EXHIBIT 10.48
Conformed Copy
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WASTE MANAGEMENT FINANCING CORPORATION
WASTE MANAGEMENT, INC.
as Master Servicer
THE OTHER SERVICERS NAMED HEREIN
THE PARTICIPANTS NAMED HEREIN
RECEIVABLES TRANSFER AND SERVICING AGREEMENT
__________________
Dated as of December 29, 1997
THE CHASE MANHATTAN BANK
as Administrative Agent
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TABLE OF CONTENTS
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ARTICLE I
Definitions..................................... 1
1.1 Defined Terms.............................................................. 1
1.2 Terms Generally............................................................ 1
1.3 Accounting Terms; GAAP..................................................... 2
ARTICLE II
Acquisition and Transfer of Participating Interest....................... 2
2.1 Acquisition and Transfer of Participating Interest......................... 2
2.2 Participating Interest..................................................... 5
2.3 Payment for Initial Transfer of a Participating Interest and any Increase
in Net Investment; Acquisition and Transfer Procedure.................. 5
2.4 Commitment Fees............................................................ 6
2.5 Fee and Purchase Discount Amount Calculations.............................. 7
2.6 Interest on Overdue Payments............................................... 7
2.7 Establishment of Accounts; Allocation of Collections; Reinvestment of
Principal Collections.................................................. 8
2.8 Payments; Pro Rata Treatment............................................... 11
2.9 Netting of Payments........................................................ 12
2.10 Termination or Reduction of Commitment..................................... 12
2.11 Optional Retransfer; Reduction of Net Investment........................... 12
2.12 Mandatory Reductions in Net Investment..................................... 13
ARTICLE III
Increased Costs................................. 14
3.1 Alternate Determination of Purchase Discount Amounts....................... 14
3.2 Increased Costs............................................................ 15
3.3 Indemnity.................................................................. 16
3.4 Taxes...................................................................... 16
3.5 Mitigation Obligations; Replacement of Participants........................ 18
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ARTICLE IV
Termination.................................. 18
4.1 Termination............................................................... 18
ARTICLE V
Covenants, Representations and Warranties..................... 18
5.1 Representations and Warranties of the Company Relating to the Company..... 18
(a) Organization; Corporate Powers................................... 19
(b) Authorization.................................................... 19
(c) Enforceability................................................... 19
(d) Governmental Approvals; No Conflicts............................. 19
(e) Litigation, etc.................................................. 19
(f) Compliance with Laws and Agreements.............................. 20
(g) Ownership of Property; Liens..................................... 20
(h) Investment Company Act; Other Regulations........................ 20
(i) Taxes............................................................ 20
(j) Ownership; Subsidiaries.......................................... 20
(k) Pro Forma Balance Sheet.......................................... 20
(l) No Material Adverse Change....................................... 21
(m) Solvency......................................................... 21
(n) Employee Benefit Plans........................................... 21
5.2 Representations and Warranties of the Company Relating to this Agreement
and the Receivables................................................... 22
5.3 Retransfer Obligation..................................................... 23
5.4 Obligations Unaffected.................................................... 24
ARTICLE VI
Conditions to Effectiveness/Transfers/Reinvestments................ 24
6.1 Commencement Date......................................................... 24
6.2 Condition to each Increase in Net Investment.............................. 26
ARTICLE VII
Affirmative Covenants............................... 27
7.1 Financial Statements...................................................... 28
7.2 Certificates; Other Information........................................... 28
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7.3 Existence; Businesses and Properties; Insurance; Receivables.............. 29
7.4 Payment of Obligations.................................................... 29
7.5 Inspection of Property; Books and Records; Discussions.................... 30
7.6 Notices................................................................... 30
7.7 Net Worth................................................................. 30
7.8 Use of Proceeds........................................................... 30
7.9 Separate Corporate Existence.............................................. 31
7.10 Facility Rating........................................................... 32
7.11 Purchase of Receivables................................................... 32
7.12 Delivery of Collections................................................... 32
ARTICLE VIII
Negative Covenants................................. 32
8.1 Accounting of Transfers................................................... 32
8.2 Limitation on Indebtedness................................................ 32
8.3 Limitation on Liens....................................................... 33
8.4 Limitation on Guarantees.................................................. 33
8.5 Limitation on Fundamental Changes......................................... 33
8.6 Limitation on Sale of Assets.............................................. 33
8.7 Limitation on Dividends and Payments on Subordinated Note................. 33
8.8 Business of the Company................................................... 34
8.9 Limitation on Investments, Loans and Advances............................. 34
8.10 Limitation on Sales and Leasebacks........................................ 34
8.11 Transactions with Affiliates.............................................. 34
8.12 Capital Stock............................................................. 34
8.13 Amendments................................................................ 34
8.14 Receivables Sale Agreement, etc........................................... 34
8.15 Policies.................................................................. 34
8.16 No Powers of Attorney..................................................... 35
8.17 Receivables Not to Be Evidenced by Promissory Notes....................... 35
8.18 Ownership of Assets and Property.......................................... 35
8.19 Rescission or Cancellation................................................ 35
8.20 Ineligible Receivables.................................................... 35
8.21 Offices................................................................... 35
8.22 Change in Name............................................................ 36
8.23 Addition of Sellers....................................................... 36
8.24 Operating Expenses........................................................ 36
ARTICLE IX
Events of Termination............................... 36
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ARTICLE X
The Administrative Agent............................ 39
10.1 Appointment............................................................ 39
10.2 Delegation of Duties................................................... 40
10.3 Exculpatory Provisions................................................. 40
10.4 Reliance By the Administrative Agent................................... 40
10.5 Notice of Default or Termination Event................................. 41
10.6 Non-Reliance on the Administrative Agent and Other Participants........ 41
10.7 Indemnification........................................................ 42
10.8 The Administrative Agent in Its Individual Capacity.................... 42
10.9 Successor Administrative Agent......................................... 42
ARTICLE XI
Miscellaneous................................. 43
11.1 Further Assurances..................................................... 43
11.2 Payments............................................................... 43
11.3 Costs and Expenses..................................................... 43
11.4 Successors and Assigns; Assignments; Participations.................... 44
11.5 GOVERNING LAW.......................................................... 46
11.6 No Waiver; Cumulative Remedies......................................... 46
11.7 Amendments and Waivers................................................. 47
11.8 Severability........................................................... 47
11.9 Notices................................................................ 47
11.10 Counterparts........................................................... 48
11.11 Construction of Agreement as Security Agreement........................ 48
11.12 Adjustments; Set-off................................................... 48
11.13 Jurisdiction; Consent to Service of Process............................ 49
11.14 Acknowledgements....................................................... 50
11.15 WAIVER OF JURY TRIAL................................................... 50
11.16 Confidentiality........................................................ 50
11.17 No Bankruptcy Petition, etc............................................ 51
11.18 Tax Treatment.......................................................... 51
ARTICLE XII
Servicing................................... 51
12.1 Servicing; Accounts; Collections........................................ 51
12.2 Collections by the Servicers; Indemnity................................. 55
12.3 Maintenance of Records.................................................. 58
12.4 Rebates, Adjustments, Returns and Reductions; Modifications............. 59
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12.5 Daily Reports; Settlement Statements...................................... 59
12.6 Representations, Warranties and Covenants of the Servicers................ 60
12.7 Acquisition Obligation.................................................... 66
12.8 Obligations Unaffected.................................................... 67
12.9 Addition of Servicers..................................................... 68
12.10 Interest on Overdue Payments.............................................. 68
12.11 Servicer Events of Defaults............................................... 68
ANNEX X Definitions
SCHEDULES
1 Names, Addresses and Commitments of Participants
2 Names; Balance of Receivables; Location of Chief Executive Offices;
Location of Receivables Records; Jurisdictions of Incorporation;
Jurisdiction in which Qualified to do Business; Effective Date; Seller
Category
3 Designated Accounts (To be delivered on the Commencement Date and shall
become a part hereof for all purposes.)
EXHIBITS
A Form of Request for Transfer and Assignment
B Reserve Events
C Form of Settlement Statement
D Form of Additional Servicer Supplement
E Form of Responsible Officer's Certificate as to Solvency, etc.
F Form of Daily Report
G Form of Assignment and Acceptance
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RECEIVABLES TRANSFER AND SERVICING AGREEMENT, dated as of December 29,
1997, among WASTE MANAGEMENT FINANCING CORPORATION, a Delaware corporation (the
"Company"), WASTE MANAGEMENT, INC., a Delaware corporation ("WMI"), as master
servicer (in such capacity, the "Master Servicer"), each of the Subsidiaries of
WMI from time to time parties hereto, in their capacities as servicers of
receivables (in such capacities, the "Servicers"), the several financial
institutions from time to time parties to this Agreement (the "Participants")
and THE CHASE MANHATTAN BANK, a New York corporation, as administrative agent
for the Participants (the "Administrative Agent").
W I T N E S S E T H :
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WHEREAS, the Company desires to sell, assign, transfer and convey to
the Participants, and the Participants desire to acquire a Participating
Interest (as hereinafter defined) in, all the Company's right, title and
interest in, to and under the Receivables (as hereinafter defined) now existing
or hereafter created and in the rights of the Company in, to and under all other
Related Property (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
1.1 Defined Terms. Capitalized terms used in this Agreement shall
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have the respective meanings assigned to such terms in Annex X hereto unless
otherwise defined herein.
1.2 Terms Generally. The definitions of terms herein shall apply
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equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein," "hereof" and "hereunder," and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
subsections, Exhibits and Schedules shall be construed to refer to Articles and
subsections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.
1.3 Accounting Terms; GAAP. Except as otherwise expressly provided
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herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time.
ARTICLE II
Acquisition and Transfer of Participating Interest
2.1 Acquisition and Transfer of Participating Interest. (a) By
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execution of this Agreement and subject to the terms and conditions contained
herein, the Company does hereby sell, transfer, assign, set over and otherwise
convey, without recourse (except as expressly provided herein), to the
Participants and to the Administrative Agent, for the benefit of the
Participants, and each Participant hereby severally agrees to purchase and
acquire from the Company, a senior undivided participating interest from time to
time (in an amount specified in subsection 2.2 and subject to the limitations
specified in subsections 2.2 and 2.3(c)) in all right, title and interest of the
Company in, to and under the following, whether now owned or hereafter acquired
(collectively, the "Receivables Property," and together with the property
described in subsections 2.1(b) and 2.1(c), the "Pooled Property"):
(i) all Receivables;
(ii) all Collections;
(iii) all Related Property;
(iv) all rights (including rescission, replevin or reclamation,
but none of the obligations) relating to any Receivable or arising
therefrom;
(v) all proceeds of, or payments in respect of, the foregoing,
including, without limitation, whatever is received upon the sale,
exchange, collection or other disposition of the foregoing or proceeds
(including, without limitation, whatever is received upon the sale,
exchange, collection or other disposition of the foregoing and all
"proceeds" as defined in Section 9-306 of the UCC as in effect in the State
of New York) thereof, including all Recoveries relating thereto.
(b) In addition, to secure the obligation of the Company hereunder,
including, without limitation the obligations set forth in subsection 2.7, the
Company hereby assigns to the Administrative Agent, for the benefit of the
Participants, and grants to the Administrative Agent, for the benefit of the
Participants, a security interest in all its right, title and interest in, to
and under the Receivables Sale Agreement and the Receivables Sale Agreement
Guarantee,
including (i) all property assigned thereunder and all rights of the Company to
receive moneys due and to become due under or pursuant to such agreement,
whether payable as fees, expenses, costs or otherwise, (ii) all rights of the
Company to receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to such agreement, (iii) claims of the Company for damages arising
out of or for breach of or default under such agreement, (iv) the right of the
Company to amend, waive or terminate such agreement, to perform thereunder and
to compel performance and otherwise exercise all remedies thereunder, (v) all
other rights, remedies, powers, privileges and claims of the Company under or in
connection with such agreement (whether arising pursuant to such agreement or
otherwise available to the Company at law or in equity), including the rights of
the Company to enforce such agreement and to give or withhold any and all
consents, requests, notices, directions, approvals, extensions or waivers under
or in connection therewith whether or not a Termination Event has occurred and
is continuing and (vi) all monies due or to become due and all amounts received
with respect to the items listed in clauses (i) through (v) and all proceeds
(including, without limitation, whatever is received upon the sale, exchange,
collection or other disposition of the foregoing and all "proceeds" as defined
in Section 9-306 of the UCC as in effect in the State of New York) thereof,
including all Recoveries relating thereto (the Pooled Property described in this
sentence being referred to herein as the "Transferred Agreements").
(c) In addition, to secure the obligations of the Company hereunder,
including, without limitation, the obligations set forth in subsection 2.7, the
Company hereby grants to the Administrative Agent, for the benefit of the
Participants, a security interest in all right, title and interest of the
Company in, to and under the following, whether now owned or hereafter acquired:
(i) all equipment in all its forms, wherever located, now or
hereafter existing (including all software, data bases, materials, books,
records, magnetic tapes, disks and cassettes relating to the Receivables
and all other equipment in which information concerning the Receivables is
stored), and all parts thereof and accessions thereto (any and all such
equipment, parts and accessions being the "Equipment");
(ii) all the following (the "Accounts"):
(A) the Collection Account and the SPC Collection Account
and, to the extent provided further herein, any interest in the
Designated Accounts or the Concentration Account, all funds and other
evidences of payment held therein and all certificates and
instruments, if any, from time to time representing or evidencing such
Account or any funds and other evidences of payment held therein;
(B) any operating account or other accounts of the Company,
all funds held therein and all certificates and instruments, if any,
from time to time representing or evidencing any such operating
account or any funds held therein;
(C) all Cash Equivalents and all certificates and instruments
from time to time representing or evidencing the Cash Equivalents;
(D) all notes, certificates of deposit and other instruments
from time to time hereafter delivered or transferred to, or otherwise
possessed by, the Administrative Agent for and on behalf of the
Company in substitution for or in addition to any of the then-existing
Accounts; and
(E) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any and all of the then-
existing Accounts; and
(iii) all proceeds of or payments in respect of any and all of the
foregoing (including proceeds that constitute property of the types
described in clauses (i) and (ii) above and including Collections) and, to
the extent not otherwise included, all payments under insurance (whether or
not the Administrative Agent is the loss payee in respect thereof), or any
indemnity, warranty or guaranty payable by reason of loss or damage to or
otherwise with respect to any of the Pooled Property.
(d) In connection with the assignment, set over and conveyance to
the Participants pursuant to subsection 2.1(a), the Company, the Master Servicer
and the Participants agree that the Administrative Agent shall constitute a
"secured party" as defined in Section 9-105(m) of the UCC. Each reference in
this Agreement, unless the context otherwise requires, to the sale, assignment,
transfer, set over or conveyance of a Receivable or other Receivables Property
shall be construed as a reference to the sale, assignment, transfer, set over or
conveyance of the senior undivided participating interest in the Receivable and
the other Receivables Property to the Participants hereunder. In connection with
the foregoing assignment, the Company and the Master Servicer agree to deliver
to the Administrative Agent each item evidencing a Receivable or other
Receivables Property (including any original documents or instruments as are
necessary to effect such assignment) in which the transfer of an interest is
perfected under the UCC or otherwise solely by possession and not by filing a
financing statement or similar document.
Notwithstanding the assignment of the Transferred Agreements set forth
in subsection 2.1(b), the Company does not hereby assign or delegate any of its
duties or obligations under the Transferred Agreements to the Administrative
Agent or the Participants and neither the Administrative Agent nor any
Participant accepts such duties or obligations, and the Company shall continue
to have the right and the obligation to purchase Receivables from the Sellers
thereunder from time to time. The foregoing assignment, set-over and conveyance
does not constitute and is not intended to result in a creation or an assumption
by the Administrative Agent or the Participant, of any obligation of the Master
Servicer, the Company, any Seller or any
other Person in connection with the Receivables or under any agreement or
instrument relating thereto, including, without limitation, any obligation to
any Obligor.
In connection with such assignments, the Company agrees to record and
file, at its own expense, any financing statements (and continuation statements
with respect to such financing statements when applicable) or, where applicable,
registrations in the appropriate records, (i) with respect to the Receivables
now existing and hereafter created and (ii) with respect to any other Pooled
Property a security interest in which may be perfected under the relevant UCC,
legislation or similar statute by such filing or registration, as the case may
be, in each case meeting the requirements of applicable law in such manner and
in such jurisdictions as are necessary to perfect and maintain perfection of the
assignment of the Receivables and such other Pooled Property (excluding returned
merchandise) to the Participants and the Administrative Agent, and to deliver a
file-stamped copy or certified statement of such financing statement or
registration or other evidence of such filing or registration to the
Administrative Agent not later than the 10th day after the Commencement Date.
The Administrative Agent shall be under no obligation whatsoever to file such
financing statement, or a continuation statement to such financing statement, or
to make any other filing or other registration under the UCC, other relevant
legislation or similar statute in connection with such transfer. The
Administrative Agent shall be entitled to conclusively rely on the filings or
registrations made by or on behalf of the Company without any independent
investigation and the Company's obligation to make such filings as evidence that
such filings have been made.
In connection with such assignments, the Company and the Master
Servicer further agree, at their own expense, on or prior to the Commencement
Date, to indicate, or to cause to be indicated, in their respective computer
files containing a master database of Receivables and to cause each Seller to
indicate in its records containing a master database of Receivables that the
Receivables have been conveyed to the Company or the Participants, as the case
may be, pursuant to the Receivables Sale Agreement or this Agreement,
respectively, for the benefit of the Participants.
2.2 Participating Interest. Subject to the terms and conditions set
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forth herein (including, without limitation, subsections 2.3(c) and 6.2), each
Participant agrees during the Commitment Period to ratably purchase a
Participating Interest and ratably increase its Net Investment in an aggregate
amount that will not result in such Participant's Net Investment exceeding such
Participant's Commitment and the Net Investment of all Participants exceeding
the aggregate Commitments then in effect. The senior undivided participating
interest of the Participants in the Receivables and the Receivables Property
(the "Participating Interest"; a Participant's Commitment Percentage of such
Participating Interest shall equal such Participant's "Participating Interest")
shall equal, at any date of determination thereof, the Net Investment at such
date and the Participating Interest of any Participant shall equal, at any date
of determination thereof, the Net Investment of such Participant at such date.
The Participating Interest shall, among other things, entitle the Participants
to receive the amounts distributable to the Participants pursuant to subsection
2.7, including, without limitation, Purchase
Discount Amounts which shall accrue thereon in accordance with this Agreement
and the payment of the Net Investment. The Company agrees to provide any
Participant upon its request with a certificate evidencing such Participant's
Participating Interest.
2.3 Payment for Initial Transfer of a Participating Interest and any
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Increase in Net Investment; Acquisition and Transfer Procedure. (a) The
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Company shall notify the Administrative Agent of the amount of the initial
transfer and assignment of a Participating Interest or any request for an
Increase in Net Investment pursuant to this subsection 2.3. The amount which
the Participants shall pay for such initial transfer and assignment or Increase
in Net Investment shall equal the amount of such initial transfer and assignment
or Increase in Net Investment, as the case may be. Amounts payable to the
Company in respect of the initial transfer and assignment of a Participating
Interest or any Increase in Net Investment on such Closing Date shall be
obtained by the Administrative Agent from the Participants and paid by the
Administrative Agent to the Company in accordance with the provisions of
subsection 2.8(a).
(b) Subject to subsections 2.3(c) and 6.2, the initial transfer and
assignment of a Participating Interest or an Increase in Net Investment of the
Participants shall occur, upon notice from the Company, on any Business Day
during the Commitment Period (each date on which the initial transfer and
assignment of a Participating Interest in the Receivables or an Increase in Net
Investment of the Participants occurs hereunder being herein referred to as the
"Closing Date" applicable to such transfer and assignment or such increase, as
the case may be); provided, that the Company shall have given the Administrative
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Agent irrevocable notice (effective upon receipt) of such request substantially
in the form of Exhibit A hereto (the "Request for Transfer and Assignment") no
later than (i) if the initial transfer and assignment of a Participating
Interest or the Increase in Net Investment on such date is to be priced solely
with reference to ABR, 12:00 Noon (New York City time) on such Closing Date or
(ii) if all or a portion of the initial transfer and assignment of a
Participating Interest or the Increase in Net Investment is to be allocated to a
Fixed Tranche, 11:00 a.m. (New York City time) three Business Days prior to such
Closing Date; provided, further, that the provisions of this subsection 2.3(b)
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shall not restrict the allocations of Collections pursuant to subsection 2.7.
Such notice shall state (i) the Closing Date, (ii) the amount of the initial
transfer and assignment of a Participating Interest or the Increase in Net
Investment, as the case may be, for the proposed transaction, (iii) what portion
thereof will be allocated to a Fixed Tranche and/or the Floating Tranche and
(iv) if any portion thereof is to be allocated to a Fixed Tranche, the length of
the Transfer Period therefor. After receipt by the Administrative Agent of the
Request for Transfer and Assignment from the Company, the Administrative Agent
shall promptly provide notice (which may be telephonic but shall be confirmed in
writing) to each Participant of the Closing Date and of the portion of the
Participating Interest or the Increase in Net Investment allocable to such
Participant on such Closing Date.
(c) Each Participant shall have no obligation to acquire a
Participating Interest or to increase its Net Investment on any Closing Date
hereunder:
(1) unless, in the case of an Increase in Net Investment, the
Increase in Net Investment for all Participants on such Closing Date is
equal to at least $10,000,000 or an integral multiple of $1,000,000 in
excess thereof;
(2) to the extent that, after giving effect to (A) in the case of the
initial transfer and assignment of a Participating Interest, such transfer,
and (B) in the case of an Increase in Net Investment, such Increase in Net
Investment on such date, the Net Investment for all Participants would
exceed the Maximum Transfer Amount; or
(3) if the Commitments of the Participants have terminated pursuant
to Article IX.
The initial transfer and assignment of the Participating Interest or an Increase
in Net Investment allocable to the Participants as a group shall be allocated to
each Participant according to the Commitment Percentage of such Participant.
