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TRANSFER AND ADMINISTRATION AGREEMENT
between
ENTERPRISE FUNDING CORPORATION,
as Company
and
▇▇▇▇▇▇▇▇'▇ CREDIT CORPORATION
as Transferor
and
▇▇▇▇▇'▇, INC.
as Servicer
and
▇▇▇▇▇▇▇▇'▇, INC.
as Servicer Guarantor
and
NATIONSBANK, N.A.
as Agent and Bank Investor
Dated as of January 15, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.1. Certain Defined Terms . . . . . . . . . . . . . . . . .1
SECTION 1.2. Other Terms . . . . . . . . . . . . . . . . . . . . . 29
SECTION 1.3. Computation of Time Periods . . . . . . . . . . . . . 29
ARTICLE II
PURCHASES AND SETTLEMENTS. . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.1. Facility. . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.2. Transfers; Certificates; Eligible Receivables . . . . 30
SECTION 2.3. Fundings. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.4. Carrying Costs, Fees and Other Costs and Expenses . . 38
SECTION 2.5. Allocations of Collections; Non-Liquidation
Settlement and Reinvestment Procedures; Servicer
Advances. . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 2.6. Liquidation Settlement Procedures. . . . . . . . . . . 42
SECTION 2.7. Fees. . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 2.8. Protection of Ownership Interest of the Company and
the Bank Investors. . . . . . . . . . . . . . . . . . 43
SECTION 2.9. Deemed Collections; Application of Payments . . . . . 45
SECTION 2.10. Payments and Computations, Etc. . . . . . . . . . . . 46
SECTION 2.11. Reports.. . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 2.12. Collection Account. . . . . . . . . . . . . . . . . . 47
SECTION 2.13. Sharing of Setoff . . . . . . . . . . . . . . . . . . 48
SECTION 2.14. Right of Setoff . . . . . . . . . . . . . . . . . . . 49
ARTICLE III
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . 50
SECTION 3.1. Representations and Warranties of the Transferor. . . 50
SECTION 3.2. Representations and Warranties of the Servicer. . . . 55
SECTION 3.3. Reaffirmation of Representations and Warranties by
the Transferor and Servicer . . . . . . . . . . . . . 56
ARTICLE IV
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 4.1. Conditions to Closing.. . . . . . . . . . . . . . . . 58
ARTICLE V
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.1. Affirmative Covenants of Transferor . . . . . . . . . 62
SECTION 5.2. Negative Covenants of the Transferor. . . . . . . . . 69
SECTION 5.3. Minimum Net Worth of Transferor . . . . . . . . . . . 73
SECTION 5.4. Covenants of the Servicer . . . . . . . . . . . . . . 73
ARTICLE VI
ADMINISTRATION AND COLLECTIONS . . . . . . . . . . . . . . . . . . . 77
SECTION 6.1. Appointment of Servicer . . . . . . . . . . . . . . . 77
SECTION 6.2. Duties of Servicer. . . . . . . . . . . . . . . . . . 77
SECTION 6.3. Rights After Designation of New Servicer. . . . . . . 49
SECTION 6.4. Servicer Default. . . . . . . . . . . . . . . . . . . 80
SECTION 6.5. Responsibilities of the Transferor and the
Designated Sellers. . . . . . . . . . . . . . . . . . 82
ARTICLE VII
TERMINATION EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 7.1. Termination Events. . . . . . . . . . . . . . . . . . 83
SECTION 7.2. Termination . . . . . . . . . . . . . . . . . . . . . 85
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS . . . . . . . . . . . . . 86
SECTION 8.1. Indemnities by the Transferor . . . . . . . . . . . . 86
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses. . . . . . 90
SECTION 8.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 8.4. Other Costs, Expenses and Related Matters . . . . . . 94
SECTION 8.5. Reconveyance Under Certain Circumstances. . . . . . . 95
ARTICLE IX
SERVICER GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . 96
SECTION 9.1. Guaranty of Obligations . . . . . . . . . . . . . . . 96
SECTION 9.2. Validity of Obligations. Irrevocability . . . . . . . 96
SECTION 9.3. Rights of Set-Off . . . . . . . . . . . . . . . . . . 97
SECTION 9.4. Representations and Warranties. . . . . . . . . . . . 97
SECTION 9.5. Guarantor Default . . . . . . . . . . . . . . . . . . 99
ARTICLE X
THE AGENT; BANK COMMITMENT . . . . . . . . . . . . . . . . . . . . .100
SECTION 10.1. Authorization and Action. . . . . . . . . . . . . . .101
SECTION 10.2. Agent's Reliance, Etc.. . . . . . . . . . . . . . . .102
SECTION 10.3. Credit Decision . . . . . . . . . . . . . . . . . . .103
SECTION 10.4. Indemnification of the Agent. . . . . . . . . . . . .104
SECTION 10.5. Successor Agent . . . . . . . . . . . . . . . . . . .104
SECTION 10.6. Payments by the Agent . . . . . . . . . . . . . . . .105
ARTICLE XI
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . .111
SECTION 11.1. Term of Agreement . . . . . . . . . . . . . . . . . .111
SECTION 11.2. Waivers; Amendments . . . . . . . . . . . . . . . . .111
SECTION 11.3. Notices . . . . . . . . . . . . . . . . . . . . . . .111
SECTION 11.4. Governing Law; Submission to Jurisdiction;
Integration . . . . . . . . . . . . . . . . . . . . .114
SECTION 11.5. Severability; Counterparts. . . . . . . . . . . . . .115
SECTION 11.6. Successors and Assigns. . . . . . . . . . . . . . . .115
SECTION 11.7. Waiver of Confidentiality . . . . . . . . . . . . . .116
SECTION 11.8. Confidentiality Agreement . . . . . . . . . . . . . .116
SECTION 11.9. No Bankruptcy Petition Against the Company. . . . . .117
SECTION 11.10. No Recourse Against Stockholders, Officers or
Director. . . . . . . . . . . . . . . . . . . . . . .117
SECTION 11.11. Characterization of the Transactions Contemplated
by the Agreement. . . . . . . . . . . . . . . . . . .117
SCHEDULES
SCHEDULE A Account Schedule
EXHIBITS
EXHIBIT A Form of Account
EXHIBIT B Credit Guidelines
EXHIBIT C List of Lock-Box Banks and Accounts
EXHIBIT D Form of Lock-Box Agreement
EXHIBIT E Form of Investor Report
EXHIBIT F Form of Transfer Certificate
EXHIBIT G Form of Assignment and Assumption Agreement
EXHIBIT H List of Actions and Suits
EXHIBIT I Location of Records
EXHIBIT J List of Subsidiaries, Divisions and Tradenames
EXHIBIT K Form of Transferor's Counsel's Opinion
EXHIBIT L Forms of Secretary's Certificate
EXHIBIT M Form of Certificate
EXHIBIT N Financial Covenant Definitions
EXHIBIT O Financial Covenants and Ratios
EXHIBIT P Form of Cycle Certificate
TRANSFER AND ADMINISTRATION AGREEMENT
TRANSFER AND ADMINISTRATION AGREEMENT (this "Agreement"),
dated as of January 15, 1997, by and among ▇▇▇▇▇▇▇▇'▇ CREDIT
CORPORATION, a Nevada corporation, as transferor (in such capacity, the
"Transferor"), ▇▇▇▇▇▇▇▇'▇, INC., a Tennessee corporation ("▇▇▇▇▇▇▇▇'▇")
in its capacity as servicer guarantor ("Servicer Guarantor"), ▇▇▇▇▇'▇,
INC., a Mississippi corporation, as servicer (the "Servicer" or
"▇▇▇▇▇'▇"), ENTERPRISE FUNDING CORPORATION, a Delaware corporation (the
"Company") and NATIONSBANK, N.A., a national banking association
("NationsBank"), as agent for the Company and the Bank Investors (in
such capacity, the "Agent") and as a Bank Investor.
PRELIMINARY STATEMENTS
WHEREAS, the Transferor may desire to convey, transfer and
assign, from time to time, undivided percentage interests in certain
accounts receivable, and the Company may desire to, and the Bank
Investors, if requested, shall, accept such conveyance, transfer and as-
signment of such undivided percentage interests, subject to the terms
and conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used in this Agree-
ment, the following terms shall have the following meanings:
"Account" shall mean each credit account established pursuant
to an Account Agreement between a Designated Seller and an Obligor as of
the Cut-Off Date and on any day thereafter, which is identified by
account number and by the Outstanding Principal Balance as of the Cut-Off
Date and referred to in the Account Schedule delivered to the Agent
on the Closing Date pursuant to Section 2.8, including any Related
Account, and any such Account established after the Cut-Off Date shall
be identified on the Account Schedule as such schedule may be amended
from time to time pursuant to Section 2.8.
"Account Agreement" shall mean the agreements and Federal
Truth in Lending Statement for Accounts, in substantially the form
attached as Exhibit A to this Agreement, as such agreements or statement
may be amended, modified or otherwise changed from time to time.
"Account Schedule" shall mean the schedule of Accounts (which
schedule may be in the form of a computer file or microfiche) of the
Transferor attached as Schedule A to this Agreement, as amended or
modified from time to time pursuant to the terms of this Agreement.
"Accrued Interest Component" means, for any Collection Period,
that portion of the Interest Component of all Related Commercial Paper
outstanding at any time during such Collection Period which has accrued
from the first day through the last day of such Collection Period wheth-
er or not such Related Commercial Paper matures during such Collection
Period, based on the actual number of days in such Collection Period
that such Related Commercial Paper was outstanding.
"Adjusted LIBOR Rate" means, with respect to any period during
which the return to any Bank Investor or the Liquidity Provider is to be
calculated by reference to the London interbank offered rate, a rate
which is 0.875% in excess of a rate per annum equal to the sum (rounded
upwards, if necessary, to the next higher 1/100 of 1%) of (A) the rate
obtained by dividing (i) the applicable LIBOR Rate by (ii) a percentage
equal to 100% minus the reserve percentage used for determining the
maximum reserve requirement as specified in Regulation D (including,
without limitation, any marginal, emergency, supplemental, special or
other reserves) that is applicable to the Agent during such period in
respect of eurocurrency or eurodollar funding, lending or liabilities
(or, if more than one percentage shall be so applicable, the daily
average of such percentage for those days in such period during which
any such percentage shall be applicable) plus (B) the then daily net
annual assessment rate (rounded upwards, if necessary, to the nearest
1/100 of 1%) as estimated by the Agent for determining the current
annual assessment payable by the Agent to the Federal Deposit Insurance
Corporation in respect of eurocurrency or eurodollar funding, lending or
liabilities.
"Administrative Agent" means NationsBank, N.A., as administra-
tive agent.
"Administrative Fee" means the fee payable by the Transferor
to the Company pursuant to Section 2.7 hereof, the terms of which are
set forth in the Fee Letter.
"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 (including any UCC financing
statement or any similar instrument filed against such Person's assets
or properties), provided, however, that an Adverse Claim shall not be
considered to exist with respect to a Receivable solely as a result of
an interest in such Receivable existing in favor of either (x) the con-
▇▇▇▇▇▇ of the merchandise sold in connection with the creation of such
Receivable or (y) the owner of a leased department which sold the
merchandise the sale of which resulted in the creation of such Receiv-
able.
"Affected Assets" means, collectively, the Receivables and the
Related Security, Collections and Proceeds relating thereto.
"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. A Person shall be
deemed to control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through
ownership of voting stock, by contract or otherwise.
"Agent" means NationsBank, N.A., in its capacity as agent for
the Company and the Bank Investors, and any successor thereto appointed
pursuant to Article X.
"Aggregate Interest Component" means aggregate sum of the
Interest Components of all issued and outstanding Related Commercial
Paper.
"Aggregate Unpaids" means, at any time, an amount equal to the
sum of (i) the aggregate accrued and unpaid Carrying Costs at such time,
(ii) all amounts of the type included in the definition of "Carrying
Costs" which may accrue after such time, (iii) the Net Investment at
such time, and (iv) all other amounts owed (whether due or accrued)
hereunder by the Transferor to the Company, the Agent or any Bank
Investor at such time.
"Arrangement Fee" means the fee payable by the Transferor to
the Administrative Agent pursuant to Section 2.7 hereof, the terms of
which are set forth in the Fee Letter.
"Assignment Amount" with respect to a Bank Investor shall mean
at any time an amount equal to the lesser of (i) such Bank Investor's
Pro Rata Share of the Net Investment at such time and (ii) such Bank
Investor's unused Commitment.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement substantially in the form of Exhibit G attached
hereto.
"Bank Investors" shall mean NationsBank, N.A. and each other
financial institution that becomes a Bank Investor pursuant to an
Assignment and Assumption Agreement and the respective successors and
permitted assigns of any of the foregoing.
"Bankruptcy Code" means Title 11 of the United States Code, as
amended and modified from time to time.
"Base Rate" means, a rate per annum equal to the greater of
(i) the prime rate of interest announced by the Liquidity Provider (or
if more than one Liquidity Provider, then by NationsBank) from time to
time, changing when and as said prime rate changes (such rate not neces-
sarily being the lowest or best rate charged by the Liquidity Provider
(or if more than one Liquidity Provider, by NationsBank)) and (ii) the
sum of (a) 1.50% and (b) the rate equal to the weighted average of the
rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published
for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Liquidity Provider (or, if more than one Liquidity Provider, then by
NationsBank) from three Federal funds brokers of recognized standing se-
lected by it.
"Benefit Plan" means any employee benefit plan as defined in
Section 3(3) of ERISA in respect of which the Transferor, any Designated
Seller or any ERISA Affiliate of the Transferor, or a Designated Seller
is, or at any time during the immediately preceding six years was, an
"employer" as defined in Section 3(5) of ERISA.
"Business Day" means any day excluding Saturday, Sunday and
any day on which banks in New York, New York, Charlotte, North Carolina,
Memphis, Tennessee, Birmingham, Alabama or Jackson, Mississippi are
authorized or required by law to close, and, when used with respect to
the determination of any Eurodollar Rate or any notice with respect
thereto, any such day which is also a day for trading by and between
banks in United States dollar deposits in the London interbank market.
"Buyers' Percentage Factor" shall mean the percentage computed
in accordance with Section 2.2(e) as follows:
NI/NRB
Where:
NI = the Net Investment at the time of such computation.
NRB = the Net Receivables Balance at the time of such computation.
Notwithstanding the foregoing computation, (i) the Buyers'
Percentage Factor shall not exceed 100%, and (ii) the Buyers' Percentage
Factor with respect to Principal Collections at any time on and after
the Termination Date shall be the percentage equivalent of a fraction
the numerator of which is the Net Investment as of the Termination Date
and the denominator of which is the lesser of (x) the Net Receivables
Balance on the last day of the Collection Period immediately prior to
the Termination Date or (y) the Net Receivables Balance on the last day
of the immediately preceding Collection Period.
"Capitalized Leases" shall mean capital leases and subleases,
as defined in the Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 13, dated November 1976, as amended.
"Carrying Costs" shall mean for a Collection Period the sum of
(i) the sum of the dollar amount of the Company's obligations for such
Collection Period determined on an accrual basis in accordance with GAAP
consistently applied (a) to pay interest with respect to Purchased
Interests pursuant to the provisions of the Liquidity Provider Agreement
(such interest to be calculated based on the Adjusted LIBOR Rate, pro-
vided that if a Termination Event shall have occurred, such interest
shall be calculated at the Base Rate plus 2.00%) outstanding at any time
during such Collection Period accrued from the first day through the
last day of such Collection Period whether or not such interest is
payable during such Collection Period and to pay interest with respect
to amounts disbursed by a Credit Support Provider pursuant to the Credit
Support Agreement outstanding at any time during such Collection Period
accrued from the first day through the last day of such Collection
Period whether or not such interest is payable during such Collection
Period, (b) to pay the Accrued Interest Component of Related Commercial
Paper with respect to any Collection Period (and, for purposes of this
clause (b), Related Commercial Paper shall include Commercial Paper
issued to fund the Net Investment even if such Commercial Paper is
issued in an amount in excess of the Net Investment), (c) to pay the
Dealer Fee with respect to Related Commercial Paper issued during such
Collection Period, (d) to pay any past due interest not paid in clause
(a) and (b) with respect to prior Collection Periods, and (e) to pay the
costs of the Company with respect to the operation of Sections 8.1, 8.2,
8.3 and 8.4, and (ii) the Program Fee, the Administrative Fee and the
Facility Fee accrued from the first day through the last day of such
Collection Period whether or not such amount is payable during such
Collection Period, and all interest amounts due the Bank Investors in
accordance with Section 2.3(c), (d) and (e).
"Certificate" means the certificate issued to the Agent for
the benefit of the Company and the Bank Investors pursuant to Section
2.2(d) hereof.
"Closing Date" means January 16, 1997.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means NationsBank, N.A., as collateral
agent for any Liquidity Provider, any Credit Support Provider, the
holders of Commercial Paper and certain other parties.
"Collection Account" means the account, established by the
Agent, for the benefit of the Company and the Bank Investors, pursuant
to Section 2.12.
"Collection Period" shall mean each calendar month; provided,
that the first Collection Period shall begin on the Closing Date and
shall end on the last day of the calendar month containing the Closing
Date.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including,
without limitation, all Recoveries and Finance Charges, if any, and cash
proceeds of Related Security with respect to such Receivable.
"Commercial Paper" means the promissory notes of the Company
issued by the Company in the commercial paper market.
"Commitment" means, (i) with respect to each Bank Investor
party hereto, the commitment of such Bank Investor to make acquisitions
from the Transferor or the Company in accordance herewith in an amount
not to exceed the dollar amount set forth opposite such Bank Investor's
signature on the signature page hereto under the heading "Commitment",
minus the dollar amount of any Commitment or portion thereof assigned
pursuant to an Assignment and Assumption Agreement plus the dollar
amount of any increase to such Bank Investor's Commitment consented to
by such Bank Investor prior to the time of determination, (ii) with re-
spect to any assignee of a Bank Investor party hereto taking pursuant to
an Assignment and Assumption Agreement, the commitment of such assignee
to make acquisitions from the Transferor or the Company not to exceed
the amount set forth in such Assignment and Assumption Agreement minus
the dollar amount of any Commitment or portion thereof assigned pursuant
to an Assignment and Assumption Agreement prior to such time of
determination and (iii) with respect to any assignee of an assignee re-
ferred to in clause (ii), the commitment of such assignee of such as-
signee to make acquisitions from the Transferor or the Company not to
exceed the amount set forth in an Assignment and Assumption Agreement
between such assignee and its assign.
"Commitment Termination Date" means January 14, 1998, or such
later date to which the Commitment Termination Date may be extended by
Transferor, the Agent and the Bank Investors not later than 30 days
prior to the then current Commitment Termination Date.
"Company" means Enterprise Funding Corporation, and its
successors and assigns.
"Credit Guidelines" shall mean the Designated Sellers' credit
and collection policy or policies and practices, relating to Accounts
and Receivables existing on the date hereof and referred to in Exhibit
B attached hereto, as modified and as supplemented from time to time in
compliance with Section 5.2(c).
"Credit Support Agreement" means the agreement between the
Company and the Credit Support Provider evidencing the obligation of the
Credit Support Provider to provide credit support to the Company in
connection with the issuance by the Company of Commercial Paper.
"Credit Support Provider" means the Person or Persons who
provides credit support to the Company in connection with the issuance
by the Company of Commercial Paper.
"Cut-Off Date" shall mean January 14, 1997.
"Cycle Certificate" shall mean the certificate of the Servicer
in the form of Exhibit P hereto.
"Date of Processing" shall mean, with respect to any
transaction giving rise to a Receivable, the date on which such
transaction is first recorded on the Servicer's computer master file of
Accounts (without regard to the effective date of such recordation).
"Dealer Fee" shall have the meaning assigned in the Fee
Letter.
"Deemed Collections" means any Collections on any Receivable
deemed to have been received pursuant to Section 2.9(a) or (b) hereof.
"Default Ratio" means, with respect to any Collection Period,
the ratio (expressed as a percentage) computed as of the last day of
each Collection Period by dividing (i) the product of (x) 12 and (y) the
aggregate amount of Receivables which became Defaulted Receivables
during such Collection Period by (ii) the aggregate amount of all Re-
ceivables (other than Defaulted Receivables) as of the last day of the
prior Collection Period.
"Defaulted Receivable" means a Receivable: (i) as to which
any payment, or part thereof, remains unpaid for 181 days or more from
the original due date for such Receivable; (ii) as to which an Event of
Bankruptcy has occurred and is continuing with respect to the Obligor
thereof; (iii) which has been identified by the Transferor, the
Designated Seller or the Servicer as uncollectible; or (iv) which,
consistent with the Credit Guidelines, should be written off as ▇▇▇▇▇-
lectible.
"Delinquency Ratio" means, the ratio (expressed as a
percentage) computed as of the last day of each Collection Period by
dividing (i) the aggregate amount of all Delinquent Receivables as of
such date by (ii) the aggregate amount of all Receivables (other than
Defaulted Receivables) as of such date.
"Delinquent Receivable" means a Receivable: (i) as to which
any payment, or part thereof, remains unpaid for more than 30 days from
the original due date for such Receivable and (ii) which is not a
Defaulted Receivable.
"Designated Seller" means (i) ▇▇▇▇▇▇▇▇'▇, Inc., a Tennessee
corporation, (ii) ▇▇▇▇▇'▇, Inc. a Mississippi corporation, and (iii) any
other Person designated with the written consent of the Agent as the
"seller" under any Receivables Purchase Agreement, and in each case such
Person's successors and permitted assigns.
"Determination Date" shall mean with respect to any Collection
Period, the twelfth day of the succeeding calendar month or, if such
twelfth day is not a Business Day, the Business Day next succeeding such
twelfth day.
"Dilution Ratio" shall mean the ratio (expressed as a
percentage) computed as of the last day of each Collection Period by
dividing (i) the aggregate amount by which Receivables are reduced or
cancelled as a result of any defective, rejected or returned merchandise
or services and all credits, rebates, discounts, disputes, warranty
claims, repossessed or returned goods, chargebacks, allowances, or any
other downward adjustments to the balance of such Receivable without
receiving Collections therefor and prior to such Receivable becoming a
Defaulted Receivable, (whether effected through the granting of credits
against the applicable Receivables or by the issuance of a check or
other payment in respect of (and as payment for) such reduction) by a
Designated Seller, the Transferor or the Servicer, provided to Obligors
in respect of Receivables during such month by (ii) the aggregate
Outstanding Principal Balance of all Receivables as of the last day of
the preceding Collection Period.
"Discount Percentage" shall mean the percentage designated by
the Transferor pursuant to Section 2.5(e).
"Discount Receivables" shall have the meaning specified in
Section 2.5(e).
"Discount Receivable Collections" shall mean, for any day, the
product of (a) a fraction the numerator of which is the amount of Dis-
count Receivables and the denominator of which is the sum of the
Principal Receivables and the Discount Receivables, in each case at the
end of the prior Collection Period and (b) Principal Collections
(without giving effect to Discount Receivables Collections) on such day.
"Early Collection Fee" means, for any funding period during
which the portion of the Net Investment that was allocated to such
funding period is reduced for any reason whatsoever, the excess, if any,
of (i) the additional interest that would have accrued during such
funding period if such reductions had not occurred, minus (ii) the
income, if any, received by the recipient of such reductions from
investing the proceeds of such reductions.
"Eligible Account" shall mean, as of the Cut-Off Date (or,
with respect to Accounts arising after the Cut-Off Date, as of the date
of creation), each Account in existence and owned by a Designated
Seller:
(a) which is payable in United States Dollars;
(b) the credit card or cards related thereto have not
been reported lost or stolen or designated fraudulent;
(c) the Obligor on which has provided, as its most
recent billing address, an address located in the United States or its
territories or possessions, or Canada, or which is a United States
military address;
(d) which is not an Account as to which any of the
Receivables existing thereunder are Defaulted Receivables;
(e) which has been created by a Designated Seller (or
another entity which sells Receivables to a Designated Seller as
permitted by a Receivables Purchase Agreement) in the ordinary course of
its business in accordance with, or under standards no less stringent
than, the Credit Guidelines;
(f) with respect to which the applicable Designated
Seller has good title thereto, free and clear of all Adverse Claims; and
(g) the Obligor on which has not been identified by
the Servicer or the Transferor, as applicable, in its computer files as
having (i) died, (ii) commenced, or had commenced in respect of such
Obligor, a case, action or proceeding under any law of any jurisdiction
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking relief with respect to such Obligor's debts, or seeking to have
such Obligor adjudicated bankrupt or insolvent, or to have a receiver,
trustee, custodian or other similar official appointed for such Obligor
or for all or any substantial part of such Obligor's assets or (iii)
made a general assignment of such Obligor's assets for the benefit of
such Obligor's creditors, which assignment is then in full force and
effect.
"Eligible Investments" means any of the following (a) negotia-
ble instruments or securities represented by instruments in bearer or
registered or in book-entry form which evidence (i) obligations fully
guaranteed by the United States of America; (ii) time deposits in, or
bankers acceptances issued by, any depositary institution or trust
company incorporated under the laws of the United States of America or
any state thereof and subject to supervision and examination by Federal
or state banking or depositary institution authorities; provided,
however, that at the time of investment or contractual commitment to
invest therein, the certificates of deposit or short-term deposits, if
any, or long-term unsecured debt obligations (other than such obligation
whose rating is based on collateral or on the credit of a Person other
than such institution or trust company) of such depositary institution
or trust company shall have a credit rating from ▇▇▇▇▇'▇ and S&P of at
least "P-1" and "A-1", respectively, in the case of the certificates of
deposit or short-term deposits, or a rating not lower than one of the
two highest investment categories granted by ▇▇▇▇▇'▇ and by S&P; (iii)
certificates of deposit having, at the time of investment or contractual
commitment to invest therein, a rating from ▇▇▇▇▇'▇ and S&P of at least
"P-1" and "A-1", respectively; or (iv) investments in money market funds
rated in the highest investment category or otherwise approved in
writing by the applicable rating agencies; (b) demand deposits in any
depositary institution or trust company referred to in (a)(ii) above;
(c) commercial paper (having original or remaining maturities of no more
than 30 days) having, at the time of investment or contractual
commitment to invest therein, a credit rating from ▇▇▇▇▇'▇ and S&P of at
least "P-1" and "A-1", respectively; (d) Eurodollar time deposits having
a credit rating from ▇▇▇▇▇'▇ and S&P of at least "P-1" and "A-1",
respectively; and (e) repurchase agreements involving any of the
Eligible Investments described in clauses (a)(i), (a)(iii) and (d)
hereof so long as the other party to the repurchase agreement has at the
time of investment therein, a rating from ▇▇▇▇▇'▇ and S&P of at least
"P-1" and "A-1", respectively.
"Eligible Receivable" means, at any time, any Receivable:
(a) with respect to which, the related Account is an
Eligible Account;
(b) which has been originated by a Designated Seller
(or another entity which sells Receivables to a Designated Seller as
permitted by a Receivables Purchase Agreement) in the ordinary course of
its business, sold to the Transferor pursuant to (and in accordance
with) the Receivables Purchase Agreement and to which the Transferor has
good title thereto, free and clear of all Adverse Claims;
(c) which (together with the Collections and Related
Security related thereto) has been the subject of either a valid trans-
fer and assignment from the Transferor to the Agent, on behalf of the
Company and the Bank Investors, of all of the Transferor's right, title
and interest therein or the grant of a first priority perfected security
interest therein (and in the Collections and Related Security related
thereto), effective until the termination of this Agreement;
(d) which arises pursuant to an Account with respect
to which each of the applicable Designated Seller (or another entity
which sells Receivables to a Designated Seller as permitted by a Receiv-
▇▇▇▇▇ Purchase Agreement) and the Transferor has performed all obliga-
tions required to be performed by it thereunder, including without
limitation shipment of the merchandise and/or the performance of the
services purchased thereunder;
(e) a purchase of which with the proceeds of Com-
mercial Paper would constitute a "current transaction" within the
meaning of Section 3(a)(3) of the Securities Act of 1933, as amended;
(f) which is an "account" or a "general intangible" or
"chattel paper" within the meaning of Article 9 of the UCC of all appli-
cable jurisdictions;
(g) which arises under an Account that, 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 and is not subject to any
litigation, right of rescission, dispute, offset, counterclaim or other
defense;
(h) which was created in compliance, in all material
respects, with all laws, rules or regulations applicable thereto (in-
cluding, without limitation, laws, rules and regulations relating to
truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and
pursuant to an Account Agreement which complies, in all material re-
spects, with all such laws, rules and regulations;
(i) which (A) satisfies all applicable requirements of
the Credit Guidelines, (B) has not been waived or modified except in
accordance with the Credit Guidelines, and (C) is assignable without the
consent of, or notice to, the Obligor thereunder;
(j) the Obligor of which has been directed to make all
payments to a specified account of the Servicer with respect to which
there shall be a Lock-Box Agreement in effect;
(k) with respect to which all material consents,
licenses, approvals or authorizations of, or registrations or
declarations with, any Governmental Authority required to be obtained,
effected or given by the Transferor or by the applicable Designated
Seller (or another entity which sells Receivables to a Designated Seller
as permitted by a Receivables Purchase Agreement) in connection with the
creation of such Receivable or the execution, delivery, creation and
performance by the Transferor or by the applicable Designated Seller (or
another entity which sells Receivables to a Designated Seller as
permitted by a Receivables Purchase Agreement) of the Account Agreement
pursuant to which such Receivable was created, have been duly obtained,
effected or given and are in full force and effect;
(l) the assignment of which under the Receivables Pur-
chase Agreement by the applicable Designated Seller and hereunder by the
Transferor (and, if applicable, the assignment by the entity which
originated such Receivable to a Designated Seller as permitted by a Re-
ceivables Purchase Agreement) does not violate, conflict or contravene
any applicable laws, rules, regulations, orders or writs or any contrac-
tual or other restriction, limitation or encumbrance; and
(m) as to which the Obligor has not exceeded its
credit limit by an amount in excess of the greater of (i) $300 or (ii)
10% of such credit limit as determined as of each cycle closing date,
except for exceptions which are immaterial in the aggregate.
"ERISA" means the U.S. Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated
and rulings issued thereunder.
"ERISA Affiliate" means, with respect to any Person, (i) any
corporation which is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Code (as in
effect from time to time, the "Code")) as such Person; (ii) a trade or
business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the Code) with such Person; or (iii) a
member of the same affiliated service group (within the meaning of Sec-
tion 414(n) of the Code) as such Person, any corporation described in
clause (i) above or any trade or business described in clause (ii)
above.
"Event of Bankruptcy" means, with respect to any Person, (i)
that such Person (a) shall generally not pay its debts as such debts
become due or (b) shall admit in writing its inability to pay its debts
generally or (c) shall make a general assignment for the benefit of
creditors; (ii) any proceeding shall be instituted by or against such
Person seeking to adjudicate it as 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 debt-
ors, or seeking the entry of an order for relief or the appointment of
a receiver, trustee or other similar official for it or any substantial
part of its property or (iii) if such Person is a corporation, such
Person or any Subsidiary shall take any corporate action to authorize
any of the actions set forth in the preceding clauses (i) or (ii).
"Excluded Taxes" shall have the meaning specified in Section
8.3 hereof.
"Facility Fee" means the fee payable by the Transferor to the
Agent for distribution to the Bank Investors pursuant to Section 2.7(a)
hereof, the terms of which are set forth in the Fee Letter.
