not a government or a
governmental subdivision or agency,
(ii) the Obligor of which is not, and has not been, the
Obligor of any Charged-Off Receivable or any Defaulted Receivable,
(iii) that is not a Charged-Off Receivable or a Defaulted
Receivable,
(iv) that is not a Delinquent Receivable at the time a
Purchaser Interest in such Receivable is purchased hereunder,
(v) that arises under a Contract that has not had any payment
or other terms of such Contract extended, modified or waived, unless
such Receivable is a Modified Receivable,
(vi) that is an "account" or "chattel paper" within the
meaning of Article 9 of the UCC of all applicable jurisdictions,
Exh. I-10
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
(vii) that is denominated and payable only in United States
dollars in the United States,
(viii) that arises under a Contract in substantially the form
of one of the form contracts set forth on Exhibit IX hereto or
otherwise approved by the Agent in writing, which, together with such
Receivable, is in full force and effect and constitutes the legal,
valid and binding obligation of the related Obligor enforceable against
such Obligor in accordance with its terms subject to no offset,
counterclaim or other defense,
(ix) that arises under a Contract that (A) does not require
the Obligor under such Contract to consent to the transfer, sale or
assignment of the rights and duties of the applicable Originator or any
of its assignees under such Contract and (B) does not contain a
confidentiality provision that purports to restrict the ability of any
Purchaser to exercise its rights under this Agreement, including,
without limitation, its right to review the Contract,
(x) that arises under a Contract that contains an obligation
to pay a specified sum of money, contingent only upon the sale of goods
or the provision of services by the applicable Originator,
(xi) that, together with the Contract related thereto, does
not contravene any law, rule or regulation applicable thereto
(including, without limitation, any law, rule and regulation relating
to truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and
with respect to which no part of the Contract related thereto is in
violation of any such law, rule or regulation,
(xii) that satisfies all applicable requirements of the Credit
and Collection Policy,
(xiii) that was generated in the ordinary course of the
applicable Originator's business,
(xiv) that arises solely from the sale, licensing or financing
of goods or the provision of services to the related Obligor by the
applicable Originator, and not by any other Person (in whole or in
part),
(xv) as to which the Agent has not notified Seller that the
Agent has determined that such Receivable or class of Receivables is
not acceptable as an
Exh. I-11
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
Eligible Receivable, including, without limitation, because such
Receivable arises under a Contract that is not acceptable to the Agent,
(xvi) that is not subject to any right of rescission, set-off,
counterclaim, any other defense (including defenses arising out of
violations of usury laws) of the applicable Obligor against the
applicable Originator or any other Adverse Claim, and the Obligor
thereon holds no right as against such Originator to cause such
Originator to repurchase the goods or merchandise the sale of which
shall have given rise to such Receivable (except with respect to sale
discounts effected pursuant to the Contract, or defective goods
returned in accordance with the terms of the Contract),
(xvii) that, (a) if such Receivable is a Discounted
Receivable, the related Contract requires that payment in full of the
Outstanding Balance of such Receivable be made not later than 63 months
after the date such Receivable was originated; (b) if such Receivable
is an EagleSoft Computer Receivable or EagleSoft Software Receivable,
the related Contract requires that payment in full of the Outstanding
Balance of such Receivable to be made not later than 39 months after
the date such Receivable was originated; and (c) otherwise, the related
Contract requires that payment in full of the Outstanding Balance of
such Receivable to be made not later than 60 months after the date such
Receivable was originated,
(xviii) as to which the applicable Originator has satisfied
and fully performed all obligations on its part with respect to such
Receivable required to be fulfilled by it, and no further action is
required to be performed by any Person with respect thereto other than
payment thereon by the applicable Obligor,
(xix) all right, title and interest to and in which has been