2.4 Commitment Fees. The Company agrees to pay to the Administrative
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Agent, for the account of the Participants, a commitment fee (the "Commitment
Fee") for the Commitment Period, computed at the rate of 0.1875 of 1% per annum
on the average daily excess of the Maximum Commitment over the Net Investment
for each day during the period for which such Commitment Fee is payable.
Accrued Commitment Fees shall be payable in arrears, based on invoices submitted
by the Administrative Agent to the Company, on the Settlement Date occurring in
March, June, September and December and on the date of the termination of the
Commitment, commencing on March 20, 1998 and shall be paid in immediately
available funds to the Administrative Agent for distribution to the
Participants.
2.5 Fee and Purchase Discount Amount Calculations. (a) Calculations
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of per annum rates under this Agreement shall be made on the basis of a 360-day
year for actual days elapsed, except that Commitment Fees and Purchase Discount
Amounts on the Floating Tranche determined by reference to the Prime Rate shall
be calculated on the basis of a 365- (or 366-, as the case may be) day year.
Each determination of the Adjusted LIBO Rate hereunder by the Administrative
Agent shall be conclusive and binding upon each of the parties hereto in the
absence of manifest error. Any change in the Purchase Discount Amount resulting
from a change in ABR or the Statutory Reserve Rate shall become effective as of
the opening of business on the day on which such change is announced.
(b) On any Business Day, the Company may, subject to paragraph (c)
below, elect to allocate all or any portion of the Net Investment not allocated
to a Fixed Tranche to one or more Fixed Tranches with Transfer Periods
commencing on such Business Day by giving the Administrative Agent irrevocable
written or telephonic (confirmed in writing) notice thereof, which notice must
be received by the
Administrative Agent prior to 1:00 p.m., New York City time, three Business Days
prior to such Business Day. Such notice shall specify (i) the applicable
Business Day, (ii) the Transfer Period for each Fixed Tranche to which a portion
of the Net Investment is to be allocated and (iii) the portion of the Net
Investment being allocated to each such Fixed Tranche. Promptly upon receipt of
each such notice, the Administrative Agent shall notify each Participant of the
contents thereof. If the Administrative Agent shall not have received timely
notice as aforesaid with respect to all or any portion of the Net Investment,
the Purchase Discount Amount on such amount shall be calculated by reference to
the ABR.
(c) Anything contained in this Agreement to the contrary
notwithstanding, (i) the portion of the Net Investment allocable to any Fixed
Tranche must be an amount equal to $10,000,000 or an integral multiple of
$1,000,000 in excess thereof, (ii) no more than ten Fixed Tranches shall be
outstanding at any one time and (iii) after the occurrence and during the
continuance of any Termination Event, at the end of the related Transfer Period
all of the Net Investment allocated to any Fixed Tranche shall be reallocated to
the Floating Tranche.
2.6 Interest on Overdue Payments. If any amount payable by the
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Company to the Participants or the Administrative Agent hereunder, whether on
account of fees or expenses or on account of amounts collected by the Company or
amounts payable by the Company pursuant to Article III or subsection 5.3, or
otherwise, is not paid by the Company or otherwise on the relevant Settlement
Date or other relevant date, such amount shall be payable together with
interest, payable on demand, for each day from such Settlement Date or other
relevant date, as the case may be, until such amount is paid in full at a rate
per annum equal to the ABR plus 2%.
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2.7 Establishment of Accounts; Allocation of Collections;
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Reinvestment of Principal Collections.
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(a) (i) The Administrative Agent shall establish and maintain in
the name of the Administrative Agent a trust account (the "Collection Account").
Collections deposited into the SPC Collection Account will be transferred to the
Collection Account as set forth in Article XII. All Collections otherwise
received by any Servicer, the Master Servicer or the Company shall be deposited
by it either to a Designated Account or into the Concentration Account as set
forth in Article XII. The Administrative Agent shall have sole and exclusive
dominion over and control of the Collection Account, and the Company, the
Sellers and the Master Servicer shall not have any dominion over or control of
any such account.
(ii) Amounts deposited in the Collection Account shall be
invested by the Administrative Agent as directed by the Master Servicer in Cash
Equivalents maturing not later than the next Business Day.
(iii) Any earnings (net of losses and investment expenses) on
such invested funds in any Collection Account ("Investment Earnings") will be
treated as Collections and retained therein.
(iv) Neither the Company nor the Master Servicer nor any Servicer
nor any Person claiming by, through or under the Company, any Servicer or the
Master Servicer shall have any right, title or interest in, or any control over
the use of, or any right to withdraw moneys from, the Collection Account, except
(A) the right to give directions for investments of amounts on deposit therein
as expressly provided for in paragraph (ii) above and (B) pursuant to the
authority granted to the Master Servicer in subsection 12.2, the Master Servicer
shall have the power, revocable by the Administrative Agent, to instruct the
Administrative Agent to make withdrawals from the Collection Account for the
purpose of carrying out the Administrative Agent's duties hereunder. Delivery
of a Daily Report by the Master Servicer or a Servicer instructing the
Administrative Agent to make withdrawals from the Collection Account shall be
deemed to constitute a representation and warranty that such withdrawal is
authorized pursuant to the terms hereof and all conditions to such withdrawal
have been satisfied. In the event that the Master Servicer or a Servicer fails
to deliver a Daily Report, the Administrative Agent may (but shall not be
obligated to) apply Receivable Proceeds in accordance with this subsection 2.7
to the payment of amounts to be paid to the Participants and the Administrative
Agent. The Company agrees that all Receivable Proceeds shall be applied and
paid in accordance with this subsection 2.7. Any Receivable Proceeds not
applied on any Business Day in accordance with this subsection 2.7 shall be
retained in the Collection Account until applied in accordance with this
subsection 2.7.
(b) Prior to the commencement of an Amortization Period, the
Collections, Retransfer Payments, Adjustment Payments and the other proceeds of
the Pooled Property deposited in the Collection Account (collectively,
"Receivable Proceeds") shall be applied by the Administrative Agent on each
Business Day (in accordance with the Daily Report provided by the Master
Servicer or a Servicer, upon which the Administrative Agent may conclusively
rely on), as follows:
(i) first, if such Business Day is a Settlement Date, to the
payment of the Monthly Servicing Fee to the Master Servicer for the benefit
of the Master Servicer and any Servicer or to a Substitute Servicer;
(ii) second, on each Purchase Discount Amount Payment Date to
the payment in arrears of accrued Purchase Discount Amounts on such
Purchase Discount Amount Payment Date to the Participants in respect of the
Participating Interest;
(iii) third, to the payment of (x) the Commitment Fees and (y)
any other amounts, if any, accrued and payable on such Business Day to the
Administrative Agent and the Participants in respect of the Participating
Interest or hereunder (including, without limitation, amounts payable under
Article III);
(iv) fourth, to retain in the Collection Account the Reserve
Amount for such Business Day;
(v) fifth, to the payments, if any, required by subsection
2.12 on such Business Day;
(vi) sixth, to the payment of the Company's indemnity
obligations hereunder and, then, to the Company's operating account for the
payment of the operating expenses of the Company incurred or reserved for
on such Business Day; provided, that the aggregate amounts paid to the
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Company's operating account pursuant to this clause (v) shall not exceed,
for any fiscal year of the Company, $250,000;
(vii) seventh, to the Company to pay for Receivables acquired
from the Sellers pursuant to the Receivables Sale Agreement in the
aggregate amount specified in the applicable Daily Report; provided, that
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the Company may elect to (A) retain all or any portion of such amounts in
the Collection Account and (B) on the next Reduction Date, if the Company
shall have given the Administrative Agent irrevocable notice in accordance
with subsection 2.11(b), have all or any portion of such amounts remitted
to the Participants on such Reduction Date and have the Net Investment
reduced accordingly (subject to the payment by the Company of any amounts
required pursuant to subsection 3.3);
(viii) eighth, to the extent such expenses are not paid
pursuant to clause (vi) above, to the Company's operating account for the
payment of the operating expenses of the Company incurred or reserved for
such Business Day;
(ix) ninth, at the Company's option and subject to the terms of
this Agreement and the Subordinated Note, to make payments on account of
the Subordinated Note, in the aggregate amount specified in the applicable
Daily Report; and
(x) tenth, at the Company's option and subject to the terms of
this Agreement, to the Company to enable the Company to make payments on
account of Restricted Payments in the aggregate amount specified in the
applicable Daily Report, so long as the outstanding principal amount of the
Subordinated Note shall be zero at the time of such payment and all accrued
interest thereon shall have been paid in full;
provided, that
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(A) in no event shall any Receivable Proceeds be
distributed from the Collection Account with respect to
clauses (v)-(x) above to the extent such distribution
would necessitate a payment under subsection 2.12;
(B) in no event shall any Receivable Proceeds be
distributed from the Collection Account with respect to
clauses (ix) and (x) above if any Seller Repurchase
Payments or Seller Adjustment Payments are owing (whether
or not then due) to the Company and are unpaid;
(C) in no event shall any Receivable Proceeds be
distributed from the Collection Account with respect to clauses
(vii) and (viii) above (other than a distribution in accordance
with the proviso in clause (vii)), if a Termination Event of a
type set forth in subsection (f), (h)(ii), (i), (m) or (n) of
Article IX (or a Potential Termination Event in respect thereof)
has occurred and is continuing or would as a result of such
payment; and
(E) in no event shall any Receivable Proceeds be
distributed from the Collection Account with respect to clauses
(ix) and (x) above if any Termination Event or a Potential
Termination Event with respect to a Termination Event of a type
set forth in subsection (f), (g), (h)(ii), (i), (m) or (n) of
Article IX shall have occurred and be continuing or would occur
as a result of such payment.
(c) During any Amortization Period, all Receivable Proceeds shall be
applied by the Administrative Agent on each Business Day (in accordance with the
Daily Report provided by the Master Servicer or a Servicer, upon which the
Administrative Agent may conclusively rely) as follows:
(i) first, (x) to the payment of Monthly Servicing Fees of the
Master Servicer or any Substitute Servicer and (y) to the payment of the
reasonable operating expenses of the Company (subject to the limitations
set forth in subsection 2.7(b)(vi));
(ii) second, to the payment on the last Business Day of each
week to the Participants in respect of the Participating Interest first to
the payment in arrears of accrued Purchase Discount Amounts and then to the
payment of the Net Investment until such time as the Net Investment and
Purchase Discount Amounts thereon shall have been paid in full;
(iii) third, after such time as the Net Investment and
Purchase Discount Amounts have been paid in full to the payment to the
Participants and the Administrative Agent of all other amounts (including,
without limitation, amounts payable under Article III) that are payable to
the Administrative Agent and its Affiliates and the Participants hereunder,
until such amounts shall have been paid in full; and
(iv) fourth, after such time as the Net Investment and Purchase
Discount Amounts thereon and all other amounts that are due and payable to
the Administrative Agent and the Participants shall have been paid in full,
the remainder to the Company.
(d) The Master Servicer shall as soon as possible but no later than
one Business Day after receipt of any Collections and other proceeds determine
whether or not they are with respect to Purchased Receivables and shall as soon
as possible
notify the Administrative Agent of such determination. The Administrative Agent
shall as soon as possible thereafter transfer any Collections that are not with
respect to Purchased Receivables from the Collection Account to the Master
Servicer for payment to the applicable Person; provided, that with respect to
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any Collections for which the Administrative Agent has not been provided such a
determination by the Master Servicer by the end of the fifth Business Day from
the date of receipt thereof, such Collections shall be deemed to be Collections
with respect to Purchased Receivables and no other Person shall have any rights
therein except to the extent provided in applicable state laws governing the
laws of restitution and mistake. Notwithstanding the foregoing, during any
Amortization Period, all cash collections and other proceeds received in respect
of an Obligor with respect to all Receivables of such Obligor shall be applied
first, to pay the outstanding principal balance of Purchased Receivables of
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such Obligor until Purchased Receivables with respect to such Obligor are paid
in full and second, amounts in excess thereof shall be paid to the Master
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Servicer for payment to the Person legally entitled thereto to pay the
outstanding principal balance of all remaining Receivables with respect to such
Obligor. The Master Servicer agrees that in making each such determination with
respect to Collections and other proceeds, the Master Servicer represents and
warrants at such time, to the best of the Master Servicer's knowledge, that such
determination is true and correct.
2.8 Payments; Pro Rata Treatment. (a) Subject to the terms and
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conditions hereof, not later than 1:00 p.m. (New York City time) on each date on
which the Participants are notified to remit payments to the Administrative
Agent or as the Administrative Agent shall direct on account of any Increase in
Net Investment, each Participant shall make available to the Administrative
Agent or as the Administrative Agent shall direct an amount in immediately
available funds equal to the amount of such remittance calculated as provided
herein. The Administrative Agent shall credit the proceeds of such payments (on
the date of receipt so long as the 1:00 p.m. deadline specified above is
satisfied) in a timely manner in accordance with the instructions of the
Company.
(b) Unless the Administrative Agent shall have been notified in
writing by any Participant prior to a Closing Date that such Participant will
not make the amount which would constitute its portion of the Participating
Interest or Increase in Net Investment on such date available to the
Administrative Agent, the Administrative Agent may assume that such Participant
has made such amount available to the Administrative Agent on such Closing Date,
and the Administrative Agent may, in reliance upon such assumption, make
available to the Company, a corresponding amount. If such amount is made
available to the Administrative Agent on a date after such Closing Date, such
Participant shall pay to the Administrative Agent on demand an amount equal to
the product of (i) the daily average Federal Funds Effective Rate during such
period, (ii) the amount of such Participant's portion of the Participating
Interest or Increase in Net Investment and (iii) a fraction the numerator of
which is the number of days that elapse from and including such Closing Date to
the date on which such Participant's funds shall have become immediately
available to the Administrative Agent and the denominator of which is 360. A
certificate of the Administrative Agent submitted to any Participant with
respect to
any amounts owing under this subsection 2.8(b) shall be conclusive, absent
manifest error. If such Participant's portion of the Participating Interest or
Increase in Net Investment is not in fact made available to the Administrative
Agent by such Participant within three Business Days of such Closing Date, the
Administrative Agent shall be entitled to recover such amount with interest
thereon at a per annum rate equal to the ABR, on demand, from the Company. No
provision contained in this subsection 2.8(b) shall prejudice any rights of the
Company against any Participant.
(c) Except where an amount is payable to a particular Participant,
all amounts payable to the Participants shall be paid to each Participant in an
amount equal to such Participant's Commitment Percentage of the aggregate amount
thereof payable to the Participants.
2.9 Netting of Payments. Anything contained in this Agreement to the
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contrary notwithstanding, the Administrative Agent may, in its sole discretion,
net any amounts the Administrative Agent is required to make available to the
Company on any day pursuant to subsection 2.7(b) or any other subsection of this
Agreement against any amounts the Administrative Agent is required to make
available to the Participants on such day pursuant to subsection 2.7(b) or any
other provision of this Agreement. At the request of any Participant, the
Administrative Agent will provide an accounting of any amounts netted pursuant
to the preceding sentence.
2.10 Termination or Reduction of Commitment. The Company may on any
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Settlement Date, upon three Business Days prior written notice to the
Administrative Agent (effective upon receipt), (i) terminate the Participants'
Commitments hereunder or (ii) reduce the Maximum Commitment hereunder in an
amount equal to $10,000,000 or a whole multiple of $1,000,000 in excess thereof;
provided, that the Maximum Commitment may not be reduced below the Net
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Investment. After receipt by the Administrative Agent of any such notice from
the Company, the Administrative Agent shall promptly provide a copy of such
notice to each Participant. Upon any such reduction, the Commitment of each
Participant shall be reduced pro rata according to the Commitment Percentage of
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such Participant. Upon any such termination or reduction as aforesaid, the
Maximum Commitment of the Participants shall terminate or be reduced, as the
case may be. Any such termination shall not in any way affect the Company's
obligations under Article III hereof. Once terminated or reduced, the
Commitments of the Participants cannot be reinstated unless otherwise agreed in
writing by all of the Participants.
2.11 Optional Retransfer; Reduction of Net Investment. (a) On any
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Settlement Date during the Amortization Period on which the Net Investment
equals 10% or less of the Net Investment as of the first day of the Amortization
Period, the Company shall have the option, exercisable upon one Business Day
prior notice to the Administrative Agent (effective upon receipt), to acquire
the Participants' total Participating Interest at a transfer price equal to the
Net Investment plus all Purchase Discount Amounts and all accrued and unpaid
fees to the date of such transfer plus any amounts payable pursuant to Article
III. After receipt by the Administrative Agent of any such notice from the
Company, the Administrative Agent shall promptly provide a copy of such notice
to each Participant.
(b) The Company may, in accordance with subsection 2.7(b)(vii),
reduce the Net Investment on any date (a "Reduction Date") which is a Business
Day, without premium or penalty (other than amounts payable pursuant to
subsection 3.3), upon at least three Business Days irrevocable notice to the
Administrative Agent, in the case of reductions in the Net Investment that are
part of any Fixed Tranche, and one Business Day irrevocable notice to the
Administrative Agent, in the case of reductions in the Net Investment that are
part of the Floating Tranche, specifying (a) the Tranches to be reduced, (b) the
date and amount of such reduction and (c) if such reduction is of a combination
of Fixed Tranche amounts and Floating Tranche amounts, the amount of reduction
allocable to each (and, with respect to such Fixed Tranche, each Tranche
thereof). Upon receipt of any such notice, the Administrative Agent will
promptly notify each Participant thereof. If any such notice is given, amounts
on deposit in the Collection Account shall be applied pursuant to subsection
2.7(b)(vi) on the date specified therein. Each reduction of the Net Investment
pursuant to this subsection 2.11(b) shall be in an amount equal to the lesser of
(x) a whole multiple of $1,000,000 and (y) the Net Investment then outstanding.
2.12 Mandatory Reductions in Net Investment. (a) On any Business
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Day during the Commitment Period on which the Net Investment exceeds the Maximum
Transfer Amount (except to the extent Excess Application Amounts in respect of
such excess are being held in a cash collateral account pursuant to subsection
2.12(c)), all Receivable Proceeds (after the payment of amounts pursuant to
clauses (i), (ii) and (iii) of subsection 2.7(b) on such Business Day) shall be
applied on such Business Day to reduce the Net Investment (and the Purchase
Discount Amounts accrued on the portion thereof so repaid) in such amount as
shall be necessary so that after giving effect to such payment there shall be no
such excess and, to the extent such Receivable Proceeds are not sufficient to
pay such excess (and the Purchase Discount Amount accrued thereon) on such
Business Day, all subsequent Receivable Proceeds (after the payment of amounts
pursuant to clauses (i), (ii) and (iii) of subsection 2.7(b) on such Business
Day) shall be applied to pay such excess (and the Purchase Discount Amounts
accrued thereon) until so paid.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, any mandatory reduction hereunder shall be applied, unless the
Administrative Agent receives instructions from the Company otherwise, (i)
first, to the Floating Tranche, (ii) second, to any Fixed Tranche the then-
applicable Transfer Period with respect to which ends on the date of the
relevant payment and (iii) third, unless otherwise directed by the Company
pursuant to subsection 2.12(c), to the other Fixed Tranches as selected by the
Administrative Agent in its sole discretion; provided, that, in any event, the
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Company shall pay such amounts, if any, required by subsection 3.3.
(c) In the event the amount of any mandatory reduction required to be
made on any date pursuant to this subsection 2.12 shall exceed the aggregate of
the amounts described in clauses (i) and (ii) of paragraph (b) above with
respect to such date (the amount of any such excess being called the "Excess
Application Amount"), the Company shall have the right to direct the
Administrative Agent to, in lieu of making such reduction in full, first apply
such reduction in the manner contemplated
by said clauses (i) and (ii) and deposit an amount equal to the Excess
Application Amount with the Administrative Agent in a cash collateral account
maintained (pursuant to documentation satisfactory to the Administrative Agent)
by and in the sole dominion and control of the Administrative Agent. Any amounts
so deposited shall be held by the Administrative Agent and applied to the
reduction of the applicable Fixed Tranches at the end of the current Transfer
Period applicable thereto. On any Business Day on which (x) collected amounts
remain on deposit in or to the credit of such cash collateral account after
giving effect to the payments made on such day pursuant to this paragraph (c)
and (y) the Company shall have delivered to the Administrative Agent a written
request or a telephonic request (which shall be promptly confirmed in writing)
that such remaining collected amounts be invested in the Cash Equivalents
specified in such request, the Administrative Agent shall use its reasonable
efforts to invest such remaining collected amounts in such Cash Equivalents;
provided, that the Administrative Agent shall have continuous dominion and
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full control over any such investments (and over any interest that accrues
thereon) to the same extent that it has dominion and control over such cash
collateral account and no Cash Equivalent shall mature after the end of the
Transfer Period for which it is to be applied. Unless a Termination Event or
Potential Termination Event then exists or would result, the Company shall have
the right to direct the Administrative Agent to withdraw any amount from such
cash collateral account if (i) the applicable Fixed Tranches have been reduced
to zero and the accrued Purchase Discount Amount thereon has been paid in full
or (ii) the Net Investment has otherwise ceased to exceed the Maximum Transfer
Amount.
(d) All payments under this subsection 2.12 shall be subject to
subsection 3.3 but otherwise without premium or penalty. All payments in
reduction of the Net Investment under this subsection 2.12 shall be accompanied
by the Purchase Discount Amounts on the amount being paid accrued to the date of
payment.
ARTICLE III
Increased Costs
3.1 Alternate Determination of Purchase Discount Amounts. If prior
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to the commencement of any Transfer Period for a Fixed Tranche:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Transfer Period; or
(b) the Administrative Agent is advised by the Required Participants
that the Adjusted LIBO Rate for such Transfer Period will not adequately
and fairly reflect the cost to such Participants (or Participant) of making
or maintaining their Eurodollar Participating Interests (or its Eurodollar
Participating Interest) included in such Fixed Tranche for such Transfer
Period;
then the Administrative Agent shall give notice thereof to the Company and the
Participants by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Participants that
the circumstances giving rise to such notice no longer exist, (i) any request
under subsection 2.5(b) that requests the conversion of any Participating
Interest to, or continuation of any Participating Interest as, a Fixed Tranche
shall be ineffective and (ii) if any Request for Transfer and Assignment
requests a Fixed Tranche, such Participating Interest shall be made as a
Floating Tranche.