"Facility Limit" means $175,000,000; provided that such amount
may not at any time exceed the aggregate Commitments at any time in
effect; provided, further, that from and after the Termination Date the
Facility Limit shall at all times equal the Net Investment plus the
Aggregate Interest Component.
"Fee Letter" means, collectively, the letter agreement or
agreements dated the date hereof (i) between the Transferor and the
Company and (ii) between the Transferor and the Agent on behalf of the
Bank Investors, in each case with respect to the fees to be paid by the
Transferor hereunder, as amended, modified or supplemented from time to
time.
"Finance Charge Collections" shall mean that portion of the
Collections with respect to the Receivables which are properly
designated in the Accounts as Finance Charges, together with (i) any
Recoveries (net of liquidation expenses, if any) in respect of Defaulted
Receivables and Related Security with respect thereto and (ii) all Dis-
count Receivable Collections.
"Finance Charges" means, with respect to an Account, any
periodic finance charges, late fees, returned check or NSF charges or
similar charges owing by an Obligor pursuant to such Account.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such accounting profession, which
are in effect as of the date of this Agreement.
"Governmental Authority" shall mean the United States of
America, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantor Default" shall have the meaning specified in
Section 9.5 hereof.
"Guaranty" means, with respect to any Person any agreement by
which such Person assumes, guarantees, endorses, contingently agrees to
purchase or provide funds for the payment of, or otherwise becomes
liable upon, the obligation 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 other creditor of such other
Person against loss, including, without limitation, any comfort letter,
operating agreement or take-or-pay contract and shall include, without
limitation, the contingent liability of such Person in connection with
any application for a letter of credit.
"Incremental Transfer" means a Transfer which is made pursuant
to Section 2.2(a) hereof.
"Indebtedness" means, with respect to any Person, without
duplication, such Person's (i) obligations for borrowed money evidenced
by a promissory note, bond or similar written obligation, including,
without limitation, conditional sales or similar title retention
agreements, (ii) obligations representing the deferred purchase price of
property other than accounts payable arising in the ordinary course of
such Person's business on terms customary in the trade, (iii) obliga-
tions, 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, acceptan-
ces, or other instruments, and all liabilities of such Person by way of
endorsements (other than for collection or deposit in the ordinary
course of business), (v) Capitalized Lease obligations, (vi) obligations
for which such Person is obligated pursuant to a Guaranty, (vii) all
Contingent Obligations (as defined in Exhibit N hereto), (viii) all
obligations arising in connection with such Person's interest rate
hedging activities, but excluding all accounts payable and accruals, in
each case in the ordinary course of business and only so long as payment
therefor is due within one year; provided, that in no event shall the
term Indebtedness include surplus and retained earnings, minority
interest in Subsidiaries, lease obligations (other than pursuant to
Capitalized Lease obligations), reserves for deferred income taxes and
investment credits, other deferred credits and reserves, and deferred
compensation obligations.
"Indemnified Amounts" has the meaning specified in Section 8.1
hereof.
"Indemnified Parties" has the meaning specified in Section 8.1
hereof.
"Interest Component" shall mean, (i) with respect to any
Commercial Paper issued on an interest-bearing basis, the interest
payable on such Commercial Paper at its maturity and (ii) with respect
to any Commercial Paper issued on a discount basis, the portion of the
face amount of such Commercial Paper representing the discount incurred
in respect thereof (including any dealer commissions to the extent
included as part of such discount).
"Investor Report" means a report, in substantially the form
attached hereto as Exhibit E or in such other form as is mutually agreed
to by the Transferor and the Agent, furnished by the Servicer pursuant
to Section 2.11 hereof.
"Law" means any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ,
decree or award of any Official Body.
"LIBOR Rate" means, with respect to any Collection Period, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in U.S. dollars at ap-
proximately 11:00 a.m. (London time) two London Business Days prior to
the first day of such Collection Period for a term of one month. If for
any reason such rate is not available, the term "LIBOR Rate" shall mean,
for any Collection Period, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in dollars at ap-
proximately 11:00 a.m. (London time) two London Business Days prior to
the first day of such Collection Period for a term of one month;
provided, however, if more than one rate is specified on the Reuters
Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates.
"Liquidity Provider" means the Person or Persons who will
provide liquidity support to the Company in connection with the issuance
by the Company of Commercial Paper.
"Liquidity Provider Agreement" means the agreement between the
Company and the Liquidity Provider evidencing the obligation of the
Liquidity Provider to provide liquidity support to the Company in
connection with the issuance by the Company of Commercial Paper.
"Lock-Box Account" means an account maintained by the Servicer
at a Lock-Box Bank for the purpose of receiving Collections from Receiv-
▇▇▇▇▇.
"Lock-Box Agreement" means an agreement between the Servicer
and a Lock-Box Bank in substantially the form of Exhibit D hereto.
"Lock-Box Bank" means each of the banks set forth in Exhibit
C hereto and such banks as may be added thereto or deleted therefrom
pursuant to Section 2.8 hereof.
"Majority Investors" shall have the meaning specified in
Section 10.1(a) hereof.
"Material Adverse Effect" means any event or condition which
would have a material adverse effect on (i) the collectibility of the
Receivables, (ii) the condition (financial or otherwise), businesses or
properties of the Transferor or any Designated Seller, (iii) the ability
of the Transferor or any Designated Seller to perform its respective
obligations under the Transaction Documents to which it is a party and
(iv) the interests of the Agent, the Company or the Bank Investors under
the Transaction Documents.
"Maximum Buyers' Percentage Factor" means 82%.
"▇▇▇▇▇'▇" shall mean ▇▇▇▇▇'▇, Inc., a Mississippi corporation.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the
current year or the immediately preceding five years contributed to by
the Transferor, the Designated Seller or any ERISA Affiliate of the
Transferor or the Designated Seller on behalf of its employees.
"Net Asset Test" means, in connection with any assignment by
the Company to the Bank Investors of an interest in the Net Investment
pursuant to Section 10.7 hereof, that on the day immediately prior to
the day on which such assignment is to take effect, the Net Receivables
Balance shall be greater than or equal to the Net Investment.
"Net Investment" means the sum of the initial Transfer Price
plus the sum of the cash amounts paid to the Transferor for each
Incremental Transfer less the aggregate amount of Collections received
and applied by the Agent to reduce such Net Investment pursuant to
Section 2.5, 2.6 or 2.9 hereof; provided that the Net Investment shall
be restored and reinstated in the amount of any Collections so received
and applied if at any time the distribution of such Collections is
rescinded or must otherwise be returned for any reason; and provided
further that the Net Investment may be increased by the amount described
in Section 10.7(d) as described therein.
"Net Portfolio Yield" shall mean, with respect to any
Collection Period, the annualized percentage equivalent of a fraction
the numerator of which is Finance Charge Collections less the Carrying
Costs for such Collection Period less the aggregate outstanding balance
of all Receivables which became Defaulted Receivables during such
Collection Period less the Servicing Fee with respect to such Collection
Period and the denominator of which is the daily average aggregate
Outstanding Principal Balance of all Receivables during such Collection
Period.
"Net Receivables Balance" at any time shall mean the aggregate
Outstanding Principal Balance of all Eligible Receivables, excluding (i)
the aggregate balance of any Discount Receivables at such time and (ii)
the amount by which the aggregate Outstanding Principal Balance of all
Eligible Receivables the Obligor of which is an employee of the
Transferor, any Designated Seller or any of their Affiliates exceeds
5.0% of the aggregate Outstanding Principal Balance of all Eligible
Receivables and (iii) all amounts owing at such time by any Designated
Seller (and any other entity which sells Receivables to a Designated
Seller as permitted by a Receivables Purchase Agreement) to (x) any con-
▇▇▇▇▇▇ of merchandise the sale of which may result in the creation of a
Receivable or (y) any owner of a leased department which sells ▇▇▇▇▇▇▇-
▇▇▇▇ the sale of which may result in the creation of a Receivable.
"Net Worth" means, with respect to the Transferor and at any
time, an amount equal to the aggregate Outstanding Principal Balance of
all Eligible Receivables at such time minus the amount of the Net
Investment at such time minus the outstanding principal amount at such
time of the subordinated note issued by the Transferor in connection
with the Receivables Purchase Agreement entered into with any Designated
Seller minus any other liabilities of the Transferor plus, if all of the
subordinated notes of the Transferor have zero balances outstanding, all
cash of the Transferor.
"Obligor" means any Person obligated to make payments under an
Account, including any guarantor thereunder.
"Obligations" shall have the meaning specified in Section 9.1
hereof.
"Official Body" means any government or political subdivision
or any agency, authority, bureau, central bank, commission, department
or instrumentality of any such government or political subdivision, or
any court, tribunal, grand jury or arbitrator, in each case whether
foreign or domestic.
"Other Transferor" means any Person other than the Transferor
that has entered into a receivables purchase agreement or transfer and
administration agreement with the Company.
"Outstanding Principal Balance" means, with respect to any Re-
ceivable at any time, the then outstanding principal amount thereof
excluding any accrued and outstanding Finance Charges related thereto
and giving effect to the amount of any credit balances and other adjust-
ments existing with respect to such Receivable on such day. The out-
standing principal amount of any Defaulted Receivables shall be
considered to be zero for the purposes of any determination hereunder of
the aggregate Outstanding Principal Balance of the Receivables or the
aggregate Outstanding Principal Balance of Eligible Receivables.
"Payment Rate" shall mean, for any Collection Period, the
percentage equivalent of a fraction, the numerator of which is equal to
the amount of all Principal Collections during such Collection Period
and the denominator of which is equal to the aggregate Outstanding
Principal Balance of all Receivables as of the last day of the prior
Collection Period.
"Person" means any corporation, limited liability company,
natural person, firm, joint venture, partnership, trust, unincorporated
organization, enterprise, government or any department or agency of any
government.
"Potential Termination Event" means an event which but for the
passage of time or the giving of notice, or both, would constitute a
Termination Event.
"Principal Collections" shall mean with respect to any
Collection Period, all Collections received during such period other
than Finance Charge Collections.
"Pro Rata Share" means, for a Bank Investor, the Commitment of
such Bank Investor divided by the sum of the Commitments of all Bank
Investors.
"Proceeds" means "proceeds" as defined in Section 9-306(1) of
the UCC.
"▇▇▇▇▇▇▇▇'▇" shall mean ▇▇▇▇▇▇▇▇'▇, Inc., a Tennessee
corporation.
"Program Fee" means the fee payable by the Transferor to the
Company pursuant to Section 2.7 hereof, the terms of which are set forth
in the Fee Letter.
"Purchased Interest" means the interest in the Receivables
acquired by a Liquidity Provider through purchase pursuant to the terms
of the Liquidity Provider Agreement.
"Purchase Termination Date" means the date upon which the
Transferor shall cease, for any reason whatsoever, to make purchases of
Receivables from the Designated Seller under the Receivables Purchase
Agreement or the Receivables Purchase Agreement shall terminate for any
reason whatsoever.
"Receivable" means the indebtedness owed to a Designated
Seller by any Obligor (without giving effect to any purchase under the
Receivables Purchase Agreement by the Transferor at any time) under an
Account and sold by such Designated Seller to the Transferor pursuant to
the Receivables Purchase Agreement, whether constituting an account,
chattel paper, instrument, investment property or general intangible,
arising in connection with the sale or lease of merchandise or the
rendering of services, and includes the right to payment of any Finance
Charges and other obligations of such Obligor with respect thereto. A
Receivable shall be deemed to have been created or the amount thereof
increased as of the end of the day on the Date of Processing of such
Receivable or such increase to the amount thereof.
"Receivables Purchase Agreement" means, collectively, (i) the
Receivables Purchase Agreement dated as of January 15, 1997 by and
between ▇▇▇▇▇▇▇▇'▇, as seller, the Transferor, as purchaser, and
▇▇▇▇▇'▇, as servicer (ii) the Receivables Purchase Agreement dated as of
January 15, 1997 by and between ▇▇▇▇▇'▇, as seller and servicer, and the
Transferor, as purchaser, and (iii) any other receivables purchase
agreement entered into by the Transferor, with the prior written consent
of the Agent, between the person designated as the 'seller' thereunder
with the Transferor, as purchaser, in each case as such agreement may be
amended, modified or supplemented and in effect from time to time.
"Records" means all Account Agreements and other documents,
books, records and other information (including, without limitation,
computer programs, tapes, discs, punch cards, data processing software
and related property and rights) maintained with respect to Receivables
and the related Obligors.
"Recoveries" shall mean all amounts received or collected by
the Servicer with respect to Defaulted Receivables.
"Reinvestment Termination Date" means the second Business Day
after the delivery by the Company to the Transferor of written notice
that the Company elects to commence the amortization of its interest in
the Net Investment pursuant to Section 2.6 or otherwise liquidate its
interest in the Transferred Interest.
"Related Account" shall mean an Account having the following
characteristics: (i) such Related Account was originated in accordance
with the Credit Guidelines; (ii) the Obligor or Obligors with respect to
such Related Account is the same Person or Persons as the Obligor or
Obligors of an Account; (iii) such Related Account is originated as a
result of the credit card with respect thereto being lost or stolen; and
(iv) such Related Account can be traced or identified as a successor ac-
count to an Account by reference to or by way of the computer or other
records of the Servicer or the Transferor.
"Related Commercial Paper" shall mean Commercial Paper issued
by the Company the proceeds of which were used to acquire, or refinance
the acquisition of, an interest in Receivables with respect to the
Transferor.
"Related Security" means with respect to any Receivable, all
of the Transferor's rights, title and interest in, to and under:
(i) all of the Transferor's interest, if any, in the
merchandise (including returned or repossessed merchandise), if
any, the sale of which gave rise to such Receivable;
(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 Account related
to such Receivable or otherwise, together with all financing state-
ments signed by an Obligor describing any collateral securing such
Receivable;
(iii) all guarantees, indemnities, warranties, insurance
(and proceeds and premium refunds thereof) or other agreements or
arrangements of any kind from time to time supporting or securing
payment of such Receivable whether pursuant to the Account related
to such Receivable or otherwise;
(iv) all Records related to such Receivable;
(v) all rights and remedies of the Transferor under the
Receivables Purchase Agreement, together with all financing state-
ments filed by the Transferor against a Designated Seller in
connection therewith; and
(vi) all rights and remedies of the Transferor under the
Receivables Purchase Agreement against any entity which sells Re-
ceivables to a Designated Seller as permitted by a Receivables Pur-
chase Agreement, together with all rights of the Transferor in all
financing statements filed by the Transferor or a Designated seller
against such an entity in connection therewith; and
(vii) all Proceeds of any of the foregoing.
"Remittance Date" shall mean the sixteenth day of each month
of the Transferor beginning January 16, 1997, or, if such day is not a
Business Day, the Business Day next succeeding such sixteenth day.
"Requirements of Law" for any Person shall mean the
certificate of incorporation or articles of association and by-laws or
other organizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination of an arbitrator or Govern-
mental Authority, in each case applicable to or binding upon such Person
or to which such Person is subject, whether Federal, state or local
(including, without limitation, usury laws, the Federal Truth in Lending
Act and Regulation Z and Regulation B of the Board of Governors of the
Federal Reserve System).
"Section 8.2 Costs" has the meaning specified in Section
8.2(d) hereof.
"Servicer" means at any time the Person then authorized
pursuant to Section 6.1 to service, administer and collect Receivables.
"Servicer Advance" shall have the meaning specified in Section
2.5(d).
"Servicer Default" has the meaning specified in Section 6.4
hereof.
"Servicing Fee" means the fees payable by the Company or the
Bank Investors to the Servicer in an amount equal to 2.0% per annum
(calculated on the basis of actual days elapsed divided by a year
consisting of 360 days) on the average daily amount of the Net Invest-
ment. Such fee shall accrue from the date of the initial purchase of an
interest in the Receivables to the date on which the Buyers' Percentage
Factor is reduced to zero. Such fee shall be payable only from Collec-
tions pursuant to, and subject to the priority of payments set forth in,
Section 2.5 hereof.
"Standard & Poor's" or "S&P" means Standard & Poor's Ratings
Services, a division of ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Subordinated Note" shall have the meaning specified in the
Receivables Purchase Agreement.
"Subsidiary" of a Person means any Person more than 50% of the
outstanding voting interests of which shall at any time be owned or con-
trolled, directly or indirectly, by such Person or by one or more Sub-
sidiaries of such Person or any similar business organization which is
so owned or controlled.
"Taxes" shall have the meaning specified in Section 8.3
hereof.
"Telerate Page 3750" shall mean the British Bankers
Association Libor Rates (determined at 11:00 a.m. London time) that are
published by Dow ▇▇▇▇▇ Telerate, Inc.
"Termination Date" means the earliest of (i) the Business Day
designated by the Transferor to the Company as the Termination Date at
any time following 60 days' written notice to the Company, (ii) the date
of termination of the commitment of the Liquidity Provider under the
Liquidity Provider Agreement, (iii) the date of termination of the
commitment of the Credit Support Provider under the Credit Support
Agreement, (iv) the day upon which a Termination Date is declared or
automatically occurs pursuant to Section 7.2(a) hereof, (v) two Business
Days prior to the Commitment Termination Date, (vi) the day on which a
Reinvestment Termination Date shall occur unless the Transferred
Interest shall have been assigned (or is concurrently so assigned) to
the Bank Investors pursuant to Section 10.7 hereof, (vii) the Purchase
Termination Date, or (viii) January 14, 1998.
"Termination Event" means an event described in Section 7.1
hereof.
"Transaction Costs" has the meaning specified in Section
8.4(a) hereof.
"Transaction Documents" means, collectively, this Agreement,
the Receivables Purchase Agreement, the Fee Letter, the Lock-Box
Agreements, the Certificate, the Transfer Certificates and all of the
other instruments, documents and other agreements executed and delivered
by the Designated Seller or the Transferor in connection with any of the
foregoing, in each case, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"Transfer" means a conveyance, transfer and assignment by the
Transferor to the Company or the Bank Investors of an undivided per-
centage ownership interest in Receivables hereunder (including, without
limitation, as a result of any reinvestment of Collections in Trans-
ferred Interests pursuant to Section 2.2(b) and 2.5).
"Transfer Certificate" has the meaning specified in Section
2.2(a) hereof.
"Transfer Date" means, with respect to each Transfer, the
Business Day on which such Transfer is made.
"Transfer Price" means with respect to any Incremental
Transfer, the amount paid to the Transferor by the Company or the Bank
Investors as described in the applicable Transfer Certificate.
"Transferor" means ▇▇▇▇▇▇▇▇'▇ Credit Corporation, a Nevada
corporation, and its successors and permitted assigns.
"Transferor's Percentage Factor" means at any time 1 minus the
Buyers' Percentage Factor.
"Transferred Interest" means, at any time of determination, an
undivided percentage ownership interest in (i) each and every then
outstanding Receivable, (ii) all Related Security with respect to each
such Receivable, (iii) all Collections with respect thereto, and (iv)
other Proceeds of the foregoing, which undivided ownership interest
shall be equal to the Buyers' Percentage Factor at such time, and only
at such time (without regard to prior calculations). The Transferred
Interest in each Receivable, together with Related Security, Collections
and Proceeds with respect thereto, shall at all times be equal to the
Transferred Interest in each other Receivable, together with Related
Security, Collections and Proceeds with respect thereto. To the extent
that the Transferred Interest shall decrease as a result of a recalcu-
lation of the Buyers' Percentage Factor, the Company or the Bank
Investors, as applicable, shall be considered to have reconveyed to the
Transferor an undivided percentage ownership interest in each Receiv-
able, together with Related Security, Collections and Proceeds with
respect thereto, in an amount equal to such decrease such that in each
case the Transferred Interest in each Receivable shall be equal to the
Transferred Interest in each other Receivable.
"UCC" means, with respect to any state, the Uniform Commercial
Code as from time to time in effect in such state.
"U.S." or "United States" means the United States of America.
SECTION 1.2. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.
All terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article
9.
SECTION 1.3. Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from
and including", the words "to" and "until" each means "to but
excluding", and the word "within" means "from and excluding a specified
date and to and including a later specified date".
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Facility. Upon the terms and subject to the
conditions herein set forth at any time prior to the Termination Date
(x) the Transferor may, at its option, convey, transfer and assign to
the Company or the Bank Investors, as applicable, and (y) the Company
may, at its option, or the Bank Investors shall, if so requested, accept
such conveyance, transfer and assignment from the Transferor of, without
recourse except as provided herein, undivided percentage ownership
interests in the Receivables, together with Related Security, Collec-
tions and Proceeds with respect thereto, from time to time. By
accepting any conveyance, transfer and assignment hereunder, neither the
Company, any Bank Investor nor the Agent assumes or shall have any
obligations or liability under any of the Accounts, all of which shall
remain the obligations and liabilities of the Transferor and the
Designated Seller.
SECTION 2.2. Transfers; Certificates; Eligible Receivables
(a) Incremental Transfers. Upon the terms and subject to the conditions
herein set forth the Transferor may, at its option, convey, transfer and
assign to the Company or the Bank Investors, as applicable, and from
time to time prior to the occurrence of the Termination Date the Company
may, at its option, or the Bank Investors, shall, if so requested by the
Transferor, accept such conveyance, transfer and assignment from the
Transferor, without recourse except as provided herein, of undivided
percentage ownership interests in the Receivables, together with Related
Security, Collections and Proceeds with respect thereto (each, an
"Incremental Transfer"); provided that after giving effect to the issu-
ance of Related Commercial Paper to fund the Transfer Price of any
Incremental Transfer and the payment to the Transferor of such Transfer
Price the sum of the Net Investment plus the Interest Component of all
outstanding Related Commercial Paper would not exceed the Facility
Limit; and, provided further, that, after giving effect to such Incre-
mental Transfer, the Transferor's Percentage Factor, as of the latest
cycle closing date reported in any Cycle Certificate delivered by the
Servicer to the Agent pursuant to Section 2.11(b), shall not be less
than the decimal equivalent of 1.00 minus the Maximum Buyers' Percentage
Factor and provided further however, that the representations and
warranties set forth in Sections 3.1 and 3.2 shall be true and correct
both immediately before and immediately after giving effect to any such
Incremental Transfer and the payment to the Transferor of the Transfer
Price related thereto and a Cycle Certificate shall have been delivered
with respect to such Incremental Transfer as required by Section 3.3
hereof.
The Transferor shall, by notice to the Agent given by
telecopy, offer to convey, transfer and assign to the Company or the
Bank Investors, as applicable, undivided percentage ownership interests
in the Receivables and the other Affected Assets relating thereto at
least two (2) Business Days prior to the proposed date of any Incre-
mental Transfer. Each such notice shall specify (w) whether such
request is made to the Company or the Bank Investors (it being
understood and agreed that once the Bank Investors acquire any
Transferred Interest hereunder, the Bank Investors shall be required to
purchase all Transferred Interests held by the Company in accordance
with Section 10.7 and thereafter the Company shall no longer accept any
additional Incremental Transfers hereunder), (x) the desired Transfer
Price (which shall be at least $1,000,000 or integral multiples of
$100,000 in excess thereof) or, to the extent that the then available
unused portion of the Facility Limit is less than such amount, such
lesser amount equal to such available portion of the Facility Limit),
and (y) the desired date of such Incremental Transfer. The Agent will
promptly notify the Company or each of the Bank Investors, as the case
may be, of the Agent's receipt of any request for an Incremental Trans-
fer to be made to such Person. To the extent that any such Incremental
Transfer is requested of the Company, the Company shall accept or reject
such offer by notice given to the Transferor and the Agent by telephone
or telecopy by no later than the close of its business on the Business
Day following its receipt of any such request. Each notice of proposed
Transfer shall be irrevocable and binding on the Transferor and the
Transferor shall indemnify the Company and each Bank Investor against
any loss or expense incurred by the Company or any Bank Investor, either
directly or indirectly (including, in the case of the Company, through
the Liquidity Provider Agreement) as a result of any failure by the
Transferor to complete such Incremental Transfer including, without
limitation, any loss or expense incurred by the Company or any Bank
Investor, either directly or indirectly (including, in the case of the
Company, pursuant to the Liquidity Provider Agreement) by reason of the
liquidation or reemployment of funds acquired by the Company (or the
Liquidity Provider) or any Bank Investor (including, without limitation,
funds obtained by issuing commercial paper or promissory notes or ob-
taining deposits as loans from third parties) for the Company or any
Bank Investor to fund such Incremental Transfer.
On the date of the initial Incremental Transfer, the Agent, on
behalf of the Company or the Bank Investors, as applicable, shall deliv-
er written confirmation to the Transferor of the Transfer Price and the
Transferor shall deliver to the Agent the Transfer Certificate in the
form of Exhibit F hereto (the "Transfer Certificate"). The Agent shall
indicate the amount of the initial Incremental Transfer together with
the date thereof on the grid attached to the Transfer Certificate. On
the date of each subsequent Incremental Transfer, the Agent shall send
written confirmation to the Transferor of the Transfer Price applicable
to such Incremental Transfer. The Agent shall indicate the amount of
the Incremental Transfer together with the date thereof as well as any
decrease in the Net Investment on the grid attached to the Transfer
Certificate. The Transfer Certificate shall evidence the Incremental
Transfers. Following each Incremental Transfer, the Company shall
deposit to the Transferor's account at the location indicated in Section
11.3 hereof, in immediately available funds, an amount equal to the
Transfer Price for such Incremental Transfer made to the Company and the
Bank Investors, respectively.
By no later than 11:00 a.m. (New York time) on any Transfer
Date, the Company or each Bank Investor, as the case may be, shall remit
its share (which, in the case of an Incremental Transfer to the Bank
Investors, shall be equal to such Bank Investor's Pro Rata Share) of the
aggregate Transfer Price for such Transfer to the account of the Agent
specified therefor from time to time by the Agent by notice to such
Persons. The obligation of each Bank Investor to remit its Pro Rata
Share of any such Transfer Price shall be several from that of each
other Bank Investor, and the failure of any Bank Investor to so make
such amount available to the Agent shall not relieve any other Bank
Investor of its obligation hereunder. Following each Incremental
Transfer and the Agent's receipt of funds from the Company or the Bank
Investors as aforesaid, the Agent shall remit the Transfer Price to the
Transferor's account at the location indicated in Section 11.3 hereof,
in immediately available funds. Unless the Agent shall have received
notice from the Company or any Bank Investor, as applicable, that such
Person will not make its share of any Transfer Price relating to any
Incremental Transfer available on the applicable Transfer Date therefor,
the Agent may (but shall have no obligation to) make the Company's or
any such Bank Investor's share of any such Transfer Price available to
the Transferor in anticipation of the receipt by the Agent of such
amount from the Company or such Bank Investor. To the extent the
Company or any such Bank Investor fails to remit any such amount to the
Agent after any such advance by the Agent on such Transfer Date, the
Company or such Bank Investor, on the one hand, and the Transferor, on
the other hand, shall be required to pay such amount, together with
interest thereon at a per annum rate equal to the Federal funds rate (as
determined in accordance with clause (ii) of the definition of "Base
Rate"), in the case of the Company or any such Bank Investor, or the
Base Rate, in the case of the Transferor, to the Agent upon its demand
therefor (provided that the Company shall have no obligation to pay such
interest amounts except to the extent that it shall have sufficient
funds to pay the face amount of its Commercial Paper in full). Until
such amount shall be repaid, such amount shall be deemed to be Net
Investment paid by the Agent and the Agent shall be deemed to be the
owner of a Transferred Interest hereunder. Upon the payment of such
amount to the Agent (x) by the Transferor, the amount of the aggregate
Net Investment shall be reduced by such amount or (y) by the Company or
such Bank Investor, such payment shall constitute such Person's payment
of its share of the applicable Transfer Price for such Transfer.
(b) Reinvestment Transfers. On each Business Day occur-
ring after the initial Incremental Transfer hereunder and prior to the
Termination Date the Transferor hereby agrees to convey, transfer and
assign to the Company or the Bank Investors then owning any Transferred
Interests, and in consideration of Transferor's agreement to maintain at
all times prior to the Termination Date a Net Receivables Balance in an
amount at least sufficient to maintain the Buyers' Percentage Factor at
an amount not greater than the Maximum Buyers' Percentage Factor, the
Company may, and the Bank Investors shall (in either case, to the extent
such Persons then own any Transferred Interest), agree to purchase from
the Transferor undivided percentage ownership interests in each and
every Receivable, together with Related Security, Collections and
Proceeds with respect thereto, to the extent that Collections are
available for such Transfer in accordance with Section 2.5 hereof, such
that after giving effect to such Transfer, (i) the amount of the Net
Investment at the close of business on such Business Day shall be equal
to the amount of the Company's Net Investment at the close of the
business on the Business Day immediately preceding such Business Day
plus the Transfer Price of any Incremental Transfer made on such day, if
any, and (ii) the Transferred Interest in each Receivable, together with
Related Security, Collections and Proceeds with respect thereto, shall
be equal to the Transferred Interest in each other Receivable, together
with Related Security, Collections and Proceeds with respect thereto.
(c) All Transfers. Each Transfer shall constitute a
purchase of undivided percentage ownership interests in each and every
Receivable, together with Related Security, Collections and Proceeds
with respect thereto, then existing, as well as in each and every
Receivable, together with Related Security, Collections and Proceeds
with respect thereto, which arises at any time after the date of such
Transfer. The Company's or the Bank Investors', as applicable,
aggregate undivided percentage ownership interest in the Receivables,
together with the Related Security, Collections and Proceeds with
respect thereto, shall equal the Buyers' Percentage Factor in effect
from time to time. So long as either the Company, on the one hand, or
the Bank Investors, on the other hand, own all of the Transferred
Interests at such time, each of the Company's and each Bank Investor's
undivided percentage ownership interest in the Affected Assets shall
equal such Person's ratable share (determined on the basis of the
relationship that such Person's Net Investment bears to the aggregate
Net Investment of the Company and all of the Bank Investors at such
time) of the Buyers' Percentage Factor at such time.
(d) Certificate. The Transferor shall issue to the
Agent the Certificate, in the form of Exhibit M, on or prior to the date
hereof.
(e) Buyers' Percentage Factor. The Buyers' Percentage
Factor shall be initially computed as of the opening of business of the
Servicer on the date of the initial Incremental Transfer hereunder.
Thereafter until the Termination Date the Buyers' Percentage Factor
shall be automatically recomputed as of the close of business of the
Servicer on each day (other than a day after the Termination Date). The
Buyers' Percentage Factor shall remain constant from the time as of
which any such computation or recomputation is made until the time as of
which the next such recomputation, if any, shall be made.
SECTION 2.3. Fundings.
(a) Prior to the Termination Date; Transferred Interest
Held by Company. At all times hereafter, but prior to the Termination
Date and not with respect to any portion of the Transferred Interest
held by the Bank Investors (or any of them), the Transferor may, subject
to the Company's approval and the limitations described below, request
that the Net Investment be allocated among one or more funding periods,
so that the aggregate amounts so allocated at all times shall equal the
Net Investment held by the Company. The Transferor shall give the
Company irrevocable notice by telephone of the new requested funding
period(s) at least two (2) Business Days prior to the expiration of any
then existing funding period; provided, however, that the Company may
select, in its sole discretion, any such new funding period if (i) the
Transferor fails to provide such notice on a timely basis or (ii) the
Company determines, in its sole discretion, that the funding period re-
quested by the Transferor is unavailable or for any reason commercially
undesirable. The Company confirms that it is its intention to fund all
or substantially all of the Net Investment held by it by issuing Related
Commercial Paper; provided that the Company may determine, from time to
time, in its sole discretion, that funding such Net Investment by means
of related Commercial Paper is not possible or is not desirable for any
reason. If the Liquidity Provider acquires from the Company a Purchased
Interest with respect to the Receivables pursuant to the terms of the
Liquidity Provider Agreement, NationsBank, on behalf of the Liquidity
Provider, may exercise the right of selection granted to the Company
hereby. The initial funding period applicable to any such Purchased
Interest shall be a period of not greater than 14 days and shall accrue
Carrying Costs on the basis of the Base Rate. Thereafter, provided that
the Termination Date shall not have occurred, Carrying Costs shall
accrue on the basis of either the Base Rate or the Adjusted LIBOR Rate,
as determined by NationsBank. In the case of any funding period out-
standing upon the Termination Date, such funding period shall end on
such date.