validly transferred by the applicable Originator directly to Seller
under and in accordance with the Receivables Sale Agreement, and Seller
has good and marketable title thereto free and clear of any Adverse
Claim,
(xx) that arises under a Contract that requires the
Outstanding Balance of such Receivable to be paid in equal consecutive
monthly installments, unless such Receivable is a Balloon Payment
Receivable,
(xxi) that, if such Receivable is a Veterinary Receivable, the
Outstanding Balance thereof, when added to the Outstanding Balance of
all other Veterinary Receivables, does not exceed 5% of the aggregate
Outstanding Balance of all Receivables,
Exh. I-12
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
(xxii) that, if such Receivable is a Balloon Payment
Receivable, the Outstanding Balance thereof, when added to the
Outstanding Balance of all other Balloon Payment Receivables, does not
exceed 5% of the aggregate Outstanding Balance of all Receivables,
(xxiii) that, if such Receivable is an EagleSoft Software
Receivable, the Outstanding Balance thereof, when added to the
Outstanding Balance of all other EagleSoft Software Receivables, does
not exceed 15% of the aggregate Outstanding Balance of all Receivables,
(xxiv) that, if such Receivable is an EagleSoft Computer
Receivable, the Outstanding Balance thereof, when added to the
Outstanding Balance of all other EagleSoft Computer Receivables, does
not exceed 10% of the aggregate Outstanding Balance of all Receivables,
(xxv) that, if such Receivable is a Modified Receivable, the
Outstanding Balance thereof, when added to the Outstanding Balance of
all other Modified Receivables, does not exceed 5% of the aggregate
Outstanding Balance of all Receivables,
(xxvi) that, if such Receivable is a Discounted Receivable,
the Outstanding Balance thereof, when added to the Outstanding Balance
of all other Discounted Receivables, does not exceed 5% of the
aggregate Outstanding Balance of all Receivables,
(xxvii) that, together with the related Contract, has not been
sold, assigned or pledged by the applicable Originator or Seller,
except pursuant to the terms of the Receivables Sale Agreement and this
Agreement,
(xxviii) that (a) if such Receivable is an EagleSoft Software
Receivable, the Obligor thereof has made at least three payments on
such Receivable and (b) otherwise, the Obligor thereof has made at
least one payment on such Receivable,
(xxix) that arises under a Contract that provides for
aggregate payments thereunder in an amount less than $250,000,
(xxx) the Obligor of which is not the Obligor of other
Receivables with an aggregate Outstanding Balance in excess of
$250,000,
(xxxi) with respect to which there is only one original
executed copy of the related Contract, which will, together with the
related records be held by the Servicer as
Exh. I-13
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
bailee of the Agent and the Purchasers, and no other custodial
agreements are in effect with respect thereto, and
(xxxii) that excludes residual value and any maintenance
component.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Excess Spread" means, as of the last day of any Fiscal Month, the sum
of (i) the weighted average annual percentage rate accruing on the Receivables,
minus (ii) 1%, minus (iii) if the Hedging Agreement shall have been entered into
in accordance with Section 7.3, the Hedge Fixed Rate otherwise, a per annum
percentage that is the percentage equivalent of the CP Costs accrued during such
Fiscal Month or the Financial Institution Yield accrued during such month (as
applicable), minus (iv) the Program Fee Rate (as defined in the Fee Letter),
minus (v) the Facility Fee Rate (as defined in the Fee Letter).
"Facility Account" means the account numbered ▇▇▇▇▇▇▇ maintained by
Seller in the name of "PDC Funding Company, LLC" at Bank One, together with any
successor account or sub-account.
"Facility Termination Date" means the earliest of (i) the Liquidity
Termination Date and (ii) the Amortization Date.
"Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy," as amended and any successor statute thereto.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.
"Fee Letter" means that certain letter agreement dated as of the date
hereof among Seller, Conduit and the Agent, as it may be amended, restated,
supplemented or otherwise modified and in effect from time to time.
"Finance Charge Collections" means Collections consisting of Finance
Charges.
Exh. I-14
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Finance Charges" means, with respect to a Contract, any finance,
interest, late payment charges or similar charges owing by an Obligor pursuant
to such Contract.