3.2 Increased Costs. (a) If any Change in Law shall:
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(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Participant (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Participant or the London interbank market any
other condition affecting this Agreement or Eurodollar Participating
Interests of any such Participant;
and the result of any of the foregoing shall be to increase the cost to such
Participant of purchasing or maintaining any Eurodollar Participating Interests
(or of maintaining its obligation to purchase any such Participating Interest)
or to reduce the amount of any sum received or receivable by such Participant
(whether of Net Investment, payment of Purchase Discount Amount or otherwise),
then the Company will pay to such Participant such additional amount or amounts
as will compensate such Participant for such additional costs incurred or
reduction suffered.
(b) If any Participant determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Participant's capital or on the capital of such Participant's holding
company, if any, as a consequence of this Agreement or its obligations pursuant
hereto to a level below that which such Participant or such Participant's
holding company could have achieved but for such Change in Law (taking into
consideration such Participant's policies and the policies of such Participant's
holding company with respect to capital adequacy), then from time to time the
Company will pay to such Participant such additional amount or amounts as will
compensate such Participant or such Participant's holding company for any such
reduction suffered.
(c) A certificate of a Participant setting forth the amount or
amounts necessary to compensate such Participant or its holding company as
specified in paragraph (a) or (b) of this subsection 3.2 shall be delivered to
the Company and shall be conclusive absent manifest error. The Company shall
pay such Participant the amount shown as due on any such certificate within 30
days after receipt thereof.
(d) Failure or delay on the part of any Participant to demand
compensation pursuant to this subsection 3.2 shall not constitute a waiver of
such Participant's right to demand such compensation; provided, that the Company
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shall
not be required to compensate a Participant pursuant to this subsection 3.2 for
any increased costs or reductions incurred more than six months prior to the
date that such Participant notifies the Company of the Change in Law giving rise
to such increased costs or reductions and of such Participant's intention to
claim compensation therefor; provided, further, that, if the Change in Law
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giving rise to such increased costs or reductions is retroactive, then the six-
month period referred to above shall be extended to include the period of
retroactive effect thereof.
(e) Notwithstanding any other provision of this subsection 3.2, no
Participant shall demand compensation for any increased cost or reduction or
other amount referred to above if it shall not at the time be the general policy
or practice of such Participant to demand such compensation in similar
circumstances under comparable provisions of other agreements.
3.3 Indemnity. In the event of (a) the payment of any Net Investment
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in respect of any Eurodollar Participating Interest other than on the last day
of a Transfer Period applicable thereto (including as a result of a Termination
Event), (b) the conversion of any Eurodollar Participating Interest other than
on the last day of the Transfer Period applicable thereto, (c) the failure to
transfer, convert, continue or reduce any Participating Interest on the date
specified in any notice delivered pursuant hereto or pursuant to subsection 2.12
or (d) the assignment of any Eurodollar Participating Interest other than on the
last day of the Transfer Period applicable thereto as a result of a request by
the Company pursuant to subsection 3.5, then, in any such event, the Company
shall compensate each Participant for the loss, cost and expense attributable to
such event. In the case of a Eurodollar Participating Interest, the loss to any
Participant attributable to any such event shall be deemed to include an amount
determined by such Participant to be equal to the excess, if any, of (i) the
amount of interest that such Participant would pay for a deposit equal to the
Participating Interest for the period from the date of such payment, conversion,
failure or assignment to the last day of the then-current Transfer Period for
such Participating Interest (or, in the case of a failure to transfer, convert
or continue, the duration of the Transfer Period that would have resulted from
such transfer, conversion or continuation) if the interest rate payable on such
deposit were equal to the Adjusted LIBO Rate for such Transfer Period, over (ii)
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the amount of interest that such Participant would earn on such amount for such
period if such Participant were to invest such amount for such period at the
interest rate that would be bid by such Participant (or an affiliate of such
Participant) for Dollar deposits from other banks in the eurodollar market at
the commencement of such period. A certificate of any Participant setting forth
any amount or amounts that such Participant is entitled to receive pursuant to
this subsection shall be delivered to the Company and shall be conclusive absent
manifest error. The Company shall pay such Participant the amount shown as due
on any such certificate within 10 days after receipt thereof.
3.4 Taxes. (a) Any and all payments by or an account of any
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obligation of the Company, any Servicer or the Master Servicer (each, a "Tax
Indemnifying Party") hereunder shall be made free and clear of and without
deduction for any
Indemnified Taxes or Other Taxes; provided, that if any Tax Indemnifying Party
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or the Administrative Agent shall be required to deduct any Indemnified Taxes or
Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this subsection) the Administrative
Agent or the relevant Participant receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Indemnifying Party
shall make such deductions and (iii) the Indemnifying Party or the
Administrative Agent, as the case may be, shall pay the full amount deducted to
the relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Company shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Company shall indemnify the Administrative Agent and each
Participant, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
subsection) paid by the Administrative Agent or such Participant, as the case
may be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Company by a Participant or by the Administrative Agent on its own behalf or on
behalf of a Participant shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by any Tax Indemnifying Party to a Governmental Authority, such Tax
Indemnifying Party shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Each Foreign Participant shall deliver to the Company and the
Administrative Agent two copies of either U.S. Internal Revenue Service Form
1001 or Form 4224, or, in the case of a Foreign Participant claiming exemption
from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", a Form W-8, or any subsequent
versions thereof or successors thereto (and, if such Foreign Participant
delivers a Form W-8, an annual certificate representing that such Foreign
Participant is not a "bank" for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of the Company and is not a controlled foreign corporation related to the
Company (within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such Foreign Participant claiming that it is
entitled to a complete exemption from U.S. federal income withholding tax on all
payments by the Company under this Agreement. Such forms shall be delivered by
each Foreign Participant on or before the date it becomes a party to this
Agreement, assuming its Participating Interest is properly classified as
indebtedness for
United States federal income tax purposes. In addition, each Foreign Participant
shall deliver such forms promptly upon the obsolescence or invalidity of any
form previously delivered by such Foreign Participant. Each Foreign Participant
shall promptly notify the Company at any time it determines that it is no longer
in a position to provide any previously delivered certificate to the Company (or
any other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this subsection 3.4,(e), a
Foreign Participant shall not be required to deliver any form pursuant to this
subsection 3.4(e) (i) that such Foreign Participant is not legally able to
deliver or (ii) if the Participating Interests have been characterized as
anything other than indebtedness for United States income tax purposes.
(f) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this subsection
3.4 shall survive the termination of this Agreement.
3.5 Mitigation Obligations; Replacement of Participants. If any
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Participant requests compensation under subsection 3.2, or if the Company is
required to pay any additional amount to any Participant or any Governmental
Authority for the account of any Participant pursuant to subsection 3.4, then
such Participant shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document requested by the
relevant Tax Indemnifying Party or to designate a different lending office for
funding or booking its Participating Interest hereunder or to assign its rights
and obligations hereunder to another of its offices, branches or affiliates, if,
in the judgment of such Participant, such filing, designation or assignment (i)
would eliminate or reduce amounts payable pursuant to subsection 3.2 or 3.4, as
the case may be, in the future and (ii) would not subject such Participant to
any unreimbursed cost or expense and would not otherwise be disadvantageous to
such Participant. The Company hereby agrees to pay all reasonable costs and
expenses incurred by any Participant in connection with any such designation or
assignment.
ARTICLE IV
Termination
4.1 Termination. This Agreement will terminate at such time after
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the expiration of the Commitment Period when the Net Investment has been reduced
to zero, all Purchase Discount Amounts accrued thereon have been paid in full
and all other amounts owing to the Participants and the Administrative Agent
hereunder shall have been paid in full; provided, however, that the indemnities
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of the Company, the Servicers and the Master Servicer to the Participants and
the Administrative Agent set forth in this Agreement (including those set forth
in Article III) shall survive such termination. Upon (i) the expiration of the
Commitment Period and (ii) the reduction of the Net Investment to zero and the
payment in full of all Purchase Discount Amounts and all other amounts owing to
the Participants and the Administrative Agent hereunder, the Administrative
Agent shall, at the expense of
the Company, execute such Uniform Commercial Code termination statements and
such other documents, and take such other actions, as the Company may reasonably
request to evidence the termination of the ownership interest of the
Participants in the Receivables and the payment of all amounts owing pursuant to
and in connection with this Agreement.
ARTICLE V
Covenants, Representations and Warranties
5.1 Representations and Warranties of the Company Relating to the
-------------------------------------------------------------
Company. The Company hereby represents and warrants to the Administrative Agent
-------
and the Participants, (x) as of the Commencement Date, and (y) with respect to
an Increase in Net Investment, as of the related Closing Date, unless, such
representation or warranty expressly relates only to a prior date, that:
(a) Organization; Corporate Powers. The Company is duly organized,
------------------------------
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite corporate power and authority to carry on its
business as now conducted and, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect, is qualified to do business in, and is in good standing in,
every jurisdiction where such qualification is required and has the corporate
power and authority to execute, deliver and perform each of the Transaction
Documents and each agreement or instrument contemplated hereby or thereby to
which it is or will be a party.
(b) Authorization. The Transactions are within the corporate powers
-------------
of the Company and have been duly authorized by all necessary corporate and, if
required, stockholder action.
(c) Enforceability. This Agreement has been duly executed and
--------------
delivered by the Company and constitutes, and each other Transaction Document if
and when executed and delivered by the Company will constitute, a legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and except as enforceability may be
limited by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(d) Governmental Approvals; No Conflicts. The Transactions (a) do
------------------------------------
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational
documents of the Company or any order of any Governmental Authority, (c) will
not violate or result in a default under any
21
indenture, agreement or other instrument binding upon the Company or its assets,
or give rise to a right thereunder to require any payment to be made by the
Company and (d) will not result in the creation or imposition of any Lien on any
asset of the Company.
(e) Litigation, etc. (i) There are no actions, suits or
---------------
proceedings by or before any arbitrator or Governmental Authority pending or, to
the knowledge of the Company, threatened against, the Company which (a) could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (b) that involve this Agreement or the Transactions.
(ii) Except with respect to matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, the Company (a) has not failed to comply with any Environmental Law or
to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (b) has not become subject to any
Environmental Liability, (c) has not received notice of any claim with respect
to any Environmental Liability or (d) does not know of any basis for any
Environmental Liability.
(f) Compliance with Laws and Agreements. The Company is in
-----------------------------------
compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. No Termination Event or Potential Termination Event
has occurred and is continuing.
(g) Ownership of Property; Liens. (i) The Company has good title
----------------------------
to, or valid leasehold interests in, all its real and personal property material
to its business, except for minor defects in title that do not interfere with
its ability to conduct its business as currently conducted or to utilize such
properties and assets for their intended purposes.
(ii) The Company owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Company does not infringe upon the rights
of any other Person, except for any such infringements that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(h) Investment Company Act; Other Regulations. (i) The Company is
-----------------------------------------
not an "investment company," as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.
(ii) The Company is not a "holding company," as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935, as
amended.
(iii) The Company is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
22
(iv) The assignment and transfer of the Participating Interests
hereunder and the use of the proceeds thereof and the other Transactions will
not violate or be inconsistent with the provisions of the Regulations of the
Board, including Regulations G, T, U and X.
(i) Taxes. The Company has timely filed or caused to be filed all
-----
Tax returns which are required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it.
(j) Ownership; Subsidiaries. All the issued and outstanding capital
-----------------------
stock of the Company is owned, legally and beneficially, directly or indirectly,
by WMI. The Company has no Subsidiaries.
(k) Pro Forma Balance Sheet. The Company has heretofore furnished to
-----------------------
the Administrative Agent and each of the Participants its pro forma balance
sheet after giving effect to the transactions to take place on the Commencement
Date. Such balance sheet (i) was prepared in good faith on the basis of
reasonable assumptions and (ii) discloses all material liabilities, direct or
contingent, of the Company as of the date thereof.
(l) No Material Adverse Change. As of the Commencement Date, there
--------------------------
has been no material adverse change in the business, properties, assets,
operations or financial condition of the Company (after giving effect to the
Transactions contemplated to occur on or prior to the Commencement Date pursuant
to the Transaction Documents) since the date of the pro forma balance sheet
referred to in paragraph (k) above.
(m) Solvency. Both prior to and after giving effect to the
--------
transactions occurring on the Commencement Date or each Closing Date, (i) the
fair value of the assets of the Company at a fair valuation will exceed the
debts and liabilities, subordinated, contingent or otherwise, of the Company;
(ii) the present fair salable value of the property of the Company will be
greater than the amount that will be required to pay the probable liability of
the Company on its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; (iii) the
Company will be able to pay its debts and liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and matured; and
(iv) the Company will not have unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is
proposed to be conducted. For all purposes of clauses (i) through (iv) above,
the amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability. The Company does not intend to, nor does it believe that it
will, incur debts beyond its ability to pay such debts as they mature, taking
into account the timing of and amounts of cash to be received by it and the
timing of and amounts of cash to be payable in respect of its debt.
23
(n) Employee Benefit Plans. No ERISA Event has occurred or is
----------------------
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $40,000,000 the fair market value of the
assets of all such underfunded Plans.
(o) Names. The legal name of the Company is as set forth in this
-----
Agreement. The Company has not had, nor has, any trade names, fictitious names,
assumed names or "doing business as" names.
(p) Liabilities. Other than, (i) the liabilities, commitments or
-----------
obligations (whether absolute, accrued, contingent or otherwise) arising under
or in respect of the Transaction Documents and (ii) immaterial amounts due and
payable in the ordinary course of business of a special-purpose company, the
Company does not have any liabilities, commitments or obligations (whether
absolute, accrued, contingent or otherwise), whether due or to become due.
(q) Collection Procedures. The Company and each Seller have in place
---------------------
procedures pursuant to the Policies which are either necessary or advisable to
ensure the timely collection of Receivables in accordance with the Transaction
Documents.
(r) Designated Accounts. The Designated Banks are the only
-------------------
institutions holding any Designated Accounts for the receipt of payments from
Obligors in respect of Receivables and the Obligors have been instructed to make
payments to Designated Accounts. Each Designated Account set forth in Schedule
3 to this Agreement is free and clear of any Lien other than a Lien created
pursuant to this Agreement.
(s) Bulk Sales. The execution, delivery and performance of this
----------
Agreement do not require compliance with any "bulk sales" law by the Company.
The representations and warranties set forth in this subsection 5.1
shall survive the initial transfer of a Participating Interest and any Increase
in the Net Investment. Upon discovery by the Company, any Participant or the
Administrative Agent of a breach of any of the foregoing representations and
warranties, the Person discovering such breach shall give prompt written notice
to such other Persons.
5.2 Representations and Warranties of the Company Relating to this
--------------------------------------------------------------
Agreement and the Receivables. The Company hereby represents and warrants to
-----------------------------
the Administrative Agent and the Participants, (x) as of the Commencement Date,
and (y) with respect to an Increase in Net Investment, as of the related Closing
Date, unless such representation or warranty expressly relates only to a prior
date, that:
24
(a) The Company is the sole legal and beneficial owner of such
Receivables, and upon the sale of each Receivable, the Participants will
become the sole legal and beneficial owner of such Receivable, free and
clear of any Liens except for Permitted Liens. The Company has not sold,
assigned or transferred, or granted any existing Lien on, the Receivables
or any of the other Pooled Property, or any interest therein, to any
Person, except the Participants hereunder.
(b) This Agreement effects a valid transfer and assignment to the
Participants of an undivided, participating ownership interest in all
right, title and interest of the Company in the Receivables and the Related
Property or, if this Agreement does not effect a transfer and assignment of
such an ownership interest, it effects a grant of a "security interest" (as
defined in the Uniform Commercial Code as in effect in the State of New
York) in such property to the Participants, which, in the case of existing
Receivables and the Related Property is enforceable upon execution and
delivery of this Agreement, and which will be enforceable with respect to
such Receivables and the Related Property hereafter created and the
proceeds thereof upon such creation. On or prior to the initial Closing
Date, all filings and other acts necessary or advisable (including but not
limited to all filings and other acts necessary or advisable under the
Uniform Commercial Code of each relevant jurisdiction) have been made or
performed in order to grant the Participants a first priority perfected
ownership interest in respect of all Receivables acquired by the Company
and Related Property. On the Commencement Date and, in the case of the
Receivables hereafter created and the proceeds thereof, upon the creation
thereof, the Participants shall have a first priority perfected ownership
or security interest in such property.
(c) The offices at which the Company keeps its records concerning the
Receivables either (x) are located at the addresses set forth on Schedule 2
or (y) have been reported to the Administrative Agent in accordance with
the provisions of subsection 8.21 of this Agreement. The chief executive
office of the Company is located at the address set forth on Schedule 2 (as
such location may be changed from time to time in accordance with
subsection 8.21 of this Agreement) and is the place where the Company is
"located" for the purposes of Section 9-103(3)(d) of the UCC as in effect
in the State of New York. The State and county where the chief executive
office of the Company is "located" for the purposes of Section 9-103(3)(d)
of the UCC as in effect in the State of New York has not changed in the
past four months.
(d) On the date each Receivable transferred to the Participants is so
transferred, each such Receivable that is included in the calculation of
the amount of Eligible Receivables on such date is an Eligible Receivable.
Each Receivable that is classified by the Company as an Eligible Receivable
in any document or report (including, without limitation, any Daily Report)
delivered hereunder shall be a Receivable with respect to which all of the
criteria contained in the definition of "Eligible Receivable" hereunder are
satisfied.
25
The representations and warranties set forth in this subsection 5.2
shall survive the initial transfer of a Participating Interest and any Increase
in Net Investment. Upon discovery by the Company, any Participant or the
Administrative Agent of a breach of any of the foregoing representations and
warranties, the Person discovering such breach shall give prompt written notice
to such other Persons.
5.3 Retransfer Obligation. (a) In the event of any breach of any of
---------------------
the representations or warranties of the Company contained in subsection 5.2 in
any material respects or the Company shall breach any covenant contained in
Article VIII then upon the earlier to occur of the discovery of such event by
the Company, or receipt by the Company of written notice of such event given by
the Administrative Agent, the outstanding Principal Amount of Eligible
Receivables used to calculate the amount of Aggregate Eligible Receivables shall
be reduced by the Principal Amount of Receivables as to which such
representations and warranties were breached; provided, however, that (i) prior
-------- -------
to the Amortization Period, to the extent that such a reduction would cause the
Invested Percentage to be more than the Maximum Invested Percentage, the Company
agrees to acquire such Receivables and any Related Property with respect thereto
on the terms and conditions set forth in paragraph (b) below and (ii) during the
Amortization Period, the Company agrees to acquire such Receivables and any
Related Property with respect thereto on the terms and conditions set forth in
paragraph (b) below.
(b) If any breach of a representation or warranty or other event
which necessitates the Company's reacquisition of a Receivable pursuant to
paragraph (a) above remains uncured, the Company shall acquire such Receivable
and any Related Property with respect thereto by depositing into the Collection
Account in immediately available funds no later than the fifth Business Day
after discovery or notice of such breach, an amount equal to (i) prior to an
Amortization Period, the lesser of (A) the amount necessary to cause the
Invested Percentage to equal the Maximum Invested Percentage and (B) the
Principal Amount of such Receivable or (ii) during an Amortization Period, the
Principal Amount of such Receivables (a payment pursuant to clause (ii), a
"Retransfer Payment"). Upon deposit of the Retransfer Payment and written
notice from the Company to the Administrative Agent that such Retransfer Payment
has been made, the Participants shall automatically and without further action
be deemed to transfer, assign, set-over and otherwise convey to the Company,
free and clear of any Lien created by the Participants but otherwise without
recourse, representation or warranty, all the right, title and interest of the
Participants in and to such Receivable, all Related Property with respect
thereto, all monies due or to become due with respect thereto and all proceeds
thereof and such reacquired Receivable shall be treated by the Participants as
collected in full as of the date on which it was transferred. The
Administrative Agent shall execute such documents and instruments of transfer or
assignment and take such other actions as shall reasonably be requested by the
Company to effect the conveyance of such Receivables pursuant to this subsection
5.3 and Collections relating thereto.
5.4 Obligations Unaffected. The obligations of the Company to the
----------------------
Administrative Agent and the Participants under this Agreement shall not be
affected
26
by reason of any invalidity, illegality or irregularity of any Receivable or any
transfer and assignment of a Receivable.
ARTICLE VI
Conditions to Effectiveness/Transfers/Reinvestments
6.1 Commencement Date. This Agreement shall become effective on the
-----------------
date (the "Commencement Date") on which each of the following conditions
precedent are either (x) satisfied or (y) waived by the Required Participants:
(a) The Company, each Servicer and the Master Servicer shall have
delivered to the Administrative Agent, with a copy for each Participant,
(i) a copy of the certificate or articles of incorporation, including all
amendments thereto, of such Person, certified as of a recent date by the
Secretary of State of the state of incorporation thereof, and such
certificate or articles shall be in form and substance satisfactory to the
Administrative Agent, and a certificate as to the good standing of such
Person as of a recent date, from such Secretary of State; (ii) a
certificate of the Secretary or Assistant Secretary or other authorized
person of such Person dated the Commencement Date and certifying (A) that
attached thereto is a true and complete copy of the Bylaws of such Person
as in effect on the Commencement Date and at all times since a date prior
to the date of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions in form and
substance satisfactory to the Administrative Agent and duly adopted by the
Board of Directors of such Person authorizing the execution, delivery and
performance of the Transaction Documents to which such Person is a party
and the transactions contemplated thereby, and that such resolutions have
not been modified, rescinded or amended and are in full force and effect,
(C) that the certificate or articles of incorporation of such Person has
not been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above and (D)
as to the incumbency and specimen signature of each officer executing any
Transaction Document or any other document delivered in connection herewith
or therewith on behalf of such Person; and (iii) a certificate of another
officer as to the incumbency and specimen signature of the Secretary or
Assistant Secretary or other authorized person executing the certificate
pursuant to clause (ii) above.