(b) After the Termination Date; Transferred Interest
Held by Company. At all times on and after the Termination Date, with
respect to any portion of the Transferred Interest which shall not have
been transferred to the Bank Investors (or any of them), the Company or
NationsBank, as applicable, shall select all funding periods and rates
applicable thereto.
(c) Prior to the Termination Date; Transferred Interest
Held by Bank Investor. At all times with respect to any portion of the
Transferred Interest transferred to the Bank Investors (or any of them)
pursuant to Section 10.7, but prior to the Termination Date, the initial
funding period applicable to such portion of the Net Investment alloca-
ble thereto shall be a period of not greater than 14 days and shall
accrue Carrying Costs on the basis of the Base Rate. Thereafter, with
respect to such portion, and with respect to any other portion of the
Transferred Interest held by the Bank Investors (or any of them),
provided that the Termination Date shall not have occurred, Carrying
Costs shall accrue with respect thereto at either the Base Rate or the
Adjusted LIBOR Rate, at the Transferor's option. The Transferor shall
give the Agent irrevocable notice by telephone of the new requested
funding period at least two (2) Business Days prior to the expiration of
any then existing funding period. In the case of any funding period
outstanding upon the occurrence of the Termination Date, such funding
period shall end on the date of such occurrence.
(d) After the Termination Date; Transferred Interest
Held by Bank Investor. At all times on and after the Termination Date,
with respect to any portion of the Transferred Interest which shall have
been owned or transferred to the Bank Investors (or any of them), the
Agent shall select all funding periods and rates applicable thereto.
(e) Eurodollar Rate Protection; Illegality. (i) If the
Agent is unable to obtain on a timely basis the information necessary to
determine the LIBOR Rate for any proposed funding period, then
(A) the Agent shall forthwith notify the Company or Bank
Investors, as applicable and the Transferor that the Adjusted LIBOR
Rate cannot be determined for such funding period, and
(B) while such circumstances exist, neither the Company, the
Bank Investors or the Agent shall allocate the Net Investment of
any additional Transferred Interests purchased during such period
or reallocate the Net Investment allocated to any then existing
funding period ending during such period, to a funding period which
accrues Carrying Costs on the basis of the Adjusted LIBOR Rate.
(ii) If, with respect to any outstanding funding period which
accrues Carrying Costs on the basis of the Adjusted LIBOR Rate, the
Company or any of the Bank Investors owning any Transferred Interest
therein notifies the Agent that it is unable to obtain matching deposits
in the London interbank market to fund its purchase or maintenance of
such Transferred Interest or that the Adjusted LIBOR Rate applicable to
such Transferred Interest will not adequately reflect the cost to the
Person of funding or maintaining its respective Transferred Interest for
such funding period then the Agent shall forthwith so notify the
Transferor, whereupon neither the Agent nor the Company or the Bank
Investors, as applicable, shall, while such circumstances exist, allo-
cate any Net Investment of any additional Transferred Interest purchased
during such period or reallocate the Net Interest allocated to any
funding period ending during such period, to a funding period which
accrues Carrying Costs on the basis of the Adjusted LIBOR Rate.
(iii) Notwithstanding any other provision of this Agreement,
if the Company or any of the Bank Investors, as applicable, shall notify
the Agent that such Person has determined (or has been notified by any
Liquidity Provider) that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful (either for
the Company, such Bank Investor, or such Liquidity Provider, as
applicable), or any central bank or other governmental authority asserts
that it is unlawful, for the Company, such Bank Investor or such
Liquidity Provider, as applicable, to fund the purchases or maintenance
of Transferred Interests at the Adjusted LIBOR Rate, then (x) as of the
effective date of such notice from such Person to the Agent, the obliga-
tion or ability of the Company or such Bank Investor, as applicable, to
fund its purchase or maintenance of Transferred Interests at the
Adjusted LIBOR Rate shall be suspended until such Person notifies the
Agent that the circumstances causing such suspension no longer exist and
(y) the Net Investment allocated to each funding period which accrues
Carrying Costs on the basis of the Adjusted LIBOR Rate in which such
Person owns an interest shall either (1) if such Person may lawfully
continue to maintain such Transferred Interest at the Adjusted LIBOR
Rate until the last day of the applicable funding period, be reallocated
on the last day of such funding period to another funding period in
respect of which the Net Investment allocated thereto accrues Carrying
Costs on a basis other than the Adjusted LIBOR Rate or (2) if such
Person shall determine that it may not lawfully continue to maintain
such Transferred Interest at the Adjusted LIBOR Rate until the end of
the applicable funding period, such Person's share of the Net Investment
allocated to such funding period shall be deemed to accrue Carrying
Costs on the basis of the Base Rate from the effective date of such
notice until the end of such funding period.
SECTION 2.4. Carrying Costs, Fees and Other Costs and Expens-
es. Notwithstanding the limitation on recourse under Section 2.1
hereof, the Transferor shall pay, as and when due in accordance with
this Agreement, all fees hereunder, including any Early Collection Fee,
Carrying Costs, all amounts payable pursuant to Article VIII hereof, if
any, and the Servicing Fees. On each Remittance Date, the Transferor
shall pay to the Agent, on behalf of the Company or the Bank Investors,
as applicable, an amount equal to the accrued and unpaid Carrying Costs
for the related Collection Period. The Transferor shall pay to the
Agent, on behalf of the Company, on each day on which Related Commercial
Paper is issued by the Company, the Dealer Fee with respect to such
Related Commercial Paper. Nothing in this Agreement shall limit in any
way the obligations of the Transferor to pay the amounts set forth in
this Section 2.4.
SECTION 2.5. Allocations of Collections; Non-Liquidation Set-
tlement and Reinvestment Procedures; Servicer Advances. (a) On each
Determination Date, the Servicer shall allocate all Collections received
during the preceding Collection Period as Finance Charge Collections or
Principal Collections. Principal Collections shall be applied by the
Servicer as described in subsection (b) below. On each Remittance Date,
the product of (A) the daily average of the Buyers' Percentage Factor
over the preceding Collection Period and (B) the aggregate Finance
Charge Collections for such preceding Collection Period shall be ap-
plied, without duplication, by the Servicer as follows:
(i) first, to the retention by the Servicer of any
Servicer Advances made by the Servicer for costs accrued with
respect to such Collection Period and;
(ii) second, to the payment to the Agent of any accrued
and unpaid Carrying Costs for such Collection Period;
(iii) third, if ▇▇▇▇▇▇▇▇'▇, Inc. or an Affiliate is not
the Servicer, to the payment to the Servicer of any Servicing Fee
due and owing;
(iv) fourth, to the payment of all amounts due and
unpaid from the Transferor under Section 2.9(a) as a result of
dilutive items and the Buyers Percentage Factor being greater than
the Maximum Percentage Factor, which payment shall be treated as a
portion of Principal Collections allocable to the Company and ap-
plied pursuant to Section 2.5(b) below;
(v) fifth, with respect to any Remittance Date occurring
on or after the Termination Date, to the payment of the Buyers'
Percentage Factor of the outstanding balance of Receivables which
have become Defaulted Receivables during such Collection Period,
which payment shall be treated as a portion of Principal
Collections allocable to the Company and applied pursuant to
Section 2.5(b) below;
(vi) sixth, if ▇▇▇▇▇▇▇▇'▇, Inc. or an Affiliate is the
Servicer, to the retention by the Servicer of any Servicing Fee due
and owing;
(vii) seventh, to the extent any Finance Charge Co-
llections remain after application in accordance with clauses (i)
through (vi) above, (A) if prior to the Termination Date such ex-
cess amounts shall be paid to the Transferor and (B) if on or after
the Termination Date such excess amounts shall be paid to the Agent
in reduction of the Net Investment.
On each Remittance Date, subject to Section 2.5(c), the
product of (A) the daily average of the Transferor's Percentage Factor
over the preceding Collection Period and (B) the aggregate Finance
Charge Collections for the preceding Collection Period shall be remitted
to the Transferor.
(b) On each Remittance Date prior to the Termination
Date, (i) the Servicer shall allocate to the Company and/or the Bank
Investors the Buyers' Percentage Factor of Principal Collections re-
ceived during the related Collection Period and not previously applied
or accounted for and, at the Transferor's option, (A) pay such amount to
the Transferor, for the benefit of the Company and/or the Bank Inves-
tors, and the Transferor shall apply such amount toward the purchase of
additional undivided percentage interests in each Receivable pursuant to
Section 2.2(b), or (B) pay such amount to the Agent in reduction of the
Net Investment and (ii) the Servicer shall pay to the Transferor the
portion of such Principal Collections not allocated to the Transferred
Interest and remaining after any reallocations pursuant to Section
2.5(c) below.
On each Remittance Date on or subsequent to the Termination
Date, the Servicer shall allocate to the Company or the Bank Investors,
as applicable, the Buyers' Percentage Factor of all Principal
Collections received during the related Collection Period and not
previously applied or accounted for and pay such amount to the Agent in
reduction of the Net Investment. In the event the Termination Date
occurred as a result of a Termination Event, the portion of such
Principal Collections not allocated to the Transferred Interest and
remaining after any reallocations pursuant to Section 2.5(c) below shall
be distributed to the Agent in reduction of the Net Investment and, in
the case of any other Termination Date, the portion of such Principal
Collections not allocated to the Transferred Interest and remaining
after any allocations pursuant to Section 2.5(c) below shall be distrib-
uted to the Transferor.
(c) If on any Remittance Date, after giving effect to
clauses (i) through (v) of Section 2.5(a), an insufficiency exists with
respect to the Buyers' Percentage Factor of Finance Charge Collections,
then, in such event, on such Remittance Date the amount of Finance
Charge Collections distributable or allocable to the Transferor, and to
the extent any such insufficiency continues to remain, the amounts dis-
tributable to the Transferor, pursuant to Section 2.5(b), shall be re-
duced by the amount of such insufficiency, and such amount(s) shall be
applied as Finance Charge Collections allocable to the Transferred
Interest and shall be applied and distributed in accordance with the
priority set forth in clauses (i) through (v) of Section 2.5(a).
(d) In the event that, on any date, the Company does not
have sufficient funds to pay the Interest Component of matured or
maturing Related Commercial Paper or any Dealer Fee due and payable on
such day, the Servicer, acting upon written notice from the Adminis-
trative Agent, shall make an advance in an amount equal to such costs
and any Dealer Fee due and payable on such day (a "Servicer Advance")
and pay to the Agent, for the account of the Company, the amount of such
advance.
(e) The Transferor shall have the option to designate a
fixed or variable percentage (the "Discount Percentage") of up to 4% of
all Receivables other than Finance Charges, late fees, overlimit fees,
return check fees and all other fees and charges and Receivables in De-
faulted Accounts created on and after any date of determination to be
treated as finance charge receivables ("Discount Receivables") in
accordance with the provisions of this Section 2.5(e), which percentage
shall remain fixed and in effect until such time as the Transferor has
provided a subsequent designation to the Agent. The Transferor shall
have the option to increase the Discount Percentage to a percentage not
greater than 4% or to reduce the Discount Percentage, provided, that no
such designation shall become effective that would cause a Termination
Event to occur.
SECTION 2.6. Liquidation Settlement Procedures. If, on the
Termination Date the Buyers' Percentage Factor is greater than the
Maximum Buyers' Percentage Factor, then the Transferor shall immediately
pay to the Agent, for the benefit of the Company or the Bank Investors,
as applicable, from previously received Principal Collections, an amount
equal to the amount that, when applied in reduction of the Net Invest-
ment, will result in a Buyers' Percentage Factor less than or equal to
the Maximum Buyers' Percentage Factor. Such amount shall be applied by
the Agent to the reduction of the Net Investment. On each Remittance
Date occurring on and following the Termination Date, Principal
Collections shall be applied in accordance with Section 2.5(b).
Following the date on which the Net Investment shall be
reduced to zero and all other Aggregate Unpaids have been paid in full,
(i) the Servicer shall recompute the Buyers' Percentage Factor as zero,
(ii) the Agent, on behalf of the Company and the Bank Investors, shall
be considered to have reconveyed to the Transferor all of the Company's
and the Bank Investors' right, title and interest in and to the Affected
Assets (including the Transferred Interest), (iii) the Servicer shall
pay to the Transferor any remaining Collections set aside and held by
the Servicer and (iv) the Agent, on behalf of the Company and the Bank
Investors, shall execute and deliver to the Transferor, at the
Transferor's expense, such documents or instruments as are necessary to
terminate the Company's and the Bank Investors' respective interests in
the Affected Assets. Any such documents shall be prepared by or on
behalf of the Transferor.
SECTION 2.7. Fees. Notwithstanding any limitation on
recourse contained in this Agreement, the Transferor shall pay the
following non-refundable fees:
(a) On each Remittance Date, to the Company solely for
its own account, the Program Fee and the Administrative Fee, and to the
Agent for distribution to the Bank Investors, the Facility Fee.
(b) On the date of execution hereof, to the Administra-
tive Agent solely for its own account, the Arrangement Fee.
SECTION 2.8. Protection of Ownership Interest of the Company
and the Bank Investors. (a) The Transferor agrees that it will, and
will cause each Designated Seller to, from time to time, at its expense,
promptly execute and deliver all instruments and documents and take all
actions as may be necessary or as the Agent may reasonably request in
order to perfect or protect the Transferred Interest or to enable the
Agent, the Company or the Bank Investors to exercise or enforce any of
their respective rights hereunder. Without limiting the foregoing, the
Transferor will, and will cause each Designated Seller to, upon the re-
quest of the Agent, the Company or any of the Bank Investors, in order
to accurately reflect this purchase and sale transaction, execute and
file such financing or continuation statements or amendments thereto or
assignments thereof (as permitted pursuant to Section 10.7 hereof) as
may be requested by the Agent, the Company or any of the Bank Investors.
The Transferor shall, and will cause each Designated Seller to, upon re-
quest of the Agent, the Company or any of the Bank Investors, obtain
such additional search reports as the Agent, the Company or any of the
Bank Investors shall request. To the fullest extent permitted by appli-
cable law, the Agent shall be permitted to sign and file continuation
statements and amendments thereto and assignments thereof without the
Transferor's or any Designated Seller's signature. Carbon, photographic
or other reproduction of this Agreement or any financing statement shall
be sufficient as a financing statement.
The Transferor agrees that it will, and will cause each
Designated Seller to, at its expense, on or prior to the Closing Date
indicate clearly and unambiguously in its master data processing records
and on any storage containers containing Records that the Receivables
created in connection with the Accounts have been conveyed to the Trans-
feror (in the case of a Designated Seller), and transferred to the
Agent, for the benefit of the Company and the Bank Investors, pursuant
to this Agreement by affixing thereon the following legend: "THE
RECEIVABLES IN THESE FILES HAVE BEEN ACQUIRED BY AND CONVEYED TO
▇▇▇▇▇▇▇▇'▇ CREDIT CORPORATION AND AN INTEREST THEREIN HAS BEEN ASSIGNED
TO NATIONSBANK, N.A., AS AGENT, FOR THE BENEFIT OF ENTERPRISE FUNDING
CORPORATION AND THOSE CERTAIN BANK INVESTORS PURSUANT TO THE TRANSFER
AND ADMINISTRATION AGREEMENT DATED AS OF JANUARY 15, 1997, AS AMENDED
FROM TIME TO TIME, AMONG ▇▇▇▇▇▇▇▇'▇ CREDIT CORPORATION, NATIONSBANK,
N.A., ENTERPRISE FUNDING CORPORATION AND THE OTHER SIGNATORIES NAMED
THEREIN." The Transferor further agrees to deliver or to cause the
Servicer to deliver to the Agent a computer file or microfiche list con-
taining a true and complete list of all such Accounts, identified by
account number and by Receivable balance as of the Cut-Off Date. Such
file or list shall be marked as the Account Schedule and Schedule A to
this Agreement, delivered to the Agent as confidential and proprietary,
and is hereby incorporated into and made a part of this Agreement. The
Transferor agrees to deliver or to cause the Servicer to deliver to the
Agent within five (5) Business Days of the request therefor by the Agent
either (i) a computer file or microfiche list containing a true and
complete list of all Accounts, including all Accounts created on or
after the Cut-Off Date, in existence as of the last day of the prior
Collection Period, identified by account number and by Receivable
balance as of the last day of the prior Collection Period or (ii) a
computer file or microfiche list containing a true and complete list of
all Accounts in existence as of the last day of the prior Collection
Period, identified by account number and by Receivable balance as of the
last day of the prior Collection Period. Such file or list shall be
marked as the Account Schedule and Schedule A to this Agreement,
delivered to the Agent as confidential and proprietary, shall replace
the previously delivered Account Schedule and Schedule A, and shall be
incorporated into and made a part of this Agreement. The Servicer
agrees, on behalf of the Transferor, at its own expense, by the end of
each Collection Period in which any Accounts or Related Accounts have
been originated to indicate clearly and unambiguously in its master data
processing records and any storage containers containing Records that
the Receivables created in connection with such Accounts or the Related
Accounts have been conveyed to the Transferor and transferred to the
Agent, for the benefit of the Company and the Bank Investors, pursuant
to this Agreement.
The Transferor shall not, and shall not permit any Designated
Seller to, change its respective name, identity or corporate structure
(within the meaning of Section 9-402(7) of the UCC as in effect in the
States of New York, Nevada and Mississippi) nor relocate its respective
chief executive office or any office where Records are kept unless it
shall have: (i) given the Agent at least thirty (30) days prior notice
thereof and (ii) prepared at Transferor's expense and delivered to the
Agent all financing statements, instruments and other documents
necessary to preserve and protect the Transferred Interest or reasonably
requested by the Agent in connection with such change or relocation.
Any filings under the UCC or otherwise that are occasioned by such
change in name or location shall be made at the expense of the Trans-
feror.
(b) The Servicer shall instruct all Obligors to cause all
Collections to be deposited directly in a Lock-Box Account maintained
with a Lock-Box Bank. Any Lock-Box Account maintained by a Lock-Box
Bank pursuant to the related Lock-Box Agreement shall be under the
exclusive ownership and control of the Agent which is hereby granted to
the Agent by the Designated Sellers and the Transferor. The Servicer
shall be permitted to give instructions to the Lock-Box Banks for so
long as neither a Servicer Default nor any other Termination Event has
occurred hereunder. The Servicer shall not add any bank as a Lock-Box
Bank to those listed on Exhibit C attached hereto unless such bank has
entered into a Lock-Box Agreement. The Servicer shall not terminate any
bank as a Lock-Box Bank unless the Agent shall have received fifteen
(15) days' prior notice of such termination. If the Transferor, a
Designated Seller or the Servicer receives any Collections, the Trans-
feror, such Designated Seller or the Servicer, as applicable, shall
immediately, but in any event within forty-eight (48) hours of receipt,
remit such Collections to a Lock-Box Account.
SECTION 2.9. Deemed Collections; Application of Payments.
(a) If on any day the Outstanding Principal Balance of a Receivable is
either (x) reduced as a result of any defective, rejected or returned
merchandise or services, any discount, credit, rebate, dispute, warranty
claim, repossessed or returned goods, chargeback, allowance or any
billing adjustment, or (y) reduced or canceled as a result of a setoff
or offset in respect of any claim by any Person (whether such claim
arises out of the same or a related transaction or an unrelated transac-
tion) or (z) any other downward adjustments to the balance of such
Receivable without receiving Collections therefor and prior to such
Receivable becoming a Defaulted Receivable, the amount of such cancella-
tion, reduction or adjustment shall thereafter be deducted from the
aggregate Outstanding Principal Balance of the Receivables and the Net
Receivables Balance. If such reduction would result in a Buyers'
Percentage Factor greater than the Maximum Buyers' Percentage Factor,
the Transferor shall pay (or direct the Servicer to pay from Collections
otherwise distributable to the Transferor) to the Agent an amount equal
to the amount that, when applied in reduction of the Net Investment,
will result in a Buyers' Percentage Factor less than or equal to the
Maximum Buyers' Percentage Factor. Such amount shall be applied by the
Agent to the reduction of the Net Investment.
(b) If on any day any of the representations or warran-
ties in Article III was or becomes untrue with respect to a Receivable
(whether on or after the date of any transfer of an interest therein to
the Agent, the Company or the Bank Investors as contemplated hereunder),
such Receivable shall thereafter not be included in any calculation of
the aggregate Outstanding Principal Balance of the Receivables or the
Net Receivables Balance. If such reduction would result in a Buyers'
Percentage Factor greater than the Maximum Buyers' Percentage Factor,
the Transferor shall pay (or direct the Servicer to pay from Collections
otherwise distributable to the Transferor) to the Agent an amount equal
to the amount that, when applied in reduction of the Net Investment,
will result in a Buyers' Percentage Factor less than or equal to the
Maximum Buyers' Percentage Factor. Such amount shall be applied by the
Agent to the reduction of the Net Investment.
SECTION 2.10. Payments and Computations, Etc. All amounts to
be paid or deposited by the Transferor or the Servicer hereunder shall
be paid or deposited in accordance with the terms hereof no later than
11:00 a.m. (New York City time) on the day when due in immediately
available funds; if such amounts are payable to the Company or any Bank
Investor they shall be paid or deposited in the account indicated in
Section 11.3 hereof, until otherwise notified by the Agent. The Trans-
feror shall, to the extent permitted by law, pay to the Agent, for the
benefit of the Company and the Bank Investors upon demand, interest on
all amounts not paid or deposited when due hereunder at a rate equal to
2% per annum plus the Base Rate. All computations of interest and all
per annum fees hereunder shall be made on the basis of a year of 360
days for the actual number of days (including the first but excluding
the last day) elapsed. Any computations by the Agent of amounts payable
by the Transferor hereunder shall be binding upon the Transferor absent
manifest error.
SECTION 2.11. Reports. (a) On each Determination Date, the
Servicer shall prepare and forward to the Agent and the Administrative
Agent (i) an Investor Report as of the end of the last day of the
immediately preceding Collection Period, and (ii) such other information
as the Agent or the Administrative Agent may reasonably request.
(b) On or before the close of business on Tuesday of each
calendar week (or if such day is not a Business Day, the next preceding
Business Day), the Servicer will deliver to the Agent and the Admin-
istrative Agent a Cycle Certificate which shall report (x) on Collec-
tions processed during the time period from the date of the latest cycle
closing date reported on in the previous Cycle Certificate through and
including the date of the latest cycle closing date reported on in the
current Cycle Certificate and (y) the Maximum Buyers' Percentage Factor
and the Buyers' Percentage Factor as of the latest cycle closing date
reported on in the current Cycle Certificate, and (z) the certain other
information concerning the Receivables as of the most recent cycle
closing date reported on in the current Cycle Certificate. The Servicer
shall report information on the Cycle Certificate with respect to each
cycle closing date not later than ten days after such cycle closing
date.
SECTION 2.12. Collection Account. There shall be established
on the day of the initial Incremental Transfer hereunder and maintained,
for the benefit of the Company and the Bank Investors, with the Agent,
a segregated account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Company and the Bank Investors. On and after the
occurrence of (i) a Servicer Default, (ii) a Guarantor Default or (iii)
a Termination Event, and from and after such time as the Guaranty pro-
vided by Article IX herein fails to remain in effect and enforceable,
the Servicer shall remit daily and prior to the close of business on the
second Business Day following receipt to the Collection Account all Col-
lections received with respect to any Receivables. Funds on deposit in
the Collection Account (other than investment earnings) shall be invest-
ed by the Agent in Eligible Investments that will mature so that such
funds will be available prior to the Remittance Date following such
investment. On each Remittance Date, all interest and earnings (net of
losses and investment expenses) on funds on deposit in the Collection
Account shall be retained in the Collection Account and be available to
make any distributions required to be made pursuant to Section 2.5(a).
On the date on which the Net Investment and all other Aggregate Unpaids
have been paid in full, any funds remaining on deposit in the Collection
Account shall be paid to the Transferor.
SECTION 2.13. Sharing of Payments, Etc. If the Company or
any Bank Investor (for purposes of this Section only, being a
"Recipient") shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of setoff, or otherwise) on account of
Transferred Interest owned by it (other than pursuant to Section 2.7, or
Article VIII and other than as a result of the differences in the timing
of the applications of Collections pursuant to Section 2.5 or 2.6) in
excess of its ratable share of payments on account of Transferred
Interest obtained by the Company and/or the Bank Investors entitled
thereto, such Recipient shall forthwith purchase from the Company and/or
the Bank Investors entitled to a share of such amount participations in
the Transferred Interests owned by such Persons as shall be necessary to
cause such Recipient to share the excess payment ratably with each such
other Person entitled thereto; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such
Recipient, such purchase from each such other Person shall be rescinded
and each such other Person shall repay to the Recipient the purchase
price paid by such Recipient for such participation to the extent of
such recovery, together with an amount equal to such other Person's rat-
able share (according to the proportion of (a) the amount of such other
Person's required payment to (b) the total amount so recovered from the
Recipient) of any interest or other amount paid or payable by the
Recipient in respect of the total amount so recovered.
SECTION 2.14. Right of Setoff. Without in any way limiting
the provisions of Section 2.13, each of the Company and the Bank
Investors is hereby authorized (in addition to any other rights it may
have) at any time after the occurrence of the Termination Date or during
the continuance of a Potential Termination Event to set-off, appropriate
and apply (without presentment, demand, protest or other notice which
are hereby expressly waived) any deposits and any other indebtedness
held or owing by the Company or such Bank Investor to, or for the
account of, the Transferor against the amount of the Aggregate Unpaids
owing by the Transferor to such Person (even if contingent or
unmatured).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the
Transferor. The Transferor represents and warrants to the Agent, the
Company and the Bank Investors that:
(a) Corporate Existence and Power. The Transferor is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all corporate
power and all material governmental licenses, authorizations, consents
and approvals required to carry on its business in each jurisdiction in
which its business is now conducted. The Transferor is duly qualified
to do business in, and is in good standing in, every other jurisdiction
in which the nature of its business requires it to be so qualified,
except where the failure to be so qualified or in good standing would
not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contraven-
tion. The execution, delivery and performance by the Transferor of this
Agreement, the Receivables Purchase Agreement, the Fee Letter, the Cer-
tificate, the Transfer Certificate and the other Transaction Documents
to which the Transferor is a party are within the Transferor's corporate
powers, have been duly authorized by all necessary corporate action, re-
quire no action by or in respect of, or filing with, any Official Body
or official thereof (except as contemplated by Section 2.8 hereof), and
do not contravene, or constitute a default under, any provision of
applicable law, rule or regulation or of the Certificate of Incorpora-
tion or Bylaws of the Transferor or of any agreement, judgment,
injunction, order, writ, decree or other instrument binding upon the
Transferor or result in the creation or imposition of any Adverse Claim
on the assets of the Transferor or any of its Subsidiaries (except as
contemplated by Section 2.8 hereof).
(c) Binding Effect. Each of this Agreement, the
Receivables Purchase Agreement, the Fee Letter, the Certificate and the
other Transaction Documents to which the Transferor is a party consti-
tutes and the Transfer Certificate upon payment of the Transfer Price
set forth therein will constitute the legal, valid and binding
obligation of the Transferor, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws affecting the rights of creditors generally.
(d) Perfection. Immediately preceding each Transfer
hereunder, the Transferor shall be the owner of all of the Receivables,
free and clear of all Adverse Claims. On or prior to each Transfer and
each recomputation of the Transferred Interest, all financing statements
and other documents required to be recorded or filed in order to perfect
and protect the Transferred Interest against all creditors of and
purchasers from the Transferor and the applicable Designated Seller will
have been duly filed in each filing office necessary for such purpose
and all filing fees and taxes, if any, payable in connection with such
filings shall have been paid in full.
(e) Accuracy of Information. All information heretofore
furnished by the Transferor (including without limitation, the Investor
Reports, any reports delivered pursuant to Section 2.11 hereof and the
financial statements delivered pursuant to Section 5.1) to the Company,
any Bank Investors, the Agent or the Administrative Agent for purposes
of or in connection with this Agreement or any transaction contemplated
hereby is, and all such information hereafter furnished by the Transfer-
or to the Company, any Bank Investors, the Agent or the Administrative
Agent will be, true and accurate in every material respect, on the date
such information is stated or certified.
(f) Tax Status. The Transferor has filed all tax
returns (federal, state and local) required to be filed and has paid or
made adequate provision for the payment of all taxes, assessments and
other governmental charges.
(g) Action, Suits. Except as set forth in Exhibit H
hereof, there are no actions, suits or proceedings pending, or to the
knowledge of the Transferor threatened, against or affecting the
Transferor or any Affiliate of the Transferor or their respective
properties, in or before any court, arbitrator or other body, which may,
individually or in the aggregate, have a Material Adverse Effect.
(h) Use of Proceeds. No proceeds of any Transfer will
be used by the Transferor to acquire any security in any transaction
which is subject to Section 13 or 14 of the Securities Exchange Act of
1934, as amended.
(i) Place of Business. The principal place of business
and chief executive office of the Transferor are located at the address
of the Transferor indicated in Section 11.3 hereof and the offices where
the Transferor keeps all its Records, are located at the address(es)
described on Exhibit I or such other locations notified to the Company
in accordance with Section 2.8 hereof in jurisdictions where all action
required by Section 2.8 hereof has been taken and completed.
(j) Good Title. Upon each Transfer and each
recomputation of the Transferred Interest, the Company or the Agent on
behalf of the Company and the Bank Investors shall acquire a valid and
perfected first priority undivided percentage ownership interest to the
extent of the Transferred Interest or a first priority perfected secu-
rity interest in the Receivables existing on the date of such Transfer
and recomputation and in the Related Security and Collections with
respect thereto free and clear of any Adverse Claim.
(k) Tradenames, Etc. As of the date hereof: (i) the
Transferor has only the subsidiaries and divisions listed on Exhibit J
hereto; and (ii) the Transferor has, within the last five (5) years,
operated only under the tradenames identified in Exhibit J hereto, and,
within the last five (5) years, has not changed its name, merged with or
into or consolidated with any other corporation or been the subject of
any proceeding under ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code (Bankruptcy), except
as disclosed in Exhibit J hereto.
(l) Nature of Receivables. Each Receivable (x)
represented by the Transferor or the Servicer to be an Eligible Receiv-
able (including in any Investor Report or other report delivered
pursuant to Section 2.11 hereof) or (y) included in the calculation of
the Net Receivables Balance, in fact satisfies at such time the defini-
tion of "Eligible Receivable" set forth herein and is an "eligible
asset" as defined in Rule 3a-7 under the Investment Company Act, of
1940, as amended.
(m) Coverage Requirement; Amount of Receivables. The
Buyers' Percentage Factor does not exceed the Maximum Buyers' Percentage
Factor. As of the Cut-Off Date, the aggregate Outstanding Principal
Balance of the Receivables in existence was $168,260,400.40 and the Net
Receivable Balance was $167,778,375.87.