"Financial Institution Yield" means for each respective Tranche Period
relating to Purchaser Interests of the Financial Institutions, an amount equal
to the product of the applicable Discount Rate for each Purchaser Interest
multiplied by the Capital of such Purchaser Interest for each day elapsed during
such Tranche Period, annualized on a 360 day basis.
"Financial Institutions" has the meaning set forth in the preamble in
this Agreement.
"First Tier Account" means each concentration account, depositary
account, lock-box account or similar account in which any Collections are
collected or deposited, including, without limitation, by means of automatic
funds transfer (other than the Second-Tier Account) and which is listed on
Exhibit IV.
"Fiscal Month" means any of the thirteen consecutive four week or five
week accounting periods used by PDCo for accounting purposes which begin on the
Sunday after the last Saturday in April of each year and ending on the last
Saturday in April of the next year.
"Funding Agreement" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of Conduit.
"Funding Source" means (i) any Financial Institution or (ii) any
insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to Conduit.
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement, provided, that if
there occurs after the date of this Agreement any change in GAAP that affects in
any material respect the calculation of any amount described in Section 9.2(f),
(m) or (n), the Agent and Seller shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such amounts with
the intent of having the respective positions of the Agent and the Purchasers
and Seller after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the amounts described in Sections 9.1(f), (m)
and (n) shall be calculated as if no such change in GAAP has occurred.
Exh. I-15
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Hedge Fixed Amount" means, with respect to each Settlement Period, an
amount equal to the product of (i) the average Aggregate Capital outstanding
during such Settlement Period, times (ii) the Hedge Fixed Rate, times (iii) a
fraction, the numerator of which is the number of days in such Settlement Period
and the denominator of which is 360.
"Hedge Fixed Rate" means, for any day during a Settlement Period, the
fixed rate payable under the Hedging Agreement (without taking into account any
netting provisions thereunder), as such rate may be, reset from time to time.
"Hedge Floating Amount" means, with respect to each Settlement Period,
an amount equal to the product of (i) the average Aggregate Capital outstanding
during such Settlement Period, times (ii) the one-month LIBO Rate applicable to
the outstanding Aggregate Capital during such Settlement Period, times (iii) a
fraction, the numerator of which is the number of days in such Settlement Period
and the denominator of which is 360.
"Hedge Provider" means Bank One and any replacement therefor selected
by the Agent and Seller in accordance with Section 7.3.
"Hedge Provider Downgrade" means the unsecured, unguaranteed, long-term
debt rating of the Hedge Provider under the then current Hedging Agreement, if
any, is reduced below A- or withdrawn by Standard & Poor's Ratings Service or
below A3 or withdrawn by ▇▇▇▇▇'▇ Investors Service.
"Hedging Agreement" has the meaning set forth in Section 7.3.
"Hedging Obligations" means all amounts payable to the Hedge Provider
under the Hedging Agreement, including, without limitation, the accrued fixed
amount under the Hedging Agreement and all breakage costs associated with the
termination of the Hedging Agreement.
"Incremental Purchase" means a purchase of one or more Purchaser
Interests which increases the total outstanding Aggregate Capital hereunder.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate
Exh. I-16
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
swap, exchange or cap agreements, (vii) Contingent Obligations and (viii)
liabilities in respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Independent Governor" shall mean a governor of Seller who is not at
such time, and has not been at any time during the preceding five (5) years, (A)
a director, officer, governor, manager, member, employee or affiliate of Seller,
any ▇▇▇▇▇▇▇▇▇ Entity, or any of their respective Subsidiaries or Affiliates, or
(B) the beneficial owner (at the time of such individual's appointment as an
Independent Governor or at any time thereafter while serving as an Independent
Governor) of any of the outstanding common membership units or capital stock, as
applicable, of Seller, any ▇▇▇▇▇▇▇▇▇ Entity, or any of their respective
Subsidiaries or Affiliates, having general voting rights.
"Intercreditor Agreement" means an intercreditor agreement by and among
the Agent, US Bank, as agent under the US Bank Contract Purchase Agreement,
PDCo, PDSI, ▇▇▇▇▇▇▇ and Seller, as the same may be amended, restated
supplemented or otherwise modified from time to time.