(b) There shall have been delivered to the Administrative Agent, with
a copy for each Participant, the written opinions of (i) Winston & ▇▇▇▇▇▇,
special counsel for the Company, the Servicers and the Master Servicer, in
form and substance satisfactory to the Administrative Agent with respect to
the treatment of the sales under the Receivables Sale Agreement as a "true
sale", the non-substantive consolidation of the Master Servicer and its
Affiliates and the Company, certain other corporate matters, the
enforceability of this Agreement and the other Transaction Documents and
the creation, perfection and priority of "security interests" in
Receivables under New York and Illinois
27
law and (ii) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., general counsel of Waste Management,
Inc., in form and substance satisfactory to the Administrative Agent with
respect to certain corporate matters, in each case addressed to the
Administrative Agent and the Participants, dated the Commencement Date, and
such additional opinions, if any, as may be reasonably requested by the
Administrative Agent.
(c) Any documents (including, without limitation, financing
statements) required to be filed in order to create, in favor of the
Administrative Agent, a perfected ownership/security interest in the Pooled
Property with respect to which an ownership/security interest may be
perfected by a filing under the UCC or other comparable statute, shall, in
each case, have been properly prepared and executed for immediate filing in
each office in each jurisdiction in which the Company maintains its
principal executive office and such filings are the only filings required
in order to perfect the transfer of the Receivables to the Participants.
(d) The Administrative Agent shall have received a certificate from
the Company, dated the Commencement Date and signed by one of its
Responsible Officers, in form and substance satisfactory to the
Administrative Agent, confirming compliance with the conditions precedent
set forth in this subsection 6.1.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Commencement Date.
(f) The Administrative Agent shall have received (i) a copy of the
Receivables Sale Agreement, duly executed on behalf of WMI, each of the
Sellers and the Company, (ii) a copy of the Receivables Sale Agreement
Guarantee, duly executed by the Seller Guarantors, and (iii) a copy of the
Subordinated Note, duly executed by the Company for the benefit of WMI as
agent for each of the Sellers.
(g) A Responsible Officer of the Company shall have certified that
all conditions to the obligations of the Company and each of the Sellers
under the Receivables Sale Agreement shall have been satisfied in all
respects (or waived by the Administrative Agent) and a copy of all
documents delivered thereunder shall be delivered to the Administrative
Agent.
(h) The Administrative Agent shall have received, as certified by a
Responsible Officer of the Company, copies of (i) the written Policies, or,
to the extent that the credit and collection policies of the Sellers are
not in written form at the Commencement Date, a written description of the
historical credit and collection practices of the Sellers and proposed
practices for the Company, in each case in form and substance acceptable to
the Administrative Agent and (ii) the Company Policies and such policies
shall be acceptable to the Administrative Agent.
28
(i) The Administrative Agent shall have reviewed the computer
programs, material tapes, data and back-up plans of the Sellers required
for the collection of Receivables and shall be satisfied that the
foregoing, including the procedures of the Sellers for the preparation,
storage and retrieval thereof, are sufficient upon the termination of the
Master Servicer or any Servicer that is an Affiliate of the Company to
permit (i) the Company or the Administrative Agent to collect the
Receivables with or without the participation of the Sellers or any
servicer and (ii) a third-party servicer to collect the Receivables with or
without the participation of the Sellers or the Company.
(j) The composition of the Company's Board of Directors (including
the independent director) shall be reasonably acceptable to the
Administrative Agent.
(k) The Administrative Agent shall have received (i) the pro forma
opening balance sheet for the Company referred to in subsection 5.1(l) and
(ii) the consolidated financial statements of the Master Servicer referred
to in subsection 12.6(s).
(l) The Administrative Agent shall have received a certificate dated
the Commencement Date and signed by a Responsible Officer of the Company,
substantially in the form of Exhibit E, to the effect that the Company will
be solvent after giving effect to the transactions occurring on the
Commencement Date.
(m) The Administrative Agent (i) shall have received evidence
reasonably satisfactory to it that the Designated Accounts, the
Concentration Account, the SPC Collection Account and the Collection
Account shall have been established in accordance with the terms and
provisions hereof, and (ii) shall otherwise be satisfied with the
arrangements for collection of the Receivables pursuant hereto, including
the establishment of standing instructions regarding the transfer of funds
to the Concentration Account.
(n) The Initial Sellers shall have commenced selling Receivables to
the Company.
Upon request, Participants may receive copies of the items delivered to the
Administrative Agent in accordance with Subsection 6.1.
6.2 Condition to each Increase in Net Investment. The obligations of
--------------------------------------------
the Participants to acquire the Participating Interest or increase the Net
Investment on any Closing Date are subject to the conditions that:
(a) no Termination Event or Potential Termination Event shall have
occurred and then be continuing, and no such Termination Event or Potential
Termination Event shall occur as a result of the proposed acquisition or
Increase in Net Investment on such Closing Date;
29
(b) the representations and warranties of the Company set forth in
Article V shall be true and correct in all material respects on and as of
such Closing Date as though made on and as of such date, except insofar as
such representations and warranties are expressly made only as of another
date (in which case they shall be true and correct in all material respects
as of such other date);
(c) the representations and warranties of the Sellers set forth in
subsection 4.1 (other than subsection 4.1(f)(1)) in the Receivables Sale
Agreement, as though made on and as of such date, except insofar as such
representations and warranties are expressly made only as of another date
(in which case they shall be true and correct in all material respects as
of such other date);
(d) the representations and warranties of the Servicers and the
Master Servicer set forth in Article XII (other than subsection 12.6(d)(i)
and 12.6(r)(iii) shall be true and correct in all material respects on and
as of such Closing Date as though made on and as of such date, except
insofar as such representations and warranties are expressly made only as
of another date (in which case they shall be true and correct in all
material respects as of such other date);
(e) the Company or the Master Servicer shall have delivered a Daily
Report on such date and such Daily Report shall demonstrate that after
giving effect to such acquisition or increase the Net Investment of the
Participants shall not exceed the Maximum Transfer Amount on such date; and
(f) the Administrative Agent shall have timely received all notices,
statements and certificates relating to such Closing Date required by
subsections 2.3 and 12.5.
Each acquisition or Increase in Net Investment on any Closing Date shall
constitute a representation and warranty by the Company that the conditions to
the transfer thereof on such Closing Date, as the case may be, have been
satisfied.
ARTICLE VII
Affirmative Covenants
The Company hereby agrees that, unless and until this Agreement is
terminated pursuant to subsection 4.1, the Company shall:
7.1 Financial Statements. Furnish to each Participant as soon as
--------------------
available, but in any event not later than 60 days after the end of
each of the first three quarterly periods of each fiscal year of the
Company, the unaudited balance sheet of the Company as at the end of
such quarter and the related unaudited statements of income and
retained earnings and
30
cash flows of the Company for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each
case, with respect to any such financial statements covering any
fiscal quarter commencing after the first anniversary of the
Commencement Date, in comparative form the figures for the
corresponding quarter and portion of the previous year, certified by a
Responsible Officer of the Company as being fairly stated in all
material respects (subject to normal year-end audit adjustments) all
such financial statements shall be complete and correct in all
material respects and shall be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods
reflected therein and with prior periods (except as approved by such
accountants or Responsible Officer, as the case may be, and disclosed
therein).
7.2 Certificates; Other Information. Furnish to each Participant, or
-------------------------------
in the case of paragraph (d), the Administrative Agent:
(a) Concurrently with the delivery of the financial statements
referred to in subsection 7.1, a certificate of a Responsible Officer of
the Company stating that, to the best of such Responsible Officer's
knowledge, the Company during such period has observed or performed all of
its covenants and other agreements, and satisfied every condition,
contained in the Transaction Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Termination Event or Potential Termination
Event, except as specified in such certificate; and
(b) Promptly, such additional financial and other information as any
Participant may from time to time reasonably request by written notice to
the Company (through the Administrative Agent).
(c) Promptly upon receipt, but in no event later than 30 days after
the Commencement Date, evidence reasonably satisfactory to the
Administrative Agent of each filing, registration or recordation required
under subsection 6.1(c) of this Agreement and subsection 3.1(b)(v) of the
Receivables Sale Agreement and evidence reasonably satisfactory to the
Administrative Agent of the payment of any necessary fee, tax or expense
relating thereto.
(d) Not later than 30 days after the Commencement Date, written
opinions of local counsel reasonably acceptable to the Administrative Agent
in states (other than Illinois and New York) in which any Category A Seller
conducts the majority of its business and any other state in which more
than 10% of the revenue of all Sellers during the first eleven months of
1997 arose, covering the perfection and priority of "security interests" in
Receivables, in each case addressed to the Administrative Agent and the
Participants and in form and substance satisfactory to the Administrative
Agent.
31
(e) Not later than 10 days after the merger or consolidation of any
Category A Seller with and into another Seller which is not a Category A
Seller, or any merger or consolidation of Sellers which create a Seller
similar in size to the original Category A Sellers, and without duplication
of opinions delivered pursuant to paragraph (d) above, written opinions of
local counsel reasonably acceptable to the Administrative Agent in states
in which any such surviving corporation conducts the majority of its
business covering the perfection and priority of "security interests" in
Receivables, in each case addressed to the Administrative Agent and the
Participants and in form and substance satisfactory to the Administrative
Agent.
(f) Not later than 60 days after the Commencement Date, with respect
to each Category A Seller and Category B Seller, tax and judgment lien
searches in jurisdictions reasonably requested by the Administrative Agent.
7.3 Existence; Businesses and Properties; Insurance; Receivables.
------------------------------------------------------------
(a) Do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its legal existence.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; comply in all material respects with
all applicable laws, rules, regulations and orders of any Governmental
Authority, whether now in effect or hereafter enacted; and at all times maintain
and preserve all property material to the conduct of such business and keep such
property in good repair, working order and condition and from time to time make,
or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith, if any, may be properly conducted at all
times.
(c) Keep its insurable properties insured (including through self-
insurance) at all times by financially sound and reputable insurers in such
amounts as shall be customary for similar businesses and maintain such other
insurance, of such types, to such extent and against such risks, as is customary
with companies in the same or similar businesses; and maintain such other
insurance as may be required by law.
(d) Defend the right, title and interest of the Participants in, to
and under the Receivables and the other Pooled Property, whether now existing or
hereafter created, against all claims of third parties claiming through or under
the Company, the Sellers, the Master Servicer or the Servicers.
(e) Duly fulfill all material obligations on its part to be fulfilled
under or in connection with each Receivable and do nothing that could reasonably
be expected to impair the rights of the Participants in any Receivable.
32
7.4 Payment of Obligations. Pay its obligations including Tax
----------------------
Liabilities, that if not paid could result in a Material Adverse Effect before
the same shall become delinquent or in default except where (a) the validity or
amount thereof shall be contested in good faith by appropriate proceedings, (b)
the Company shall set aside on its books adequate reserves as required in
accordance with GAAP and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect.
7.5 Inspection of Property; Books and Records; Discussions. Maintain
------------------------------------------------------
all financial records in accordance with GAAP and permit any Persons designated
by the Administrative Agent (or, during the continuance of any Termination
Event, any Participant) to visit and inspect the financial records and the
properties of the Company at reasonable times, upon reasonable notice and as
often as reasonably requested and to make extracts from and copies of such
financial records, and permit any Persons designated by the Administrative Agent
(or, during the continuance of any Termination Event, any Participant) to
discuss the affairs, finances and condition of the Company with the officers
thereof and independent accountants therefor (subject to reasonable requirements
of confidentiality, including requirements imposed by law or by contract).
7.6 Notices. Promptly give notice to the Administrative Agent and
-------
each Participant of:
(a) the occurrence of any Termination Event, Potential Termination
Event, Servicer Default or Servicer Event of Default, specifying the nature
and extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) any Lien not permitted by subsection 8.3 on any Receivable or any
other Pooled Property other than the conveyances and Liens hereunder and
under the Receivables Sale Agreement;
(c) the filing or commencement of any action, suit or proceeding,
whether at law or in equity or by or before any Governmental Authority,
against the Company in respect of which there is a reasonable possibility
of an adverse determination and which, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect; and
(d) any development known to a Responsible Officer of the Company
that has resulted in, or could reasonably be anticipated to result in, a
Material Adverse Effect.
7.7 Net Worth. Maintain at all times a consolidated net worth, as
---------
determined in accordance with GAAP, of at least the Minimum Equity Amount.
7.8 Use of Proceeds. The Company shall use the proceeds of the
---------------
initial transfer and assignment of the Participating Interest and of any
Increases in Net Investment (a) to acquire Receivables from the Sellers pursuant
to the Receivables
33
Sale Agreement in an amount not to exceed the aggregate amount specified in the
applicable Daily Report, (b) to pay operating expenses of the Company, (c) to
make payments on account of the Subordinated Note in the aggregate amount
specified in the applicable Daily Report, and (d) to make payments on account of
Restricted Payments in the aggregate amount specified in the applicable Daily
Report in each case subject to the priority, restrictions and limitations set
forth in subsection 2.7(b) as if such proceeds constituted Receivable Proceeds.
7.9 Separate Corporate Existence. The Company shall:
----------------------------
(a) maintain its own deposit account or accounts, separate from those
of any Affiliate, with commercial banking institutions and ensure that the
funds of the Company will not be diverted to any other Person or for other
than corporate uses of the Company, nor will such funds be commingled with
the funds of any Seller or any other Subsidiary or Affiliate of any Seller;
provided, that notwithstanding the foregoing, Collections in respect of
--------
Purchased Receivables and Receivables may be deposited into the Designated
Accounts and the Concentration Account;
(b) to the extent that it shares the same officers or other employees
as any of its stockholders or Affiliates, the salaries of and the expenses
related to providing benefits to such officers and other employees shall be
fairly allocated among such entities, and each such entity shall bear its
fair share of the salary and benefit costs associated with all such common
officers and employees;
(c) to the extent that it jointly contracts with any of its
stockholders or Affiliates to do business with vendors or service providers
or to share overhead expenses, the costs incurred in so doing shall be
allocated fairly among such entities, and each such entity shall bear its
fair share of such costs. To the extent that the Company contracts or does
business with vendors or service providers where the goods and services
provided are partially for the benefit of any other Person, the costs
incurred in so doing shall be fairly allocated to or among such entities
for whose benefit the goods or services are provided, and each such entity
shall bear its fair share of such costs. All material transactions between
the Company and any of its Affiliates, whether currently existing or
hereafter entered into, shall be only on an arm's length basis, it being
understood and agreed that the transactions contemplated in the Transaction
Documents meet the requirements of this clause (c);
(d) maintain a principal executive office at a separate address from
the address of WMI and its Affiliates; provided, that segregated offices in
--------
the same building shall constitute separate addresses for purposes of this
clause (d). To the extent that the Company and any of its stockholders or
Affiliates have offices in the same location, there
34
shall be a fair and appropriate allocation of overhead costs among them,
and each such entity shall bear its fair share of such expenses;
(e) issue separate financial statements prepared not less frequently
than quarterly and prepared in accordance with GAAP;
(f) conduct its affairs in its own name and strictly in accordance
with its articles of incorporation and observe all necessary, appropriate
and customary corporate formalities, including, but not limited to, holding
all regular and special stockholders' and directors' meetings appropriate
to authorize all corporate action, keeping separate and accurate minutes of
its meetings, passing all resolutions or consents necessary to authorize
actions taken or to be taken, and maintaining accurate and separate books,
records and accounts, including, but not limited to, payroll and
intercompany transaction accounts;
(g) not assume or guarantee any of the liabilities of any Seller,
any Servicer or any Affiliate of any thereof; and
(h) take, or refrain from taking, as the case may be, all other
actions that are necessary to be taken or not to be taken in order to (x)
ensure that the assumptions and factual recitations set forth in the
Specified Bankruptcy Opinion Provisions remain true and correct in all
material respects with respect to the Company and (y) comply with those
procedures described in such provisions which are applicable to the
Company.
7.10 Facility Rating. Promptly upon request of the Administrative
---------------
Agent, at the expense of the Company, cause the receivables purchase facility
created by this Agreement to be rated by S&P or another nationally recognized
rating agency designated by the Administrative Agent.
7.11 Purchase of Receivables. Purchase Receivables solely pursuant
-----------------------
to (i) the Receivables Sale Agreement or (ii) this Agreement.
7.12 Delivery of Collections. In the event that the Company receives
-----------------------
Collections directly from Obligors, deposit such Collections into the
Concentration Account or the Collection Account within one Business Day after
receipt thereof by the Company.
ARTICLE VIII
Negative Covenants
The Company hereby agrees that, unless and until this Agreement is
terminated pursuant to subsection 4.1, the Company shall not directly or
indirectly:
35
8.1 Accounting of Transfers. Prepare any financial statements which
-----------------------
shall account for the transactions contemplated hereby (other than capital
contributions contemplated hereby) in any manner other than as sales of
participating interests in the Purchased Receivables by the Company to the
Participants or in any other respect account for or treat the transactions
contemplated hereby (including for financial accounting purposes, except as
required by law) (other than capital contributions and loans from Affiliates
contemplated hereby) in any manner other than as assignments and transfers of
participating interests in the Purchased Receivables by the Company to the
Participants; provided, however, that this subsection 8.1 shall not apply for
-------- -------
any tax or tax accounting purposes.
8.2 Limitation on Indebtedness. Create, incur, assume or suffer to
--------------------------
exist any Indebtedness, except: (a) Indebtedness evidenced by the Subordinated
Note; (b) Indebtedness representing fees, expenses and indemnities payable
pursuant to and in accordance with the Transaction Documents; and (c)
Indebtedness for services supplied or furnished to the Company in an amount not
to exceed $100,000 at any time outstanding; provided, that any Indebtedness
--------
permitted hereunder and described in clauses (a) and (c) shall be payable by the
Company solely from funds available to the Company which are not otherwise
needed to be applied to the payment of any amounts by the Company hereunder and
shall be non-recourse other than with respect to proceeds in excess of the
proceeds needed to be so applied.
8.3 Limitation on Liens. Create, incur, assume or suffer to exist
-------------------
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for Permitted Liens.
8.4 Limitation on Guarantees. Become or remain liable, directly or
------------------------
contingently, in connection with any Indebtedness or other liability of any
other Person, whether by guarantee, endorsement (other than endorsements of
negotiable instruments for deposit or collection in the ordinary course of
business), agreement to purchase or repurchase, agreement to supply or advance
funds, or otherwise, except in connection with indemnification obligations of
the Company to the limited extent provided in the Company's articles of
incorporation and by-laws; provided, that any such indemnification shall be paid
--------
solely from funds available to the Company which are not otherwise needed to be
applied to the payment of any amounts hereunder, shall be non-recourse other
than with respect to proceeds in excess of the proceeds necessary to make such
payment, and shall not constitute a claim against the Company to the extent that
insufficient proceeds exist to make such payment.
8.5 Limitation on Fundamental Changes. Enter into any merger,
---------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or make any material change in its
present method of conducting business or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, other than the assignments and transfers to the Participants
contemplated hereby.
36
8.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
----------------------------
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, other than (a) the assignments and transfers
contemplated hereby and (b) sales or other dispositions of property with an
aggregate book value not exceeding $10,000 in any period of twelve consecutive
fiscal months.
8.7 Limitation on Dividends and Payments on Subordinated Note.
---------------------------------------------------------
Declare or pay any dividend on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any shares of any class of
Capital Stock of the Company, whether now or hereafter outstanding, or make any
other distribution in respect thereof, either directly or indirectly, whether in
cash or property or in obligations of the Company (such declarations, payments,
setting apart, purchases, redemptions, defeasances, retirements, acquisitions
and distributions being herein called "Restricted Payments"), or make, directly
or indirectly, payments in any form in respect of the Subordinated Note except
that, so long as no breach of subsection 7.7, no Termination Event or Potential
Termination Event with respect to a Termination Event set forth in subsection
(f), (g), (h)(ii), (i), (m) or (n) of Article IX shall have occurred and be
continuing or would result therefrom and the Amortization Period has not
commenced, the Company may (a) make payments on the Subordinated Note and (b)
make Restricted Payments, each pursuant to subsection 2.7; provided, however,
-------- -------
such Restricted Payment are made no more frequently than on a weekly basis and
is effected in accordance with all corporate and legal formalities applicable to
the Company, all such payments made on any date shall be paid solely from funds
available to the Company which are not otherwise needed to be applied to the
payment of any amounts hereunder.
8.8 Business of the Company. Engage at any time in any business or
-----------------------
business activity other than the acquisition of Receivables pursuant to the
Receivables Sale Agreement, the assignments and transfers hereunder and the
other transactions contemplated by the Transaction Documents, and any activity
incidental to the foregoing and necessary or convenient to accomplish the
foregoing, or enter into or be a party to any agreement or instrument other than
in connection with the foregoing.
8.9 Limitation on Investments, Loans and Advances. Make any advance,
---------------------------------------------
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except for the
Receivables and the other Pooled Property.
8.10 Limitation on Sales and Leasebacks. Enter into any arrangement
----------------------------------
with any Person providing for the leasing by the Company of real or personal
property which has been or is to be sold or transferred by the Company to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of the
Company.
37
8.11 Transactions with Affiliates. Sell or transfer any property or
----------------------------
assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates except as expressly
contemplated by the Transaction Documents.
8.12 Capital Stock. Issue any Capital Stock to any Person or permit
-------------
any of its Capital Stock to be transferred to any Person.
8.13 Amendments. Amend (or permit to be amended) its Certificate of
----------
Incorporation.
8.14 Receivables Sale Agreement, etc. Amend, supplement or otherwise
--------------------------------
modify (or permit to be amended, supplemented or otherwise modified) any
material provision of the Receivables Sale Agreement or any of the other
Transaction Documents or give any consent, waiver or notice to any Seller
thereunder or other party or parties thereto without the consent of the
Administrative Agent and the Required Participants.
8.15 Policies. Amend, supplement or otherwise modify in any material
--------
respect (or permit to be amended, supplemented or otherwise modified in any
material respect) the Policies or the Company Policies or vary the
implementation of the Policies or the Company Policies other than (a) with the
consent of the Required Participants and (b) changes that are required by
applicable law; provided, that material changes to the Policies and the Company
--------
Policies shall include, without limitation, changes to the timing of Defaulted
Receivables and changes to the creditworthiness criteria used in determining
whether to extend credit to a Person and in determining the amount of such
credit to extend.