(n) Credit Guidelines. Since January 9, 1997, there
have been no material changes in the Credit Guidelines other than as
permitted hereunder. Since such date, no material adverse change has
occurred in the overall rate of collection of the Receivables.
(o) No Termination Event. No event has occurred and is
continuing and no condition exists which constitutes a Termination Event
or a Potential Termination Event.
(p) Not an Investment Company. The Transferor is not,
and is not controlled by, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or is exempt from all
provisions of such Act.
(q) ERISA. Each of the Transferor and its ERISA
Affiliates is in compliance in all material respects with ERISA and no
lien exists in favor of the Pension Benefit Guaranty Corporation on any
of the Receivables.
(r) Lock-Box Accounts. The names and addresses of all
the Lock-Box Banks, together with the account numbers of the Lock-Box
Accounts at such Lock-Box Banks, are specified in Exhibit C hereto (or
at such other Lock-Box Banks and/or with such other Lock-Box Accounts as
have been notified to the Collateral Agent and for which Lock-Box
Agreements have been executed in accordance with Section 2.8(b) hereof
and delivered to the Servicer). All Obligors have been instructed to
make payment to a Lock-Box Account and only Collections are deposited
into the Lock-Box Accounts.
(s) Bulk Sales. No transaction contemplated hereby or
by the Receivables Purchase Agreement requires compliance with any bulk
sales act or similar law.
(t) Transfers Under Receivables Purchase Agreement.
Each Receivable which has been transferred to the Transferor by a
Designated Seller has been purchased by the Transferor from such
Designated Seller pursuant to, and in accordance with, the terms of the
Receivables Purchase Agreement.
(u) Preference; Voidability. The Transferor shall have
given reasonably equivalent value to each Designated Seller in
consideration for the transfer to the Transferor of the applicable
Receivables and Collections and Related Security from such Designated
Seller, and each such transfer shall not have been made for or on
account of an antecedent debt owed by such Designated Seller to the
Transferor and no such transfer is or may be voidable under any Section
of the Bankruptcy Reform Act of 1978 (11 U.S.C. Section 101 et seq.), as
amended.
(v) Representations and Warranties of each Designated
Seller. Each representation and warranty of each Designated Seller set
forth in Article IV of the Receivables Purchase Agreement is true and
correct in all material respects and the Transferor hereby remakes all
such representations and warranties for the benefit of the Agent, the
Company, the Bank Investors and the Administrative Agent.
Any document, instrument, certificate or notice delivered to
the Company hereunder shall be deemed a representation and warranty by
the Transferor.
SECTION 3.2. Representations and Warranties of the Servicer.
The Servicer represents and warrants to the Agent, the Company and the
Bank Investors that:
(a) Corporate Existence and Power. The Servicer is a
corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all corporate
power and all material governmental licenses, authorizations, consents
and approvals required to carry on its business in each jurisdiction in
which its business is now conducted. The Servicer is duly qualified to
do business in, and is in good standing in, every other jurisdiction in
which the nature of its business requires it to be so qualified, except
where the failure to be so qualified or in good standing would not have
a Material Adverse Effect.
(b) Corporate and Governmental Authorization; Contraven-
tion. The execution, delivery and performance by the Servicer of this
Agreement are within the Servicer's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official
(except as contemplated by Section 2.8), and do not contravene, or
constitute a default under, any provision of applicable law or regula-
tion or of the charter or Bylaws of the Servicer or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Servicer or result in the creation or imposition of any lien on assets
of the Servicer or any of its Subsidiaries (except as contemplated by
Section 2.8).
(c) Binding Effect. This Agreement constitutes the
legal, valid and binding obligation of the Servicer enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the rights of creditors
generally.
(d) Accuracy of Information. All information heretofore
furnished by the Servicer in writing to the Transferor, the Company or
the Administrative Agent for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Servicer to the Transferor, the
Company or the Administrative Agent will be, true and accurate in every
material respect, on the date such information is stated or certified.
(e) Tax Status. The Servicer has filed all tax returns
(federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges.
(f) Action, Suits. Except as set forth in Exhibit H
attached hereto (as such exhibit may be amended from time to time),
there are no actions, suits or proceedings pending, or to the knowledge
of the Servicer threatened, against or seeking to prevent the issuance
of the Certificate or the consummation of any of the transactions
contemplated by this Agreement, or otherwise affecting the Servicer or
any Affiliate of the Servicer or their respective properties, in or
before any court, arbitrator or other body, which may, individually or
in the aggregate, have a Material Adverse Effect.
(g) Collections and Servicing. Since November 2, 1996,
there has been no material adverse change in the ability of the Servicer
to service and collect the Receivables and no material adverse change
has occurred in the overall rate of collections of Receivables.
(h) Not an Investment Company. The Servicer is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, or is exempt from all provisions of such Act.
(i) ERISA. The Servicer is in compliance in all
material respects with ERISA.
SECTION 3.3. Reaffirmation of Representations and Warranties
by the Transferor and Servicer. On each day that a Transfer is made
hereunder, the Transferor, by accepting the proceeds of such Transfer,
whether delivered to the Transferor pursuant to Section 2.2(a) or
Section 2.5 hereof, and the Servicer, shall be deemed to have certified
that all of their respective representations and warranties described in
Sections 3.1 and 3.2 hereof are correct on and as of such day as though
made on and as of such day. Each Incremental Transfer shall be subject
to the further condition precedent that prior to the date of such Incre-
mental Transfer, the Servicer shall have delivered to the Agent and the
Administrative Agent, in form and substance satisfactory to the Agent
and the Administrative Agent, a completed Cycle Certificate dated the
second Business Day prior to the date of such Incremental Transfer,
together with such additional information as may be reasonably requested
by the Administrative Agent or the Agent; and the Transferor shall be
deemed to have represented and warranted that such conditions precedent
have been satisfied.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. On or prior to the date
of execution hereof, the Transferor shall deliver to the Agent the
following documents, instruments and fees all of which shall be in a
form and substance acceptable to the Agent:
(a) A copy of the resolutions of the Board of Directors
of the Transferor certified by its Secretary approving the execution,
delivery and performance by the Transferor of this Agreement, the Re-
ceivables Purchase Agreement and the other Transaction Documents to be
delivered by the Transferor hereunder or thereunder.
(b) A copy of the resolutions of the Board of Directors
of each Designated Seller, the Servicer and the Servicer Guarantor
certified by its Secretary approving the execution, delivery and perfor-
▇▇▇▇▇ by such Person of this Agreement, the Receivables Purchase Agree-
ment and the other Transactions Documents to be delivered by such Person
hereunder or thereunder.
(c) The Articles of Incorporation of the Transferor
certified by the Secretary of State or other similar official of the
Transferor's jurisdiction of incorporation dated a date reasonably prior
to the Closing Date.
(d) The Articles of Incorporation of each Designated
Seller, the Servicer and the Servicer Guarantor certified by the
Secretary of State or other similar official of such Person's jurisdic-
tion of incorporation dated a date reasonably prior to the Closing Date.
(e) A Good Standing Certificate for the Transferor
issued by the Secretary of State or a similar official of the
Transferor's jurisdiction of incorporation and certificates of quali-
fication as a foreign corporation issued by the Secretaries of State or
other similar officials of each jurisdiction where such qualification is
material to the transactions contemplated by this Agreement and the
other Transaction Documents, in each case, dated a date reasonably prior
to the Closing Date.
(f) A Good Standing Certificate for each Designated
Seller, the Servicer and the Servicer Guarantor issued by the Secretary
of State or a similar official of such Persons's jurisdiction of incor-
poration and certificates of qualification as a foreign corporation
issued by the Secretaries of State or other similar officials of each
jurisdiction when such qualification is material to the transactions
contemplated by this Agreement and the Receivables Purchase Agreement
and the other Transaction Documents, in each case, dated a date reason-
ably prior to the Closing Date.
(g) A Certificate of the Secretary of the Transferor
substantially in the form of Exhibit L attached hereto.
(h) A Certificate of the Secretary of each Designated
Seller, the Servicer and the Servicer Guarantor substantially in the
form of Exhibit L attached hereto.
(i) Copies of proper financing statements (Form UCC-1),
dated a date reasonably near to the date of the initial Incremental
Transfer naming the Transferor as the debtor in favor of the Agent, for
the benefit of the Company and the Bank Investors, secured party or
other similar instruments or documents as may be necessary or in the
reasonable opinion of the Agent desirable under the UCC of all appro-
priate jurisdictions or any comparable law to perfect the Agent's
undivided percentage interest in all Receivables and the Related
Security and Collections relating thereto.
(j) Copies of proper financing statements (Form UCC-1),
dated a date reasonably near to the date of the initial Incremental
Transfer naming each Designated Seller as the debtor in favor of the
Transferor as secured party and the Agent, for the benefit of the
Company and the Bank Investors, as assignee of the secured party or
other similar instruments or documents as may be necessary or in the
reasonable opinion of the Agent desirable under the UCC of all appro-
priate jurisdictions or any comparable law to perfect the Transferor's
ownership interest in all Receivables.
(k) Copies of proper financing statements (Form UCC-3),
if any, necessary to terminate all security interests and other rights
of any person in Receivables previously granted by Transferor.
(l) Copies of proper financing statements (Form UCC-3),
if any, necessary to terminate all security interests and other rights
of any person in Receivables previously granted by each Designated
Seller.
(m) Certified copies of request for information or
copies (Form UCC-11) (or a similar search report certified by parties
acceptable to the Agent) dated a date reasonably near the date of the
initial Incremental Transfer listing all effective financing statements
which name the Transferor or any Designated Seller (under their
respective present names and any previous names) as debtor and which are
filed in jurisdictions in which the filings were made pursuant to items
(i) or (j) above together with copies of such financing statements (none
of which shall cover any Receivables or Contracts).
(n) Executed copies of the Lock-Box Agreements relating
to each of the Lock-Box Banks and the Lock-Box Accounts.
(o) An opinion of Butler, Snow, O'Mara, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, PLLC, special counsel to the Transferor, the Servicer, the
Servicer Guarantor and the Designated Sellers, covering the matters set
forth in Exhibit K hereto.
(p) An opinion of Butler, Snow, O'Mara, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, PLLC, special counsel to the Transferor and the Designated
Sellers, covering certain bankruptcy and insolvency matters (i.e. "true
sale" and nonconsolidation) in form and substance satisfactory to the
Agent and Agent's counsel.
(q) An opinion of Baker, Donelson, Bearman & ▇▇▇▇▇▇▇▇,
special Tennessee counsel to ▇▇▇▇▇▇▇▇'▇, covering certain Tennessee
Uniform Commercial Code matters in form and substance satisfactory to
the Agent and Agent's counsel.
(r) An opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, special Nevada counsel
to the Transferor, covering certain corporate and security interest
matters in form and substance satisfactory to the Agent and the Agent's
counsel.
(s) A computer tape setting forth as of the Cut-Off Date
all Receivables and the Outstanding Principal Balances thereon and such
other information as the Agent may reasonably request.
(t) An executed copy of this Agreement, the Receivables
Purchase Agreement, the Fee Letter and each of the other Transaction
Documents to be executed by the Designated Sellers, the Servicer, the
Servicer Guarantor or the Transferor.
(u) The Transfer Certificate, duly executed by the
Transferor.
(v) The Certificate, duly executed by the Transferor and
appropriately completed.
(w) The Arrangement Fee in accordance with Section
2.7(b).
(x) An Investor Report for December 31, 1996.
(y) A Cycle Certificate as of the Cut-Off Date.
(z) A writing indicating the appointment by the Trans-
feror and each Designated Seller of CT Corporation as agent for process
pursuant to Section 11.4(d) hereof.
(aa) Such other documents, instruments, certificates and
opinions as the Agent or the Administrative Agent, shall reasonably re-
quest.
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of Transferor. At all
times from the date hereof to the later to occur of (i) the Termination
Date or (ii) the date on which the Net Investment and all other Aggre-
gate Unpaids have been paid in full, in cash, unless the Agent shall
otherwise consent in writing:
(a) Financial Reporting. The Transferor will, and will
cause each Designated Seller and each of such Designated Seller's
Subsidiaries to, maintain, for itself and each of its respective Subsid-
iaries, a system of accounting established and administered in
accordance with GAAP, and furnish to the Agent:
(i) Annual Reporting. Within ninety (90) days after the
close of the Transferor's and ▇▇▇▇▇▇▇▇'▇ fiscal years, (beginning
with the fiscal year ending, in the case of ▇▇▇▇▇▇▇▇'▇, in 1997,
and in the case of the Transferor, in 1998) audited financial
statements, prepared in accordance with GAAP on a consolidated
basis for (x) the Transferor and (y) for ▇▇▇▇▇▇▇▇'▇ and its Sub-
sidiaries, in each case, including balance sheets as of the end of
such period, related statements of operations, shareholder's equity
and cash flows, accompanied by an unqualified audit report certi-
fied by independent certified public accountants, acceptable to the
Agent, prepared in accordance with GAAP and, upon the Agent's
request, any management letter prepared by said accountants and
accompanied by (i) a certificate of said accountants that
▇▇▇▇▇▇▇▇'▇ is in compliance with the financial covenants set forth
in Exhibit O attached hereto or, if ▇▇▇▇▇▇▇▇'▇ is not in compliance
with such covenants, stating the nature and status thereof and (ii)
a certificate of the chief financial officer or chairman,
president, treasurer or any executive vice president of the Trans-
feror stating that no Termination Event or Potential Termination
Event exists, or if any Termination Event or Potential Termination
Event exists, stating the nature and status thereof and showing the
computation of each of the financial ratios and restrictions set
forth in Exhibit O attached hereto.
(ii) Quarterly Reporting. Within forty-five (45) days
after the close of the first three quarterly periods of each of the
Transferor's and ▇▇▇▇▇▇▇▇'▇ fiscal years, for (x) the Transferor
and (y) for ▇▇▇▇▇▇▇▇'▇ and its Subsidiaries, in each case, consol-
idated unaudited balance sheets as at the close of each such period
and consolidated related statements of operations, shareholder's
equity and cash flows for the period from the beginning of such
fiscal year to the end of such quarter, and showing the computation
of each of the financial ratios and restrictions set forth in
Exhibit O attached hereto all certified by its chief financial
officer, chairman, president, treasurer or any executive vice
president.
(iii) Compliance Certificate. Together with the ▇▇▇▇▇-
cial statements required hereunder, a compliance certificate signed
by the chief financial officer, chairman, president, treasurer or
any executive vice president of the Transferor or ▇▇▇▇▇▇▇▇'▇, as
applicable, stating that (x) the attached financial statements
have been prepared in accordance with GAAP and accurately reflect
the financial condition of the Transferor or ▇▇▇▇▇▇▇▇'▇ as ap-
plicable and (y) to the best of such Person's knowledge, no Termi-
nation Event or Potential Termination Event exists, or if any
Termination Event or Potential Termination Event exists, stating
the nature and status thereof and showing the computation of, and
showing compliance with, each of the financial ratios and restric-
tions set forth in Exhibit O attached hereto.
(iv) Shareholders Statements and Reports. Promptly upon
the furnishing thereof to the shareholders of ▇▇▇▇▇▇▇▇'▇, copies of
all financial statements, reports and proxy statements so fur-
nished.
(v) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly,
monthly or other regular reports which ▇▇▇▇▇▇▇▇'▇ or any subsidiary
files with the Securities and Exchange Commission.
(vi) Notice of Termination Events or Potential
Termination Events. As soon as possible and in any event within
two (2) days after the occurrence of each Termination Event or each
Potential Termination Event, a statement of the chief financial
officer or chief accounting officer of the Transferor setting forth
details of such Termination Event or Potential Termination Event
and the action which the Transferor proposes to take with respect
thereto.
(vii) Change in Credit Guidelines and Debt Ratings.
Within thirty (30) days after the date any material change in or
amendment to the Credit Guidelines is made, a copy of the Credit
Guidelines then in effect indicating such change or amendment.
Within fifteen (15) days after the date of any change in ▇▇▇▇▇▇▇▇'▇
public or private debt ratings (including any related implied or
"shadow" ratings), if any, a written certification of ▇▇▇▇▇▇▇▇'▇
public and private debt ratings after giving effect to any such
change.
(viii) Credit Guidelines. Within ten (10) Business Days
of the request of the Agent, a complete copy of the Credit Guide-
lines then in effect.
(ix) ERISA. Promptly after the filing or receiving
thereof, copies of all reports and notices with respect to any
Reportable Event (as defined in Article IV of ERISA) which the
Transferor, any Designated Seller or any ERISA Affiliate of the
Transferor or any Designated Seller files under ERISA with the In-
ternal Revenue Service, the Pension Benefit Guaranty Corporation or
the U.S. Department of Labor or which the Transferor, any
Designated Seller or any ERISA Affiliates of the Transferor or any
Designated Seller receives from the Internal Revenue Service, the
Pension Benefit Guaranty Corporation or the U.S. Department of
Labor.
(x) Other Information. Such other information including
non-financial information) as the Agent or the Administrative Agent
may from time to time reasonably request with respect to any
Designated Seller, the Transferor or any Subsidiary of any of the
foregoing.
(b) Conduct of Business. The Transferor will, and will
cause each Designated Seller and each Designated Seller's Subsidiaries
to, carry on and conduct its business in substantially the same manner
and in substantially the same fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is
conducted.
(c) Compliance with Laws. The Transferor will, and will
cause each Designated Seller and each Designated Seller's Subsidiaries
to, comply with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it or its respective properties
may be subject.
(d) Furnishing of Information and Inspection of Records.
The Transferor will, and will cause each Designated Seller to, furnish
to the Agent from time to time such information with respect to the
Receivables as the Agent may reasonably request, including, without
limitation, listings identifying the Obligor and the Outstanding
Principal Balance for each Receivable. The Transferor will, and will
cause each Designated Seller to, at any time and from time to time
during regular business hours permit the Agent, or its agents or repre-
sentatives, (i) to examine and make copies of and take abstracts from
all Records and (ii) to visit the offices and properties of the
Transferor or such Designated Seller, as applicable, for the purpose of
examining such Records, and to discuss matters relating to Receivables
or the Transferor's or such Designated Seller's performance hereunder
and under the other Transaction Documents to which such Person is a
party with any of the officers, directors, employees or independent
public accountants of the Transferor or such Designated Seller, as
applicable, having knowledge of such matters.
(e) Keeping of Records and Books of Account. The Trans-
feror will, and will cause each Designated Seller to, 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 main-
tain, 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 daily identification
of each new Receivable and all Collections of and adjustments to each
existing Receivable). The Transferor will, and will cause each
Designated Seller to, give the Agent notice of any material change in
the administrative and operating procedures of the Transferor or such
Designated Seller, as applicable, referred to in the previous sentence.
(f) Performance and Compliance with Accounts. The
Transferor, at its expense, will, and will cause each Designated Seller
to, timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by the Transferor
or such Designated Seller under the Accounts related to the Receivables.
(g) Credit Guidelines. The Transferor will, and will
cause each Designated Seller to, comply in all material respects with
the Credit Guidelines in regard to each Receivable and the related
Account.
(h) Collections. The Transferor shall, and shall cause
each Designated Seller to, instruct all Obligors to cause all Collec-
tions to be deposited directly to a Lock-Box Account.
(i) Collections Received. The Transferor shall, and
shall cause each Designated Seller to, hold in trust, and deposit, imme-
diately, but in any event not later than the close of business on the
second Business Day following its receipt thereof, to a Lock-Box Account
all Collections received from time to time by the Transferor or such
Designated Seller, as the case may be.
(j) Sale Treatment. The Transferor will not (i) permit
any Designated Seller to, account for (including for accounting and tax
purposes), or otherwise treat, the transactions contemplated by the
Receivables Purchase Agreement in any manner other than as a sale of an
undivided percentage ownership interest in the Receivables by such
Designated Seller to the Transferor, or (ii) account for (other than for
tax purposes) or otherwise treat the transactions contemplated hereby in
any manner other than a sale of an undivided percentage ownership
interest in the Receivables by the Transferor to the Company or the Bank
Investors, as applicable. In addition, the Transferor shall, and shall
cause each Designated Seller to, disclose (in a footnote or otherwise)
in all of its respective financial statements (including any such
financial statements consolidated with any other Persons' financial
statements) the existence and nature of the transaction contemplated
hereby and by the Receivables Purchase Agreement and the interest of the
Transferor (in the case of a Designated Seller's financial statements),
the Company and the Bank Investors in the Affected Assets.
(k) Separate Business. The Transferor shall at all
times (a) to the extent the Transferor's office is located in the
offices of ▇▇▇▇▇▇▇▇'▇ or any Affiliate of ▇▇▇▇▇▇▇▇'▇, pay fair market
rent for its executive office space located in the offices of ▇▇▇▇▇▇▇▇'▇
or any Affiliate of ▇▇▇▇▇▇▇▇'▇, (b) have at all times at least two
members of its board of directors which are not and, within the
immediately preceding two years, have not been employees, officers or
directors of ▇▇▇▇▇▇▇▇'▇ or any Affiliate of ▇▇▇▇▇▇▇▇'▇ or of any major
creditor of ▇▇▇▇▇▇▇▇'▇ or any Affiliate of ▇▇▇▇▇▇▇▇'▇ and are persons
who are familiar and have experience with asset securitization, (c)
maintain the Transferor's books, financial statements, accounting
records and other corporate documents and records separate from those of
▇▇▇▇▇▇▇▇'▇ or any other entity, (d) not commingle the Transferor's
assets with those of ▇▇▇▇▇▇▇▇'▇ or any other entity, (e) act solely in
its corporate name and through its own authorized officers and agents,
(f) make investments directly or by brokers engaged and paid by the
Transferor or its agents (provided that if any such agent is an
Affiliate of the Transferor it shall be compensated at a fair market
rate for its services), (g) separately manage the Transferor's
liabilities from those of ▇▇▇▇▇▇▇▇'▇ or any Affiliates of ▇▇▇▇▇▇▇▇'▇ and
pay its own liabilities, including all administrative expenses, from its
own separate assets, except that ▇▇▇▇▇▇▇▇'▇ may pay the organizational
expenses of the Transferor, and (h) pay from the Transferor's assets all
obligations and indebtedness of any kind incurred by the Transferor.
The Transferor shall abide by all corporate formalities, including the
maintenance of current minute books, and the Transferor shall cause its
financial statements to be prepared in accordance with GAAP in a manner
that indicates the separate existence of the Transferor and its assets
and liabilities. The Transferor shall (i) pay all its liabilities, (ii)
not assume the liabilities of ▇▇▇▇▇▇▇▇'▇ or any Affiliate of ▇▇▇▇▇▇▇▇'▇,
(iii) not lend funds or extend credit to ▇▇▇▇▇▇▇▇'▇ or any Affiliate of
▇▇▇▇▇▇▇▇'▇ except pursuant to the Receivables Purchase Agreement in
connection with the purchase of Receivables thereunder, (iv) not guaran-
tee the liabilities of ▇▇▇▇▇▇▇▇'▇ or any Affiliates of ▇▇▇▇▇▇▇▇'▇ and
(v) not own the stock of, or any other beneficial interest in, any
subsidiaries or any other entity. The officers and directors of the
Transferor (as appropriate) shall make decisions with respect to the
business and daily operations of the Transferor independent of and not
dictated by any controlling entity. The Transferor shall not engage in
any business not permitted by its Certificate of Incorporation as in
effect on the Closing Date.
(l) Inventory Financings. The Transferor shall, and
will cause each Designated Seller to, specifically exclude from the
property subject to any Adverse Claim granted on inventory any and all
accounts receivable generated by sales of such inventory and the pro-
ceeds thereof, and shall provide evidence, in each case satisfactory to
the Agent, that any and all accounts receivable generated by sales of
such inventory and the proceeds thereof shall have been excluded from
any such Adverse Claims.
(m) Corporate Documents. The Transferor shall not
amend, alter, change or repeal any Articles of its Articles of Incor-
poration without the prior written consent of the Agent.
SECTION 5.2. Negative Covenants of the Transferor. During
the term of this Agreement, unless the Agent shall otherwise consent in
writing:
(a) No Sales, Liens, Etc. Except as otherwise provided
herein and the Receivables Purchase Agreement, the Transferor will not,
and will not permit any Designated Seller to, sell, assign (by operation
of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon (or the filing of any financing statement)
or with respect to (x) any of the Affected Assets, (y) any goods (other
than inventory), the sale of which may give rise to a Receivable or any
Receivable or related Account, or (z) any account which concentrates in
a Lock-Box Bank to which any Collections of any Receivable are sent, or
assign any right to receive income in respect thereof.
(b) No Extension or Amendment of Receivables. Except as
otherwise permitted in this Section 5.2 and in Section 6.2 hereof, the
Transferor will not, and will not permit any Designated Seller to, ex-
tend, amend or otherwise modify the terms of any Receivable, or amend,
modify or waive any term or condition of any Account related thereto.
The Transferor further covenants that, except as otherwise required by
any Requirement of Law, it shall not, and shall not cause or otherwise
permit the Servicer at any time to, reduce the periodic finance charges
assessed on any Receivable or other fees on any Account if, as a result
of such reduction, the reasonable expectation of the Net Portfolio Yield
as of such date would be less than 1.00% and unless (a) such reduction
is made applicable to the comparable segment of the consumer revolving
credit accounts owned and serviced by the Servicer that have char-
acteristics the same as, or substantially similar to, the Accounts that
are the subject of such change or (b) if it does not own such a compara-
ble segment, it will not make any such change with the intent to materi-
ally benefit itself over the Company and the Bank Investors.
(c) Performance of Account Agreements. The Transferor
shall not, and shall not permit any Designated Seller to fail to comply
with and perform its obligations under the applicable Account Agreements
relating to the Accounts and the Credit Guidelines except insofar as any
such failure to comply or perform would not materially and adversely
affect the rights of the Company, the Agent, or any Bank Investor in the
Receivables or the collectibility of the Receivables. The Transferor
shall not change the terms and provisions of the Account Agreements or
the Credit Guidelines in any respect (including, without limitation, the
calculation of the amount, and the timing, of uncollectible Receivables)
except to the extent (a) such change is made applicable to the compa-
rable segment of the consumer revolving credit accounts owned and
serviced by the Transferor or such Designated Seller that have char-
acteristics the same as, or substantially similar to, the Accounts that
are the subject of such change or (b) if it does not own such a compara-
ble segment, it will not make any such change with the intent to materi-
ally benefit itself over the Company, the Agent, or any Bank Investor,
and such change does not materially and adversely affect the rights of
the Company, the Agent or any Bank Investor in the Receivables or the
collectibility of the Receivables. References to the Receivables in
this paragraph shall be deemed to refer to the Receivables in the aggre-
gate.
(d) No Change in Business or Credit Guidelines. The
Transferor will not, and will not permit any Designated Seller to, make
any change in the character of its business or in the Credit Guidelines,
which change would, in either case, impair the collectibility of any
substantial portion of the Receivables or otherwise result in a Material
Adverse Effect.
(e) No Mergers, Etc. The Transferor will not, and
except as otherwise permitted pursuant to the Receivables Purchase
Agreement, will not permit any Designated Seller to, (i) consolidate or
merge with or into any other Person (except for a merger by a Designated
Seller with or into any wholly-owned subsidiary of such Designated
Seller, where the Designated Seller shall be the surviving entity and
except, with the express consent of the Agent, for the merger by the
Transferor with Parisian Services, Inc., where the Transferor shall be
the surviving entity) or (ii) sell, lease or transfer all or substan-
tially all of its assets to any other Person except that ▇▇▇▇▇'▇, Inc.
may sell substantially all of its assets to a partnership consisting
only of ▇▇▇▇▇'▇, Inc., as a general partner with at least 90% of the
partnership interest, and Parisian, Inc., as a general partner with not
more than 10% of the partnership interest, provided, that such partner-
ship shall enter into an agreement with ▇▇▇▇▇'▇ which shall require the
partnership to sell all of its accounts receivable to ▇▇▇▇▇'▇, which
shall transfer all of its Receivables to the Transferor pursuant to a
Receivables Purchase Agreement.
(f) Change in Payment Instructions to Obligors. The
Transferor will not, and will not permit any Designated Seller to, add
or terminate any bank as a Lock-Box Bank or any account as a Lock-Box
Account to or from those listed in Exhibit C hereto or make any change
in its instructions to Obligors regarding payments to be made to any
Lock-Box Account, unless (i) such instructions are to deposit such
payments to another existing Lock-Box Account or (ii) the Agent shall
have received written notice of such addition, termination or change at
least 30 days prior thereto and the Agent shall have received a Lock-Box
Agreement executed by each new Lock-Box Bank or an existing Lock-Box
Bank with respect to each new Lock-Box Account, as applicable.
(g) Deposits to Lock-Box Accounts. The Transferor will
not, and will not permit any Designated Seller to, deposit or otherwise
credit, or cause or permit to be so deposited or credited, to any Lock-Box
Account cash or cash proceeds other than Collections of Receivables.
(h) Change of Name, Etc. The Transferor will not, and
will not permit any Designated Seller to, change its name, identity or
structure or the location of its chief executive office, unless at least
10 days prior to the effective date of any such change the Transferor or
such Designated Seller, as applicable, delivers to the Agent and the
Collateral Agent (i) such documents, instruments or agreements, executed
by the Transferor or such Designated Seller, as applicable, as are
necessary to reflect such change and to continue the perfection of the
Agent's and the Collateral Agent's ownership interests or security
interests in the Affected Assets and (ii) new or revised Lock-Box Agree-
ments executed by the Lock-Box Banks which reflect such change and
enable the Agent to continue to exercise its rights contained in Section
2.8 hereof.
(i) Amendment to Receivables Purchase Agreements. The
Transferor will not, and will not permit any Designated Seller to,
amend, modify, or supplement any Receivables Purchase Agreement, except
with the prior written consent of the Agent and the Administrative
Agent; nor shall the Transferor take, or permit any Designated Seller to
take, any other action under any Receivables Purchase Agreement that
shall have a material adverse affect on the Agent, the Company or any
Bank Investor or which is inconsistent with the terms of this Agreement.
(j) Other Debt. Except as provided for herein, the
Transferor will not create, incur, assume or suffer to exist any
indebtedness whether current or funded, or any other liability other
than (i) indebtedness of the Transferor representing fees, expenses and
indemnities arising hereunder or under a Receivables Purchase Agreement
for the purchase price of the Receivables under a Receivables Purchase
Agreement, and (ii) other indebtedness incurred in the ordinary course
of its business in an amount not to exceed $9,750 at any time out-
standing.
(k) ERISA Matters. The Transferor will not, and will
not permit any Designated Seller to, (i) engage or permit any of its
respective ERISA Affiliates to engage in any prohibited transaction (as
defined in Section 4975 of the Code and Section 406 of ERISA) for which
an exemption is not available or has not previously been obtained from
the U.S. Department of Labor; (ii) permit to exist any accumulated
funding deficiency (as defined in Section 302(a) of ERISA and Section
412(a) of the Code) or funding deficiency with respect to any Benefit
Plan other than a Multiemployer Plan; (iii) fail to make any payments to
any Multiemployer Plan that the Transferor, such Designated Seller or
any ERISA Affiliate of the Transferor or such Designated Seller is re-
quired to make under the agreement relating to such Multiemployer Plan
or any law pertaining thereto; (iv) terminate any Benefit Plan so as to
result in any liability; or (v) permit to exist any occurrence of any
reportable event described in Title IV of ERISA which represents a
material risk of a liability to the Transferor, such Designated Seller,
or any ERISA Affiliate of the Transferor or such Designated Seller under
ERISA or the Code.