"LIBO Rate" means the rate per annum equal to the sum of (i) (a) the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars appearing on Reuters Screen LIBOR01 as of 11:00 a.m. (London time)
two Business Days prior to the first day of the relevant Tranche Period, and
having a maturity equal to such Tranche Period, provided that, (i) if Reuters
Screen LIBOR01 is not available to the Agent for any reason, the applicable LIBO
Rate for the relevant Tranche Period shall instead be the applicable British
Bankers' Association Interest Settlement Rate for deposits in U.S. dollars as
reported by any other generally recognized financial information service as of
11:00 a.m. (London time) two Business Days prior to the first day of such
Tranche Period, and having a maturity equal to such Tranche Period, and (ii) if
no such British Bankers' Association Interest Settlement Rate is available to
the Agent, the applicable LIBO Rate for the relevant Tranche Period shall
instead be the rate determined by the Agent to be the rate at which Bank One
offers to place deposits in U.S. dollars with first-class banks in the London
interbank market at approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Tranche Period, in the approximate amount to be
funded at the LIBO Rate and having a maturity equal to such Tranche Period,
divided by (b) one minus the maximum aggregate reserve requirement (including
all basic, supplemental, marginal or other reserves) which is imposed against
the Agent in respect of Eurocurrency liabilities, as defined in Regulation D of
the Board of Governors of the Federal Reserve System as in effect from time to
time (expressed as a decimal), applicable to such Tranche Period plus (ii) 1.00%
per annum. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16
of 1%.
Exh. I-17
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Liquidity Termination Date" means May 9, 2003, as extended by mutual
agreement of Seller, the Agent and the Purchasers.
"Lock-Box" means each locked postal box with respect to which a bank
who has executed a Collection Account Agreement has been granted exclusive
access for the purpose of retrieving and processing payments made on the
Receivables and which is listed on Exhibit IV.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of any Seller Party and its Subsidiaries, (ii)
the ability of any Seller Party to perform its obligations under this Agreement
or the Performance Provider to perform its obligations under the Performance
Undertaking, (iii) the legality, validity or enforceability of this Agreement or
any other Transaction Document, (iv) any Purchaser's interest in the Receivables
generally or in any significant portion of the Receivables, the Related Security
or the Collections with respect thereto, or (v) the collectibility of the
Receivables generally or of any material portion of the Receivables.
"Modified Receivable" means a Receivable as to which the payment terms
of the related Contract have been extended or modified for credit reasons since
the origination of such Receivable.
"Monthly Report" means a report, in substantially the form of Exhibit X
hereto (appropriately completed), furnished by the Servicer to the Agent
pursuant to Section 8.5.
"Net Receivables Balance" means, at any time, the aggregate Outstanding
Balance of all Eligible Receivables at such time reduced by (i) the aggregate
amount by which the Outstanding Balance of all Eligible Receivables of each
Obligor and its Affiliates exceeds the Concentration Limit for such Obligor and
(ii) the excess of the aggregate Outstanding Balance of all Eligible Receivables
that are Discounted Receivables over the aggregate Discounted Receivable
Discounted Balance of all such Receivables.
"Non-Defaulting Financial Institution" has the meaning set forth in
Section 13.5.
"Non-Renewing Financial Institution" has the meaning set forth in
Section 13.6(a).
"Obligations" shall have the meaning set forth in Section 2.1.
"Obligor" means a Person obligated to make payments pursuant to a
Contract.
Exh. I-18
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Originated Receivable" means all indebtedness and other obligations
owed to Seller or an Originator (at the time it arises, and before giving effect
to any transfer or conveyance under the Receivables Sale Agreement or hereunder)
or in which Seller or an Originator has a security interest or other interest,
including, without limitation, any indebtedness, obligation or interest
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale, licensing or financing of goods or the
rendering of services by an Originator, and further includes, without
limitation, the obligation to pay any Finance Charges with respect thereto.