8.16 No Powers of Attorney. Grant any powers of attorney to any
---------------------
Person for any purposes except (a) for the purpose of permitting any Person to
perform any ministerial functions on behalf of the Company that are not
prohibited by or inconsistent with the terms of the Transaction Documents; (b)
to the Administrative Agent in connection herewith; or (c) as expressly
permitted by the Transaction Documents.
8.17 Receivables Not to Be Evidenced by Promissory Notes. Take any
---------------------------------------------------
action to cause any Receivable to be evidenced by any "instrument" (as defined
in the UCC as in effect in any state in which the Company's or the applicable
Seller's chief executive office or books and records relating to such Receivable
are located), except in connection with its enforcement or collection of an Aged
Receivable.
8.18 Ownership of Assets and Property. Own or lease any material
--------------------------------
tangible assets other than as expressly contemplated pursuant to the terms of
this Agreement and the other Transaction Documents, or own or lease any
facilities or incur, create, assume or permit to exist any lease obligations
other leases of office space, equipment or other facilities for use by the
Company in its ordinary course of business, employment agreements, service
agreements, agreements relating to shared employees and the other Transaction
Documents and agreements necessary to perform its obligations under the
Transaction Documents.
38
employees and the other Transaction Documents and agreements necessary to
perform its obligations under the Transaction Documents.
8.19 Rescission or Cancellation. Rescind or cancel any Receivable or
--------------------------
modify or extend any term or provision of any thereof without the prior written
consent of the Required Participants, except (a) in the ordinary course of its
business and consistent with the Policies and the Company Policies or (b) as
required by any Requirement of Law; provided, that the Company may cause
--------
Receivables to become Defaulted Receivables and may allow Sellers to make
Adjustments in accordance with subsection 2.5 of the Receivables Sale Agreement.
8.20 Ineligible Receivables. Without the prior written approval of
----------------------
the Required Participants, take any action to cause, or which would permit, an
Eligible Receivable to cease to be an Eligible Receivable, except as otherwise
expressly provided for in this Agreement.
8.21 Offices. (a) Move outside the state where such office is now
-------
located the location of its chief executive office or of any of the offices
where it keeps its records with respect to the Receivables without (i) 30 days'
prior written notice to the Administrative Agent and (ii) taking all actions
reasonably requested by the Administrative Agent (including but not limited to
all filings and other acts necessary or advisable under the Uniform Commercial
Code of each relevant jurisdiction) in order to continue the Participants' first
priority perfected ownership interest in all Receivables now owned or hereafter
created or (b) fail to give the Administrative Agent prompt notice of a change
within the state where such office is now located of the location of its chief
executive office or any office where it keeps its records with respect to the
Receivables; provided, however, that the Company shall not change the location
-------- -------
of its chief executive office to outside of the United States, or to a state
which is within the Tenth Circuit unless it delivers an Opinion of Counsel
reasonably acceptable to the Administrative Agent to the effect that Octagon Gas
-----------
Systems, Inc. ▇. ▇▇▇▇▇▇, 995 F.2d 948 (10th Cir. 1993) is no longer controlling
-----------------------
precedent in the Tenth Circuit.
8.22 Change in Name. Change its name, identity or corporate
--------------
structure in any manner which would or might make any financing statement or
continuation statement (or other similar instrument) filed in accordance
herewith seriously misleading within the meaning of Section 9-402(7) of the UCC
as in effect in any applicable jurisdiction in which UCC filings have been made
without 30 days' prior written notice to the Administrative Agent.
8.23 Addition of Sellers. Agree to the addition of any Subsidiary as
-------------------
an additional Seller pursuant to subsection 9.14 of the Receivables Sale
Agreement unless the Administrative Agent and the Required Participants have
approved such addition in writing.
8.24 Operating Expenses. Incur or otherwise become liable for
------------------
operating expenses other than expenses for office space, equipment, personnel,
39
office supplies, computer time, services of third party professionals and other
reasonable overhead expenses.
ARTICLE IX
Events of Termination
If any of the following events (herein called "Termination Events")
shall have occurred and be continuing:
(a) the Company shall fail to deliver any Daily Report or any
Settlement Statement conforming in all material respects to the
requirements of subsection 12.5 and such failure shall continue for two
consecutive Business Days; provided, that if a Force Majeure Delay shall
--------
have occurred with respect to any Servicer or the Master Servicer, the
failure of the Company to deliver any Daily Report or Settlement Statement,
shall not, in either case, constitute a Termination Event unless such
failure continues for longer than the lesser of (x) ten consecutive
Business Days and (y) the length of such Force Majeure Delay;
(b) the Company shall fail to pay, or the Participants or the
Administrative Agent shall not be paid, any amount (i) required to be paid
hereunder in respect of reduction of the Net Investment when required to be
paid or (ii) required to be paid in respect of Purchase Discount Amounts,
any other amounts payable to the Participants or Administrative Agent or
any payment reflected in any Daily Report or Settlement Statement as being
required to be made by the Company, in any case, with respect to this
clause (ii), within five Business Days after the date when required to be
paid;
(c) default shall be made in the due observance or performance by the
Company of any covenant, condition or agreement contained in subsection 7.7
or Article VIII;
(d) the Company shall fail to observe or perform any covenant or
agreement applicable to it contained herein (other than as specified in
paragraph (a), (b) or (c) of this Article IX); provided, that no such
--------
failure shall constitute a Termination Event under this paragraph (d)
unless such failure shall continue unremedied for a period of 30
consecutive days after notice thereof from the Administrative Agent or the
Required Participants to the Company;
(e) any representation, warranty, certification or statement made or
deemed made by the Company in this Agreement or in any Settlement Statement
or other certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been false or misleading in
any material respect on or as of the date made or deemed made; provided,
--------
that a Termination Event shall not be deemed to have occurred under this
paragraph (e) based upon a
40
breach of a representation or warranty contained in subsection 5.2 if the
Company shall have complied with the provisions of subsection 5.3(b) in
respect thereof;
(f) (i) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (A) liquidation, reorganization
or other relief in respect of the Company or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (B)
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or for a substantial part
of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered; (ii) the Company shall (A)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (B) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or petition described in
clause (f)(i) of this subsection, (C) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or for a substantial part of its assets,
(D) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (E) make a general assignment for the
benefit of creditors or (F) take any action for the purpose of effecting
any of the fore going; or (iii) the Company shall become unable, admit in
writing or fail generally to pay its debts as they become due;
(g) any event or condition occurs that results in any Material
Indebtedness of WMI or any Subsidiary of WMI or the Credit Facility
becoming due prior to its scheduled maturity or that enables or permits
(with or without the giving of notice, but subject to the expiration of any
stated grace period) the holder or holders of any Material Indebtedness or
the Credit Facility or any trustee or agent on its or their behalf to cause
any Material Indebtedness or the Credit Facility to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, or to
terminate any commitment associated therewith, prior to its scheduled
maturity or termination date; provided, that this clause (g) shall not
--------
apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Indebtedness;
(h) (i) an ERISA Event shall have occurred that, in the opinion of
the Required Participants, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a Material
Adverse Effect; or (ii) a notice of Lien shall have been filed by the PBGC
against the Company under Section 412(n) of the Code or Section 302(f) of
ERISA for a failure to make a required installment or other payment to a
plan to which Section 412(n) of the Code or Section 302(f) of ERISA applies
unless there
41
shall have been delivered to the Administrative Agent proof of release of
such Lien;
(i) a Federal tax notice of Lien, in an amount equal to or greater
than $1,000,000, shall have been filed against the Company unless the
Company shall have delivered to the Administrative Agent proof of release
of such Lien or against the Master Servicer unless the Master Servicer
shall have set aside on its books adequate reserves or there shall have
been delivered to the Administrative Agent proof of release of such Lien;
(j) there shall have occurred a Change in Control;
(k) (i) one or more judgments for the payment of money in an
aggregate amount in excess of $100,000 shall be rendered against the
Company and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy
upon any assets of the Company to enforce any such judgment; or (ii) one or
more judgments for the payment of money in an aggregate amount in excess of
$100,000,000 shall be rendered against WMI or any Subsidiary of WMI or any
combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of WMI or any Subsidiary of WMI to enforce any such
judgment; or
(l) any material provision of the Transaction Documents shall not be
in full force and effect, enforceable in accordance with its terms, or the
Company, a Seller or the Master Servicer, or any Affiliate of any of the
foregoing, shall so assert in writing;
(m) the Participating Interest shall for any reason cease to be a
valid and perfected first priority undivided ownership interest in the
Receivables;
(n) the Company shall have become an "investment company" under the
Investment Company Act of 1940;
(o) one or more Purchase Termination Events shall have occurred and
be continuing or an Early Termination shall have occurred, in each case
with respect to Sellers which in the aggregate generated more than 10% of
the aggregate revenues of all Sellers during the immediately preceding
Settlement Period;
(p) the Company shall fail to pay the Purchase Price for any newly
created Receivable when due pursuant to subsection 2.3 of the Receivables
Sale Agreement (including, without limitation, by application of any
restrictions in such subsection); provided that no such failure shall
--------
constitute a Termination Event under this paragraph (p) unless such failure
shall continue for five consecutive Business Days;
42
(q) a Servicer Event of Default shall have occurred and be
continuing; or
(r) the Net Investment exceeds the Maximum Transfer Amount on the
second Business Day following any Settlement Date, after giving effect to
the calculation of the Maximum Invested Percentage on such Settlement Date,
and after application of Collections and all other payments and amounts to
reduce the Net Investment to and including such second Business Day (except
to the extent Excess Application Amounts in respect of such excess are
being held in a cash collateral account pursuant to subsection 2.12(c));
then, (x) if such event is (I) a Termination Event described in paragraph (f)
(other than clause (iii) thereof) above or (II) a Termination Event described in
paragraph (q) above resulting from a Purchase Termination Event described in
paragraph (e) of subsection 12.11, automatically the Commitments and the
Commitment Period shall thereupon terminate without notice of any kind, which is
hereby waived by the Company and (y) if such event is any other Termination
Event, so long as such Termination Event shall be continuing, the Administrative
Agent may, with the consent of the Required Participants, and shall, upon the
request of the Required Participants, by notice to the Company terminate the
Commitments and the Commitment Period.
In addition, in the event of (i) the occurrence of a Termination Event
described in paragraph (f) above or (ii) the Net Investment has not been reduced
to zero within six months after the termination of the Commitments and the
Commitment Period, the Administrative Agent shall proceed to sell, dispose of,
or otherwise liquidate the Receivable and the Related Property in a commercially
reasonable manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids and Administrative Agent shall proceed to
consummate the sale, liquidation or disposition of the Receivables and the
Related Property as provided above with the highest bidder for the Receivables
and the Related Property. The Company or any of its Affiliates shall be
permitted to bid for the Receivables and the Related Property. In addition, the
Company or any of its Affiliates shall have the right to match any bid by a
third person and be granted the right to purchase the Receivables and Related
Property at such matched bid price. All reasonable costs and expenses incurred
by the Administrative Agent in such sale shall be reimburse to the
Administrative Agent as provided herein. The proceeds from the sale,
disposition or liquidation of the Receivables shall be treated as Collections on
the Receivables and such proceeds shall be applied in accordance with subsection
2.7.
ARTICLE X
The Administrative Agent
10.1 Appointment. Each Participant hereby irrevocably designates and
-----------
appoints the Administrative Agent as the agent of such Participant under this
Agreement and each Participant irrevocably authorizes the Administrative Agent,
as the agent for such Participant, to take such action on its behalf under the
43
provisions of this Agreement and to exercise such powers and perform such duties
as are expressly delegated to the Administrative Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental thereto,
including, but not limited to, the signing by the Administrative Agent, as agent
for the Participants, of any financing statements related to the Receivables.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Participant,
the Company, any Servicer or the Master Servicer, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Administrative Agent.
10.2 Delegation of Duties. The Administrative Agent may perform any
--------------------
and all its duties and exercise its rights and powers by or through any one or
more sub-agents appointed by the Administrative Agent. The Administrative Agent
and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Affiliates. The exculpatory
provisions of the succeeding paragraphs shall apply to any such sub-agent and to
the Affiliates of the Administrative Agent and any such sub-agent, and shall
apply to their respective activities in connection with the syndication of the
Participating Interests provided for herein as well as activities as
Administrative Agent.
10.3 Exculpatory Provisions. Neither the Administrative Agent nor
----------------------
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action (including, without limitation,
any action under subsection 2.7 hereof) lawfully taken or omitted to be taken by
it or such Person under or in connection with this Agreement or the transactions
contemplated hereby or thereby (except for its or such Person's own gross
negligence or willful misconduct), (ii) responsible in any manner to any party
hereto for any recitals, statements, representations or warranties made by the
Company, any Servicer, the Master Servicer or any of the Participants or any
officer thereof contained in this Agreement, or in any certificate, report,
statement or other document (including, without limitation, any Daily Report or
Settlement Statement) referred to or provided for in, or received by the
Administrative Agent under or in connection with this Agreement or the
transactions contemplated hereby or thereby or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
(iii) for any failure of the Company, any Servicer, the Master Servicer, or any
of the Participants to perform their respective obligations hereunder. The
Administrative Agent shall not be under any obligation to any party hereto to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or to inspect the
properties, books or records of the Company, any Servicer, the Master Servicer
or any of the Participants.
10.4 Reliance By the Administrative Agent. The Administrative Agent
------------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, (including, without limitation, any Daily Report or Settlement
Statement) resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it
44
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to any of the Participants and counsel to the
Company, any Servicer or the Master Servicer), independent accountants and other
experts selected by the Administrative Agent, as the case may be. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement unless it shall first receive such advice or
concurrence of the Participants as it deems appropriate or it shall first be
indemnified to its satisfaction by the Participants against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
in accordance with a request of the Participants entitled to give such a request
hereunder, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Participants.
10.5 Notice of Default or Termination Event. The Administrative
--------------------------------------
Agent shall not be deemed to have knowledge or notice of the occurrence of any
default or Termination Event hereunder unless the Administrative Agent has
received notice from a Participant, the Company, any Servicer or the Master
Servicer referring to this Agreement, describing such default or Termination
Event and stating that such notice is a "notice of default" or a "notice of
Termination Event", as the case may be. In the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give promptly
notice thereof to the Participants and to the Company. The Administrative Agent
shall take such action with respect to such default or Termination Event as
shall be reasonably directed by the Required Participants; provided, that unless
--------
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to), subject to the terms
hereof, take such action, or refrain from taking such action, with respect to
such default or Termination Event as it shall deem advisable in the best
interests of the Participants.
10.6 Non-Reliance on the Administrative Agent and Other Participants.
---------------------------------------------------------------
Each Participant hereby expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representations or warranties to it and that no act
by the Administrative Agent hereinafter taken, including any review of the
affairs of the Company, any Servicer or the Master Servicer, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Participant. Each Participant hereby represents to the Administrative Agent
that it has, independently and without reliance upon the Administrative Agent or
any other Participant, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property and financial and other condition and
creditworthiness of the Company, the Servicers and the Master Servicer and made
its own decision to acquire a Participating Interest hereunder and enter into
this Agreement. Each Participant hereby also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Participant, and based on such documents and
45
information as it shall deem appropriate at the time, continue to make its own
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property and financial and other condition and
creditworthiness of the Company, the Servicers and the Master Servicer. Except
for notices, reports and other documents expressly required to be furnished to
the Participants by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Participant with any
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Company, any Servicer or the
Master Servicer which may come into the possession of the Administrative Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
10.7 Indemnification. Each Participant hereby agrees to indemnify
---------------
the Administrative Agent in its capacity as such (to the extent not reimbursed
by the Company or the Master Servicer and without limiting the obligation of the
Company and the Master Servicer to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this subsection 10.7, from and against any and all subsection 11.3(b)(i)
Indemnified Liabilities which may at any time (including without limitation at
any time following the termination of the commitment of the Participants to
increase their Participating Interest hereunder) be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of this Agreement, or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided,
--------
that no Participant shall be liable for the payment of any portion of such
Indemnified Liabilities resulting from the Administrative Agent's gross
negligence or willful misconduct. The agreements in this subsection 10.7 shall
survive the termination of the commitments of the Participants to acquire a
Participating Interest hereunder, the collection of all Receivables, the
termination of this Agreement and the payment of all amounts payable hereunder.
10.8 The Administrative Agent in Its Individual Capacity. The
---------------------------------------------------
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Company, the Servicers,
the Master Servicer or any of their affiliates as though the Administrative
Agent were not the Administrative Agent. With respect to any Participating
Interests purchased or maintained by it under this Agreement, the Administrative
Agent shall have the same rights and powers hereunder as any Participant and may
exercise the same as though it were not the Administrative Agent, and the term
"Participant" shall include the Administrative Agent in its individual capacity.
10.9 Successor Administrative Agent. Subject to the appointment and
------------------------------
acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by notifying the Participants and
the Company. Upon any such resignation, the Required Participants shall have
the right to appoint a successor in consultation with the Company. If no
successor shall have
46
been so appointed by the Required Participants and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Participants, appoint a successor Administrative Agent, with the consent of the
Company (not to be unreasonably withheld), which shall be a bank with an office
in New York, New York, having a combined capital and surplus of at least
$500,000,000 or an Affiliate of any such bank which is also a bank. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
bank, such successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After the Administrative Agent's resignation hereunder,
the provisions of this Article X and of subsection 11.3 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Administrative Agent.
ARTICLE XI
Miscellaneous
11.1 Further Assurances. Each of the Company, the Servicers and the
------------------
Master Servicer agrees, from time to time, to do and perform any and all acts
and to execute any and all further instruments reasonably required or requested
by the Administrative Agent at the request of any Participant more fully to
effect the purposes of this Agreement and the assignments and transfers of the
Participating Interest hereunder, including, without limitation, the execution
of any financing statements or continuation statements relating to the
Receivables for filing under the provisions of the Uniform Commercial Code, or
any similar law, of any applicable jurisdiction.
11.2 Payments. Each payment to be made by any of the Participants,
--------
the Company, any of the Servicers or the Master Servicer hereunder shall be made
on the required payment date in Dollars and in immediately available funds at
the office of the Administrative Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ or to such other office as may be specified by the Administrative
Agent in a notice to the Company, the Servicers, the Master Servicer and the
Participants.
11.3 Costs and Expenses. (a) The Company agrees to pay all
------------------
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates in connection with the preparation of this Agreement and the other
Transaction Documents, or by the Administrative Agent and its Affiliates in
connection with the syndication of the Commitments or the administration of this
Agreement, or in connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or incurred by the Administrative Agent or
any Participant in connection with the enforcement or protection of their rights
in connection with this Agreement and the other Transaction Documents, including
its rights under this subsection, or in connection with the purchases made
hereunder, including in connection with any
47
workout, restructuring or negotiations in respect thereof, including the
reasonable fees, charges and disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Administrative Agent, and, the reasonable fees, charges and
disbursements of any other counsel (including the reasonable allocated costs of
internal counsel if a Participant elects to use internal counsel in lieu of
outside counsel) for the Administrative Agent or any Participant (but no more
than one such counsel for any Participant).
(b) The Company agrees to indemnify the Administrative Agent, each
Participant and each of their respective directors, officers, employees and
agents (each such Person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees, charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Transaction Document or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their respective
obligations thereunder or the consummation of the Transactions and the other
transactions contemplated thereby, (the "subsection 11.3(b)(i) Indemnified
Liabilities") (ii) the use of the proceeds of the initial transfer and
assignment of the Participating Interest and of any Increases in Net Investment,
(iii) any Environmental Liability related in any way to the Company, or (iv) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto; provided, that such indemnity
--------
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (A) are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or wilful misconduct of such Indemnitee (treating, for
this purpose only, any Participant and its directors, officers, employees and
agents as a single Indemnitee) or (B) arise from (x) any Receivable which
becomes a Charge-Off as a result of non-payment by the Obligor with respect
thereto, (y) any action taken, or omitted to be taken, by any Servicer which is
not an Affiliate of WMI, or (z) any action taken by the Participants in
collecting from an Obligor.
(d) The provisions of this subsection 11.3 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of all or any portion of the Net Investment, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Transaction Document, or any investigation made by or on behalf of the
Administrative Agent or any Participant. All amounts due under this subsection
11.3 shall be payable on written demand therefor.
11.4 Successors and Assigns; Assignments; Participations. (a) The
---------------------------------------------------
provisions of this Agreement shall be binding upon and inure to the benefit of
the Company, the Participants, the Master Servicer, the Servicers, the
Administrative Agent and their respective successors and assigns, except that
the Company, the Servicers and the Master Servicer may not assign or transfer
any of its or their rights or obligations under this Agreement without the prior
written consent of each Participant (and any attempted assignment or transfer by
the Company without such
48
consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Affiliates of each of the
Administrative Agent and the Participants) any legal or equitable right, remedy
or claim under or by reason of this Agreement.
(b) Any Participant may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Participating Interest and any Commitment of such Participant);
provided, that (i) except in the case of an assignment to a Participant or an
--------
Affiliate of a Participant, each of the Company and the Administrative Agent
must give their prior written consent to such assignment (which consent shall
not be unreasonably withheld and the parties hereto agree that the potential
payment of amounts under subsections 3.2, 3.3 or 3.4 to such assignee does not
constitute a basis upon which to withhold such consent), (ii) except in the case
of an assignment to a Participant or an Affiliate of a Participant or an
assignment of the entire remaining amount of the assigning Participant's
Commitment, the amount of the Commitment of the assigning Participant subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 unless each of the Company and the Administrative
Agent otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Participant's rights and
obligations under this Agreement, (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and (v) the assignee,
if it shall not be a Participant, shall deliver to the Administrative Agent an
Administrative Questionnaire; provided, further, that any consent of the Company
-------- -------
otherwise required under this paragraph shall not be required if a Termination
Event under clause (f) of Article IX has occurred and is continuing. Upon
acceptance and recording pursuant to paragraph (d) of this subsection, from and
after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Participant under this Agreement, and the assigning Participant thereunder
shall, to the extent of the interest assigned by such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the assigning Participant's rights and
obligations under this Agreement, such Participant shall cease to be a party
hereto but shall continue to be entitled to the benefits of subsections 3.2,
3.3, 3.4 and 11.3). Any assignment or transfer by a Participant of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Participant of a
participation in such rights and obligations in accordance with paragraph (e) of
this subsection.