(l) Payment to the Designated Sellers. With respect to
any Receivable sold by a Designated Seller to the Transferor, the
Transferor shall, and shall cause such Designated Seller to, effect such
sale under, and pursuant to the terms of, a Receivables Purchase Agree-
ment, including, without limitation, the payment by the Transferor
either in cash or by increase in the amount of the Subordinated Note to
such Designated Seller of an amount equal to the purchase price for such
Receivable as required by the terms of the Receivables Purchase Agree-
ment.
SECTION 5.3. Minimum Net Worth of Transferor.
(a) On the Closing Date, the Transferor shall have a Net
Worth of at least $10,000,000.
(b) The Transferor shall make no distributions of
dividends or returns of capital except to the extent that, after giving
effect thereto, the Transferor shall have a Net Worth at least equal to
10% of the highest aggregate Outstanding Principal Balance of all Eligi-
ble Receivables shown on any Cycle Certificate delivered with respect to
the immediately preceding twelve calendar month period.
SECTION 5.4. Covenants of the Servicer. At all times from the
date hereof to the later to occur of (i) the Termination Date or (ii)
the date on which the Net Investment and all other Aggregate Unpaids
have been paid in full, in cash, the Servicer covenants that, unless the
Agent shall otherwise consent in writing:
(a) Compliance with Requirements of Law. The Servicer
shall duly satisfy its obligations in all material respects on its part
to be fulfilled under or in connection with each Receivable and the
related Account, will maintain in effect all material qualifications
required under Requirements of Law in order to service properly each
Receivable and the related Account and will comply in all material
respects with all other Requirements of Law in connection with servicing
each Receivable and the related Account the failure to comply with which
would have a material adverse effect on the Company.
(b) No Rescission or Cancellation. The Servicer shall
not permit any rescission or cancellation of a Receivable except as
ordered by a court of competent jurisdiction or other Governmental
Authority or in the ordinary course of its business and in accordance
with the Credit Guidelines.
(c) Protection of Company's Rights. The Servicer shall
take no action, nor omit to take any action, which would impair the
rights of the Company in any Receivable or the related Account.
(d) All Consents Required. All approvals, authoriza-
tions, consents, orders or other actions of any Person or of any
governmental body or official required in connection with the execution
and delivery by the Servicer of this Agreement, the performance by the
Servicer of the transactions contemplated by this Agreement and the
fulfillment by the Servicer of the terms hereof, have been obtained.
(e) Custodian. The Servicer will, at its own cost and
expense, (i) maintain the books and records with respect to the Accounts
and the Receivables and copies of all documents relating to each Account
as custodian for the Company and (ii) clearly and unambiguously ▇▇▇▇
such books and records that indicate the Receivables have been sold to
the Company and simultaneously assigned to the Agent, for benefit of the
Company and the Bank Investors, pursuant to this Agreement.
(f) No Extension or Amendment of Receivables. Except as
otherwise permitted in Sections 5.2 and 6.2 hereof, the Servicer will
not extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive any term or condition of any Account related
thereto. The Servicer further covenants that, except as otherwise re-
quired by any Requirement of Law, it shall not reduce the periodic fi-
▇▇▇▇▇ charges assessed on any Receivable or other fees on any Account
if, as a result of such reduction, the reasonable expectation of the Net
Portfolio Yield as of such date would be less than 1.00% and unless (a)
such reduction is made applicable to the comparable segment of the
consumer revolving credit accounts owned and serviced by the Servicer
that have characteristics the same as, or substantially similar to, the
Accounts that are the subject of such change or (b) if it does not own
such a comparable segment, it will not make any such change with the
intent to materially benefit the Transferor or itself over the Company
and the Bank Investors.
(g) No Change in Business. The Servicer will not make
any change in the character of its business which would impair the
collectibility of any Receivable or otherwise result in a Material
Adverse Effect.
(h) No Mergers, Etc. The Servicer will not (i) ▇▇▇▇▇▇▇-
date or merge with or into any other Person (except for a merger with or
into any wholly-owned subsidiary, where the Servicer shall be the
surviving entity), or (ii) sell, lease or transfer all or substantially
all of its assets to any other Person except that ▇▇▇▇▇'▇, Inc. may sell
substantially all of its assets to a partnership consisting only of
▇▇▇▇▇'▇, Inc., as a general partner with at least 90% of the partnership
interest, and Parisian, Inc., as a general partner with not more than
10% of the partnership interest, provided, that such partnership shall
enter into an agreement with ▇▇▇▇▇'▇ which shall require the partnership
to sell all of its accounts receivable to ▇▇▇▇▇'▇, which shall transfer
all of its Receivables to the Transferor pursuant to a Receivables
Purchase Agreement.
(i) Change in Payment Instructions to Obligors. The
Servicer will not make any change in the instructions to Obligors
regarding payments to be made to any Lock-Box Account, unless (i) such
instructions are to deposit such payments to another existing Lock-Box
Account or (ii) the Agent shall have received written notice of such
change at least 30 days prior thereto and the Agent shall have received
a Lock-Box Agreement executed by each new Lock-Box Bank or an existing
Lock-Box Bank with respect to each new Lock-Box Account, as applicable.
(j) Deposits to Lock-Box Accounts. The Servicer will
not deposit or otherwise credit, or cause or permit to be so deposited
or credited, to any Lock-Box Account cash or cash proceeds other than
Collections of Receivables.
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Servicer. The servicing, admin-
istering and collection of the Receivables shall be conducted by such
Person (the "Servicer") so designated from time to time in accordance
with this Section 6.1. Until the Company gives notice to ▇▇▇▇▇'▇ of the
designation of a new Servicer, ▇▇▇▇▇'▇ is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Servicer
pursuant to the terms hereof. The Servicer may not delegate any of its
rights, duties or obligations hereunder, or designate a substitute
Servicer, without the prior written consent of the Agent, and provided
that the Servicer shall continue to remain solely liable for the perfor-
▇▇▇▇▇ of the duties as Servicer hereunder notwithstanding any such
delegation hereunder. The Agent may, and upon the direction of the
Majority Investors the Agent shall, after the occurrence of a Servicer
Default or any other Termination Event designate as Servicer any Person
(including itself) to succeed ▇▇▇▇▇'▇ or any successor Servicer, on the
condition in each case that any such Person so designated shall agree to
perform the duties and obligations of the Servicer pursuant to the terms
hereof. The Agent may notify any Obligor of the Transferred Interest.
SECTION 6.2. Duties of Servicer.
(a) The Servicer shall take or cause to be taken all
such action as may be necessary or advisable to collect each Receivable
from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with
the Credit Guidelines. Each of the Transferor, the Company, the Agent
and the Bank Investors hereby appoints as its agent the Servicer, from
time to time designated pursuant to Section 6.1 hereof, to enforce its
respective rights and interests in and under the Affected Assets. To
the extent permitted by applicable law, each of the Transferor and the
Designated Sellers (to the extent not then acting as Servicer hereunder)
hereby grants to any Servicer appointed hereunder an irrevocable power
of attorney to take any and all steps in the Transferor's and/or such
Designated Seller's name and on behalf of the Transferor or such
Designated Seller necessary or desirable, in the reasonable determi-
nation of the Servicer, to collect all amounts due under any and all
Receivables, including, without limitation, endorsing the Transferor's
and/or such Designated Seller's name on checks and other instruments
representing Collections and enforcing such Receivables and the related
Accounts. The Servicer shall set aside for the account of the Trans-
feror and the Company their respective allocable shares of the Collec-
tions of Receivables in accordance with Sections 2.5 and 2.6 hereof.
The Servicer shall segregate and deposit to the Agent's account the
Company's allocable share of Collections of Receivables when required
pursuant to Article II hereof. The Transferor shall deliver to the
Servicer and the Servicer shall hold in trust for the Transferor, the
Company, the Agent and the Bank Investors, in accordance with their re-
spective interests, all Records which evidence or relate to Receivables
or Related Security. Notwithstanding anything to the contrary contained
herein, the Agent shall have the absolute and unlimited right to direct
the Servicer (whether the Servicer is ▇▇▇▇▇▇▇▇'▇ or any other Person) to
commence or settle any legal action to enforce collection of any
Receivable or to foreclose upon or repossess any Related Security. The
Servicer shall not make the Agent, the Company or any of the Bank
Investors a party to any litigation without the prior written consent of
such Person.
(b) The Servicer shall, as soon as practicable following
receipt thereof, turn over to the Transferor any collections of any in-
debtedness of any Person which is not on account of a Receivable. If
the Servicer is not the Transferor or an Affiliate of the Transferor,
the Servicer, by giving three Business Days' prior written notice to the
Agent, may revise the percentage used to calculate the Servicing Fee so
long as the revised percentage will not result in a Servicing Fee that
exceeds 110% of the reasonable and appropriate out-of-pocket costs and
expenses of such Servicer incurred in connection with the performance of
its obligations hereunder as documented to the reasonable satisfaction
of the Agent, provided, however, that at any time after the Buyers'
Percentage Factor equals or exceeds 100%, any compensation to the
Servicer in excess of the Servicing Fee initially provided for herein
shall be an obligation of the Transferor and shall not be payable, in
whole or in part, from Collections allocated to the Company or the Bank
Investors, as applicable. The Servicer, if other than the Transferor or
an Affiliate of the Transferor, shall as soon as practicable upon ▇▇-
▇▇▇▇, deliver to the Transferor all Records in its possession which evi-
dence or relate to indebtedness of an Obligor which is not a Receivable.
(c) On or before 90 days after the end of each fiscal
year of the Servicer, beginning with the fiscal year ending February 1,
1997, the Servicer shall cause a firm of independent public accountants
(who may also render other services to the Servicer, the Transferor, the
Designated Sellers or any Affiliates of any of the foregoing) to furnish
a report to the Agent to the effect that they have (i) compared the
information contained in a sample of the Investor Reports and Cycle Cer-
tificates delivered during such fiscal year then ended with the informa-
tion contained in the Accounts and the Servicer's records and computer
systems for such period, and that, on the basis of such examination and
comparison, such firm is of the opinion that the information contained
in the Investor Reports and the Cycle Certificates selected reconciles
with the information contained in the Accounts and the Servicer's re-
cords and computer system and that the servicing of the Receivables has
been conducted in compliance with this Agreement, and (ii) confirmed by
testing the mathematical accuracy of the information set forth in the
Investor Reports and Cycle Certificates delivered during such fiscal
year, except, in each case for (a) such exceptions as such firm shall
believe to be immaterial (which exceptions need not be enumerated) and
(b) such other exceptions as shall be set forth in such statement.
(d) Notwithstanding anything to the contrary contained
in this Article VI, the Servicer, if not the Transferor or any Affiliate
of the Transferor, shall have no obligation to collect, enforce or take
any other action described in this Article VI with respect to any
indebtedness that is not included in the Transferred Interest other than
to deliver to the Transferor the collections and documents with respect
to any such indebtedness as described in Section 6.2(b) hereof.
SECTION 6.3. Rights After Designation of New Servicer. At
any time following the designation of a Servicer (other than the
Transferor or any Affiliate of the Transferor) pursuant to Section 6.1
hereof:
(i) The Agent may direct that payment of all amounts
payable under any Receivable be made directly to the Agent or its
designee.
(ii) The Transferor shall, at the Agent's request and at
the Transferor's expense, give notice of the Agent's, the Trans-
feror's and/or the Bank Investors' ownership of Receivables to each
Obligor and direct that payments be made directly to the Agent or
its designee.
(iii) The Transferor shall, at the Agent's request, (A)
assemble all of the Records, and shall make the same available to
the Agent or its designee at a place selected by the Agent or its
designee, and (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections of
Receivables in a manner acceptable to the Agent and shall, promptly
upon receipt, remit all such cash, checks and instruments, duly en-
dorsed or with duly executed instruments of transfer, to the Agent
or its designee.
(iv) The Transferor and each Designated Seller hereby
authorize the Agent to take any and all steps in the Transferor's
or such Designated Seller's name and on behalf of the Transferor
and such Designated Seller necessary or desirable, in the determi-
nation of the Agent, to collect all amounts due under any and all
Receivables, including, without limitation, endorsing the
Transferor's or such Designated Seller's name on checks and other
instruments representing Collections and enforcing such Receivables
and the related Accounts.
SECTION 6.4. Servicer Default. The occurrence of any one or
more of the following events shall constitute a Servicer Default:
(a) the Servicer or, to the extent that the Transferor
or any Affiliate of the Transferor is then acting as Servicer, the
Transferor or such Affiliate, as applicable, shall fail (i) to observe
or perform any term, covenant or agreement hereunder (other than as
referred to in clauses (ii) or (iii) of this Section 6.4(a)) or under
any of the other Transaction Documents to which such Person is a party
or by which such Person is bound, and such failure shall remain
unremedied for ten (10) days, or (ii) to make any payment or deposit
required to be made by it hereunder when due or the Servicer shall fail
to observe or perform any term, covenant or agreement on the Servicer's
part to be performed under Section 2.8(b) hereof or (iii) to observe or
perform any term, covenant or agreement under Sections 5.4(a), 5.4(b),
5.4(c), 5.4(f), 5.4(g), 5.4(i) or 5.4(j); or
(b) any representation, warranty, certification or
statement made by the Servicer or the Transferor or any Affiliate of the
Transferor (in the event that the Transferor or such Affiliate is then
acting as the Servicer) in this Agreement, the Receivables Purchase
Agreement or in any of the other Transaction Documents or in any
certificate or report delivered by it pursuant to any of the foregoing
shall prove to have been incorrect in any material respect when made or
deemed made; or
(c) failure or the default by the Servicer or any of its
Subsidiaries in the performance of any material term, provision or
condition contained in any agreement under which any Indebtedness
greater than $5,000,000 was created or is governed, if such event is an
"event of default" or "default" under any such agreement; or any In-
debtedness of the Servicer or any of its Subsidiaries greater than
$5,000,000 shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the
scheduled date of maturity thereof; or
(d) any Event of Bankruptcy shall occur with respect to
the Servicer or any of its Subsidiaries; or
(e) there shall have occurred any material adverse
change in the operations of the Servicer since the end of the last
fiscal year ending prior to the date of its appointment as Servicer
hereunder or any other event shall have occurred which, in the
commercially reasonable judgment of the Agent, materially and adversely
affects the Servicer's ability to either collect the Receivables or to
perform under this Agreement.
SECTION 6.5. Responsibilities of the Transferor and the
Designated Sellers. Anything herein to the contrary notwithstanding,
the Transferor shall, and/or shall cause each Designated Seller to, (i)
perform all of such Designated Seller's obligations under the Accounts
related to the Receivables to the same extent as if interests in such
Receivables had not been sold hereunder and under the Receivables Pur-
chase Agreement and the exercise by the Agent, the Company and the Bank
Investors of their rights hereunder and under the Receivables Purchase
Agreement shall not relieve the Transferor or such Designated Seller
from such obligations and (ii) pay when due any taxes, including without
limitation, any sales taxes payable in connection with the Receivables
and their creation and satisfaction. Neither the Agent, the Company nor
any of the Bank Investors shall have any obligation or liability with
respect to any Receivable or related Accounts, nor shall it be obligated
to perform any of the obligations of any Designated Seller thereunder.
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. Termination Events. The occurrence of any one
or more of the following events shall constitute a Termination Event:
(a) the Transferor or the Servicer shall fail to make
any payment or deposit to be made by it hereunder or under the
Receivables Purchase Agreement when due hereunder or thereunder; or
(b) any representation, warranty, certification or
statement made by the Transferor in this Agreement, any other
Transaction Document to which it is a party 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; or
(c) the Transferor, or the Servicer, shall default in
the performance of any payment or undertaking (other than those covered
by clause (a) above) (i) to be performed or observed under Sections
5.1(a)(vi), 5.1(a)(vii), 5.1(b), 5.1(c), 5.1(f), 5.1(g), 5.1(h), 5.1(i),
5.1(k), 5.1(l), 5.2(a), 5.2(c), 5.2(d), 5.2(e), 5.2(f), 5.2(g) or 5.2(h)
or Section 5.3 or (ii) to be performed or observed under any other
provision hereof and such default in the case of this clause (ii) shall
continue for ten (10) days; or
(d) failure or the default by the Transferor or any
Designated Seller in the performance of any material term, provision or
condition contained in any agreement to which any such Person is a party
and under which any Indebtedness greater than $5,000,000 was created or
is governed, if such event is an "event of default" or "default" under
any such agreement; or any Indebtedness of the Transferor or any Desig-
nated Seller greater than $5,000,000 shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled
payment) prior to the scheduled date of maturity thereof; or
(e) any Event of Bankruptcy shall occur with respect to
the Transferor, any Designated Seller or any Subsidiary of either the
Transferor or any Designated Seller; or
(f) the Agent, on behalf of the Company and/or the Bank
Investors, shall, for any reason, fail or cease to have a valid and per-
fected first priority ownership or security interest in the Affected
Assets free and clear of any Adverse Claims; or
(g) a Servicer Default shall have occurred; or
(h) any of the Receivables Purchase Agreements shall
have terminated; or
(i) the Transferor, the Servicer or any Designated
Seller shall enter into any transaction or merger whereby it is not the
surviving entity; or
(j) (i) the Buyers' Percentage Factor exceeds the
Maximum Buyers' Percentage Factor, unless the Transferor reduces the Net
Investment or increases the balance of the Affected Assets on the next
Business Day so as to reduce the Buyers' Percentage Factor to less than
or equal to the Maximum Buyers' Percentage Factor, (ii) the Buyers' Per-
centage Factor equals or exceeds 100% at any time; or (iii) the Net
Investment plus the aggregate Interest Component of all outstanding
Related Commercial Paper shall exceed the Facility Limit at any time; or
(k) the Payment Rate averaged for any three consecutive
Collection Periods is less than 16.00%; or
(l) the average Net Portfolio Yield for any three
consecutive Collection Periods is less than 1.00%; or
(m) the Delinquency Ratio averaged for any three
consecutive Collection Periods is greater than 7.50%; or
(n) the Default Ratio averaged for any three consecutive
Collection periods is greater than 9.00%; or
(o) the Dilution Ratio averaged over any three
consecutive Collection Periods is greater than or equal to 5.00%; or
(p) the Liquidity Provider or the Credit Support
Provider shall have given notice that an event of default has occurred
and is continuing under any of its respective agreements with the
Company; or
(q) the Commercial Paper issued by the Company shall not
be rated at ▇▇▇▇▇ "▇▇" by Standard & Poor's and at least "P2" by
Moody's; or
(r) a Guarantor Default shall have occurred and be
continuing.
SECTION 7.2. Termination. (a) Upon the occurrence of any
Termination Event, the Agent may, or at the direction of the Majority
Investors shall, by notice to the Transferor and the Servicer declare
the Termination Date to have occurred; provided, however, that in the
case of any event described in Section 7.1(e), 7.1(f), 7.1(j)(ii) or
7.1(j)(iii) above, Termination Date shall be deemed to have occurred
automatically upon the occurrence of such event. Upon any such
declaration or automatic occurrence, the Agent shall have, in addition
to all other rights and remedies under this Agreement or otherwise, all
other rights and remedies provided under the UCC of the applicable
jurisdiction and other applicable laws, all of which rights shall be
cumulative.
(b) At all times after the declaration or automatic
occurrence of the Termination Date pursuant to Section 7.2(a), the
Carrying Costs shall thereafter be calculated on the basis of the Base
Rate plus 2.00% for all existing and future funding periods.
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor. Without limiting
any other rights which the Agent, the Company or the Bank Investors may
have hereunder or under applicable law, the Transferor hereby agrees to
indemnify the Company, the Bank Investors, the Agent, the Administrative
Agent, the Collateral Agent, the Liquidity Provider and the Credit Sup-
port Provider and any successors and permitted assigns and their respec-
tive officers, directors and employees (collectively, "Indemnified
Parties") from and against any and all damages, losses, claims, liabili-
ties, costs and expenses, including, without limitation, reasonable
attorneys' fees (which such attorneys may be employees of the Liquidity
Provider, the Credit Support Provider, the Agent, the Administrative
Agent or the Collateral Agent, as applicable) and disbursements (all of
the foregoing being collectively referred to as "Indemnified Amounts")
awarded against or incurred by any of them in any action or proceeding
between the Transferor, any Designated Seller or the Servicer and any of
the Indemnified Parties or between any of the Indemnified Parties and
any third party or otherwise arising out of or as a result of this
Agreement, the other Transaction Documents, the ownership or mainte-
▇▇▇▇▇, either directly or indirectly, by the Agent, the Company or any
Bank Investor of the Transferred Interest or any of the other
transactions contemplated hereby or thereby, excluding, however, (i)
Indemnified Amounts to the extent resulting from gross negligence or
willful misconduct on the part of an Indemnified Party or (ii) recourse
(except as otherwise specifically provided in this Agreement) for
uncollectible Receivables. Without limiting the generality of the
foregoing, the Transferor shall indemnify each Indemnified Party for
Indemnified Amounts relating to or resulting from:
(i) any representation or warranty made by the Trans-
feror or any Designated Seller or the Servicer or any officers of
the Transferor or any Designated Seller or the Servicer under or in
connection with this Agreement, the Receivables Purchase Agreement,
any of the other Transaction Documents, any Investor Report or any
other information or report delivered by the Transferor or the Ser-
vicer pursuant hereto, which shall have been false or incorrect in
any material respect when made or deemed made;
(ii) the failure by the Transferor or any Designated
Seller or the Servicer to comply with any applicable law, rule or
regulation with respect to any Receivable or the related Account,
or the nonconformity of any Receivable or the related Account with
any such applicable law, rule or regulation;
(iii) the failure to vest and maintain vested in the
Company and/or the Bank Investors, an undivided first priority,
perfected percentage ownership interest, to the extent of the
Transferred Interest, in the Affected Assets free and clear of any
Adverse Claim or (y) to create or maintain a valid and perfected
first priority security interest in favor of the Agent, for the
benefit of the Company and/or the Bank Investors, in the
Transferor's interest in the Affected Assets as contemplated
pursuant to Section 11.11, free and clear of any Adverse Claim;
(iv) the failure to file, or any delay in filing,
financing statements, continuation statements, or other similar in-
struments or documents under the UCC of any applicable jurisdiction
or other applicable laws with respect to any of the Affected
Assets;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy) of the Obligor to the payment of any
Receivable (including, without limitation, a defense based on such
Receivable or the related Account not being the legal, valid and
binding obligation of such Obligor enforceable against it in accor-
dance with its terms), or any other claim resulting from the sale
of merchandise or services related to such Receivable or the fur-
nishing or failure to furnish such merchandise or services;
(vi) any failure of the Servicer to perform its duties
or obligations in accordance with the provisions hereof; or
(vii) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of
whatever sort arising out of or in connection with merchandise or
services which are the subject of any Receivable;
(viii) the transfer of an ownership interest in any
Receivable other than an Eligible Receivable;
(ix) the failure by the Transferor or any Designated
Seller or the Servicer to comply with any term, provision or
covenant contained in this Agreement or any of the other Transac-
tion Documents to which it is a party or to perform any of its
respective duties under the Accounts;
(x) the Buyers' Percentage Factor exceeds the Maximum
Buyers' Percentage Factor at any time;
(xi) the failure of any Designated Seller to pay when
due any taxes, including without limitation, sales, excise or per-
▇▇▇▇▇ property taxes payable in connection with any of the Receiv-
▇▇▇▇▇;
(xii) any repayment by any Indemnified Party of any
amount previously distributed in reduction of Net Investment which
such Indemnified Party believes in good faith is required to be
made;
(xiii) the commingling by the Transferor, any Designated
Seller or the Servicer of Collections of Receivables at any time
with other funds;
(xiv) any investigation, litigation or proceeding
related to this Agreement, any of the other Transaction Documents,
the use of proceeds of Transfers by the Transferor or any
Designated Seller, the ownership of Transferred Interests, or any
Receivable, Related Security or Account;
(xv) the failure of any Lock-Box Bank to remit any
amounts held in the Lock-Boxes and/or the Lock-Box Accounts pur-
suant to the instructions of the Servicer, the Transferor, any
Designated Seller or the Agent (to the extent such Person is enti-
tled to give such instructions in accordance with the terms hereof
and of any applicable Lock-Box Agreement) whether by reason of the
exercise of set-off rights or otherwise;
(xvi) any inability to obtain any judgment in or utilize
the court or other adjudication system of, any state in which an
Obligor may be located as a result of the failure of the Transferor
or any Designated Seller to qualify to do business or file any
notice of business activity report or any similar report;
(xvii) any failure of the Transferor to give reasonably
equivalent value to a Designated Seller in consideration of the
purchase by the Transferor from such Designated Seller of any Re-
ceivable, or any attempt by any Person to void, rescind or set-aside
any such transfer under statutory provisions or common law or
equitable action, including, without limitation, any provision of
the Bankruptcy Code; or
(xviii) any action taken by the Transferor, any
Designated Seller or the Servicer in the enforcement or collection
of any Receivable;
provided, however, that if the Company enters into agreements for the
purchase of interests in receivables from one or more Other Transferors,
the Company shall allocate such Indemnified Amounts which are in
connection with the Liquidity Provider Agreement, the Credit Support
Agreement or the credit support furnished by the Credit Support Provider
to the Transferor and each Other Transferor; and provided, further, that
if such Indemnified Amounts are attributable to the Transferor, a
Designated Seller or the Servicer and not attributable to any Other
Transferor, the Transferor shall be solely liable for such Indemnified
Amounts or if such Indemnified Amounts are attributable to Other
Transferors and not attributable to the Transferor, any Designated
Seller or the Servicer, such Other Transferors shall be solely liable
for such Indemnified Amounts.
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses. (a)
If after the date hereof, the adoption of any Law or bank regulatory
guideline or any amendment or change in the interpretation of any
existing or future Law or bank regulatory guideline by any Official Body
charged with the administration, interpretation or application thereof,
or the compliance with any directive of any Official Body (in the case
of any bank regulatory guideline, whether or not having the force of
Law):
(i) shall subject any Indemnified Party to any tax, duty
or other charge (other than Excluded Taxes) with respect to this
Agreement, the other Transaction Documents, the ownership,
maintenance or financing of the Transferred Interest, the Receiv-
▇▇▇▇▇ or payments of amounts due hereunder, or shall change the
basis of taxation of payments to any Indemnified Party of amounts
payable in respect of this Agreement, the other Transaction Docu-
ments, the ownership, maintenance or financing of the Transferred
Interest, the Receivables or payments of amounts due hereunder or
its obligation to advance funds hereunder, under the Liquidity Pro-
vider Agreement or the credit support furnished by the Credit
Support Provider or otherwise in respect of this Agreement, the
other Transaction Documents, the ownership, maintenance or
financing of the Transferred Interest or the Receivables (except
for changes in the rate of general corporate, franchise, net income
or other income tax imposed on such Indemnified Party by the juris-
diction in which such Indemnified Party's principal executive
office is located);
(ii) shall impose, modify or deem applicable any re-
serve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors
of the Federal Reserve System) against assets of, deposits with or
for the account of, or credit extended by, any Indemnified Party or
shall impose on any Indemnified Party or on the United States
market for certificates of deposit or the London interbank market
any other condition affecting this Agreement, the other Transaction
Documents, the ownership, maintenance or financing of the Trans-
ferred Interest, the Receivables or payments of amounts due hereun-
der or its obligation to advance funds hereunder under the Liquid-
ity Provider Agreement or the credit support provided by the Credit
Support Provider or otherwise in respect of this Agreement, the
other Transaction Documents, the ownership, maintenance or
financing of the Transferred Interest or the Receivables; or
(iii) imposes upon any Indemnified Party any other
expense (including, without limitation, reasonable attorneys' fees
and expenses, and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to this Agreement,
the other Transaction Documents, the ownership, maintenance or
financing of the Transferred Interest, the Receivables or payments
of amounts due hereunder or its obligation to advance funds hereun-
der under the Liquidity Provider Agreement or the credit support
furnished by the Credit Support Provider or otherwise in respect of
this Agreement, the other Transaction Documents, the ownership,
maintenance or financing of the Transferred Interests or the Re-
ceivables,
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the other Transaction
Documents, the ownership, maintenance or financing of the Transferred
Interest, the Receivables, the obligations hereunder, the funding of any
purchases hereunder, the Liquidity Provider Agreement or the Credit
Support Agreement, by an amount deemed by such Indemnified Party to be
material, then, within ten (10) days after demand by such Indemnified
Party through the Agent, the Transferor shall pay to the Agent, for the
benefit of such Indemnified Party, such additional amount or amounts as
will compensate such Indemnified Party for such increased cost or
reduction.
(b) If any Indemnified Party shall have determined that
after the date hereof, the adoption of any applicable Law or bank
regulatory guideline regarding capital adequacy, or any change therein,
or any change in the interpretation thereof by any Official Body, or any
directive regarding capital adequacy (in the case of any bank regulatory
guideline, whether or not having the force of law) of any such Official
Body, has or would have the effect of reducing the rate of return on
capital of such Indemnified Party (or its parent) as a consequence of
such Indemnified Party's obligations hereunder or with respect hereto to
a level below that which such Indemnified Party (or its parent) could
have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital ade-
quacy) by an amount deemed by such Indemnified Party to be material,
then from time to time, within ten (10) days after demand by such
Indemnified Party through the Agent, the Transferor shall pay to the
Agent, for the benefit of such Indemnified Party, such additional amount
or amounts as will compensate such Indemnified Party (or its parent) for
such reduction.
(c) The Agent will promptly notify the Transferor of any
event of which it has knowledge, occurring after the date hereof, which
will entitle an Indemnified Party to compensation pursuant to this Sec-
tion 8.2. A notice by the Agent or the applicable Indemnified Party
claiming compensation under this Section and setting forth the addition-
al amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, the Agent or
any applicable Indemnified Party may use any reasonable averaging and
attributing methods.
(d) Anything in this Section 8.2 to the contrary not-
withstanding, if the Company enters into agreements for the acquisition
of interests in receivables from one or more Other Transferors, the
Company shall allocate the liability for any amounts under this Section
8.2 which are in connection with the Liquidity Provider Agreement, the
Credit Support Agreement or the credit support provided by the Credit
Support Provider ("Section 8.2 Costs") to the Transferor and each Other
Transferor; provided, however, that if such Section 8.2 Costs are
attributable to the Transferor, a Designated Seller or the Servicer and
not attributable to any Other Transferor, the Transferor shall be solely
liable for such Section 8.2 Costs or if such Section 8.2 Costs are at-
tributable to Other Transferors and not attributable to the Transferor,
any Designated Seller or the Servicer, such Other Transferors shall be
solely liable for such Section 8.2 Costs.
SECTION 8.3. Taxes. All payments made hereunder by the
Transferor or the Servicer (each, a "payor") to the Company, any Bank
Investor or the Agent (each, a "recipient") shall be made free and clear
of and without deduction for any present or future income, excise, stamp
or franchise taxes and any other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority
on any recipient (or any assignee of such parties) (such non-excluded
items being called "Taxes"), but excluding franchise taxes and taxes
imposed on or measured by the recipient's net income or gross receipts
("Excluded Taxes"). In the event that any withholding or deduction from
any payment made by the payor hereunder is required in respect of any
Taxes, then such payor shall:
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment to
such authority; and
(c) pay to the recipient such additional amount or
amounts as is necessary to ensure that the net amount actually received
by the recipient will equal the full amount such recipient would have
received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against any recipient with
respect to any payment received by such recipient hereunder, the
recipient may pay such Taxes and the payor will promptly pay such
additional amounts (including any penalties, interest or expenses) as
shall be necessary in order that the net amount received by the
recipient after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such recipient would have
received had such Taxes not been asserted.