Indebtedness and other rights and obligations arising from any one transaction,
including, without limitation, indebtedness and other rights and obligations
represented by an individual invoice, shall constitute a Receivable separate
from an Originated Receivable consisting of the indebtedness and other rights
and obligations arising from any other transaction; provided further, that any
indebtedness, rights or obligations referred to in the immediately preceding
sentence shall be an Originated Receivable regardless of whether the account
debtor, any Originator or Seller treats such indebtedness, rights or obligations
as a separate payment obligation.
"Originator" means each of PDSI and ▇▇▇▇▇▇▇, in their respective
capacities as seller under the Receivables Sale Agreement.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Participant" has the meaning set forth in Section 12.2.
"▇▇▇▇▇▇▇▇▇ Entity" means each of PDCo and each Originator and their
respective successors.
"PDCo" has the meaning set forth in the preamble to this Agreement.
"PDSI" means ▇▇▇▇▇▇▇▇▇ Dental Supply, Inc., a Minnesota corporation,
together with its successors and assigns.
"Performance Provider" means PDCo in its capacity as Provider under the
Performance Undertaking.
"Performance Undertaking" means that certain Performance Undertaking,
dated as of May 10, 2002, by Performance Provider in favor of Seller,
substantially in the form of Exhibit XI, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
Exh. I-19
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Permitted Investments" means (a) evidences of indebtedness maturing
within thirty days after the date of loan thereof, issued by, or guaranteed by
the full faith and credit of, the federal government of the United States, (b)
repurchase agreements with banking institutions or broker-dealers registered
under the Securities Exchange Act of 1934 which are fully secured by obligations
of the kind specified in clause (a), (c) money market funds (i) rated not lower
than the highest rating category from ▇▇▇▇▇'▇ Investors Service and "AAA m" or
"AAAm-g," from Standard & Poor's Rating Service or (ii) which are otherwise
acceptable to the Agent or (d) commercial paper issued by any corporation
incorporated under the laws of the United States and rated at least "A-1+" (or
the equivalent) by Standard & Poor's Ratings Service and at least "P-1" (or the
equivalent) by ▇▇▇▇▇'▇ Investors Service.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"P.O. Box" means a locked postal box located in a United States post
office to which Obligors remit payments of Receivables.
"Postal Notice" means a notice from an Originator directing the United
States post office where any P.O. Box is located to transfer control of such
P.O. Box to the Agent, which notice shall be substantially in the form of
Exhibit XII.
"Potential Amortization Event" means an event which, with the passage
of time or the giving of notice, or both, would constitute an Amortization
Event.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Principal Collections" means Collections other than Finance Charge
Collections.
"Pro Rata Share" means, for each Financial Institution, a percentage
equal to (i) the Commitment of such Financial Institution, divided by (ii) the
aggregate amount of all Commitments of all Financial Institutions hereunder,
adjusted as necessary to give effect to the application of the terms of Sections
13.5 or 13.6.
"Purchase Limit" means $200,000,000.
"Purchase Notice" has the meaning set forth in Section 1.2.
Exh. I-20
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Purchase Price" means, with respect to any Incremental Purchase of a
Purchaser Interest, the amount paid to Seller for such Purchaser Interest which
shall not exceed the least of (i) the amount requested by Seller in the
applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the
applicable purchase date and (iii) the excess, if any, of the Net Receivables
Balance (less the Credit Enhancement) on the applicable purchase date over the
aggregate outstanding amount of Aggregate Capital determined as of the date of
the most recent Monthly Report, taking into account such proposed Incremental
Purchase.
"Purchaser Interest" means, at any time, an undivided percentage
ownership interest (computed as set forth below) associated with a designated
amount of Capital, selected pursuant to the terms and conditions hereof in (i)
each Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Security with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:
C
--------
NRB - CE
where:
C = the Capital of such Purchaser Interest.
CE = the Credit Enhancement.
NRB = the Net Receivables Balance.
Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
Business Day immediately preceding the Amortization Date shall remain constant
at all times thereafter.
Exh. I-21
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
"Purchasers" means Conduit and each Financial Institution.
"Purchasing Financial Institution" has the meaning set forth in Section
12.1(b).