(c) The Administrative Agent, acting for this purpose as an agent of
the Company, shall maintain at one of its offices in The City of New York a copy
of each Assignment and Acceptance delivered to it and a register for the
recordation of the
49
names and addresses of the Participants, and the Commitment of, and the Net
Investment of, each Participant pursuant to the terms hereof from time to time
(the "Register"). The entries in the Register shall be conclusive, and the
Company, the Administrative Agent and the Participants may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a
Participant hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Participant and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Participant
hereunder), the processing and recordation fee referred to in paragraph (b) of
this subsection and any written consent to such assignment required by paragraph
(b) of this subsection, the Administrative Agent shall accept such Assignment
and Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Participant may, without the consent of the Company or the
Administrative Agent, sell participations to one or more banks or other entities
(an "Additional Participant") in all or a portion of such Participant's rights
and obligations under this Agreement (including all or a portion of its
Participating Interest and any Commitment of any Participant); provided, that
--------
(i) such Participant's obligations under this Agreement shall remain unchanged,
(ii) such Participant shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Company, the
Administrative Agent and the other Participants shall continue to deal solely
and directly with such Participant in connection with such Participant's rights
and obligations under this Agreement. Any agreement or instrument pursuant to
which a Participant sells such a participation shall provide that such
Participant shall retain the sole right to enforce this Agreement and to approve
any amendment, modification or waiver of any provision of this Agreement;
provided, that such agreement or instrument may provide that such Participant
--------
will not, without the consent of the Additional Participant, agree to any
amendment, modification or waiver described in the first proviso to subsection
11.7(b) that affects such Additional Participant. Subject to paragraph (f) of
this subsection, the Company agrees that each Additional Participant shall be
entitled to the benefits of subsections 3.2, 3.3 and 3.4 to the same extent as
if it were a Participant and had acquired its interest by assignment pursuant to
paragraph (b) of this subsection.
(f) An Additional Participant shall not be entitled to receive any
greater payment under subsection 3.2 or 3.4 than the applicable Participant
would have been entitled to receive with respect to the participation sold to
such Additional Participant, unless the sale of the participation to such
Additional Participant is made with the Company's prior written consent. An
Additional Participant that would be a Foreign Participant if it were a
Participant shall not be entitled to the benefits of subsection 3.4 unless the
Company is notified of the participation sold to such Additional Participant and
such Additional Participant
50
agrees, for the benefit of the Company, to comply with subsection 3.4(e) as
though it were a Participant.
(g) Any Participant may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Participant, including any such pledge or assignment to a
Federal Reserve Bank, and this subsection shall not apply to any such pledge or
assignment of a security interest; provided, that no such pledge or assignment
--------
of a security interest shall release a Participant from any of its obligations
hereunder or substitute any such assignee for such Participant as a party
hereto.
(h) Each Participant that is a special-purpose securitization conduit
and has a Conduit Party that provides liquidity and/or credit facilities in
connection with such conduit's pro rata share of the Participating Interest
shall be entitled to receive payments pursuant to Article III as though such
Conduit Party were a Participant hereunder but no such payment shall exceed the
amount such conduit shall be obligated to pay to such Conduit Party pursuant to
similar sections of the liquidity and/or credit facilities agreement between
such conduit and such Conduit Party. No conduit shall be entitled to receive
any payment contemplated by subsection 3.4 if the Conduit Party with respect to
which such payment is being claimed could not have satisfied the requirements of
subsection 3.4(e) (if such Conduit Party were a Participant).
11.5 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
-------------
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.6 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Administrative Agent or the
Participants, any right, remedy, power or privilege hereunder, shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
11.7 Amendments and Waivers. Neither this Agreement nor any terms
----------------------
hereof may be amended, supplemented, modified or waived except in accordance
with the provisions of this subsection 11.7. The Required Participants may, or,
with the written consent of the Required Participants, the Administrative Agent
may, from time to time, (a) enter into with the Company, the Master Servicer and
the Servicers written amendments, supplements or modifications hereto for the
purpose of adding any provisions to this Agreement or changing in any manner the
rights of the Participants, the Company, the Servicers or the Master Servicer
hereunder or (b) waive in a written instrument, on such terms and conditions as
the Required Participants or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or any
default or Termination Event and its consequences; provided, however, that no
-------- -------
such waiver and no such
51
amendment, supplement or modification shall (i) extend the Scheduled Termination
Date; or reduce the rate or extend the time of payment of any Purchase Discount
Amount or Commitment Fee; or extend the time of payment of any mandatory
reduction of the Net Investment; or modify subsection 2.12 so that the fact that
the Net Investment exceeds the Maximum Transfer Amount does not necessitate a
mandatory reduction in the Net Investment; or change the definition of "Maximum
Invested Percentage" or consent to any amendment to subsection 2.6 of the
Receivables sale Agreement; or increase the amount of any Participant's
Commitment; or amend, modify or waive any provision of this subsection 11.7; or
reduce the percentage specified in the definition of Required Participants; or
consent to the assignment or transfer by the Company, any Servicer or the Master
Servicer of any of their respective rights and obligations under this Agreement
(except in accordance with Article XII); or release any substantial portion of
the Pooled Property (other than pursuant to subsection 5.3 or 12.7); in each
case without the written consent of each Participant directly affected thereby
or (ii) amend, modify or waive any provision of Article X without the written
consent of the Administrative Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Participants and
shall be binding upon the Company, the Servicers, the Master Servicer, the
Participants, the Administrative Agent and all future holders of a Participating
Interest. In the case of any waiver, the Company, the Servicers, the Master
Servicer, the Participants and the Administrative Agent shall be restored to
their former position and rights hereunder, any default or Termination Event
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other default or Termination Event, or impair any
right consequent thereon.
11.8 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent 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.
11.9 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Company and the Administrative
Agent, as set forth under their signatures on the signature pages hereof (in the
case of the Master Servicer and the Servicers) and as set forth on Schedule 1
hereto (in the case of the Participants), or to such other address as may be
hereafter notified by the respective parties hereto:
52
The Company: Waste Management Financing Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Loan and Agency Services
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided, that any notice, request or demand to or upon the Administrative Agent
--------
or the Participants pursuant to subsections 2.3, 2.7, 2.8, 2.10, 2.11 and 2.12
shall not be effective until received.
11.10 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Company and the
Administrative Agent.
11.11 Construction of Agreement as Security Agreement. (a) Subject
-----------------------------------------------
to subsection 11.18, although it is the intent of the parties to this Agreement
that the conveyance of the Company's right, title and interest in, to and under
the Receivables and the Related Property pursuant to this Agreement shall
constitute a purchase and sale and not a loan, in the event that such conveyance
is deemed to create a loan, the Company hereby grants to the Administrative
Agent, for the benefit of the Participants, a perfected first priority security
interest in all of the Company's present and future right, title and interest
in, to and under the Receivables and the Related Property to secure the payment
of the applicable Net Investment interest thereon and the other fees and
expenses payable to the Participants, and that this Agreement shall constitute a
security agreement under applicable law in favor of the Administrative Agent,
for the benefit of the Participants.
(b) Each Servicer hereby grants to the Administrative Agent on behalf
of the Participants a first priority security interest in all of the Servicer's
right, title and interest in, to and under its records relating to the
Receivables and Related Property serviced by it to secure all of the Company's
obligations hereunder.
(c) This Agreement shall constitute a security agreement under
applicable law.
53
11.12 Adjustments; Set-off. (a) If any Participant (a "benefitted
--------------------
Participant") shall at any time receive any payment of all or part of its
Participating Interest of the Net Investment, or any Purchase Discount Amount in
respect thereof, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in paragraph (f) of Article IX, or otherwise) in a
greater proportion than any such payment to and collateral received by any other
Participant, if any, in respect of such other Participant's Participating
Interest of the Net Investment, or any Purchase Discount Amount in respect
thereof, such benefitted Participant shall acquire for cash from the other
Participants such portion of each such other Participant's Participating
Interest of the Net Investment, or shall provide such other Participants with
the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Participant to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Participants;
provided, however, that if all or any portion of such excess payment or
-------- -------
benefits is thereafter recovered from such benefitted Participant, such
acquisition shall be rescinded, and the transfer price and benefits returned, to
the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Participants
provided by law, each Participant shall have the right, without prior notice to
the Company, any such notice being expressly waived by the Company to the extent
permitted by applicable law, upon any amount, other than amounts in respect of
Net Investment and the Purchase Discount Amounts with respect thereto, becoming
payable by the Company hereunder to set off and appropriate and apply against
such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Participant
or any branch or agency thereof to or for the credit or the account of the
Company. Each Participant agrees promptly to notify the Company and the
Administrative Agent after any such set-off and application made by such
Participant; provided, that the failure to give such notice shall not affect the
--------
validity of such set-off and application.
11.13 Jurisdiction; Consent to Service of Process. (a) Each of the
-------------------------------------------
Company, the Master Servicer and each Servicer hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or the
other Transaction Documents, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall
54
affect any right that the Administrative Agent or any Participant may otherwise
have to bring any action or proceeding relating to this Agreement or the other
Transaction Documents against the Company, the Master Servicer or any Servicer
or their properties in the courts of any jurisdiction.
(b) Each of the Company, the Master Servicer and each Servicer hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or the other Transaction Documents in any New York State or
Federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in subsection 11.9. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
11.14 Acknowledgements. Each of the Company, the Master Servicer and
----------------
each Servicer hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Transaction Documents to which it
is a party;
(b) neither the Administrative Agent nor any Participant has any
fiduciary relationship with or duty to the Company, the Master Servicer or
any Servicer arising out of or in connection with this Agreement or any of
the other Transaction Documents, and the relationship between the
Administrative Agent and the Participants, on one hand, and the Company, on
the other hand, in connection herewith or therewith is solely that of
purchaser/creditor and seller/debtor; and
(c) no joint venture is created hereby or by the other Transaction
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Participants or among the Company, the Master Servicer or
any Servicer and the Participants.
11.15 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
--------------------
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED
55
TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, AS APPLICABLE,
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SUBSECTION
11.15.
11.16 Confidentiality. Each Participant agrees to maintain the
---------------
confidentiality of information furnished to it by or on behalf of the Company or
the Master Servicer in connection with the Transactions as provided in any
separate confidentiality agreement entered into between the Company and/or the
Master Servicer and such Participant.
11.17 No Bankruptcy Petition, etc. Each Servicer, the Master
---------------------------
Servicer, each Participant and the Administrative Agent covenants and agrees
that, prior to the date which is one year and one day after the date of
termination of this Agreement pursuant to subsection 4.1, it will not institute
against, or join any other Person in instituting against, the Company any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any federal or state bankruptcy or similar law. The
Company, the Master Servicer, the Servicers, and the Participants each agree
that it will not institute against, or join any other Person in instituting
against any Participant that is a special-purpose securitization conduit, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other similar proceeding under the laws of the United States or any state of the
United States.
The obligations of any Participant under this Agreement are solely the
corporate obligations of such Participant. No recourse shall be had for the
payment of any amount owing in respect to this Agreement or for the payment of
any fee hereunder or for any other obligation or claim arising out of or based
upon this Agreement against any direct or indirect stockholder or other owner,
employee, officer, director or incorporator of any Participant.
11.18 Tax Treatment. It is the intent of the Company and the
-------------
Participants that, for federal, state and local income and franchise tax
purposes, the Participating Interest will be indebtedness of the Company secured
by the Pooled Property. The Company and the Participants agree to treat the
Company as the owner of the Pooled Property and the Participating Interest as
indebtedness of the Company secured by the Pooled Property and the Purchase
Discount Amount as interest for United States tax purposes (including for
reporting purposes), except as otherwise required by law or any tax authorities.
This subsection 11.18 shall survive the termination of this Agreement and shall
be binding on all transferees. In addition, each of the parties hereto
represents and warrants that it is entering into this Agreement for its own
account and on its own behalf and that it does not intend this Agreement (or the
transactions contemplated thereby) to create a partnership, joint venture or
other similar arrangement between, or among, the parties hereto. The powers
granted and obligations undertaken in this Agreement shall be construed so as to
further such intent.
56
ARTICLE XII
Servicing
12.1 Servicing; Accounts; Collections. (a) Appointment of
-------------------------------- --------------
Servicers. The Participants and the Company hereby appoint (i) the Master
---------
Servicer and the Servicers as their agents to service and administer the
Receivables originated by the Sellers and (ii) the Master Servicer as their
agent to coordinate the servicing of the Receivables by the Servicers. Each of
the Servicers and the Master Servicer hereby consents to such appointment and
agrees to service and administer the Receivables in accordance with the terms
and conditions contained herein. The Company hereby appoints the Master
Servicer, and the Master Servicer hereby consents to such appointment, to take
any actions on behalf of the Company which by the terms hereof have been
delegated to the Master Servicer and any further actions incidental thereto.
The Company and the Master Servicer may agree, in accordance with subsection
8.11, that the Master Servicer may perform on behalf of the Company certain of
the Company's obligations under the Transaction Documents. Prior to the
occurrence of a Complete Servicing Transfer, on each Settlement Date, the
Servicers and the Master Servicer shall receive the Monthly Servicing Fee for
performing their functions as Servicers and Master Servicer hereunder as
provided in subsection 2.7.
(b) Establishment of Accounts. (i) The Master Servicer and the
-------------------------
Servicers shall establish and maintain (A) one or more bank accounts which may
be in the name of the Master Servicer or any Servicer (each, an "Initial Deposit
Account") for the deposit of Collections on Purchased Receivables ("Purchased
Receivables Collections") and Collections on Receivables of any Subsidiary of
WMI which are not Purchased Receivables ("WMI Collections") and (B) one or more
bank accounts which shall be in the name of the Master Servicer or any Servicer
(each, a "Subsequent Deposit Account") for the deposit of Purchased Receivables
Collections and WMI Collections on deposit in any Initial Deposit Account or for
the direct deposit of Purchased Receivables Collections or WMI Collections. The
Initial Deposit Accounts and the Subsequent Deposit Accounts are collectively
referred to herein as the "Designated Accounts." Each of the Master Servicer and
the Servicers represents, warrants, covenants and agrees that (X) the Designated
Accounts shall only be used for the deposit of Purchased Receivables Collections
and WMI Collections and (Y) the Designated Banks shall have received standing
instructions from the Master Servicer or the Servicer, as applicable, directing
that all available funds on deposit in any Designated Account on such day be
transferred at least as often as once each day (unless the amount on deposit on
such day is less than $5,000) that is a business day for such Designated Bank
and in any event by 1:00 p.m. (New York City time) on the business day following
each such day of deposit, by a wire transfer in immediately available funds to
the Concentration Account (either directly or through the Subsequent Deposit
Account).
(ii) The Master Servicer shall establish and maintain an account (the
"Concentration Account") which shall initially be held in the name of the Master
57
Servicer or any Servicer for the central collection of Purchased Receivables
Collections and WMI Collections. The Master Servicer agrees that at any time
after the initial acquisition of the Participating Interest (the "Initial
Acquisition Date"), it shall upon five days prior written notice from the
Administrative Agent, transfer the Concentration Account and/or the Initial
Deposit Account held at The First National Bank of Chicago (Account No. ▇▇▇▇▇▇▇)
to the name of the Administrative Agent, which shall hold such account as agent
for the benefit of (1) with respect to Purchased Receivables Collections, the
Participants and the Company and (2) with respect to WMI Collections, the Master
Servicer pursuant to an agreement to be entered into in form and substance
reasonably satisfactory to the Master Servicer and the Administrative Agent. The
Master Servicer represents, warrants, covenants and agrees that (A) the
Concentration Account shall only be used for the deposit of Purchased
Receivables Collections and WMI Collections and (B) the Designated Bank at which
the Concentration Account is held shall have received standing instructions from
the Master Servicer directing that available funds on deposit in the
Concentration Account on such day shall be transferred in accordance with the
instructions provided by the Master Servicer at least as often as once each day
that is a business day for such Designated Bank and in any event by 1:00 p.m.
(New York City time) on the business day following each such day of deposit, by
a wire transfer of immediately available funds, to the SPC Collection Account
and such other account designated by the Master Servicer.
(iii) The Company shall establish and maintain an account (the "SPC
Collection Account") which shall initially be held in the name of the Company
for the deposit of Purchased Receivables Collections. The Company agrees that at
any time after the Initial Acquisition Date, it shall upon five days prior
written notice from the Administrative Agent transfer the SPC Collection Account
to the name of the Administrative Agent which shall hold such account for the
benefit of the Participants. The Company represents, warrants, covenants and
agrees that (A) the SPC Collection Account shall only be used for the deposit of
Purchased Receivables Collections and (B) the Designated Bank at which the SPC
Collection Account is held shall have received standing instructions from the
Company directing that all available funds on deposit in the SPC Collection
Account on such day be transferred at least as often as once each day that is a
business day for such bank and in any event by 1:00 p.m. (New York City time) on
the business day following each such day of deposit, by a wire transfer of
immediately available funds, (1) during any time when any Net Investment is
outstanding, to the Collection Account and (2) otherwise, to an account
designated in writing by the Master Servicer to make payments as provided in
subsection 12.1(c)(ii).
(iv) In the event a Termination Event shall occur and be continuing,
the Master Servicer and the Servicers, at the request of the Administrative
Agent, agree to notify (and, if such Servicer fails to so notify, the Company
irrevocably grants the Administrative Agent the authority to notify) all
Obligors on Purchased Receivables to make all future payments directly to the
Collection Account or any other account designated by the Administrative Agent.
Upon the termination of the Commitment Period as a result of the occurrence of a
Termination Event, the Master Servicer agrees it shall, upon five days prior
written notice from the
58
Administrative Agent, transfer the Designated Accounts to the name of the
Administrative Agent, which shall hold such account as agent for the benefit of
(1) with respect to Purchased Receivables Collections, the Participants and the
Company and (2) with respect to WMI Collections, the Master Servicer pursuant to
an agreement to be entered into in form and substance reasonably satisfactory to
the Master Servicer and the Administrative Agent.
(v) Upon the transfer to the name of the Administrative Agent of the
SPC Collection Account, the Administrative Agent shall have sole and exclusive
dominion over and control of the SPC Collection Account and the Company, the
Master Servicer and any Servicer shall not have any right to make withdrawals
from the SPC Collection Account other than the right to authorize transfers to
the Collection Account as set forth herein and pursuant to the terms hereof.
(vi) The Administrative Agent shall treat all collections received by
it or deposited in the Collection Account as "Collections" for purposes of this
Agreement as of the Business Day Received (as defined in the immediately
succeeding sentence). As used herein, the term "Business Day Received" shall
mean (i) if funds are otherwise deposited in the Collection Account by 1:00 p.m.
(New York City time), such day of deposit and (ii) if funds are deposited in the
Collection Account after 1:00 p.m. (New York City time), the Business Day next
following such day of deposit.
(c) Collection Procedures. (i) All Collections received by any
---------------------
Servicer, the Master Servicer or the Company shall be deposited by it to a
Designated Account as soon as possible after receipt thereof, such deposit to
occur in no event later than the Business Day after such receipt. Each
Collection shall be deposited into a Designated Account by delivery of a check
of an Obligor, by wire transfer from an account of such Obligor to such
Designated Account or by means of by a wire transfer in immediately available
funds and shall be transferred from such Designated Account (either directly or
through another Designated Account) to the Concentration Account at least as
often as once each day that is a business day for the applicable Designated
Bank, such transfer from such Designated Account to be commenced in any event by
1:00 p.m. (New York City time) on the Business Day following such day of
deposit; provided, that Collections may, at the option of the applicable
--------
Obligor, be deposited directly into the Concentration Account.
(ii) All Collections deposited in the Concentration Account shall be
transferred to the SPC Collection Account on the same day that they are
deposited in the Concentration Account. The Master Servicer, the Servicers and
the Company agree that no amounts may be withdrawn from the Concentration
Account on any day until the amount of Purchased Receivables Collections
deposited therein on such day have been transferred to the SPC Collection
Account. If within five days after an amount has been deposited in the
Concentration Account, the Master Servicer or the Servicers are not able to
determine whether or not such amount is a Purchased Receivables Collection or a
WMI Collection, such amount shall be deemed to be a Purchased Receivables
Collection and shall immediately be transferred to the SPC
59
Collection Account. On any Business Day when the Net Investment is zero, subject
to the terms and conditions hereof, amounts deposited in the SPC Collection
Account shall be paid to an account designated by the Master Servicer to pay for
Receivables acquired from the Seller pursuant to the Receivables Sale Agreement,
make payments on the Subordinated Note or make Restricted Payments. On any
Business Day when any Net Investment is outstanding, all amounts deposited in
the SPC Collection Account on such day shall be transferred to the Collection
Account on such day.
(iii) Each of the Company, the Master Servicer and each Servicer
represents, warrants, covenants and agrees that all Collections shall be
collected, processed and deposited pursuant to, and in accordance with, the
terms of this Agreement and that it shall take all actions necessary to permit
the transfer of funds as described in this subsection 12.1 on a timely basis.
(iv) The Company represents, warrants, covenants and agrees that it
shall not make or maintain any deposits in any bank account, deposit account or
trust account with any financial institution other than the Designated Accounts,
the Concentration Account, the SPC Collection Account and the Collection Account
as provided for by this Agreement and other than one operating account funded
solely with amounts disbursed as operating expenses pursuant to subsection 2.7.
The Company shall provide the Administrative Agent with the account number and
location of such account, and any other information as the Administrative Agent
may reasonably request with respect thereto. The Company represents, warrants,
covenants and agrees that it shall have no bank accounts or interest in bank
accounts other than the Designated Accounts, the Concentration Account, the SPC
Collection Account and the Collection Account and such operating account. The
Company represents, warrants, covenants and agrees that no new bank accounts or
deposit accounts will be established unless and until the Company has received
the prior written consent of the Administrative Agent.