If the payor fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the recipient the
required receipts or other required documentary evidence, the payor
shall indemnify the recipient for any incremental Taxes, interest, or
penalties that may become payable by any recipient as a result of any
such failure.
SECTION 8.4. Other Costs, Expenses and Related Matters. (a)
The Transferor agrees, upon receipt of a written invoice, to pay or
cause to be paid, and to save the Company, the Bank Investors and the
Agent harmless against liability for the payment of, all reasonable
out-of-pocket expenses (including, without limitation, attorneys',
accountants' and other third parties' fees and expenses, any filing fees
and expenses incurred by officers or employees of the Company, the Bank
Investors and/or the Agent) or intangible, documentary or recording
taxes incurred by or on behalf of the Company, any Bank Investor and the
Agent (i) in connection with the negotiation, execution, delivery and
preparation of this Agreement, the other Transaction Documents and any
documents or instruments delivered pursuant hereto and thereto and the
transactions contemplated hereby or thereby (including, without limita-
tion, the perfection or protection of the Transferred Interest) and (ii)
from time to time (a) relating to any amendments, waivers or consents
under this Agreement and the other Transaction Documents, (b) arising in
connection with the Company's, any Bank Investor's, the Agent's or the
Collateral Agent's enforcement or preservation of rights (including,
without limitation, the perfection and protection of the Transferred
Interest under this Agreement), or (c) arising in connection with any
audit, dispute, disagreement, litigation or preparation for litigation
involving this Agreement or any of the other Transaction Documents (all
of such amounts, collectively, "Transaction Costs").
(b) The Transferor shall pay the Agent, for the account
of the Company and the Bank Investors, as applicable, on demand any
Early Collection Fee due on account of the receipt by the Company or any
Bank Investor of any amounts applied in reduction of the Net Investment
on any day other than a Remittance Date or the last day of any
applicable funding period (in the case of any LIBOR-based funding).
SECTION 8.5. Reconveyance Under Certain Circumstances. The
Transferor agrees to accept the reconveyance from the Agent, on behalf
of the Company and/or the Bank Investors, of the Transferred Interest if
the Agent notifies Transferor of a material breach of any representation
or warranty made or deemed made pursuant to Article III of this
Agreement and Transferor shall fail to cure such breach within 15 days
(or, in the case of the representations and warranties in Sections
3.1(d) and 3.1(j), 3 days) of such notice. The reconveyance price shall
be paid by the Transferor to the Agent, for the account of the Company
and the Bank Investors, as applicable, in immediately available funds on
such 15th day (or 3rd day, if applicable) in an amount equal to the
Aggregate Unpaids.
ARTICLE IX
SERVICER GUARANTEE
SECTION 9.1. Guaranty of Obligations. ▇▇▇▇▇▇▇▇'▇
unconditionally guarantees the full and prompt payment when due of all
of the payment obligations and timely performance of all of the perfor-
▇▇▇▇▇ obligations of ▇▇▇▇▇'▇ as Servicer ("Obligations") of every kind
and nature now or hereafter existing, or due or to become due, under
this Agreement, to the Transferor, the Company, the Agent or any Bank
Investor. ▇▇▇▇▇▇▇▇'▇ shall pay all reasonable costs and expenses
including, without limitation, all court costs and attorney's fees and
expenses paid or incurred by the Transferor, the Company, the Agent or
any Bank Investor in connection with (a) the collection of all or any
part of the Obligations from ▇▇▇▇▇▇▇▇'▇ and (b) the prosecution or
defense of any action by or against the Transferor, the Company, the
Agent or any Bank Investor in connection with the Obligations whether
involving ▇▇▇▇▇▇▇▇'▇, ▇▇▇▇▇'▇ or any other party including a trustee in
bankruptcy.
SECTION 9.2. Validity of Obligations. Irrevocability.
▇▇▇▇▇▇▇▇'▇ agrees that its obligations under this guaranty shall be
unconditional, irrespective of (i) the validity, enforceability, dis-
charge, disaffirmance, settlement or compromise (by any Person,
including a trustee in bankruptcy) of the Obligations or of this Agree-
ment, (ii) the absence of any attempt to collect the Obligations from
▇▇▇▇▇'▇ or any guarantor, (iii) the waiver or consent by the Transferor,
Company, the Agent or any Bank Investor with respect to any provision of
any instrument evidencing the Obligations, (iv) any change of the time,
manner or place of payment or performance, or any other term of any of
the Obligations, (v) any law, regulation or order of any jurisdiction
affecting any term of any of the Obligations or rights of the Transfer-
or, the Company, the Agent or any Bank Investor with respect thereto,
(vi) the failure by the Transferor, the Company, the Agent or any Bank
Investor to take any steps to perfect and maintain perfected its
respective interest in the Receivables or other property acquired by the
Transferor from ▇▇▇▇▇'▇ or any security or collateral related to the
Obligations or (vii) any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of a guarantor.
▇▇▇▇▇▇▇▇'▇ agrees that none of the Transferor, the Company, the Agent or
any Bank Investor shall be under any obligation to ▇▇▇▇▇▇▇▇ any assets
in favor of or against or in payment of any or all of the Obligations.
▇▇▇▇▇▇▇▇'▇ further agrees that, to the extent that ▇▇▇▇▇'▇ makes a
payment or payments to the Transferor, the Company, the Agent or any
Bank Investor, which payment or payments or any part thereof are subse-
quently invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to ▇▇▇▇▇'▇, its estate, trustee,
receiver or any other party, including without limitation, ▇▇▇▇▇▇▇▇'▇,
under any bankruptcy, insolvency or similar state or federal law, common
law or equitable cause, then to the extent of such payment or repayment,
the Obligation or part thereof which has been paid, reduced or satisfied
by such amount shall be reinstated and continued in full force and
effect as of the date such initial payment, reduction or satisfaction
occurred. ▇▇▇▇▇▇▇▇'▇ waives all set-offs and counterclaims and all
presentments, demands for performance, notices of dishonor and notices
of acceptance of this guaranty. ▇▇▇▇▇▇▇▇'▇ agrees that its obligations
under this guaranty shall be irrevocable.
SECTION 9.3. Rights of Set-Off. ▇▇▇▇▇▇▇▇'▇ hereby authorizes
the Transferor, the Company, the Agent or any Bank Investor at any time
and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (whether general or special, time or
demand, provisional or final) at any time held and other indebtedness at
any time owing by the Transferor, the Company, the Agent or any Bank
Investor to or for the credit or the account of ▇▇▇▇▇▇▇▇'▇ against any
and all of the obligations of ▇▇▇▇▇▇▇▇'▇ now or hereafter existing under
this Agreement to the Transferor or the Company. ▇▇▇▇▇▇▇▇'▇ acknowledg-
es that the Company's rights described in this Section 9.3 are in
addition to other rights and remedies (including, without limitation,
other rights of set-off) the Transferor or the Company may have.
SECTION 9.4. Representations and Warranties. ▇▇▇▇▇▇▇▇'▇
hereby represents and warrants to the Transferor, the Company, the Agent
and the Bank Investors as of the date hereof, as follows:
(a) Organization, etc. ▇▇▇▇▇▇▇▇'▇ is a corporation duly
organized, validly existing and in good standing under the laws of
Tennessee and has full corporate power, authority and legal right to own
or lease all of its properties and assets, to carry on its business as
it is now being conducted and to execute, deliver and perform this
Agreement. ▇▇▇▇▇▇▇▇'▇ is duly qualified as a foreign corporation in
good standing under the laws of each other jurisdiction in which the
nature of its business requires such qualification and in which failure
to so qualify would render this guaranty unenforceable or would have a
material adverse effect on ▇▇▇▇▇▇▇▇'▇ ability to perform its obligations
under this Agreement.
(b) Authorization; Valid Agreement. The execution,
delivery and performance of this Agreement has been duly authorized by
all required corporate or other action on the part of ▇▇▇▇▇▇▇▇'▇, and
this Agreement constitutes the legal, valid and binding obligation of
▇▇▇▇▇▇▇▇'▇, enforceable in accordance with its terms, subject to appli-
cable bankruptcy, insolvency, moratorium or other similar laws affecting
the rights of creditors generally as such laws would apply in the event
of the bankruptcy, insolvency, moratorium or other similar event with
respect to ▇▇▇▇▇▇▇▇'▇ and to general principles of equity.
(c) No Conflicts. The execution, delivery and perfor-
▇▇▇▇▇ by ▇▇▇▇▇▇▇▇'▇ of this Agreement does not and will not (a)
contravene its charter or By-Laws, (b) in any material respect, violate
any provision of, or require any filing, registration, consent or
approval under, any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to ▇▇▇▇▇▇▇▇'▇, (c) result in a breach of or constitute a
default or require any consent under any material indenture or loan or
credit agreement or any other material agreement, lease or instrument to
which ▇▇▇▇▇▇▇▇'▇ is a party or by which it or its properties may be
bound or affected or (d) result in, or require, the creation or
imposition of any material lien upon or with respect to any of the
properties now owned or hereafter acquired by ▇▇▇▇▇▇▇▇'▇.
(d) No Proceedings. There are no proceedings or inves-
tigations pending, or to the best knowledge of ▇▇▇▇▇▇▇▇'▇, threatened
against ▇▇▇▇▇▇▇▇'▇ before any Governmental Authority (a) asserting the
invalidity of this Agreement, (b) seeking to prevent the consummation of
the transactions contemplated by this Agreement, (c) seeking any
determination or ruling that would materially adversely affect the
performance by ▇▇▇▇▇▇▇▇'▇ of its obligations under this Agreement or (d)
seeking any determination or ruling that would materially adversely
affect the validity or enforceability of this Agreement.
SECTION 9.5. Guarantor Default. The occurrence of any one or
more of the following events shall constitute a Guarantor Default:
(a) any representation, warranty, certification or
statement made by ▇▇▇▇▇▇▇▇'▇ in this Agreement shall prove to have been
incorrect in any material respect when made or deemed made; or
(b) ▇▇▇▇▇▇▇▇'▇ shall (i) fail to pay when due any
amount to be paid by it hereunder, (ii) fail to observe or perform any
other term, covenant, condition or agreement provided for herein, which
failure, in the case of clause (ii) above, continues for a period of
thirty (30) days after the earlier of (A) the date on which written
notice of such failure shall have been given to ▇▇▇▇▇▇▇▇'▇ by the Compa-
ny or the Administrative Agent or (B) the date on which the Transferor,
▇▇▇▇▇▇▇▇'▇ or ▇▇▇▇▇'▇, as applicable, became aware or, in the exercise
of reasonable care, should have become aware of such failure; or
(c) the failure by ▇▇▇▇▇▇▇▇'▇ to satisfy the financial
covenants set forth in Exhibit O hereto; or
(d) ▇▇▇▇▇▇▇▇'▇ or any Subsidiary shall fail to perform
any material term, provision or condition contained in any agreement
under which any Indebtedness greater than $5,000,000 was created or is
governed, if such event is an "event of default" or "default" under such
agreement; or any Indebtedness of ▇▇▇▇▇▇▇▇'▇ or any Subsidiary greater
than $5,000,000 shall be declared to be due and payable or required to
be prepaid (other than by a regularly scheduled payment) prior to the
scheduled date of maturity thereof; or
(e) any Event of Bankruptcy shall occur with respect to
▇▇▇▇▇▇▇▇'▇ or an Event of Bankruptcy shall occur with respect to any
Subsidiary of ▇▇▇▇▇▇▇▇'▇ which would have a Material Adverse Effect.
ARTICLE X
THE AGENT; BANK COMMITMENT
SECTION 10.1. Authorization and Action.The Company and each
Bank Investor hereby appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement and the other Transaction Documents as are delegated to the
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. In furtherance, and without limiting the
generality, of the foregoing, the Company and each Bank Investor hereby
appoints the Agent as its agent to execute and deliver all further
instruments and documents, and take all further action that the Agent
may deem necessary or appropriate or that the Company or a Bank Investor
may reasonably request in order to perfect, protect or more fully evi-
dence the interests transferred or to be transferred from time to time
by the Transferor hereunder, or to enable any of them to exercise or en-
force any of their respective rights hereunder, including, without
limitation, the execution by the Agent as secured party/assignee of such
financing or continuation statements, or amendments thereto or assign-
ments thereof, relative to all or any of the Receivables now existing or
hereafter arising, and such other instruments or notices, as may be
necessary or appropriate for the purposes stated hereinabove. The
Company and the Majority Investors may direct the Agent to take any such
incidental action hereunder. With respect to other actions which are
incidental to the actions specifically delegated to the Agent hereunder,
the Agent shall not be required to take any such incidental action here-
under, but shall be required to act or to refrain from acting (and shall
be fully protected in acting or refraining from acting) upon the
direction of the Majority Investors; provided, however, that Agent shall
not be required to take any action hereunder if the taking of such ac-
tion, in the reasonable determination of the Agent, shall be in ▇▇▇▇▇-
tion of any applicable law, rule or regulation or contrary to any provi-
sion of this Agreement or shall expose the Agent to liability hereunder
or otherwise. Upon the occurrence and during the continuance of any
Termination Event or Potential Termination Event, the Agent shall take
no action hereunder (other than ministerial actions or such actions as
are specifically provided for herein) without the prior consent of the
Majority Investors. The Agent shall not, without the prior written
consent of all Bank Investors, which consent shall not be unreasonably
withheld or delayed, agree to (i) amend, modify or waive any provision
of this Agreement in any way which would (A) reduce or impair Col-
lections or the payment of Carrying Costs or fees payable hereunder to
the Bank Investors or delay the scheduled dates for payment of such
amounts, (B) increase the Servicing Fee (other than as permitted
pursuant to Section 6.2(b)), (C) modify any provisions of this Agreement
or a Receivables Purchase Agreement relating to the timing of payments
required to be made by the Transferor or the Designated Seller or the
application of the proceeds of such payments, (D) permit the appointment
of any Person (other than the Agent) as successor Servicer, or (E)
release any property from the lien provided by this Agreement (other
than as expressly contemplated herein). The Agent shall not agree to
any amendment of this Agreement which increases the dollar amount of a
Bank Investor's Commitment without the prior consent of such Bank Inves-
tor. In addition, the Agent shall not agree to any amendment of this
Agreement not specifically described in the two preceding sentences
without the consent of the related Majority Investors. "Majority Inves-
tors" shall mean, at any time, the Agent and those Bank Investors which
hold Commitments aggregating in excess of 51% of the Facility Limit as
of such date. In the event the Agent requests the Company's or a Bank
Investor's consent pursuant to the foregoing provisions and the Agent
does not receive a consent (either positive or negative) from the
Company or such Bank Investor within 10 Business Days of the Company's
or Bank Investor's receipt of such request, then the Company or such
Bank Investor (and its percentage interest hereunder) shall be disre-
garded in determining whether the Agent shall have obtained sufficient
consent hereunder.
(a) The Agent shall exercise such rights and powers
vested in it by this Agreement and the other Transaction Documents, and
use the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the conduct of
such person's own affairs.
SECTION 10.2. Agent's Reliance, Etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them as Agent under or
in connection with this Agreement or any of the other Transaction
Documents, except for its or their own gross negligence or willful
misconduct. Without limiting the foregoing, the Agent: (i) may consult
with legal counsel (including counsel for the Transferor or a Designated
Seller), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accoun-
tants or experts; (ii) makes no warranty or representation to the
Company or any Bank Investor and shall not be responsible to the Company
or any Bank Investor for any statements, warranties or representations
made in or in connection with this Agreement; (iii) shall not have any
duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or any of
the other Transaction Documents on the part of the Transferor, the Ser-
vicer or any Designated Seller or to inspect the property (including the
books and records) of the Transferor, the Servicer or any Designated
Seller; (iv) shall not be responsible to the Company or any Bank Inves-
tor for the due execution, legality, validity, enforceability, genuine-
ness, sufficiency or value of this Agreement, any of the other
Transaction Documents or any other instrument or document furnished
pursuant hereto or thereto; and (v) shall incur no liability under or in
respect of this Agreement or any of the other Transaction Documents by
acting upon any notice (including notice by telephone), consent,
certificate or other instrument or writing (which may be by telex)
believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 10.3. Credit Decision. The Company and each Bank
Investor acknowledges that it has, independently and without reliance
upon the Agent, any of the Agent's Affiliates, any other Bank Investor
or the Company (in the case of any Bank Investor) and based upon such
documents and information as it has deemed appropriate, made its own
evaluation and decision to enter into this Agreement and the other
Transaction Documents to which it is a party and, if it so determines,
to accept the transfer of any undivided ownership interest in the
Affected Assets hereunder. The Company and each Bank Investor also
acknowledges that it will, independently and without reliance upon the
Agent, any of the Agent's Affiliates, any other Bank Investor or the
Company (in the case of any Bank Investor) and based on such documents
and information as it shall deem appropriate at the time, continue to
make its own decisions in taking or not taking action under this Agree-
ment and the other Transaction Documents to which it is a party.
SECTION 10.4. Indemnification of the Agent. The Bank Inves-
tors agree to indemnify the Agent (to the extent not reimbursed by the
Transferor), ratably in accordance with their Pro Rata Shares, from and
against any and all liabilities, obligations, losses, damages, penal-
ties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent, any of the other
Transaction Documents hereunder or thereunder, provided that the Bank
Investors shall not be liable for any portion of such liabilities, obli-
gations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, the Bank
Investors agree to reimburse the Agent, ratably in accordance with their
Pro Rata Shares, promptly upon demand for any out-of-pocket expenses
(including counsel fees) incurred by the Agent in connection with the
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement and the
other Transaction Documents, to the extent that such expenses are in-
curred in the interests of or otherwise in respect of the Bank Investors
hereunder and/or thereunder and to the extent that the Agent is not
reimbursed for such expenses by the Transferor.
SECTION 10.5. Successor Agent. The Agent may resign at any
time by giving written notice thereof to each Bank Investor, the Company
and the Transferor and may be removed at any time with cause by the
Majority Investors. Upon any such resignation or removal, the Company
and the Majority Investors shall appoint a successor Agent. The Company
and each Bank Investor agrees that it shall not unreasonably withhold or
delay its approval of the appointment of a successor Agent. If no such
successor Agent shall have been so appointed, and shall have accepted
such appointment, within 30 days after the retiring Agent's giving of
notice of resignation or the Majority Investors' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Company and the
Bank Investors, appoint a successor Agent which successor Agent shall be
either (i) a commercial bank organized under the laws of the United
States or of any state thereof and have a combined capital and surplus
of at least $50,000,000 or (ii) an Affiliate of such a bank. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations
under this Agreement. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article IX shall continue to
inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement.
SECTION 10.6. Payments by the Agent. Unless specifically
allocated to a Bank Investor pursuant to the terms of this Agreement,
all amounts received by the Agent on behalf of the Bank Investors shall
be paid by the Agent to the Bank Investors (at their respective accounts
specified in their respective Assignment and Assumption Agreements) in
accordance with their respective related pro rata interests in the Net
Investment on the Business Day received by the Agent, unless such
amounts are received after 12:00 noon on such Business Day, in which
case the Agent shall use its reasonable efforts to pay such amounts to
the Bank Investors on such Business Day, but, in any event, shall pay
such amounts to the Bank Investors in accordance with their respective
related pro rata interests in the Net Investment not later than the fol-
lowing Business Day.
SECTION 10.7. Bank Commitment; Assignment to Bank Investors.
(a) Bank Commitment. At any time on or prior to the
Commitment Termination Date, in the event that the Company does not
effect an Incremental Transfer as requested under Section 2.2(a), then
at any time, the Transferor shall have the right to require the Company
to assign its interest in the Net Investment in whole to the Bank
Investors pursuant to this Section 10.7. In addition, at any time on or
prior to the Commitment Termination Date (i) upon the declaration of the
Termination Date because of the occurrence of a Termination Event or
(ii) the Company elects to give notice to the Transferor of a Reinvest-
ment Termination Date, the Transferor hereby requests and directs that
the Company assign its interest in the Net Investment in whole to the
Bank Investors pursuant to this Section 10.7 and the Transferor hereby
agrees to pay the amounts described in Section 10.7(d) below. Provided
that the Net Asset Test is satisfied, upon any such election by the
Company or any such request by the Transferor, the Company shall make
such assignment and the Bank Investors shall accept such assignment and
shall assume all of the Company's obligations hereunder. In connection
with any assignment from the Company to the Bank Investors pursuant to
this Section 10.7, each Bank Investor shall, on the date of such as-
signment, pay to the Company an amount equal to its Assignment Amount.
In addition, at any time on or prior to the Commitment Termination Date
the Transferor shall have the right to request funding under this Agree-
ment directly from the Bank Investors provided that at such time all
conditions precedent set forth herein for an Incremental Transfer shall
be satisfied and provided further that in connection with such funding
by the Bank Investors, the Bank Investors accept the assignment of all
of the Company's interest in the Net Investment and assume all of the
Company's obligations hereunder concurrently with or prior to any such
Incremental Transfer. Upon any assignment by the Company to the Bank
Investors contemplated hereunder, the Company shall cease to make any
additional Incremental Transfers hereunder.
(b) Assignment. No Bank Investor may assign all or a
portion of its interests in the Net Investment, the Receivables, and
Collections, Related Security and Proceeds with respect thereto and its
rights and obligations hereunder to any Person unless approved in
writing by the Agent. In the case of an assignment by the Company to
the Bank Investors or by a Bank Investor to another Person, the assignor
shall deliver to the assignee(s) an Assignment and Assumption Agreement
in substantially the form of Exhibit G attached hereto, duly executed,
assigning to the assignee a pro rata interest in the Net Investment, the
Receivables, and Collections, Related Security and Proceeds with respect
thereto and the assignor's rights and obligations hereunder and the
assignor shall promptly execute and deliver all further instruments and
documents, and take all further action, that the assignee may reasonably
request, in order to protect, or more fully evidence the assignee's
right, title and interest in and to such interest and to enable the
Agent, on behalf of such assignee, to exercise or enforce any rights
hereunder and under the other Transaction Documents to which such
assignor is or, immediately prior to such assignment, was a party. Upon
any such assignment, (i) the assignee shall have all of the rights and
obligations of the assignor hereunder and under the other Transaction
Documents to which such assignor is or, immediately prior to such
assignment, was a party with respect to such interest for all purposes
of this Agreement and under the other Transaction Documents to which
such assignor is or, immediately prior to such assignment, was a party
(it being understood that the Bank Investors, as assignees, shall (x) be
obligated to effect Incremental Transfers under Section 2.2(a) in accor-
dance with the terms thereof, notwithstanding that the Company was not
so obligated and (y) not have the right to elect the commencement of the
liquidation of the Net Investment pursuant to the definition of "Rein-
vestment Termination Date", notwithstanding that the Company had such
right) and (ii) the assignor shall relinquish its rights with respect to
such interest for all purposes of this Agreement and under the other
Transaction Documents to which such assignor is or, immediately prior to
such assignment, was a party. No such assignment shall be effective
unless a fully executed copy of the related Assignment and Assumption
Agreement shall be delivered to the Agent and the Transferor. All costs
and expenses of the Agent and the assignor incurred in connection with
any assignment hereunder shall be borne by the Transferor and not by the
assignor or any such assignee. No Bank Investor shall assign any
portion of its Commitment hereunder without also simultaneously assign-
ing an equal portion of its interest in the Liquidity Provider Agree-
ment.
(c) Effects of Assignment. By executing and delivering
an Assignment and Assumption Agreement, the assignor and assignee
thereunder confirm to and agree with each other and the other parties
hereto as follows: (i) other than as provided in such Assignment and
Assumption Agreement, the assignor makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties
or representations made in or in connection with this Agreement, the
other Transaction Documents or any other instrument or document fur-
nished pursuant hereto or thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value or this Agreement, the
other Transaction Documents or any such other instrument or document;
(ii) the assignor makes no representation or warranty and assumes no re-
sponsibility with respect to the financial condition of the Transferor,
any Designated Seller or the Servicer or the performance or observance
by the Transferor, any Designated Seller or the Servicer of any of their
respective obligations under this Agreement, the Receivables Purchase
Agreement, the other Transaction Documents or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it
has received a copy of this Agreement, the Receivables Purchase Agree-
ment and such other instruments, documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Assumption Agreement and to purchase such
interest; (iv) such assignee will, independently and without reliance
upon the Agent, or any of its Affiliates, or the assignor and based on
such agreements, documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not
taking action under this Agreement and the other Transaction Documents;
(v) such assignee appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement,
the other Transaction Documents and any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by
the terms hereof or thereof, together with such powers as are reasonably
incidental thereto and to enforce its respective rights and interests in
and under this Agreement, the other Transaction Documents, the Receiv-
▇▇▇▇▇, the Collections and the Related Security; (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Trans-
action Documents are required to be performed by it as the assignee of
the assignor; and (vii) such assignee agrees that it will not institute
against the Company any proceeding of the type referred to in Section
11.9 prior to the date which is one year and one day after the payment
in full of all Commercial Paper issued by the Company.
(d) Transferor's Obligation to Pay Certain Amounts;
Additional Assignment Amount. The Transferor shall pay to the Agent,
for the account of the Company, in connection with any assignment by the
Company to the Bank Investors pursuant to this Section 10.7, an
aggregate amount equal to all Carrying Costs to accrue through the end
of each outstanding funding period plus all other Aggregate Unpaids
(other than the Net Investment). To the extent that such Carrying Costs
relate to interest or discount on Commercial Paper issued to fund the
Net Investment, if the Transferor fails to make payment of such amounts
at or prior to the time of assignment by the Company to the Bank Inves-
tors, such amount shall be paid by the Bank Investors (in accordance
with their respective Pro Rata shares) to the Company as additional con-
sideration for the interests assigned to the Bank Investors and the
amount of the "Net Investment" hereunder held by the Bank Investors
shall be increased by an amount equal to the additional amount so paid
by the Bank Investors.
(e) Administration of Agreement After Assignment. After
any assignment by the Company to the Bank Investors pursuant to this
Section 10.7 (and the payment of all amounts owing to the Company in
connection therewith), all rights of the Administrative Agent and the
Collateral Agent set forth herein shall be deemed to be afforded to the
Agent on behalf of the Bank Investors instead of either such party.
(f) Payments. After any assignment by the Company to
the Bank Investors pursuant to this Section 10.7, all payments to be
made hereunder by the Transferor or the Servicer to the Bank Investors
shall be made to the Agent's account as such account shall have been
notified to the Transferor and the Servicer.
(g) Downgrade of Bank Investor. If at any time prior to
any assignment by the Company to the Bank Investors as contemplated
pursuant to this Section 10.7, the short term debt rating of any Bank
Investor shall be "A-2" or "P-2" from Standard & Poor's or Moody's,
respectively, with negative credit implications, such Bank Investor,
upon request of the Agent, shall, within 30 days of such request, assign
its rights and obligations hereunder to another financial institution
(which institution's short term debt shall be rated at least "A-2" and
"P-2" from Standard & Poor's and Moody's, respectively, and which shall
not be so rated with negative credit implications). If the short term
debt rating of a Bank Investor shall be "A-3" or "P-3", or lower, from
Standard & Poor's or Moody's, respectively (or such rating shall have
been withdrawn by Standard & Poor's or Moody's), such Bank Investor,
upon request of the Agent, shall, within five (5) Business Days of such
request, assign its rights and obligations hereunder to another
financial institution (which institution's short term debt shall be
rated at least "A-2" and "P-2" from Standard & Poor's and Moody's,
respectively, and which shall not be so rated with negative credit
implications). In either such case, if any such Bank Investor shall not
have assigned its rights and obligations under this Agreement within the
applicable time period described above, the Company shall have the right
to require such Bank Investor to accept the assignment of such Bank
Investor's Pro Rata Share of the Net Investment; such assignment shall
occur in accordance with the applicable provisions of this Section 10.7.
Such Bank Investor shall be obligated to pay to the Company, in
connection with such assignment, in addition to the Pro Rata Share of
the Net Investment, an amount equal to the interest component of the
outstanding Commercial Paper issued to fund the portion of the Net
Investment being assigned to such Bank Investor, as reasonably deter-
mined by the Agent. Notwithstanding anything contained herein to the
contrary, upon any such assignment to a downgraded Bank Investor as
contemplated pursuant to the immediately preceding sentence, the
aggregate available amount of the Facility Limit, solely as it relates
to new Incremental Transfers by the Company, shall be reduced by the
amount of unused Commitment of such downgraded Bank Investor; it being
understood and agreed, that nothing in this sentence or the two
preceding sentences shall affect or diminish in any way any such
downgraded Bank Investor's Commitment to the Transferor or such
downgraded Bank Investor's other obligations and liabilities hereunder
and under the other Transaction Documents.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Term of Agreement. This Agreement shall
terminate on the date following the Termination Date upon which the Net
Investment and all other Aggregate Unpaids have been paid in full, in
each case, in cash; provided, however, that (i) the rights and remedies
of the Agent, the Company, the Bank Investors and the Administrative
Agent with respect to any representation and warranty made or deemed to
be made by the Transferor pursuant to this Agreement, (ii) the indemni-
fication and payment provisions of Article VIII, and (iii) the agreement
set forth in Section 11.9 hereof, shall be continuing and shall survive
any termination of this Agreement.
SECTION 11.2. Waivers; Amendments. No failure or delay on
the part of the Agent, the Company, the Administrative Agent or any Bank
Investor in exercising any power, right or remedy under this Agreement
shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or remedy preclude any other further
exercise thereof or the exercise of any other power, right or remedy.
The rights and remedies herein provided shall be cumulative and nonex-
clusive of any rights or remedies provided by law. Any provision of
this Agreement may be amended if, but only if, such amendment is in
writing and is signed by the Transferor, the Company, the Agent and the
Majority Investors.
SECTION 11.3. Notices. Except as provided below, all
communications and notices provided for hereunder shall be in writing
(including telecopy or electronic facsimile transmission or similar
writing) and shall be given to the other party at its address or
telecopy number set forth below or at such other address or telecopy
number as such party may hereafter specify for the purposes of notice to
such party. Each such notice or other communication shall be effective
(i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section 11.3 and confirmation is
received, (ii) if given by mail 3 Business Days following such posting,
postage prepaid, U.S. certified or registered, (iii) if given by
overnight courier, one (1) Business Day after deposit thereof with a
national overnight courier service, or (iv) if given by any other means,
when received at the address specified in this Section 11.3. However,
anything in this Section to the contrary notwithstanding, the Transferor
hereby authorizes the Company to effect Transfers and funding period
selections based on telephonic notices made by any Person which the
Company in good faith believes to be acting on behalf of the Transferor.
The Transferor agrees to deliver promptly to the Company a written
confirmation of each telephonic notice signed by an authorized officer
of Transferor. However, the absence of such confirmation shall not
affect the validity of such notice. If the written confirmation differs
in any material respect from the action taken by the Company, the
records of the Company shall govern absent manifest error.
If to the Company:
Enterprise Funding Corporation
c/o Merrill ▇▇▇▇▇ Money Market, Inc.
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to the Administrative Agent)
If to the Transferor:
▇▇▇▇▇▇▇▇'▇ Credit Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
(with a copy to ▇▇▇▇▇▇▇▇'▇, Inc.)