"Receivable" means at any time, each and every Originated Receivable
that has been identified for sale to Seller in any Sale Assignment (as defined
in the Receivables Sale Agreement), including all schedules thereto, delivered
pursuant to Section 1.1(a)(ii) of the Receivables Sale Agreement.
"Receivables Sale Agreement" means that certain Receivables Sale
Agreement, dated as of May 10, 2002, by and among the Originators and Seller, as
the same may be amended, restated, supplemented or otherwise modified from time
to time.
"Records" means, with respect to any Receivable, all Contracts and
other documents, books, records and other information (including, without
limitation, computer programs, tapes, disks, punch cards, data processing
software and related property and rights) relating to such Receivable, any
Related Security therefor and the related Obligor.
"Reduction Notice" has the meaning set forth in Section 1.3.
"Reduction Percentage" means, for any Purchaser Interest acquired by
the Financial Institutions from Conduit for less than the Capital of such
Purchaser Interest, a percentage equal to a fraction the numerator of which is
the Conduit Transfer Price Reduction for such Purchaser Interest and the
denominator of which is the Capital of such Purchaser Interest.
"Related Equipment" means with respect to any Receivable, the goods
sold or licensed to or financed for the Obligor which sale, licensing or
financing gave rise to such Receivable and all financing statements or other
filings with respect thereto.
"Related Security" means, with respect to any Receivable:
(i) all of Seller's interest in the Related Equipment or other
inventory and goods (including returned or repossessed inventory or
goods), if any, the sale, licensing or financing of which by the
applicable Originator gave rise to such Receivable, and all insurance
contracts with respect thereto,
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure payment
of such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise, together with all
Exh. I-22
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
financing statements and security agreements describing any collateral
securing such Receivable,
(iii) all guaranties, letters of credit, insurance,
"supporting obligations" (within the meaning of Section 9-102(a) of the
UCC of all applicable jurisdictions) and other agreements or
arrangements of whatever character from time to time supporting or
securing payment of such Receivable whether pursuant to the Contract
related to such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of Seller's right, title and interest in, to and
under the Receivables Sale Agreement and the Performance Undertaking,
(vii) all of Seller's right, title and interest in and to each
Lock-Box, P.O. Box and Collection Account, and any and all agreements
related thereto,
(viii) all of Seller's right, title and interest in, to and
under the Hedging Agreement, and
(ix) all proceeds of any of the foregoing.
"Repossessed" means that, with respect to any Related Equipment, the
applicable Originator or its agent has obtained possession, control and dominion
of such Related Equipment from the related Obligor.
"Required Financial Institutions" means, at any time, Financial
Institutions with Commitments in excess of 66-2/3% of the Purchase Limit.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
membership units of Seller now or hereafter outstanding, except a dividend
payable solely in shares of that class of membership units or in any junior
class of membership units of Seller, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of membership units of Seller now or
hereafter outstanding, (iii) any payment or prepayment of principal of, premium,
if any, or interest, fees or other charges on or with respect to, and any
redemption, purchase, retirement, defeasance, sinking fund or similar payment
and any claim for rescission with respect to the Subordinated Loans
Exh. I-23
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
(as defined in the Receivables Sale Agreement), (iv) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of membership
units of Seller now or hereafter outstanding, and (v) any payment of management
fees by Seller (except for reasonable management fees to the Originators or
their Affiliates in reimbursement of actual management services performed).
"Second Tier Account" means the account numbered ▇▇▇▇▇▇▇ maintained by
Seller in the name of "PDC Funding Company, LLC" at Bank One, together with any
successor account or sub-account.
"Seller" has the meaning set forth in the preamble to this Agreement.
"Seller Parties" has the meaning set forth in the preamble to this
Agreement.
"Servicer" means at any time the Person (which may be the Agent) then
authorized pursuant to Article VIII to service, administer and collect
Receivables.
"Servicing Fee" has the meaning set forth in Section 8.6.