(v) Each of the Company, the Master Servicer and each Servicer
represents, warrants, covenants and agrees that no location other than the
Designated Accounts and the Concentration Account has been established for the
deposit of Collections. Each of the Company, the Master Servicer and each
Servicer represents, warrants, covenants and agrees that no new location for the
deposit of Collections will be established unless and until the Company has
received the prior written consent of the Administrative Agent.
(vi) The Company agrees to pay all fees for the services of the
Designated Banks in respect of the SPC Collection Account, and the Master
Servicer agrees to pay or cause to be paid all fees for the services of the
Designated Banks in respect of the Designated Accounts and the Concentration
Account.
12.2 Collections by the Servicers; Indemnity. (a) The Master
---------------------------------------
Servicer and each Servicer shall manage the servicing and administration of the
Receivables, the collection of payments due under the Receivables and the
charging off of any Receivables as uncollectible, all in accordance with the
Policies, the
60
Company Policies and all the terms and provisions of this Agreement. The Master
Servicer and each Servicer shall have full power and authority, acting alone or
through any party properly designated by it hereunder, to do any and all things
in connection with such servicing and administration which it may deem necessary
or desirable, but at all times subject to the terms of this Agreement. Without
limiting the generality of the foregoing and subject to subsection 12.7, the
Master Servicer and each Servicer agree to cause each Subsidiary of the Master
Servicer to continue to perform such servicing functions with respect to the
Receivables originated by such Subsidiary that such Subsidiary has historically
performed; provided that the Master Servicer and each Servicer shall remain
liable for the failure of any such Subsidiary to perform such functions and each
Servicer or its designee is hereby authorized and empowered to give direction to
the Administrative Agent with respect to withdrawals from, and payments to, the
Collection Account in accordance with the Daily Report and as otherwise
specified in this Agreement. The Master Servicer and each Servicer will, at its
cost and expense and as agent for the Participants and the Company, use its best
efforts to collect, consistent with its past practices, as and when the same
becomes due, the amount owing on each Receivable for which it is the Servicer.
No Servicer will make any material changes that deviate from the Policies or the
Company Policies in its administrative, servicing and collection systems without
the prior written approval of the Required Participants. In the event of default
under any Receivable, the responsible Servicer shall have the power and
authority, on behalf of the Participants and the Company, to take such action in
respect of such Receivable as such Servicer may reasonably deem advisable. In
the enforcement or collection of any Receivable, each Servicer shall be entitled
to ▇▇▇ thereon in (i) its own name, (ii) if, but only if, the Administrative
Agent consents in writing, as agent of the Participants, or (iii) if, but only
if, the Company consents in writing, as agent for the Company. In no event shall
any Servicer or the Master Servicer be entitled to take any action which would
make the Administrative Agent or any of the Participants or the Company a party
to any litigation without the express prior written consent of the
Administrative Agent or each such Participant or the Company, as the case may
be.
(b) The Master Servicer and the Servicers which are Affiliates of
Company hereby agree, jointly and severally, to indemnify and hold harmless each
Indemnitee (as defined in subsection 11.3(b)), from and against any loss,
liability, expense, damage or injury suffered or sustained by reason of any
acts, omissions or alleged acts or omissions arising out of, or relating to,
activities of the Master Servicer and the Servicers which are Affiliates of the
Company pursuant to the Transactions, including but not limited to any judgment,
award, settlement, reasonable attorneys' fees and other reasonable costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided, that the Master Servicer and the
--------
Servicers which are Affiliates of the Company shall not so indemnify any
Indemnitee for any loss, liability, damage, injury, cost or expense of such
Indemnitee (i) arising solely from a default by an Obligor with respect to any
Receivable (other than arising out of (A) any discharge, claim, offset or
defense (other than discharge in bankruptcy of the Obligor) of the Obligor to
the payment of any Purchased Receivable arising
61
from the actions of the Master Servicer or Servicer which is an Affiliate of the
Company (including, without limitation, a defense based on such Purchased
Receivable's not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or (B) a failure by the
Master Servicer or Servicer which is an Affiliate of the Company to perform its
duties or obligations under this Agreement), or (ii) to the extent that such
liability, cost or expense arises from the gross negligence, bad faith or wilful
misconduct of such Indemnitee or any other Indemnitee. The provisions of this
indemnity shall run directly to, and be enforceable by, an injured party and
shall survive the termination of this Agreement and the resignation of the
Master Servicer or any Servicer which is an Affiliate of the Company.
(c) The Servicers, the Master Servicer and the Company each hereby
irrevocably grant to the Administrative Agent an irrevocable power of attorney,
with full power of substitution, coupled with an interest, to take in the name
of the Master Servicer, such Servicer or the Company or in its own name at any
time after the occurrence of a Complete Servicing Transfer all steps necessary
or advisable to endorse, negotiate or otherwise realize on any writing or other
right of any kind held or owned by the Master Servicer, such Servicer or the
Company or transmitted to or received by the Administrative Agent as payment on
account or otherwise in respect of any Receivable.
(d) Upon the occurrence and during the continuance of any Servicer
Event of Default, the Administrative Agent shall, at the request of the Required
Participants, by giving two Business Days' notice in writing to the Master
Servicer (a "Transfer Notice"), terminate any or all Servicer or Master Servicer
administrative, servicing and collection functions provided for herein as to any
or all of the Servicers and the Master Servicer (the termination of all such
functions with respect to all Servicers and the Master Servicer being referred
to as a "Complete Servicing Transfer" and any other such termination being
referred to as a "Partial Servicing Transfer"). Upon the occurrence of either a
Partial Servicing Transfer or a Complete Servicing Transfer, without limitation,
(i) a designee of the Required Participants (for purposes of paragraphs (d)
through (e) of this subsection 12.2, the term "Substitute Servicer" means such
designee, as appropriate) shall administer the administrative, servicing and
collection functions of each terminated Servicer and/or the Master Servicer, as
the case may be (each, a "Transferring Servicer") (in the case of a Partial
Servicing Transfer) or all Servicers and the Master Servicer (in the case of a
Complete Servicing Transfer) in any manner it deems fit (which may include
notifying any Obligor of the assignment to the Participants of the interest in
the affected Receivables and/or directing any Obligor to make all payments in
respect of the affected Receivables in the name of the Substitute Servicer);
provided, that the Substitute Servicer shall furnish or cause to be furnished to
--------
the Company such information as such Company needs to perform its obligations
under this Agreement, and the Company may, without independent investigation,
rely on such information for all purposes of this Agreement and (ii) the
Company, each Transferring Servicer (in the case of a Partial Servicing
Transfer) or each Servicer and the Master Servicer (in the case of a Complete
Servicing Transfer) shall, at its own expense, (x) if so
62
requested by the Substitute Servicer, endorse each instrument, if any,
evidencing any Receivable to the Substitute Servicer in such manner as the
Substitute Servicer shall reasonably direct and (y) perform, or cause to be
performed by any Person involved in administrative, servicing or collection
functions on behalf of or under the direction of each Transferring Servicer (in
the case of a Partial Servicing Transfer) or each Servicer and the Master
Servicer (in the case of a Complete Servicing Transfer) or the Company, any and
all acts, any and all documents as, in each case, may be reasonably requested by
the Substitute Servicer in order to effect the purposes of this Agreement and
the transfer and assignment of the Participating Interest and to perfect and
protect the ownership interest of the Participants in the Receivables and the
Related Property. Each Servicer agrees to serve as a Substitute Servicer if so
designated by the Required Participants at any time and from time to time. Upon
the occurrence of a Partial Servicing Transfer or a Complete Servicing Transfer,
each Transferring Servicer (in the case of a Partial Servicing Transfer) or each
Servicer and the Master Servicer (in the case of a Complete Servicing Transfer)
shall promptly transfer its electronic records relating to its Receivables to
the Substitute Servicer in such electronic form as the Substitute Servicer may
reasonably request and shall promptly transfer to the Substitute Servicer all
other records, correspondence and documents necessary for the continued
servicing of such Receivables in the manner and at such times as the Substitute
Servicer shall reasonably request; provided, that to the extent that such
--------
Transferring Servicer or such Servicer and the Master Servicer, as the case may
be, is required to have, as a result of a continuing relationship with the
related Obligors, access to any such records in respect of its Receivables, the
Substitute Servicer shall allow such Transferring Servicer or such Servicer and
the Master Servicer, as the case may be, to have reasonable access to such
records upon reasonable advance notice and so long as such access shall not
disrupt or otherwise interfere with the Substitute Servicer's use of such
records in performing its duties hereunder. Upon the occurrence of a Partial
Servicing Transfer or a Complete Servicing Transfer, each Transferring Servicer
(in the case of a Partial Servicing Transfer) or each Servicer and the Master
Servicer (in the case of a Complete Servicing Transfer) shall promptly transfer
to the Administrative Agent non-exclusive licenses to use any computer programs,
material tapes, disks, cassettes and data necessary or advisable to permit the
collection of Receivables by a Servicer without the participation of any Seller
or the Company or, to the extent that such transfer would violate legal
restrictions applicable thereto, shall establish other arrangements to use any
computer programs, material tapes, disks, cassettes and data necessary or
advisable to permit the collection of Receivables by a Servicer without the
participation of any Seller or the Company.
(e) Each Transferring Servicer (in the case of a Partial Servicing
Transfer) or each Servicer and the Master Servicer (in the case of a Complete
Servicing Transfer) and the Company shall each execute and deliver such
additional documents and shall take such further action as the Substitute
Servicer may reasonably request to effect or evidence the transfer of servicing
and shall execute and deliver to the Substitute Servicer such powers-of-attorney
(in addition to the power of attorney provided for in subsection 12.2(c)) as may
be
63
necessary or appropriate to enable the Substitute Servicer, on behalf of the
Participants, to endorse for payment any check, draft or other instrument
delivered in payment of any amount under or in respect of an affected
Receivable. If any Servicer, the Master Servicer or the Company receives any
cash or checks, drafts or other instruments for the payment of money on account
or otherwise in respect of the Purchased Receivables, such Servicer, the Master
Servicer or the Company shall segregate such cash and other items, hold such
cash and other items in trust for the benefit of the Participants and cause such
cash and other items (properly endorsed, where required, so that such items may
be collected by the Substitute Servicer) to be transmitted or delivered to the
Substitute Servicer for deposit in the Concentration Account within one Business
Day after the date any such cash or other item shall have been identified and
segregated by such Servicer, the Master Servicer or the Company as being on
account of a Purchased Receivable.
12.3 Maintenance of Records. Each Servicer and the Master Servicer
----------------------
will hold in trust for the Participants at the office of such Servicer or Master
Servicer set forth in Schedule 2 such books of account and other records as it
currently maintains for its own purposes in the ordinary course of its business,
which books of account and other records shall be in a form reasonably
satisfactory to the Administrative Agent to determine at any time the status of
the Receivables and all collections and payments in respect thereof (including,
without limitation, an ability to recreate records evidencing Receivables in the
event of the destruction of the originals thereof). The Administrative Agent
may at any time and from time to time upon reasonable prior notice during the
regular business hours of any Servicer or the Master Servicer inspect, audit,
check and make abstracts from the books, accounts, records, or other papers of
such Servicer or the Master Servicer pertaining to the Receivables. From time
to time upon the written request of the Administrative Agent, which request
shall be promptly made upon a request therefor to the Administrative Agent by
any Participant, each Servicer or the Master Servicer, at its own expense, will
as promptly as is practicable deliver to the Administrative Agent a schedule of
the Receivables indicating as to each Receivables information as to the Obligor
thereon, the unpaid balance thereof, the amount and delinquency of any
Receivable that is past due and such other information as the Administrative
Agent may reasonably request. Upon the written request of the Administrative
Agent, which request may only be made at any time after a Partial Servicing
Transfer or a Complete Servicing Transfer, each terminated Servicer and the
Master Servicer, at its own expense, will deliver to the Administrative Agent,
or to any agent selected by the Administrative Agent, any records pertaining
thereto and evidence thereof as the Administrative Agent may deem necessary to
enable it to enforce the Participants' rights thereunder; provided, that to the
--------
extent that such terminated Servicer or the Master Servicer is required to have,
as a result of a continuing relationship with the related Obligors, access to
any such records in respect of its Receivables, the Administrative Agent (or the
agent selected by it) shall allow such terminated Servicer or the Master
Servicer to have reasonable access to such records upon reasonable advance
notice and so long as such access shall not disrupt or otherwise interfere with
the Administrative Agent's (or its agent's) use of such records in performing
its duties hereunder. Upon the expiration of the
64
Commitment Period, the reduction of the Net Investment to zero and the payment
in full of all amounts owing to the Participants and the Administrative Agent
hereunder, the Administrative Agent will promptly return to the Servicers and
the Master Servicer any such records delivered to the Administrative Agent or
its agent.
12.4 Rebates, Adjustments, Returns and Reductions; Modifications.
-----------------------------------------------------------
From time to time the Master Servicer or a Servicer may make Adjustments to
Receivables in accordance with subsection 12.6(o). If the Master Servicer or
any Servicer makes any Adjustment, then, in any such case, the amount of
Receivables will be automatically reduced by the principal amount of such
Adjustment. Any Adjustment shall be made on the Business Day on which such
adjustment obligation arises or is identified. In addition, (and without
limiting the obligations of the Sellers under the Receivables Sale Agreement to
make Seller Adjustment Payment in respect thereof) if, after giving effect to
any such Adjustment, the Invested Percentage would exceed the Maximum Invested
Percentage, the Company shall pay to the Administrative Agent, for the account
of the Participants, an amount equal to the lesser of (i) the dollar amount of
such Adjustment and (ii) the amount necessary to cause the Invested Percentage
to equal the Maximum Invested Percentage (the amount of each such payment is
referred to herein as an "Adjustment Payment"). Such Adjustment Payment shall be
treated as a Collection and shall be distributed in accordance with the
applicable provisions of subsection 2.7.
12.5 Daily Reports; Settlement Statements. (a) On each Business Day
------------------------------------
the Company and Master Servicer, jointly and severally, agree to prepare a
written report (the "Daily Report") in the form of Exhibit F, with such changes
as may be agreed upon by the Administrative Agent, the Company and the Master
Servicer, setting forth for the preceding Business Day (the "Reporting Day")
total Collections, the amount of Receivables created and the Aggregate Eligible
Receivables, and such other information as the Administrative Agent may request,
which report shall show such information for all Sellers as well as only with
respect to Sellers whose Effective Date has occurred. The Master Servicer shall
complete such Daily Report and deliver it to the Administrative Agent prior to
12:00 Noon (New York City time) on the second Business Day following the
Reporting Day. Each Daily Report shall be transmitted by telecopy to the
Administrative Agent at the telecopy number specified in subsection 11.9.
(b) Not later than five Business Days prior to each Settlement Date
until the Participating Interest of the Participants in the Receivables has been
reduced to zero and the Commitments of the Participants hereunder have been
terminated, the Company and the Master Servicer, jointly and severally, agree to
submit to the Administrative Agent a statement (hereinafter, a "Settlement
Statement"), substantially in the form attached hereto as Exhibit C or such
other form as may be acceptable to the Administrative Agent, which statement
shall show such information for all Sellers as well as only with respect to
Sellers whose Effective Date has occurred. Promptly upon receipt thereof, the
Administrative Agent shall forward a copy of each Settlement Statement to each
Participant.
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(c) (i) Within 45 days after the end of each fiscal quarter of WMI,
the Master Servicer will deliver to the Administrative Agent and each
Participant a certificate of a Responsible Officer of the Master Servicer
stating that (a) a review of the activities of the Master Servicer and each
Servicer and its performance hereunder during such fiscal quarter was made under
the supervision of such Responsible Officer, (b) to the best knowledge of such
Responsible Officer, based on such review, the Master Servicer and each Servicer
has accurately and correctly performed its obligations hereunder in all material
respects throughout such quarter, or, if there has been a material default in
the performance of any such obligation, specifying the nature and status of each
such default and (c) to the best knowledge of such Responsible Officer, based on
such review, each Daily Report and Settlement Statement was accurate and correct
in all material respects, except as specified in such certificate.
12.6 Representations, Warranties and Covenants of the Servicers.
----------------------------------------------------------
Each Servicer and the Master Servicer hereby makes the following
representations, warranties and covenants to the Participants and the
Administrative Agent:
(a) Organization; Powers. Such Person is duly organized, validly
--------------------
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its
business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, is qualified to do business in, and is
in good standing in, every jurisdiction where such qualification is
required.
(b) Authorization; Enforceability. The Servicing Transactions are
-----------------------------
within the corporate powers of such Person and have been duly authorized by
all necessary corporate and, if required, stockholder action. Each
Transaction Document has been duly executed and delivered by such Person
and constitutes a legal, valid and binding obligation of each such Person,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
(c) Governmental Approvals; No Conflicts. The Servicing
------------------------------------
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except
such as have been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the charter, by-laws
or other organizational documents of such Person or any order of any
Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon such Person or
its assets, or give rise to a right thereunder to require any payment to be
made by such Person, and (d) will not result in the creation or imposition
of any Lien on any asset of such Person.
66
(d) Litigation and Environmental Matters. (i) Except for the
------------------------------------
Disclosed Matters, as of the Commencement Date, there are no actions, suits
or proceedings by or before any arbitrator or Governmental Authority
pending against or, to the knowledge of such Person, threatened against or
affecting such Person (A) could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect (other than the
Disclosed Matters) or (B) that involve this Agreement or the Transactions.
(ii) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect, such Person (i) has not
failed to comply with any Environmental Law or to obtain, maintain or
comply with any permit, license or other approval required under any
Environmental Law, (ii) has not become subject to any Environmental
Liability, (iii) has not received notice of any claim with respect to any
Environmental Liability or (iv) does not know of any basis for any
Environmental Liability.
(e) Compliance with Laws and Agreements. Such Person is in compliance
-----------------------------------
with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to do
so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect. No Servicer Event of Default has
occurred and is continuing.
(f) Taxes. Such Person has timely filed or caused to be filed all Tax
-----
returns and reports required to have been filed and has paid or caused to
be paid all Taxes required to have been paid by it, except (a) Taxes that
are being contested in good faith by appropriate proceedings and for which
such Person has set aside on its books adequate reserves or (b) to the
extent that the failure to do so could not reasonably be expected to result
in a Material Adverse Effect.
(g) Agreement to Cooperate. The Master Servicer shall from time to
----------------------
time and at any time provide, and shall cause its Subsidiaries to provide,
information with respect to the business, operations, properties and
financial matters of the Master Servicer and such Subsidiaries to the
Company, its officers, employees, agents and professional advisers in
connection with the replacement or refinancing, in whole or in part, of
this Agreement and the other Transaction Documents with a new receivables
financing facility in which ownership interests in, or notes, commercial
paper, certificates or other debt instruments secured by, the Receivables
shall be sold in one or more public offerings, private placements or
otherwise (such facility, the "Replacement Facility"), and the Master
Servicer shall otherwise cooperate with, and cause its Subsidiaries to
cooperate with, the Company and such officers, employees, agents and
professional advisers in the negotiation, development, preparation and
execution of, such Replacement Facility.
67
(h) Protection of Participants' Rights. Such Person shall take no
----------------------------------
action, nor omit to take any action, which act or omission would
substantially impair the rights of Participants in the Receivables, nor
shall it reschedule, revise or defer payments due on any Receivable except
in accordance with the Policies and the Company Policies or except as
otherwise expressly permitted by this Agreement; provided, that such Person
--------
shall have no obligation to the Participants or the Administrative Agent
under this paragraph (h) in respect of Receivables which become Defaulted
Receivables as a result of non-payment by the Obligor with respect thereto.
(i) Security Interest. Except for the conveyance hereunder and under
-----------------
the Receivables Sale Agreement, such Person will not sell, pledge, assign
or transfer to any other Person, or grant, create, incur, assume or suffer
to exist any Lien on any Receivable or other Pooled Property transferred
and assigned to the Participants, whether now existing or hereafter
created, or any interest therein, and such Person shall defend the right,
title and interest of the Participants in, to and under any Receivable or
other Pooled Property transferred and assigned to the Participants, whether
now existing or hereafter created, against all claims of third parties
claiming through or under such Person, the Master Servicer or any Seller.
(j) Location of Offices. The chief executive office of each Servicer
-------------------
and the Master Servicer is listed on Schedule 2, which office is the place
where such Person is "located" for the purposes of Section 9-103(3)(d) of
the Uniform Commercial Code of the State of New York, and the offices of
each Servicer and the Master Servicer where such Servicer and the Master
Servicer keeps its records concerning the Receivables are also listed in
said Schedule. Such Person (i) will not move outside the State listed on
Schedule 2 under the heading "Chief Executive Office" the location of its
chief executive office or outside of the State listed on Schedule 2 under
the heading "Offices Where Records Kept" the location of any of the offices
where it keeps its records with respect to the Receivables without 30 days'
prior written notice to the Administrative Agent and (ii) will promptly
take all actions reasonably required (including but not limited to all
filings and other acts necessary or advisable under the Uniform Commercial
Code of each jurisdiction) in order to continue the first priority
perfected ownership interest of the Participants in all Receivables and
other Pooled Property now owned or hereafter created. Such Person will give
the Administrative Agent prompt notice of a change within the State listed
on Schedule 2 of the location of its chief executive office or of a change
within the State listed on Schedule 2 of the location of any office where
it keeps its records with respect to the Receivables and the other Pooled
Property.
(k) No Adverse Change. There has not been since the date of this
-----------------
Agreement any material adverse change in the ability of such Person to
perform its obligations under Article XII of this Agreement.