Payment Information:
NATIONSBANK OF TEXAS, N.A.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Account Number: 3750796988
If to ▇▇▇▇▇▇▇▇'▇, Inc.
▇▇▇▇▇▇▇▇'▇ Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
If to the Servicer:
▇▇▇▇▇'▇, INC.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
If to the Collateral Agent:
NationsBank, N.A.
NationsBank Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇-- NC1-007-10-07
Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Agent:
NationsBank, N.A.
NationsBank Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇-- NC1-007-10-07
Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Information:
NationsBank, N.A.
ABA ▇▇▇-▇▇▇-▇▇▇
for the account of NationsBank Charlotte
Account No. 10822016511
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to the Administrative Agent:
NationsBank, N.A.
NationsBank Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇-- NC1-007-10-07
Structured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Bank Investors, at their respective addresses set
forth on the signature pages hereto or of the Assignment and Assumption
Agreement pursuant to which it became a party hereto.
SECTION 11.4. Governing Law; Submission to Jurisdiction;
Integration.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE TRANSFEROR
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK
STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. The Transferor hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection
which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient
forum. Nothing in this Section 11.4 shall affect the right of the
Company to bring any action or proceeding against the Transferor or its
property in the courts of other jurisdictions.
(b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE AMONG ANY OF THEM ARISING OUT OF, CONNECTED
WITH, RELATING TO OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.
(c) This Agreement contains the final and complete inte-
gration 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.
(d) The Transferor and each Designated Seller hereby
appoint CT Corporation, located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, as the authorized agent upon whom process may be served in any
action arising out of or based upon this Agreement, the other
Transaction Documents to which such Person is a party or the transac-
tions contemplated hereby or thereby that may be instituted in the
United States District Court for the Southern District of New York and
of any New York State court sitting in The City of New York by the
Company, the Agent, any Bank Investor, the Collateral Agent or any
assignee of any of them.
SECTION 11.5. Severability; Counterparts. 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.
SECTION 11.6. Successors and Assigns. This Agreement shall
be binding on the parties hereto and their respective successors and
assigns; provided, however, that neither the Transferor nor any
Designated Seller may assign any of its rights or delegate any of its
duties hereunder or under the Receivables Purchase Agreement or under
any of the other Transaction Documents to which it is a party without
the prior written consent of the Agent. No provision of this Agreement
shall in any manner restrict the ability of the Company or any Bank
Investor to assign, participate, grant security interests in, or other-
wise transfer any portion of the Transferred Interest.
(a) Each of the Transferor and each Designated
Seller hereby agrees and consents to the assignment by the Company from
time to time of all or any part of its rights under, interest in and
title to this Agreement and the Transferred Interest to any Liquidity
Provider. In addition, each of the Transferor and each Designated
Seller hereby consents to and acknowledges the assignment by the Company
of all of its rights under, interest in and title to this Agreement and
the Transferred Interest to the Collateral Agent.
SECTION 11.7. Waiver of Confidentiality. Each of the
Transferor and each Designated Seller hereby consents to the disclosure
of any non-public information with respect to it received by the
Company, the Agent, any Bank Investor or the Administrative Agent to any
of the Company, the Agent, any nationally recognized rating agency
rating the Company's Commercial Paper, the Administrative Agent, the
Collateral Agent, any Bank Investor or potential Bank Investor, the Li-
quidity Provider or the Credit Support Provider in relation to this
Agreement.
SECTION 11.8. Confidentiality Agreement. Each of the
Transferor and each Designated Seller hereby agrees that it will not
disclose the contents of this Agreement or any other proprietary or
confidential information of the Company, the Agent, the Administrative
Agent, the Collateral Agent, any Liquidity Provider or any Bank Investor
to any other Person except (i) its auditors and attorneys, employees or
financial advisors (other than any commercial bank) and any nationally
recognized rating agency, provided such auditors, attorneys, employees,
financial advisors or rating agencies are informed of the highly
confidential nature of such information or (ii) as may be required to
comply with any rules or reporting obligations described in the Securi-
ties Exchange Act of 1934, as amended or (iii) as otherwise required by
applicable law, order of a court of competent jurisdiction or as
required by an applicable state or federal regulatory authority in the
exercise of its duly authorized governmental powers.
SECTION 11.9. No Bankruptcy Petition Against the Company.
Each of the Transferor and each Designated Seller hereby covenants and
agrees that, prior to the date which is one year and one day after the
payment in full of all outstanding Commercial Paper or other indebt-
edness of the Company, it will not institute against, or join any other
Person in instituting against, the Company any bankruptcy, reorganiza-
tion, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of
the United States.
SECTION 11.10. No Recourse Against Stockholders, Officers or
Directors. No recourse under any obligation, covenant or agreement of
the Company contained in this Agreement shall be had against ▇▇▇▇▇▇▇
▇▇▇▇▇ Money Markets Inc. (or any affiliate thereof), or any stockholder,
officer or director of the Company, as such, by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any
statute or otherwise; it being expressly agreed and understood that this
Agreement is solely a corporate obligation of the Company, and that no
personal liability whatsoever shall attach to or be incurred by ▇▇▇▇▇▇▇
▇▇▇▇▇ Money Markets Inc. (or any affiliate thereof), or the stockhold-
ers, officers or directors of the buyer, as such, or any of them, under
or by reason of any of the obligations, covenants or agreements of the
Company contained in this Agreement, or implied therefrom, and that any
and all personal liability for breaches by the Company of any of such
obligations, covenants or agreements, either at common law or at equity,
or by statute or constitution, of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Money Markets Inc. (or
any affiliate thereof) and every such stockholder, officer or director
of the Company is hereby expressly waived as a condition of and consid-
eration for the execution of this Agreement.
SECTION 11.11. Characterization of the Transactions Con-
templated by the Agreement. It is the intention of the parties that the
transactions contemplated hereby constitute the sale of the Transferred
Interest, conveying good title thereto free and clear of any Adverse
Claims to the Agent, on behalf of the Company and the Bank Investors,
and that the Transferred Interest not be part of the Transferor's estate
in the event of an insolvency. If, notwithstanding the foregoing, the
transactions contemplated hereby should be deemed a financing, the
parties intend that the Transferor shall be deemed to have granted to
the Agent, on behalf of the Company and the Bank Investors, and the
Transferor hereby grants to the Agent, on behalf of the Company and the
Bank Investors, a first priority perfected and continuing security
interest in all of the Transferor's right, title and interest in, to and
under the Receivables, together with Related Security, Collections and
Proceeds with respect thereto, and together with all of the Transferor's
rights under the Receivables Purchase Agreements with respect to the Re-
ceivables and with respect to any obligations thereunder of any
Designated Seller with respect to the Receivables, and that this Agree-
ment shall constitute a security agreement under applicable law. The
Transferor hereby assigns to the Agent, on behalf of the Company and the
Bank Investors, all of its rights and remedies under the Receivables
Purchase Agreement with respect to the Receivables and with respect to
any obligations thereunder of the Designated Sellers with respect to the
Receivables. The Transferor agrees that it shall not give any consent
or waiver required or permitted to be given under a Receivables Purchase
Agreement without the prior consent of the Agent.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Transfer and Administration Agreement as of the date
first written above.
ENTERPRISE FUNDING CORPORATION,
as Company
By: ___________________________
Name: _________________________
Title: ________________________
▇▇▇▇▇▇▇▇'▇ CREDIT CORPORATION,
as Transferor
By: ____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇'▇, INC.,
as Servicer
By: _____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
▇▇▇▇▇▇▇▇'▇, INC.
as Servicer Guarantor
By: _______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
Commitment NATIONSBANK, N.A., as Agent
$175,000,000 and a Bank Investor
By: ________________________________
Name: ______________________________
Title: _____________________________
Schedule A
----------
[Account Schedule]
Exhibit A
---------
[Form of Account]
Exhibit B
---------
[Credit Guidelines]
Exhibit C
---------
List of Lock-Box Banks and Accounts
1. For ▇▇▇▇▇▇▇▇'▇, Inc.:
First Tennessee Bank National Association
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Account Number: ▇▇▇▇▇▇▇
2. For ▇▇▇▇▇'▇, Inc.:
AmSouth Bank of Alabama
Main office, Birmingham
Post Office Box 11007
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Account Number: ▇▇-▇▇▇-▇▇▇
Exhibit D
---------
FORM OF LOCK-BOX AGREEMENT
January __, 1997
[Name and Address
of Lock-Box Bank]
Re: [Name of Designated Seller]
Lock-Box Account
No[s]. ___________
Ladies and Gentlemen:
[______________] (the "Seller") hereby notifies you that
in connection with certain transactions involving its accounts
receivable, it has transferred exclusive ownership and dominion of
its lock-box account no[s]. __________ maintained with you (collec-
tively the "Accounts") to NationsBank, N.A., as agent (the
"Agent"), and that the Seller will transfer exclusive control of
the Accounts to the Agent effective upon delivery to you of the
Notice of Effectiveness (as hereinafter defined).
In furtherance of the foregoing, the Seller and the Agent
hereby instruct you, beginning on the date of your receipt of the
Notice of Effectiveness: (i) to collect the monies, checks, in-
struments and other items of payment mailed to the Accounts; (ii)
to deposit into the Accounts all such monies, checks, instruments
and other items of payment or all funds collected with respect
thereto (unless otherwise instructed by the Agent); and (iii) to
transfer all funds deposited and collected in the Accounts pursuant
to instructions given to you by the Agent from time to time.
You are hereby further instructed: (i) unless and until
the Agent notifies you to the contrary at any time after your
receipt of the Notice of Effectiveness, to make such transfers from
the Accounts at such times and in such manner as the Seller or the
Servicer, in its capacity as servicer for the Agent, shall from
time to time instruct to the extent such instructions are not
inconsistent with the instructions set forth herein, and (ii) to
permit the Seller, the Servicer (in its capacity as servicer for
the Agent) and the Agent to obtain upon request any information
relating to the Accounts, including, without limitation, any
information regarding the balance or activity of the Accounts.
The Seller also hereby notifies you that, beginning on
the date of your receipt of the Notice of Effectiveness and
notwithstanding anything herein or elsewhere to the contrary, the
Agent, and neither the Seller nor ▇▇▇▇▇▇▇▇'▇ Credit Corporation,
shall be irrevocably entitled to exercise any and all rights in re-
spect of or in connection with the Accounts, including, without
limitation, the right to specify when payments are to be made out
of or in connection with the Accounts. The Agent has a continuing
interest in all of the checks and their proceeds and all monies and
earnings, if any, thereon in the Accounts, and you shall be the
Agent's agent for the purpose of holding and collecting such
property. The monies, checks, instruments and other items of pay-
ment mailed to, and funds deposited to, the Accounts will not be
subject to deduction, set-off, banker's lien, or any other right
in favor of any person other than the Agent (except that you may
set off (i) all amounts due to you in respect of your customary
fees and expenses for the routine maintenance and operation of the
Accounts, and (ii) the face amount of any checks which have been
credited to the Accounts but are subsequently returned unpaid
because of uncollected or insufficient funds).
This Agreement may not be terminated at any time by the
Seller or you without the prior written consent of the Agent.
Neither this Agreement nor any provision hereof may be changed,
amended, modified or waived orally but only by an instrument in
writing signed by the Agent and the Seller.
You shall not assign or transfer your rights or
obligations hereunder (other than to the Agent) without the prior
written consent of the Agent and the Seller. Subject to the
preceding sentence, this Agreement shall be binding upon each of
the parties hereto and their respective successors and assigns, and
shall inure to the benefit of, and be enforceable by, the Agent,
each of the parties hereto and their respective successors and as-
signs.
You hereby represent that the person signing this
Agreement on your behalf is duly authorized by you to so sign.
You agree to give the Agent and the Seller prompt notice
if the Accounts become subject to any writ, garnishment, judgment,
warrant of attachment, execution or similar process.
Any notice, demand or other communication required or
permitted to be given hereunder shall be in writing and may be
personally served or sent by facsimile or by courier service or by
United States mail and shall be deemed to have been delivered when
delivered in person or by courier service or by facsimile or three
(3) Business Days after deposit in the United States mail (regis-
tered or certified, with postage prepaid and properly addressed).
For the purposes hereof, (i) the addresses of the parties hereto
shall be as set forth below each party's name below, or, as to each
party, at such other address as may be designated by such party in
a written notice to the other party and the Agent and (ii) the
address of the Agent shall be NationsBank, N.A., NationsBank
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Structured Finance, or at such other
address as may be designated by the Agent in a written notice to
each of the parties hereto.
Please agree to the terms of, and acknowledge receipt of,
this notice by signing in the space provided below.
The transfer of control of the Accounts, referred to in
the first paragraph of this letter, shall become effective upon
delivery to you of a notice (the "Notice of Effectiveness") in
substantially the form attached hereto as Annex "1".
Very truly yours,
[Name of Designated Seller]
By: __________________________________
Title: _______________________________
Attention: ___________________________
Facsimile No.:
ACKNOWLEDGED AND AGREED:
[NAME OF LOCK-BOX BANK]
By:________________________
Title:_____________________
Date:______________________
[Address]
Attention:_________________
Facsimile No.:_____________
ANNEX 1
TO LOCK-BOX AGREEMENT
[FORM OF NOTICE OF EFFECTIVENESS]
DATED: ________, 199_
TO: [Name of Lock-Box Bank]
[Address]
ATTN: ______________________
Re: Lock-Box Account No[s]._______
Ladies and Gentlemen:
We hereby give you notice that the transfer of control
of the above-referenced Lock-Box Account[s], as described in our
letter agreement with you dated _______, 199_ is effective as of
the date hereof. You are hereby instructed to comply immediately
with the instructions set forth in that letter.
Very truly yours,
[Name of Designated Seller]
By:_____________________________
Title:__________________________
ACKNOWLEDGED AND AGREED:
[NAME OF LOCK-BOX BANK]
By:________________________
Title:_____________________
Date:______________________
[Address]
Attention:_________________
Facsimile No.:_____________
Exhibit E
----------
Form of Investor Report
Exhibit F
---------
[Transfer Certificate]
TRANSFER CERTIFICATE
Reference is made to the Transfer and Administration
Agreement dated as of January 15, 1997 (the "Agreement") among
▇▇▇▇▇▇▇▇'▇ Credit Corporation, as transferor (in such capacity, the
"Transferor"), ▇▇▇▇▇'▇, Inc., as servicer (in such capacity, the
"Servicer"), ▇▇▇▇▇▇▇▇'▇, Inc., Enterprise Funding Corporation (the
"Company"), NationsBank, N.A., as Agent, and certain financial
institutions from time to time a party thereto as Bank Investors.
Terms defined in the Agreement are used herein as therein defined.
The Transferor hereby conveys, transfers and assigns to
the Agent, on behalf of the Company and/or the Bank Investors, as
applicable, an undivided ownership interest in the Affected Assets
(each, an "Incremental Transfer"). Each Incremental Transfer by
the Transferor to the Agent and each reduction or increase in the
Net Investment in respect of each Incremental Transfer evidenced
hereby shall be indicated by the Agent on the grid attached hereto
which is part of this Transfer Certificate.
If, notwithstanding the foregoing, the transactions
contemplated hereby should be deemed a financing, the parties
intend that the Transferor shall be deemed to have granted to the
Agent, on behalf of the Company and the Bank Investors, and the
Transferor hereby grants to the Agent, on behalf of the Company and
the Bank Investors, a security interest in all of the Transferor's
right, title and interest in, to and under the Receivables,
together with Related Security, Collections and Proceeds with
respect thereto, and together with all of the Transferor's rights
under the Receivables Purchase Agreements with respect to the Re-
ceivables and with respect to any obligations thereunder of any
Designated Seller with respect to the Receivables, and that this
Agreement shall constitute a security agreement under applicable
law.
This Transfer Certificate is made without recourse except
as otherwise provided in the Agreement.
This Transfer Certificate shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this
Transfer Certificate to be duly executed and delivered by its duly
authorized officer as of the date first above written.
▇▇▇▇▇▇▇▇'▇ Credit Corporation
By
Name:
Title:
GRID
Net Investment
Date of Amount of (Giving Effect
Incremental Incremental to Incremental
Transfer Transfer Transfer
----------- ----------- ------------
Exhibit G
---------
Form of Assignment and Assumption Agreement
Reference is made to the Transfer and Administration
Agreement dated as of January 15, 1997, as it may be amended or
modified from time to time (as so modified and amended, the "Agree-
ment") among ▇▇▇▇▇▇▇▇'▇ Credit Corporation, as transferor (in such
capacity, the "Transferor"), ▇▇▇▇▇'▇, Inc., as servicer (in such
capacity, the "Servicer"), ▇▇▇▇▇▇▇▇'▇, Inc., Enterprise Funding
Corporation (the "Company"), NationsBank, N.A., as agent, and
certain financial institutions from time to time a party thereto
as Bank Investors. Terms defined in the Agreement are used herein
with the same meaning.
___________________ (the "Assignor") and
_____________________ (the "Assignee") agree as follows:
(a) The Assignor hereby sells and
assigns to the Assignee, and the Assignee hereby purchases and
assumes from the Assignor, a percentage interest in and to all
rights and obligations of the Bank Investors (including, without
limitation, such percentage interest in the Commitment) as of the
Effective Date (as such term is hereinafter defined) under the
Agreement equal to the percentage equivalent of a fraction the
numerator of which is $________ and the denominator of which is the
Facility Limit.
(b) In consideration of the payment
of $___________, being ___% of the existing Net Investment, and of
$___________, being ___% of the aggregate unpaid accrued Carrying
Costs payable to the Assignor, receipt of which payment is hereby
acknowledged, the Assignor hereby assigns to the Agent for the
account of the Assignee, and the Assignee hereby purchases from the
Assignor, a ___% interest in and to all of the Assignor's right,
title and interest in and to the Net Investment purchased by the
undersigned on _______________, 19__ under the Agreement.
(c) The Assignor (i) represents and
warrants that it is the legal and beneficial owner of the interest
being assigned by it hereunder and that such interest is free and
clear of any Lien created by it; (ii) makes no representation or
warranty and assumes no responsibility with respect to any state-
ments, warranties or representations made in or in connection with
the Agreement or any other instrument or document furnished
pursuant thereto or the execution, legality, validity, enforce-
ability, genuineness, sufficiency or value of the Agreement or the
Certificates, or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition
of either the Transferor or the Designated Seller or the
performance or observance by either the Transferor or the
Designated Seller of any of its obligations under the Agreement,
the Certificate, or any instrument or document furnished pursuant
thereto.
(d) The Assignee (i) confirms that
it has received a copy of the Agreement, each Receivables Purchase
Agreement, the Certificate and the Fee Letter, together with copies
of the financial statements referred to in Section 5.1 of the
Agreement, to the extent delivered through the date of this Agree-
ment, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter
into this Assignment and purchase such interest in the Assignor's
rights and obligations under the Agreement; (ii) agrees that it
will, independently and without reliance upon the Agent, any of its
Affiliates, the Assignor or any other Investor and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under the Agreement, the Receivables Purchase Agreements,
the Certificate and the Fee Letter; (iii) appoints and authorizes
the Agent to take such action as agent on its behalf and to exer-
cise such power under the Agreement, the Receivables Purchase
Agreements, the Certificate and the Fee Letter as are delegated to
the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (iv) appoints the Agent to enforce
its respective rights and interests in and under the Affected
Assets in accordance with Section 10.7 of the Agreement; (v) agrees
that it will perform in accordance with their terms all of the
obligations which by the terms of the Agreement are required to be
performed by it as a Bank Investor; and (vi) specifies as its
address for notices and its account for payments the office and
account set forth beneath its name on the signature pages hereof[;
and (vii) attaches the forms prescribed by the Internal Revenue
Service of the United States of America certifying as to the
Assignee's status for purposes of determining exemption from United
States withholding taxes with respect to all payments to be made
to the Assignee under the Agreement or such other documents as are
necessary to indicate that all such payments are subject to such
rates at a rate reduced by an applicable tax treaty].1
(e) The effective date for this
Assignment shall be the later of (i) the date on which the Agent
receives this Assignment executed by the parties hereto, and re-
ceives and agrees to the consent of the Transferor executed in
substantially the form of Annex 1 hereto (the "Consent"), and (ii)
the date of this Assignment (the "Effective Date"). Following the
execution of this Assignment, this Assignment and such Consent will
be delivered to the Agent for acceptance and, with respect to the
Assignment, recording by the Agent.
(f) Upon such acceptance and
recording, as of the Effective Date, (i) the Assignee shall be a
party to the Agreement and, to the extent provided in this Assign-
ment, have the rights and obligations of a Bank Investor thereunder
and (ii) the Assignor shall, to the extent provided in this Assign-
ment, relinquish its rights and be released from its obligations
under the Agreement.
(g) Upon such acceptance and
recording, from and after the Effective Date, the Agent shall make
all payments under the Agreement in respect of the interest
assigned hereby (including, without limitation, all payments in
respect of such interest in Net Investment, Carrying Costs and
fees) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Agreement for periods
prior to the Effective Date directly between themselves.
(h) This Assignment shall be
governed by, and construed in accordance with, the laws of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment to be executed by their respective officers thereunto
duly authorized as of the ____ day of _________, ___.
[NAME OF ASSIGNOR]
By:
Name:
Title:
[NAME OF ASSIGNEE]
By:
Name:
Title:
Address for notices and Account for payments:
[Address]
[Account]
Accepted this _____ day
of _______, ____
NATIONSBANK, N.A.,
as Agent
By: ________________________
Name:
Title:
_______________________________
1If the Assignee is organized under the laws of a jursidication
outside the United States.
Exhibit H
---------
List of Actions and Suits
None
Exhibit I
---------
Location of Records
1. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
2. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Exhibit J
---------
List of Subsidiaries, Divisions and Tradenames
None
Exhibit K
---------
[Form of Transferor's Counsel Opinion]
[Letterhead of Counsel for the Transferor]
January __, 1997
Enterprise Funding Corporation
c/o Merrill ▇▇▇▇▇ Money Markets Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
World Financial Center--South Tower
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇--▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
NationsBank, N.A.
as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section
4.1(o) of the Transfer and Administration Agreement dated as of
January 15, 1997 (the "Agreement") among ▇▇▇▇▇▇▇▇'▇ Credit
Corporation, a Nevada corporation (the "Transferor"), ▇▇▇▇▇'▇,
Inc., a Mississippi corporation, as a designated seller and as ser-
vicer (the "Servicer"), ▇▇▇▇▇▇▇▇'▇, Inc., a Tennessee corporation,
individually, as servicer guarantor and as a designated seller (in
such capacity, a "Designated Seller", and together with ▇▇▇▇▇'▇,
Inc., the "Designated Sellers"), Enterprise Funding Corporation,
a Delaware corporation (the "Company"), NationsBank, N.A., a
national banking association ("NationsBank") as Agent and as a Bank
Investor, and certain financial institutions from time to time a
party thereto as Bank Investors. Terms defined in the Agreement
and not otherwise defined herein are used in this opinion with the
meanings so defined.
We have acted as counsel to the Designated Sellers, the
Servicer, the Servicer Guarantor and the Transferor in connection
with the preparation of the Agreement, the Receivables Purchase
Agreements, the other Transaction Documents and the transactions
contemplated thereby.
We have examined, on the date hereof, the Agreement and
all Exhibits thereto, each of the Receivables Purchase Agreements
and all Exhibits thereto, the Certificate and the Transfer Certifi-
cate delivered under the Agreement, certificates of public offi-
cials and of officers of the Transferor and the Designated Sellers
and certified copies of the Designated Sellers' and the
Transferor's certificates of incorporation, by-laws, resolutions
of the respective Boards of Directors authorizing the Designated
Sellers' and the Transferor's participation in the transactions
contemplated by the Agreement and the Receivables Purchase
Agreements (copies of each of the above having been delivered to
you), copies of the financing statements on Form UCC-1 filed in the
filing offices listed on Schedule I hereto executed by each
Designated Seller, as debtor, in favor of the Transferor, as
secured party, and showing thereon the Agent, on behalf of the Bank
Investors and the Company, as the assignee of the secured party,
substantially in the form attached hereto as Exhibit A (the
"Designated Sellers' Financing Statements") and copies of the fi-
nancing statements on Form UCC-1 filed in the filing offices listed
on Schedule II hereto executed by Transferor, as debtor, in favor
of the Agent, on behalf of the Bank Investors and the Company, as
secured party, substantially in the form attached hereto as Exhibit
B (the "Transferor Financing Statements"). We have also examined
the closing documents delivered pursuant to the Agreement and the
Receivables Purchase Agreements and copies of all such documents
and records, and have made such investigations of law, as we have
deemed necessary and relevant as a basis for our opinion. With
respect to the accuracy of material factual matters which were not
independently established, we have relied on certificates and
statements of officers of the Designated Sellers and the Trans-
feror.
On the basis of the foregoing, we are of the opinion
that:
1. The Transferor is a corporation duly incorporated,
validly existing and in good standing under the laws of Nevada, has
the corporate power and authority to own its properties and to
carry on its business as now being conducted, and had at all
relevant times, and now has, all necessary power, authority, and
legal right to acquire and own the Receivables, and is duly
qualified and in good standing as a foreign corporation and is
authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires
such qualification or authorization, except for qualifications and
authorizations the lack of which, singly or in the aggregate, has
not had and will not have a materially adverse affect upon the
business properties of the Transferor or its ability to perform its
obligations under the Transaction Documents.
2. Each of the Designated Sellers is a corporation duly
incorporated, validly existing and in good standing under the laws
of its governing jurisdiction, has the corporate power and authori-
ty to own its properties and to carry on its business as now being
conducted, and had at all relevant times, and now has, all
necessary power, authority, and legal right to acquire and own the
Receivables, and is duly qualified and in good standing as a
foreign corporation and is authorized to do business in each
jurisdiction in which the character of its properties or the nature
of its business requires such qualification or authorization,
except for qualifications and authorizations the lack of which,
singly or in the aggregate, has not had and will not have a
materially adverse affect upon the business properties of the
Transferor or its ability to perform its obligations under the
Transaction Documents.
3. The Transferor has the power, corporate and other,
and has taken all necessary corporate action to execute, deliver
and perform the Agreement and the other Transaction Documents, each
in accordance with its respective terms, and to consummate the
transactions contemplated thereby. The Transaction Documents to
which the Transferor is a party have been duly executed and deliv-
ered by the Transferor and when duly executed and delivered will
constitute the legal, valid and binding obligations of the
Transferor enforceable against the Transferor in accordance with
their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
4. Each of the Designated Sellers has the power, corpo-
rate and other, and has taken all necessary corporate action to
execute, deliver and perform the Receivables Purchase Agreement to
which it is a party and each other Transaction Document to which
it is a party, each in accordance with its respective terms, and
to consummate the transactions contemplated thereby. Each Transac-
tion Document to which a Designated Seller is a party has been duly
executed and delivered by such Designated Seller and when duly exe-
cuted and delivered will constitute the legal, valid and binding
obligation of such Designated Seller enforceable against such
Designated Seller in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency and
other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
5. The execution, delivery and performance in accordance
with their terms by the Transferor of the Agreement and the other
Transaction Documents and the consummation of the transactions con-
templated thereby, do not and will not (i) require (a) any govern-
mental approval or (b) any consent or approval of any stockholder
of the Transferor that has not been obtained, (ii) violate or con-
flict with, result in a breach of, or constitute a default under
(a) the certificate of incorporation or the by-laws of the Trans-
feror, (b) any other agreement to which the Transferor is a party
or by which the Transferor or any of its properties may be bound,
or (c) any applicable law, or any order, rule, or regulation appli-
cable to the Transferor of any court or of any federal or state
regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Transferor or any of
its properties, or (iii) result in or require the creation or
imposition of any Lien upon any of the assets, property or revenue
of the Transferor other than as contemplated by the Agreement.
6. The execution, delivery and performance in accordance
with their terms by each Designated Seller of the Receivables
Purchase Agreements and the other Transaction Documents to which
it is a party and the consummation of the transactions contemplated
thereby do not and will not (i) require (a) any governmental
approval or (b) any consent or approval of any stockholder of such
Designated Seller that has not been obtained, (ii) violate or con-
flict with, result in a breach of, or constitute a default under
(a) the certificate of incorporation or the by-laws of such
Designated Seller, (b) any other agreement to which such Designated
Seller is a party or by which such Designated Seller or any of its
properties may be bound, or (c) any applicable law, or any order,
rule, or regulation applicable to such Designated Seller of any
court or of any federal or state regulatory body, administrative
agency, or other governmental instrumentality having jurisdiction
over such Designated Seller or any of its properties, or (iii)
result in or require the creation or imposition of any Lien upon
any of the assets, property or revenue of such Designated Seller
other than as contemplated by the Receivables Purchase Agreement.
7. Except as set forth in the schedule attached hereto,
there are not, in any court or before any arbitrator of any kind
or before or by any governmental or non-governmental body, any ac-
tions, suits, proceedings or investigations, pending or to the best
of our knowledge after due inquiry, threatened (i) against the
Transferor or the business or any property of the Transferor except
actions, suits or proceedings that, if adversely determined, would
not, singly or in the aggregate, have a Material Adverse Effect or
(ii) relating to the Agreement or any other Transaction Document.
8. Except as set forth in the schedule attached hereto,
there are not, in any court or before any arbitrator of any kind
or before or by any governmental or non-governmental body, any ac-
tions, suits, proceedings or investigations, pending, or to the
best of our knowledge after due inquiry, threatened (i) against the
Designated Sellers or the business or any property of the
Designated Sellers except actions, suits or proceedings that, if
adversely determined, would not, singly or in the aggregate, have
a Material Adverse Effect or (ii) relating to the Receivables
Purchase Agreement, or any other Transaction Document.
9. The Receivables constitute ["accounts"] ["general
intangibles"]["chattel paper"] as [that][such] term[s] [is][are]
defined in the Uniform Commercial Code as in effect in [XYZ].
10. Each Receivables Purchase Agreement creates a valid
"security interest" (as that term is defined in Section 1-201(37)
of the Uniform Commercial Code (including the conflict of laws
rules thereof) as in effect in each applicable jurisdiction (the
"UCC"), including New York (the "New York UCC") and _______ (the
"XYZ UCC"), under Article 9 of the New York UCC ("Security Inter-
est") in favor of the Transferor in the Receivables conveyed
thereby and in the proceeds thereof (except that the Security
Interest will attach to any Receivable created after the date
hereof only when the applicable Designated Seller possesses rights
in such Receivable). The internal laws of XYZ govern the per-
fection by the filing of financing statements of the Transferor's
Security Interest in the Receivables and the proceeds thereof. The
Designated Sellers' Financing Statements have been filed in the
filing office(s) located in XYZ listed on Schedule I hereto, which
[is] [are] the only office(s) in which filings are required under
the XYZ UCC to perfect the Transferor's Security Interest in the
Receivables and the proceeds thereof, and accordingly the
Transferor's Security Interest will, on the date of the initial
transfer under each of the Receivables Purchase Agreements, be
perfected under Article 9 of the XYZ UCC in each Receivable
conveyed thereby and in the proceeds thereof. All filing fees and
all taxes required to be paid as a condition to or upon the filing
of the Designated Sellers' Financing Statements in XYZ have been
paid in full. As of the date hereof, there were no (i) UCC
financing statements naming a Designated Seller as debtor, seller
or assignor and covering any Receivables or any interest therein
or (ii) notices of the filing of any federal tax lien (filed pursu-
ant to Section 6323 of the Internal Revenue Code) or lien of the
Pension Benefit Guaranty Corporation (filed pursuant to Section
4068 of the Employment Retirement Insurance Act) covering any
Receivable or any interest therein. The filing of the Designated
Sellers' Financing Statements in the filing offices listed on
Schedule I will create a first priority Security Interest in each
Receivable. Such perfection and priority will continue, provided
that appropriate continuation statements are timely filed where and
when required under the UCC.