"Settlement Date" means (A) the 19th day of each calendar month, and
(B) the last day of the relevant Tranche Period in respect of each Purchaser
Interest of the Financial Institutions; or, in each case, if such day is not a
Business Day, then the first Business Day thereafter.
"Settlement Period" means (A) in respect of each Purchaser Interest of
Conduit, (i) at any time when the Hedge Agreement is not in full force and
effect, the immediately preceding Accrual Period and (ii) at any time when the
Hedge Agreement is in full force and effect, each period commencing on (and
including) a Settlement Date and ending on (but excluding) the next Settlement
Date, and (B) in respect of each Purchaser Interest of the Financial
Institutions, the entire Tranche Period of such Purchaser Interest. As used
herein, the "related" Settlement Period with respect to a Settlement Date means
the Settlement Period which precedes such Settlement Date in the case of
Purchaser Interests of the Conduit or which ends on such Settlement Date in the
case of Purchaser Interests of the Financial Institutions.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, limited liability company, joint venture or
similar business organization more than 50% of the
Exh. I-24
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of Seller.
"Termination Date" has the meaning set forth in Section 2.2(d).
"Termination Percentage" has the meaning set forth in Section 2.2(d).
"Terminating Financial Institution" has the meaning set forth in
Section 13.6(a).
"Terminating Tranche" has the meaning set forth in Section 4.3(b).
"Tranche Period" means, with respect to any Purchaser Interest held by
a Financial Institution:
(a) if Financial Institution Yield for such Purchaser Interest
is calculated on the basis of the LIBO Rate, a period of one month, or
such other period as may be mutually agreeable to the Agent and Seller,
commencing on a Business Day selected by Seller or the Agent pursuant
to this Agreement. Such Tranche Period shall end on the day in the
applicable succeeding calendar month which corresponds numerically to
the beginning day of such Tranche Period, provided, however, that if
there is no such numerically corresponding day in such succeeding
month, such Tranche Period shall end on the last Business Day of such
succeeding month; or
(b) if Financial Institution Yield for such Purchaser Interest
is calculated on the basis of the Prime Rate, a period commencing on a
Business Day selected by Seller and agreed to by the Agent, provided no
such period shall exceed one month.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Purchaser Interest which commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortization Date. The duration of each Tranche Period
which commences after the Amortization Date shall be of such duration as
selected by the Agent.
"Transaction Documents" means, collectively, this Agreement, each
Purchase Notice, the Receivables Sale Agreement, the Performance Undertaking,
the Intercreditor Agreement, each Collection Account Agreement, the Hedging
Agreement, the Fee Letter,
Exh. I-25
▇▇▇▇▇▇▇▇▇ RECEIVABLES PURCHASE AGREEMENT
the Subordinated Note (as defined in the Receivables Sale Agreement) and all
other instruments, documents and agreements executed and delivered in connection
herewith.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"Unconditional Liquidity Provider" means a Financial Institution that
is identified by the Agent or by Bank One as an entity which will not under any
circumstance receive any Conduit Transfer Price Reduction hereunder.
"US Bank" means U.S. Bank National Association, a national banking
association, together with its successors.
"US Bank Contract Purchase Agreement" means that certain Second Amended
and Restated Contract Purchase Agreement, dated as of April 28, 2000, by and
among PDCo, PDSI, certain financial institutions party thereto and US Bank, as
agent, as amended by the First Amendment to Second Amended and Restated Contract
Purchase Agreement, dated as of April 30, 2001 and as further amended, restated,
supplemented or otherwise modified from time to time.
"US Bank Receivable" means each receivable identified on a schedule to
the US Bank Contract Purchase Agreement (or in any other writing delivered
pursuant thereto) as a receivable to be sold thereunder and identified at least
by the obligor thereof and the outstanding principal amount thereof.
"Veterinary Receivable" means a Receivable arising from the sale or
financing by ▇▇▇▇▇▇▇ of veterinary equipment.
"▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ Veterinary Supply, Inc., a Minnesota
corporation, together with its successors and assigns.
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC in the State of
Illinois, and not specifically defined herein, are used herein as defined in
such Article 9.
Exh. I-26