11. The Agreement and the Transfer Certificate creates
a valid "security interest" (as that term is defined in Section 1-201(37)
of the Uniform Commercial Code (including the conflict of
laws rules thereof) as in effect in each applicable jurisdiction
(the "UCC"), including New York (the "New York UCC") and _______
(the "XYZ UCC"), under Article 9 of the New York UCC ("Security
Interest") in favor of the Company in each Receivable (except that
the Security Interest will attach only when the Transferor
possesses rights in such Receivable). The internal laws of XYZ
govern the perfection by the filing of financing statements of the
Company's Security Interest in the Receivables and the proceeds
thereof. The Transferor Financing Statement(s) have been filed in
the filing office(s) located in XYZ listed on Schedule II hereto,
which [is] [are] the only office(s) in which filings are required
under the XYZ UCC to perfect the Company's Security Interest in the
Receivables and the proceeds thereof, and accordingly the Company's
Security Interest in each Receivable and the proceeds thereof will,
on the date of the initial transfer under the Agreement, be
perfected under Article 9 of the XYZ UCC. All filing fees and all
taxes required to be paid as a condition to or upon the filing of
the Transferor Financing Statement(s) in XYZ have been paid in
full. As of the date hereof, there were no (i) UCC financing
statements naming the Transferor as debtor, seller or assignor and
covering any Receivables or any interest therein or (ii) notices
of the filing of any federal tax lien (filed pursuant to Section
6323 of the Internal Revenue Code) or lien of the Pension Benefit
Guaranty Corporation (filed pursuant to Section 4068 of the Em-
ployment Retirement Insurance Act) covering any Receivable or any
interest therein. The filing of the Transferor Financing State-
ment(s) in the filing offices listed on Schedule II will create a
first priority Security Interest in each Receivable. Such
perfection and priority will continue, provided that appropriate
continuation statements are timely filed where and when required
under the UCC.
In giving the opinions in paragraphs 10 and 11, we have
assumed that (1) the Designated Sellers' and the Transferor's chief
executive offices will continue to be located in XYZ, and (2) the
Designated Sellers and the Transferor have kept and will continue
to keep all of their respective records concerning Receivables
located only in XYZ. The conclusions expressed in paragraphs 10
and 11 are subject to the accuracy of the personnel in the filing
offices referred to above with regard to the filing, indexing and
recording of financing statements and notices of Liens, and to the
correctness of reports to us by ____________, who performed the
searches of such records and who made the filings on behalf of the
Designated Sellers and the Transferor in XYZ.
In giving the opinions set forth in paragraphs 10 and 11,
we have assumed that all filings as appropriate in the event of a
change in the name, identity or corporate structure of the debtor
(or seller or assignor) named in any financing statements and all
continuation statements necessary under the UCC to maintain the
perfection of the Transferor's Security Interest and the Company's
Security Interest in the Receivables and the proceeds thereof will
be duly and timely filed. In giving such opinions, we also do not
express any opinion as to (a) transactions excluded from Article
9 of the UCC by virtue of Section 9-104 of the UCC, (b) any
security interest in proceeds except to the extent that the valid-
ity and perfection of any interest in proceeds (as such term is
defined under the UCC) thereof that is covered by the Designated
Sellers' Financing Statements or the Transferor Financing
Statements or any duly filed financing statement referred to above
may be permitted by Section 9-306 of the UCC, and (c) any security
interest that is terminated or released.
The foregoing opinions and conclusions were given only
in respect of the laws of XYZ, the Uniform Commercial Code as in
effect on the date hereof in the State of New York and, to the
extent specifically referred to herein, the Federal laws of the
United States of America.
This opinion has been delivered at your request for the
purposes contemplated by the Agreement. Without our prior written
consent, this opinion is not to be utilized or quoted for any other
purpose and no one other than you is entitled to rely thereon;
provided, that any Bank Investor, Liquidity Provider, any Credit
Support Provider and any placement agent or dealer of the Company's
commercial paper may rely on this opinion as of it were addressed
to them.
Very truly yours,
Exhibit L-1
-----------
[FORM OF SECRETARY'S CERTIFICATE]
I, __________________, the undersigned ▇▇▇▇▇▇▇▇'▇ Credit
Corporation of (the "Company"), a ________ corporation, DO HEREBY
CERTIFY that:
1. Attached hereto as Annex A is a true and complete
copy of the Certificate of Incorporation of the Company as in
effect on the date hereof.
2. Attached hereto as Annex B is a true and complete
copy of the By-laws of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete
copy of the resolutions duly adopted by the Board of Directors of
the Company [adopted by consent] as of _________________, 199_,
authorizing the execution, delivery and performance of each of the
documents mentioned therein, which resolutions have not been
revoked, modified, amended or rescinded and are still in full force
and effect.
4. The below-named persons have been duly qualified as
and at all times since ________________, 199_, to and including the
date hereof have been officers or representatives of the Company
holding the respective offices or positions below set opposite
their names and are authorized to execute on behalf of the Company
the below-mentioned Transfer and Administration Agreement and all
other Transaction Documents (as defined in such Transfer and
Administration Agreement) to which the Company is a party and the
signatures below set opposite their names are their genuine signa-
tures:
Name Office Signatures
[OFFICE]
[OFFICE]
5. The representations and warranties of the Company
contained in Section 3.1 of the Transfer and Administration
Agreement dated as of January 15, 1997 among the Company, ▇▇▇▇▇'▇,
Inc., ▇▇▇▇▇▇▇▇'▇, Inc., Enterprise Funding Corporation,
NationsBank, N.A. and certain financial institutions named therein
are true and correct as if made on the date hereof.
WITNESS my hand and seal of the Company as of this ____
day of January, 1997.
Secretary
I, the undersigned, Vice President of the Company, DO
HEREBY CERTIFY that _____________________ is the duly elected and
qualified Secretary of the Company and the signature above is -
his/her genuine signature.
WITNESS my hand as of this ____ day of January, 1997.
Vice President
Exhibit L-2
-----------
[FORM OF SECRETARY'S CERTIFICATE]
I, __________________, the undersigned ________________
of [▇▇▇▇▇▇▇▇'▇, Inc.] [▇▇▇▇▇'▇, Inc.] (the "Company"), a ________
corporation, DO HEREBY CERTIFY that:
1. Attached hereto as Annex A is a true and complete
copy of the Certificate of Incorporation of the Company as in
effect on the date hereof.
2. Attached hereto as Annex B is a true and complete
copy of the By-laws of the Company as in effect on the date hereof.
3. Attached hereto as Annex C is a true and complete
copy of the resolutions duly adopted by the Board of Directors of
the Company [adopted by consent] as of _________________, 199_,
authorizing the execution, delivery and performance of each of the
documents mentioned therein, which resolutions have not been
revoked, modified, amended or rescinded and are still in full force
and effect.
4. The below-named persons have been duly qualified as
and at all times since ________________, 199_, to and including the
date hereof have been officers or representatives of the Company
holding the respective offices or positions below set opposite
their names and are authorized to execute on behalf of the Company
the below-mentioned Transfer and Administration Agreement and all
other Transaction Documents (as defined in such Transfer and
Administration Agreement) to which the Company is a party and the
signatures below set opposite their names are their genuine signa-
tures:
Name Office Signatures
[OFFICE]
[OFFICE]
5. The representations and warranties of the Company
contained in Section 3.1 of the Transfer and Administration
Agreement dated as of January 15, 1997 among the Company,
[▇▇▇▇▇▇▇▇'▇, Inc.] [▇▇▇▇▇'▇, Inc.], ▇▇▇▇▇▇▇▇'▇ Credit Corporation,
Enterprise Funding Corporation, NationsBank, N.A. and certain
financial institutions named therein are true and correct as if
made on the date hereof.
WITNESS my hand and seal of the Company as of this ____
day of January __, 1997.
Secretary
I, the undersigned, Vice President of the Company, DO
HEREBY CERTIFY that _____________________ is the duly elected and
qualified Secretary of the Company and the signature above is -
his/her genuine signature.
WITNESS my hand as of this ____ day of January, 1997.
Vice President
Exhibit M
----------
[Form of Certificate]
THIS CERTIFICATE OR ANY INTEREST HEREIN MAY NOT BE TRANSFERRED,
ASSIGNED, EXCHANGED OR CONVEYED EXCEPT IN ACCORDANCE WITH THE
TRANSFER AND ADMINISTRATION AGREEMENT REFERRED TO HEREIN. THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES
LAWS AND NO TRANSFER HEREOF MAY BE MADE EXCEPT IN ACCORDANCE WITH
THE SECURITIES ACT OF 1933, AS AMENDED AND ANY OTHER APPLICABLE
LAWS.
No. 1 One Unit
[Date]
Evidencing an undivided interest in a pool of accounts receivables
acquired from time to time in the ordinary course of business by
▇▇▇▇▇▇▇▇'▇ Credit Corporation (the "Transferor").
This Certificate does not evidence an interest in or obligation of
▇▇▇▇▇▇▇▇'▇ Credit Corporation.
This certifies that NATIONSBANK, N.A., on behalf of and
as agent for Enterprise Funding Corporation and the Bank Investors
(as defined in the Agreement), as their respective interests may
appear from time to time, is the registered owner of a fractional
undivided interest in a pool of accounts receivables pursuant to
a Transfer and Administration Agreement among the Transferor,
▇▇▇▇▇▇▇▇'▇, Inc., ▇▇▇▇▇'▇, Inc., Enterprise Funding Corporation,
NationsBank, N.A. and certain financial institutions named therein,
dated as of January 15, 1997 (the "Agreement"). The Receivables
consist of all accounts receivables generated under the Accounts
from time to time hereafter, all monies due or to become due in
payment of the Receivables and the other assets and interests as
provided in the Agreement.
To the extent not defined herein, capitalized terms used
herein have the meanings assigned to such terms in the Agreement.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as
amended from time to time, the holder hereof by virtue of the
acceptance hereof assents and by which the holder hereof is bound.
In the event of any inconsistency or conflict between the terms of
this Certificate and the terms of the Agreement, the terms of the
Agreement shall control.
This Certificate represents a fractional undivided inter-
est in the Receivables, including the right to receive Collections
and other amounts at the times and in the amounts specified in the
Agreement. The aggregate interest in the Receivables represented
by this Certificate at any time shall equal the Buyers' Percentage
Factor as determined in accordance with the Agreement.
IN WITNESS WHEREOF, the Transferor has caused this Cer-
tificate to be duly executed.
▇▇▇▇▇▇▇▇'▇ Credit Corporation
By:
Name:
Title:
Exhibit N
----------
Financial Covenant Definitions
"Acquisition" shall mean, the acquisition of (i) a con-
trolling equity interest in another Person (including the purchase
of an option, warrant or convertible or similar type security to
acquire such a controlling interest at the time it becomes
exercisable by the holder thereof), whether by purchase of such
equity interest or upon exercise of an option or warrant for, or
conversion of securities into, such equity interest, or (ii) assets
of another Person which constitute all or substantially all of the
assets of such Person or all or substantially all of a line or line
of business conducted by or a division of such Person.
"Agent" shall mean, for the purpose of these financial
covenant definitions, NationsBank of Texas, National Association,
a national banking association, in its capacity as agent for the
Lenders.
"Applicable Commitment Percentage" shall mean at any time
for each Lender with respect to the Revolving Credit Facility
(including its Participations and its obligations under the Credit
Facilities Agreement to NationsBank of Texas, National Association
to acquire Participations), a fraction (expressed as a percentage),
(A) the numerator of which shall be the amount of such Lender's
Revolving Credit Commitment at such date of determination (which
Revolving Credit Commitment for each Lender as of the Closing Date
is set forth in Exhibit A attached hereto and incorporated herein
by reference), and (B) the denominator of which shall be the Total
Revolving Credit Commitment at such date of determination provided
that each Applicable Commitment Percentage of each Lender shall be
increased or decreased to reflect any assignments to or by such
Lender effected in accordance with Section 11.01 of the Credit
Facilities Agreement.
"Borrower" shall mean, for the purpose of these financial
covenant definitions, ▇▇▇▇▇▇▇▇'▇, Inc., having a principal place
of business in Jackson, Mississippi.
"Borrowing Base" means, at any time of determination, an
amount determined pursuant to the following formula:
Borrowing
Base = Borrowing Base Factor multiplied by
(Eligible Inventory - Commercial L/Cs)
"Borrowing Base Factor" means 60% through the end of the
Borrower's fiscal year 1996 and 55% thereafter.
"Capital Leases" means all leases which have been or
should be capitalized in accordance with GAAP as in effect from
time to time including Statement No. 13 of the Financial Accounting
Standards Board and any successor thereof.
"Closing Date" means the date as of which the Credit
Facilities Agreement was executed by the Borrower, the Lenders and
the Agent and on which the conditions set forth in Section 5.01
thereof were satisfied.
"Commercial L/Cs" means, at any date of determination,
the aggregated stated amount of outstanding commercial or
documentary letters of credit issued for the benefit of any Person
and for the account of the Borrower or any Subsidiary to the extent
that such letters of credit were issued in connection with the pur-
chase of inventory by the Borrower or such Subsidiary and such
inventory is determined to be an asset thereof and included as such
on its books and records.
"Common Stock" means the common stock, par value $.10 per
share, of the Servicer.
"Consistent Basis" in reference to the application of
GAAP means the accounting principles observed in the period
referred to are comparable in all material respects to those
applied in the preparation of the audited financial statements of
the Borrower referred to in Section 6.01(f)(i) of the Credit
Facilities Agreement and the audited financial statements of the
Servicer, ▇▇▇▇▇▇▇▇'▇ and each other Person referred to in Section
5.1(a) of the Agreement.
"Consolidated Capitalization" means, at any time at which
the amount thereof is to be determined, the sum of Consolidated
Funded Indebtedness plus Consolidated Shareholders' Equity.
"Consolidated EBITDA" means, with respect to ▇▇▇▇▇▇▇▇'▇
and its Subsidiaries for any period of computation thereof, the sum
of, without duplication, (i) Consolidated Net Income, plus (ii)
Consolidated Interest Expense, plus (iii) taxes on income, plus
(iv) amortization, plus (v) depreciation, all determined on a
consolidated basis in accordance with GAAP applied on a Consistent
Basis; provided however, at all times until a Four-Quarter Period
wholly occurs after the Closing Date, Consolidated EBITDA shall be
calculated giving pro forma effect to the Parisian Acquisition for
the Four-Quarter Period ending on or most recently prior to the
date of computation; provided further, that certain one-time
extraordinary charges incurred by ▇▇▇▇▇▇▇▇'▇ as a result of the
Parisian Acquisition and the Acquisition by ▇▇▇▇▇▇▇▇'▇ of all the
capital stock of Younkers, Inc. pursuant to that certain Agreement
and Plan of Merger among ▇▇▇▇▇▇▇▇'▇, Baltic Merger Corporation and
Younkers, Inc. dated as of October 22, 1995 shall be excluded from
the computation of Consolidated EBITDA.
"Consolidated Financing Charges" means those charges owed
and allocated to third parties with respect to accounts receivable
securitizations transacted in the ordinary course of business and
consistent with past practice.
"Consolidated Fixed Charge Ratio" means, with respect to
▇▇▇▇▇▇▇▇'▇ and its Subsidiaries for the Four-Quarter Period ending
on the date of computation thereof, the ratio of (a) Consolidated
EBITDA plus Consolidated Financing Charges plus, to the extent
deducted in arriving at Consolidated EBITDA, lease, rental and all
other payments made in respect of or in connection with operating
leases, to (b) Consolidated Fixed Charges during such Four-Quarter
Period.
"Consolidated Fixed Charges" means, with respect to
▇▇▇▇▇▇▇▇'▇ and its Subsidiaries, for the periods indicated, the sum
of, without duplication, (i) Consolidated Interest Expense, plus
(ii) to the extent deducted in arriving at Consolidated EBITDA,
lease, rental and all other payments made in respect of or in
connection with operating leases, plus (iii) current maturities of
Consolidated Funded Indebtedness, plus (iv) all dividends and other
distributions (other than distributions in the form of any stock
(including without limitation capital stock of the ▇▇▇▇▇▇▇▇'▇),
security, note or other instrument) paid during such period
(regardless of when declared) on any shares of capital stock of
▇▇▇▇▇▇▇▇'▇ then outstanding, including without limitation its
Common Stock and its preferred stock, plus (v) Consolidated
Financing Charges, all determined on a consolidated basis in accor-
dance with GAAP applied on a Consistent Basis.
"Consolidated Funded Indebtedness" means, at any time as
of which the amount thereof is to be determined, all indebtedness
in respect of money borrowed of ▇▇▇▇▇▇▇▇'▇ and its Subsidiaries,
including without limitation all Capital Leases and the deferred
purchase price of any property or asset, evidenced by a promissory
note, bond or similar written obligation for the payment of money
(including, but not limited to, conditional sales or similar title
retention agreements and all current maturities and borrowings
under short term loans) plus the face amount of all issued and
outstanding standby letters of credit and all obligations (to the
extent not duplicative) arising under such letters of credit, all
determined on a consolidated basis in accordance with GAAP applied
on a Consistent Basis.
"Consolidated Interest Expense" means, with respect to
any period of computation thereof, the gross interest expense of
▇▇▇▇▇▇▇▇'▇ and its Subsidiaries, including without limitation (i)
the amortization of debt discounts, (ii) the amortization of all
fees (including, without limitation, fees payable in respect of a
Swap Agreement) payable in connection with the incurrence of
Indebtedness to the extent included in interest expense and (iii)
the portion of all payments made in connection with Capital Leases
allocable to interest expense, all determined on a consolidated
basis in accordance with GAAP applied on a Consistent Basis.
"Consolidated Net Income" means, for any period of
computation thereof, the gross revenues from operations of
▇▇▇▇▇▇▇▇'▇ and its Subsidiaries (including interest income from
investments), less all operating and non-operating expenses of
▇▇▇▇▇▇▇▇'▇ and its Subsidiaries including taxes on income, all
determined on a consolidated basis in accordance with GAAP applied
on a Consistent Basis; but excluding as income: (i) net gains on
the sale, conversion or other disposition of capital assets, net
gains on the acquisition, retirement, sale or other disposition of
capital stock and other securities of ▇▇▇▇▇▇▇▇'▇ or its Subsid-
iaries, and net gains on the collection of proceeds of life
insurance policies, which net gains in the aggregate during any
Four-Quarter Period exceed $200,000, (ii) any write-up of any
asset, and (iii) any other net gain or credit of an extraordinary
nature, all determined in accordance with GAAP applied on a
Consistent Basis.
"Consolidated Shareholders' Equity" means at any time as
of which the amount thereof is to be determined, the sum of the
following in respect of ▇▇▇▇▇▇▇▇'▇ and its Subsidiaries (determined
on a consolidated basis and excluding intercompany items among
▇▇▇▇▇▇▇▇'▇ and its Subsidiaries and any upward adjustment after the
Closing Date due to revaluation of assets): (i) the amount of
issued and outstanding share capital, plus (ii) the amount of addi-
tional paid-in capital and retained income (or, in the case of a
deficit, minus the amount of such deficit), plus (iii) the amount
of any foreign currency translation adjustment (if positive, of,
if negative, minus the amount of such translation adjustment) minus
(iv) the book value of any treasury stock and the book value of any
stock subscription receivables, all as determined in accordance
with GAAP applied on a Consistent Basis.
"Consolidated Senior Indebtedness" means at any time as
of which the amount thereof is to be determined, the difference of
all Consolidated Funded Indebtedness then outstanding, including
without limitation any Loans, minus the aggregate principal amount
of any Consolidated Funded Indebtedness then outstanding
subordinate in terms acceptable to the Agent and the Required
Lenders of payment and available remedy to the Loans and the terms
and conditions set forth herein, including without limitation
Consolidated Subordinated Debt.
"Consolidated Subordinated Debt" means at any time as of
which the amount thereof is to be determined, the sum of the
following in respect of ▇▇▇▇▇▇▇▇'▇ and its Subsidiaries determined
on a consolidated basis: (i) the Convertible Subordinated
Debentures, (ii) the Junior Subordinated Debentures, (iii) the
Parisian Senior Subordinated Notes and (iv) all other Consolidated
Funded Indebtedness which is by its terms subordinate in all
respects to the Loans as required by, and in substance acceptable
to, the Agent.
"Contingent Obligation" of any Person means (i) all
contingent liabilities required (or which, upon the creation or
incurring thereof, would be required) to be included in the
consolidated financial statements (including footnotes) of such
Person in accordance with GAAP applied on a Consistent Basis,
including Statement No. 5 of the Financial Accounting Standards
Board, (ii) all reimbursement obligations of such Person with
respect to any letter of credit and all obligations of such Person
guaranteeing or in effect guaranteeing any Indebtedness, dividend
or other obligation of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, including obligations
of such Person however incurred:
(i) to purchase such Indebtedness or other
obligation or any property or assets constituting
security therefor;
(ii) to advance or supply funds in any manner (i)
for the purchase or payment of such Indebtedness or
other obligation, or (ii) to maintain a minimum working
capital, net worth or other balance sheet condition or
any income statement condition of the primary obligor;
(iii) to grant or convey any lien, security
interest, pledge, charge or other encumbrance on any
property or assets of such Person to secure payment of
such Indebtedness or other obligation;
(iv) to lease property or to purchase securities or
other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(v) otherwise to assure the owner of the
Indebtedness or such obligation of the primary obligor
against loss in respect thereof;
with respect to Contingent Obligations (such as litigation,
guarantees and pension plan liabilities), such liabilities shall
be computed at the amount which, in light of all the facts and
circumstances existing at the time, represent the present value of
the amount which can reasonably be expected to become an actual or
matured liability.
"Convertible Subordinated Debentures" means the 4 3/4%
Convertible Subordinated Debentures Due 2003 of ▇▇▇▇▇▇▇▇'▇ in the
aggregate principal amount of $86,250,000 issued pursuant to that
certain Indenture dated as of October 26, 1993, between ▇▇▇▇▇▇▇▇'▇
and Union Planters National Bank, as trustee (the "Convertible
Subordinated Debentures Indenture").
"Credit Facilities Agreement" shall mean that certain
Credit Facilities and Reimbursement Agreement, dated as of October
11, 1996, among ▇▇▇▇▇▇▇▇'▇, Inc., as Borrower, each Lender party
thereto and NationsBank of Texas, National Association, in its
capacity as Agent for the Lenders, as amended and modified up to
January 15, 1996.
"Four-Quarter Period" means a period of four full
consecutive quarter annual periods, taken together as one
accounting period, and in the event any such quarter annual period
occurs prior to the effective date of the Parisian Acquisition, or
is the period in which such effective date occurs (each a "Pre-Acquisition
Period"), all financial statements, data, computations
and determinations for such Four-Quarter Period shall be made on
a pro forma basis for each Pre-Acquisition Period giving effect to
the Parisian Acquisition for all prior periods.
"Indebtedness" means with respect to any Person, without
duplication, all Indebtedness for Money Borrowed, all indebtedness
of such Person for the acquisition of property, all indebtedness
secured by any Lien on the property of such Person whether or not
such indebtedness is assumed, all liability of such Person by way
of endorsements (other than for collection or deposit in the
ordinary course of business), all Contingent Obligations, all Rate
Hedging Obligations, that portion of obligations with respect to
Capital Leases and other items which in accordance with GAAP is
classified as a liability on a balance sheet; but excluding all
accounts payable and accruals, in each case in the ordinary course
of business and only so long as payment therefor is due within one
year; provided that in no event shall the term Indebtedness include
surplus and retained earnings, minority interest in Subsidiaries,
lease obligations (other than pursuant to Capital Leases), reserves
for deferred income taxes and investment credits, other deferred
credits and reserves, and deferred compensation obligations.
"Junior Subordinated Debentures" means the 7.5% Junior
Subordinated Debentures Due March 31, 2004 of ▇▇▇▇▇▇▇▇'▇ issued in
the original aggregate principal amount of $17,500,000.
"Lender" shall mean each lender having executed and
delivered a signature page to the Credit Facilities Agreement or
an instrument of assignment with respect to the Credit Facilities
Agreement pursuant to Section 11.01 thereof on or prior to January
15, 1997.
"Letter of Credit" means a standby letter of credit
issued by NationsBank of Texas, National Association, for the
account of the Borrower in favor of a Person advancing credit or
securing an obligation on behalf of the Borrower.
"Lien" means any interest in property securing any
obligation owed to, or a claim by, a Person other than the owner
of the property, whether such interest is based on the common law,
statue or contract, and including but not limited to the lien or
security interest arising from a mortgage, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. For the purposes
of the Credit Facilities Agreement and these financial covenants,
the Borrower and its Subsidiaries shall be deemed to be the owners
of any property which either of them have acquired or hold subject
to a conditional sale agreement, financing lease, or other arrange-
ment pursuant to which title to the property has been retained by
or vested in some other Person for security purposes.
"Loan" or "Loans" means any of the Revolving Credit Loans
or Swing Line Loans.
"Outstanding Letters of Credit" means all undrawn amounts
of Letters of Credit plus all Reimbursement Obligations.
"Parisian" means Parisian, Inc., an Alabama corporation,
acquired as part of the Parisian Acquisition and thereafter a
Subsidiary.
"Parisian Acquisition" means the Acquisition by
▇▇▇▇▇▇▇▇'▇ of Parisian wherein each issued and outstanding share
of Parisian's common shares will be converted into cash and shares
of the common stock of ▇▇▇▇▇▇▇▇'▇, substantially in accordance with
the terms and conditions of the Purchase Agreement.
"Parisian Senior Subordinated Notes" means the 9.875%
Senior Subordinated Notes Due 2003 of Parisian in the aggregate
principal amount of $125,000,000 issued pursuant to the Parisian
Indenture.
"Participation" means, with respect to any Lender other
than NationsBank of Texas, N.A., the extension of credit
represented by a participation of such Lender under the Credit
Facilities Agreement in the liability of NationsBank of Texas,
N.A., in respect of a Swing Line Loan made or Letter of Credit
issued by NationsBank of Texas, N.A. in accordance with the terms
of the Credit Facilities Agreement.
"Person" means an individual, partnership, limited
partnership, corporation, limited liability corporation, trust,
unincorporated organization, association, joint venture or a
government or agency or political subdivision thereof.
"Purchase Agreement" means that certain Agreement and
Plan of Merger by and among Parisian, Casablanca Merger Corp., an
Alabama corporation and wholly owned subsidiary of the Borrower,
and the Borrower dated as of July 8, 1996 setting forth the terms
and conditions of the Parisian Acquisition.
"Rate Hedging Obligations" means any and all obligations
of the Borrower, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions
therefor), under (a) any and all agreements, devices or
arrangements designed to protect at least one of the parties
thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or
exchange transactions, including, but not limited to, U.S. dollar-denominated
or cross-currency interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate
options, puts, warrants and those commonly known as interest rate
"swap" agreements; and (b) any and all cancellations, buybacks,
reversals, terminations or assignments of any of the foregoing.
"Required Lenders" means, as of any date, Lenders on such
date having Credit Exposure (as defined below) aggregating at least
51% of the aggregate Credit Exposure of all the Lenders on such
date. For purposes of the preceding sentence, the amount of the
"Credit Exposure" of each Lender shall be equal at all times (i)
other than following the occurrence and during the continuance of
an Event of Default (as defined in the Credit Facilities
Agreement), to its Revolving Credit Commitment, and (ii) following
the occurrence and during the continuance of an Event of Default
(as defined in the Credit Facilities Agreement), to the aggregate
principal amount of Revolving Credit Loans owing to such Lender
plus the amount of such Lender's Applicable Commitment Percentage
of Swing Line Outstanding and Outstanding Letters of Credit;
provided that, if any Lender shall have failed to pay to
NationsBank of Texas, National Association, its Applicable Commit-
ment Percentage of any Swing Line Loan or drawing under any Letter
of Credit resulting in an outstanding Reimbursement Obligation,
such Lender's Credit Exposure attributable to such Swing Line
Outstanding or outstanding Letters of Credit or both shall be
deemed to be held by NationsBank of Texas, National Association for
purposes of this definition.
"Revolving Credit Facility" means the facility described
in Section 2.01 of the Credit Facilities Agreement providing for
Loans to the Borrower by the Lenders in the aggregate principal
amount equal to (i) the lesser of the Borrowing Base and the Total
Revolving Credit Commitment, less (ii) the aggregate principal
amount of Swing Line Outstanding and Outstanding Letters of Credit.
"Revolving Credit Loan" means a Loan made pursuant to the
Revolving Credit Facility (but specifically excludes all Swing Line
Loans).
"Subsidiary" means any corporation or other entity in
which more than 50% of its outstanding voting stock or more than
50% of all equity interests is owned directly or indirectly by the
Borrower and/or by one or more of the Borrower's Subsidiaries at
or after the Closing Date, including without limitation Parisian,
Inc.
"Swap Agreement" means, for the purpose of these
financial covenant definitions, one or more agreements between the
Borrower and another Person, on terms mutually acceptable to the
Borrower and such Person, which agreements create Rate Hedging
Obligations.
"Swing Line Loans" means Loans made by NationsBank of
Texas, National Association to the Borrower pursuant to Section
2.02 of the Credit Facilities Agreement.
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal amount of all Swing Line
Loans then outstanding.
"Total Letter of Credit Commitment" shall mean an amount
equal to $15,000,000, "Total Revolving Credit Commitment" means an
amount equal to $275,000,000, as reduced from time to time in
accordance with Section 2.09 of the Credit Facilities Agreement;
the Total Letter of Credit Commitment and the Total Swing Line
Commitment are included within, and are not in addition to, the
Total Revolving Credit Commitment.
"Total Swing Line Commitment" means an amount equal to
$20,000,000.
Exhibit O
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Financial Covenants and Ratios
Capitalized terms used in this Exhibit which are defined in Exhibit
N hereto shall have the meanings set forth therein.
1. ▇▇▇▇▇▇▇▇'▇ Inc. shall not permit at any time during the peri-
ods set forth below the ratio of Consolidated Senior Indebt-
edness to Consolidated Capitalization to be greater than the
ratios set forth opposite the following respective periods:
Period Ratio
Closing Date through Fiscal Year End 1996 .50 to 1.00
At all times thereafter .40 to 1.00
2. ▇▇▇▇▇▇▇▇'▇ Inc. shall not permit, at any time during any
four-quarter period of ▇▇▇▇▇▇▇▇'▇ Inc. ending during the
periods set forth below, the Consolidated Fixed Charge Ratio
for such four-quarter period to be equal to or less than the
ratios set forth opposite the respective periods below:
Period Ratio
Closing Date through Fiscal Year End 1996 1.25 to 1.00
At all times thereafter 1.50 to 1.00
3. ▇▇▇▇▇▇▇▇'▇ Inc. shall not permit at any time the ratio of
Consolidated Funded Indebtedness to Consolidated EBITDA to be
equal to or greater than the following ratios set forth
opposite the following periods below:
Period Ratio
Closing Date through Fiscal Year End 1996 4.00 to 1.00
At all times thereafter 3.50 to 1.00
Exhibit P
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[FORM OF CYCLE CERTIFICATE]
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