68
(l) Designated Accounts and other Payment Methods. Listed on
---------------------------------------------
Schedule 3 is each Designated Account to which, as of the initial Closing
Date, the Obligors have been directed to remit payments on account of the
Receivables, except to the extent that any of the Servicers, in the normal
course of their business and consistent with past practices, have directed
such Obligors to remit payments by (i) delivering cash, a check or other
instrument to or in care of the Person delivering goods to such Obligor,
(ii) a wire transfer of such funds directly to the Concentration Account or
(iii) delivering a check to the business offices, agents or officers of
such Servicer. Neither the Master Servicer nor any Servicer shall (i) add
or terminate any bank as a bank at which a Designated Account is
maintained, (ii) add or terminate any such Designated Account at any such
bank, (iii) make any change in its instructions to any Obligor regarding
payments to be made to any such bank or Designated Account or (iv) revoke
any standing instructions directing such Designated Bank to transfer
amounts on deposit therein to the Concentration Account as provided in
subsection 12.1; provided, that a Servicer may at any time change its
--------
instructions to Obligors so as to require such Obligors to make payments to
a different Designated Account, so long as such Servicer has previously
delivered to the Administrative Agent evidence that standing instructions
in form and substance reasonably satisfactory to the Administrative Agent
regarding such Designated Account will be delivered to the applicable
Designated Bank.
(m) Reports. The information with respect to the Receivables
-------
serviced by such Person contained in each Settlement Statement will be true
and correct in all material respects as of the date of such Settlement
Statement.
(n) Instruments. Such Person will not take any action to cause any
-----------
Receivable to be evidenced by any "instrument" (as defined in the Uniform
Commercial Code as in effect in the State of New York) except in connection
with the enforcement or collection of a Receivable.
(o) Extension of Receivables; Amendment of Policies. Extend, make
-----------------------------------------------
any Adjustment to, rescind, cancel, amend or otherwise modify, or attempt
or purport to extend, amend or otherwise modify, the terms of any Purchased
Receivables, except (i) in accordance with the terms of the Policies and
the Company Policies, (ii) as required by any Requirement of Law, (iii) in
the case of Adjustments, upon making an Adjustment Payment pursuant to
subsection 12.4 or (iv) with the consent of the Required Participants,
provided the Servicers may cause Receivables to become Defaulted
Receivables. Neither the Servicers nor the Master Servicer shall amend or
otherwise modify or waive any term or condition of the Policies or the
Company Policies except in accordance with subsection 5.10 of the
Receivables Sale Agreement.
69
(p) Ineligible Receivables. Without the prior written approval of
----------------------
the Required Participants, such Person shall not take any action to cause,
or which would permit, an Eligible Receivable to cease to be an Eligible
Receivable, except as expressly permitted in this Agreement.
(q) Notices. Such Person will give written notice to the
-------
Administrative Agent and each Participant promptly upon obtaining knowledge
of the occurrence of any Termination Event, Potential Termination Event,
Servicer Default or Servicer Event of Default (which notice shall specify
what, if any, action will be taken with respect thereto).
(r) Financial Statements; Liabilities; Disclosure; No Material
----------------------------------------------------------
Adverse Change. (i) The Master Servicer has heretofore furnished to the
--------------
Participants its consolidated balance sheet and statements of income,
stockholders equity and cash flows (A) as of and for the fiscal year ended
December 31, 1996, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public
accountants, and (B) as of and for the fiscal quarter and the portion of
the fiscal year ended September 30, 1997, signed by its chief financial
officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows
of the Master Servicer and its consolidated Subsidiaries as of such dates
and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements
referred to in clause (B) above. As of the Commencement Date, the Master
Servicer and its Subsidiaries do not have any material Guarantee
obligations, contingent liabilities and liabilities for taxes, or any long-
term leases or unusual forward or long-term commitments, including, without
limitation, any material interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, that have
materially changes from those reflected, individually or in the aggregate,
in either (i) the most recent financial statements referred to in this
paragraph or (ii) filings made by the Master Servicer with the SEC that
were publicly available prior to the Commencement Date. During the period
from December 31, 1996 to and including the date hereof there has been no
disposition by the Master Servicer or any of its Subsidiaries of any
material part of their business or property (determined on a consolidated
basis with respect to the Master Servicer and its Subsidiaries), other than
dispositions disclosed in filings made with the SEC that were publicly
available prior to the Commencement Date. The Master Servicer has
disclosed to the Participants all agreements, instruments and corporate or
other restrictions to which it or any of its Subsidiaries is subject, and
all other matters known to it, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.
(ii) None of the reports, financial statements, certificates or other
information furnished by or on behalf of the Master Servicer to the
Administrative Agent or any Participant on or prior to the Commencement
Date in connection with the negotiation of this Agreement or delivered
70
hereunder, taken as a whole, contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, that, with respect to projected financial
--------
information, the Master Servicer represent only that such information was
prepared in good faith based upon assumptions believed to be reasonable at
the time.
(iii) During the period from December 31, 1996 through the
Commencement Date, there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or
otherwise, of the Master Servicer and its Subsidiaries, taken as a whole.
(iv) In connection with the representations and warranties made by
the Master Servicer in this subsection 12.6(r), the Participants agree that
the Master Servicer shall not be deemed in breach of any representation or
warranty in this paragraph on account of the Master Servicer's completing
the matters or taking the actions described in the Master Servicer's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, as
filed with the SEC, under the heading "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Outlook", or, in respect
of any such matter or action or other matters emerging from comments
received by the Master Servicer from the SEC or the Master Servicer's
ongoing review of its accounting policies, practices or procedures,
incurring charges, increasing reserves or writing down asset values or
adjusting, revising or restating financial statements or footnotes for one
or more quarters or years, so long as the nature and amount of any such
charge, reserve, write-down, adjustment, revision or restatement are
substantially within the parameters disclosed to the Participants prior to
the Commencement Date.
(s) Financial Statements. The Master Servicer shall furnish to each
--------------------
Participant:
(i) as soon as available, but in any event within 105 days
after the end of each fiscal year of the Master Servicer, to the
extent prepared to comply with SEC requirements, a copy of the Form
10-K filed with the SEC for such fiscal year or, if no such Form 10-K
was so filed by the Master Servicer for such fiscal year, a copy of
the consolidated balance sheet of the Master Servicer and its
consolidated Subsidiaries as at the end of such year and the related
consolidated statements of income, shareholders' equity and retained
earnings and cash flows for such year, setting forth the comparative
amounts for the previous year and in each case certified without a
"going concern" or like qualification or exception, or scope
limitation, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. or other independent certified
public accountants of recognized standing reasonably acceptable to the
Administrative Agent; and
71
(ii) as soon as available, but in any event not later than 60
days after the end of each of the first three quarterly periods of
each fiscal year of the Master Servicer, to the extent prepared to
comply with SEC requirements, a copy of Form 10-Qs filed with the SEC
for such fiscal quarter or, if no such Form 10-Q was so filed by the
Master Servicer for such fiscal quarter, the unaudited consolidated
balance sheet of the Master Servicer and its consolidated Subsidiaries
as at the end of such quarter and the related unaudited consolidated
statements of income, shareholders' equity and retained earnings and
cash flows of the Master Servicer and its consolidated Subsidiaries
for such quarter and the portion of the fiscal year through the end of
such quarter, setting forth the comparative amounts for the
corresponding quarter and portion of the previous year, in each case
certified by a Responsible Officer of the Master Servicer as being
fairly stated in all material respects (subject to normal year-end
audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants or Responsible
Officer, as the case may be, and disclosed therein) except that the monthly
financial statements provided pursuant to clause (iii) shall only be
consistent with GAAP in all material respects and that the monthly
financial statements provided pursuant to clause (iii) shall not be
required to include footnotes.
(t) Certificates; Other Information. The Master Servicer shall
-------------------------------
furnish to each Participant concurrently with the delivery of the financial
statements referred to in clause (s)(i) and (ii), a certificate of a
Responsible Officer of the Master Servicer stating that, to the best of
such Responsible Officer's knowledge, each Transaction Party during such
period has observed or performed all of its covenants and other agreements,
and satisfied every condition, contained in the Transaction Documents to
which it is a party to be observed, performed or satisfied by it, and that
such Responsible Officer has obtained no knowledge of any Servicer Default
or Servicer Event of Default except as specified in such certificate.
(u) Separate Corporate Existence of the Company. The Master Servicer
-------------------------------------------
shall cause the Company to comply with the provisions of subsection 7.9.
Neither the Master Servicer nor any Servicer shall take any action, or omit
to take any action, which is inconsistent with the provisions thereof.
(v) Accuracy of Schedule 2. Schedule 2 is a true and complete
----------------------
listing of (i) all Subsidiaries of the Master Servicer that generate
Receivables and (ii) the jurisdiction of incorporation of each such
Subsidiary and all states in which each such Subsidiary is qualified to do
business the amount of Receivables set forth opposite each Subsidiaries'
name is the true and
72
correct balance of Receivables owned by such Subsidiary as of the date
indicated on Schedule 2.
Each of the Master Servicer and each Servicer agrees and acknowledges that each
of the representations and warranties contained in this subsection 12.6 shall be
deemed to have been made by the Master Servicer or such Servicer, as the case
may be, (x) as of the Commencement Date, and (y) with respect to an Increase in
Net Investment, as of the related Closing Date, unless, in either case, such
representation or warranty expressly relates only to a prior date.
12.7 Acquisition Obligation. (a) In the event of any breach of any
----------------------
of the representations, warranties or covenants of the Master Servicer or any
Servicer which is an Affiliate of the Company contained in subsection 12.6(e),
(h), (i), (j), (o), or (p), then upon the earlier to occur of the discovery of
such event by a Responsible Officer of such Person, or receipt by such Person of
written notice of such event given by the Administrative Agent, the outstanding
Principal Amount of Receivables shall be reduced by the Principal Amount of such
Receivables in respect of which such representation or warranty was incorrect or
such covenant was breached; provided, however, that (i) prior to the
-------- -------
Amortization Period, to the extent that such a reduction would cause the
Invested Percentage to be more than the Maximum Invested Percentage, the Master
Servicer and the Servicers which are Affiliates of the Company, jointly and
severally, agree to acquire such Receivable and any Related Property with
respect thereto on the terms and conditions set forth in paragraph (b) below and
(ii) during the Amortization Period, the Master Servicer and the Servicers which
are Affiliates of the Company, jointly and severally, agree (regardless of which
such Servicer or Master Servicer shall have been responsible for such breach) to
acquire such Receivable and any Related Property with respect thereto on the
terms and conditions set forth in paragraph (b) below. In the event of any
breach of any of the representations, warranties or covenants of the Master
Servicer or any Servicer which is not an Affiliate of the Company contained in
subsection 12.6(e), (h), (i), (j), (o) or (p), then upon the earlier to occur of
the discovery of such event by such Person, or receipt by such Person of written
notice of such event given by the Administrative Agent, the outstanding
Principal Amount of Receivables shall be reduced by the Principal Amount of such
Receivables in respect of which such representation or warranty was incorrect or
such covenant was breached upon the deposit by the Master Servicer or such
Servicer (which deposit the Master Servicer or such Servicer hereby agrees to
make) into the Collection Account in immediately available funds an amount equal
to the Principal Amount of such Receivable (together with payments pursuant to
paragraph (b), "Servicer Transfer Payments").
(b) If any breach of a representation, warranty or covenant by a
Servicer or the Master Servicer which is an Affiliate of the Company which
necessitates the acquisition of a Receivable by the Master Servicer and the
Servicers pursuant to paragraph (a) remains uncured on the day which is 5 days
after discovery or notice of such breach, the Master Servicer and such Servicers
shall acquire such Receivable and any Related Property with respect thereto by
depositing into the Collection Account in immediately available funds on such
5th
73
day (or, if such day is not a Business Day, the immediately succeeding Business
Day), an amount equal to (i) prior to an Amortization Period, the lesser of (A)
the amount necessary to cause the Invested Percentage to equal the Maximum
Invested Percentage and (B) the Principal Amount of such Receivable or (ii)
during an Amortization Period, the Principal Amount of such Receivable (also, a
"Servicer Transfer Payment"). Upon deposit of the Servicer Transfer Payment, the
Participants shall automatically and without further action be deemed to sell,
transfer, assign, set-over and otherwise convey to such Person, free and clear
of any Lien created by the Participants but otherwise without recourse,
representation or warranty, all the right, title and interest of the
Participants in and to such Receivable, and all Related Property with respect
thereto; and such retransferred Receivable shall be treated by the Participants
as collected in full as of the date on which it was transferred. The
Administrative Agent shall execute such documents and instruments of transfer or
assignment and take such other actions as shall reasonably be requested by the
Master Servicer to effect the conveyance of such Receivables pursuant to this
subsection 12.7.
12.8 Obligations Unaffected. The obligations of the Master Servicer,
----------------------
each Servicer and the Company to the Administrative Agent and the Participants
under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable or any transfer and assignment of a
Receivable.
12.9 Addition of Servicers. Subject to the terms and conditions
---------------------
hereof, from time to time one or more Subsidiaries of WMI which the
Administrative Agent has approved may become additional Servicers parties hereto
upon execution by each such Subsidiary of an Additional Servicer Supplement.
12.10 Interest on Overdue Payments. If any amount payable by the
----------------------------
Servicers or the Master Servicer to the Participants or the Administrative Agent
hereunder, whether on account of fees or expenses or on account of amounts
collected by the Servicers or the Master Servicer or amounts payable pursuant to
subsection 12.4 or 12.7, or otherwise, is not paid by such Servicer or the
Master Servicer, as the case may be, on the relevant Settlement Date or other
relevant date, such amount shall be payable together with interest for each day
from such Settlement Date or other relevant date, as the case may be, until such
amount is paid in full at a rate per annum equal to ABR plus 2%.
----
12.11 Servicer Events of Defaults. If any of the following events
---------------------------
(herein called "Servicer Events Of Default") shall have occurred and be
continuing:
(a) any Servicer or the Master Servicer, as the case may be, (1)
shall fail to deliver any Daily Report or any Settlement Statement
conforming in all material respects to the requirements of subsection 12.5
and such failure shall continue unremedied for two consecutive Business
Days after the Administrative Agent shall have delivered notice thereof to
such Servicer or the Master Servicer, as the case may be; provided, that if
--------
a
74
Force Majeure Delay shall have occurred with respect to the Servicers or
the Master Servicer, the failure to deliver any Daily Report or Settlement
Statement, shall not constitute, in either case, a Servicer Event of
Default unless such failure continues for longer than the lesser of (x) ten
consecutive Business Days and (y) the length of such Force Majeure Delay
(or, if greater, two Business Days) after the Administrative Agent shall
have delivered notice of such failure to the Company, or (2) shall fail to
make any payment reflected in such Daily Report or Settlement Statement as
being required to be made by it thereunder on the date such report or
statement is delivered;
(b) any Servicer or the Master Servicer, as the case may be, shall
fail to pay any amount required to be paid by it hereunder (other than
those specified in paragraph (a) of this subsection 12.11) within five
Business Days after the date when due;
(c) any Servicer or the Master Servicer, as the case may be, shall
fail to observe or perform any covenant or agreement applicable to it
contained herein (other than as specified in subsections (a) and (b) of
this subsection 12.11); provided, that, except in the case of any failure
--------
to observe or perform any covenant contained in subsection 12.6(q), no such
failure shall constitute a Servicer Event of Default under this paragraph
(c) unless such failure shall continue unremedied for a period of 30
consecutive days after notice thereof from the Administrative Agent, the
Required Participants or the Company; provided, that a Servicer Event of
--------
Default shall not be deemed to have occurred under this paragraph (c) based
upon a breach of a representation, warranty or covenant contained in
subsection 12.6(e), (h), (i), (j), (o) or (p) if the Servicers and Master
Servicer shall have complied with the provisions of subsection 12.7 with
respect thereto;
(d) any representation, warranty, certification or statement made or
deemed made by any Servicer or the Master Servicer, as the case may be, in
this Agreement or in any Settlement Statement or other certificate,
financial statement or other document delivered pursuant to this Agreement
shall prove to have been false or misleading in any material respect on or
as of the date made or deemed made; provided, that a Servicer Event of
--------
Default shall not be deemed to have occurred under this paragraph (d) based
upon a breach of a representation, warranty or covenant contained in
subsection 12.6(e), (h), (i), (j), (o) or (p) if the Servicers and Master
Servicer shall have complied with the provisions of subsection 12.7 with
respect thereto;
(e) (i) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization
or other relief in respect of any Servicer or the Master Servicer, as the
case may be, or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the
75
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Servicer or Master Servicer, as the case may be,
or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered; (ii)
any Servicer or the Master Servicer shall (A) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (B) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (i) of this subsection, (C)
apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Servicer or the
Master Servicer or for a substantial part of its assets, (D) file an answer
admitting the material allegations of a petition filed against it in any
such proceeding, (E) make a general assignment for the benefit of creditors
or (F) take any action for the purpose of effecting any of the foregoing;
or (iii) any Servicer or the Master Servicer shall become unable, admit in
writing or fail generally to pay its debts as they become due;
(f) a Purchase Termination Event shall have occurred and be
continuing under the Receivables Sale Agreement with respect to Sellers
which in the aggregate generated more than 10% of the aggregate revenues of
all Sellers during the immediately preceding Settlement Period;
then, in any such event, so long as such Servicer Event of Default shall be
continuing, with the consent of the Required Participants the Administrative
Agent or the Company may, or upon the request of the Required Participants the
Administrative Agent or the Company shall, terminate the rights of any or all of
the Servicers and the Master Servicer in accordance with subsection 12.2(d) by
notice to each such Servicer and/or the Master Servicer, as the case may be.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
WASTE MANAGEMENT FINANCING
CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
WASTE MANAGEMENT, INC.,
as Master Servicer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President-Finance
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Servicers:
-------------
WASTE MANAGEMENT OF NORTH AMERICA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
Address for Notices for all Servicers:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Finance
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a
Participant
By: /s/ B. ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: B. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Participants:
------------
Bank of America National Trust and
----------------------------------
Savings Association
-------------------
(Name of Participant)
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Attorney-in-Fact
Address for Notices:
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THREE RIVERS FUNDING CORPORATION
--------------------------------------
(Name of Participant)
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Address for Notices:
Mellon Financial Markets, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE 1
----------
NAMES, ADDRESSES AND COMMITMENTS OF PARTICIPANTS
------------------------------------------------
Commitment
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THE CHASE MANHATTAN BANK.......................................... $103,125,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Loan and Agency Services
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION.............. 89,375,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
CREDIT LYONNAIS NEW YORK BRANCH................................... 89,375,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE FIRST NATIONAL BANK OF CHICAGO................................ 89,375,000
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FIRST UNION NATIONAL BANK......................................... 89,375,000
One First ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THREE RIVERS FUNDING CORPORATION.................................. 89,375,000
c/o Mellon Financial Markets, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
ANNEX X
"ABR": for any day, a rate per annum equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the ABR due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
"Accounts": as defined in subsection 2.1(c)(ii) of the Receivables
Transfer Agreement.
"Additional Participant": as defined in subsection 11.4(e) of the
Receivables Transfer Agreement.
"Additional Seller Supplement": an instrument substantially in the
form of Exhibit B to the Receivables Sale Agreement by which a Subsidiary
of WMI becomes a Seller party to the Receivables Sale Agreement.
"Additional Servicer Supplement": an instrument substantially in the
form of Exhibit D to the Receivables Transfer Agreement by which a
Subsidiary of WMI becomes a Servicer party to the Receivables Transfer
Agreement.
"Adjusted LIBO Rate": with respect to a Fixed Tranche for any
Transfer Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate in effect for such
Transfer Period multiplied by (b) the Statutory Reserves Rate.
"Adjustment": as defined in subsection 2.5 of the Receivables Sale
Agreement.
"Adjustment Payment": as defined in subsection 12.4 of the
Receivables Transfer Agreement.
"Administrative Agent": The Chase Manhattan Bank, in its capacity as
administrative agent for the Participants under the Receivables Transfer
Agreement.
"Administrative Questionnaire": an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate": with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
2
"Aged Receivable": as of any date of determination, any Receivable
(a) which is unpaid in whole or in part for more than 91 days after its
original invoice date or (b) which is, as of such date of determination, a
Defaulted Receivable.
"Aged Receivable Amount": as of any date, the aggregate amount of
Aged Receivables which would otherwise have been Eligible Receivables as of
the most recent Settlement Period End Date, but for the fact that such
Receivables were Aged Receivables as of such day.
"Aggregate Eligible Receivables": as of any date of determination (a)
the aggregate outstanding Principal Amount of all Eligible Receivables on
such date (provided that for purposes of this clause (a) the criteria set
forth in clause (b) of the definition of Eligible Receivables shall not be
applicable) minus (b) the Aged Receivable Amount as of such date minus (c)
----- -----
the aggregate Excess Amounts with respect to all Obligors on such date;
provided, that all calculations required in determining Aggregate Eligible
--------
Receivables (a) shall include, and shall only include, Eligible Receivables
of Sellers as to which their Effective Date has occurred and (b) shall not
include Receivables of a Seller from which the Company has ceased
purchasing Receivables pursuant to subsection 9.15 of the Receivables Sale
Agreement or a Seller with respect to which the Company has terminated its
obligation to acquire Receivables pursuant to Article VII of the
Receivables Sale Agreement.
"Agreement": the agreement wherein such term is used, as the same may
be amended, supplemented or otherwise modified from time to time.
"Amortization Period": the period commencing on the date the
Commitment Period ends and ending with the termination of the Receivables
Transfer Agreement pursuant to subsection 4.1 thereof.
"Applicable Eurodollar Margin": .675% per annum; provided, that for
--------
any day on which the Net Investment exceeds 50% of the Maximum Commitment,
the Applicable Eurodollar Margin for such day shall be .75% per annum.
"Applicable Obligor Percentage": with respect to any Obligor, 4.0%.
"Assessment Rate": for any day, the annual assessment rate in effect
on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R.
Part 327 (or any successor provision) to the Federal Deposit Insurance
Corporation for insurance by such Corporation of time deposits made in
dollars at the offices of such member in the United States; provided, that
--------
if, as a result of any change in any law, rule or regulation, it is no
longer possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall
3
be such annual rate as shall be determined by the Administrative Agent to
be representative of the cost of such insurance to the Participants.
"Assignment and Acceptance": an assignment and acceptance entered into
by a Participant and an assignee (with the consent of any party whose
consent is required by subsection 11.4 of the Receivables Transfer
Agreement), and accepted by the Administrative Agent, substantially in the
form of Exhibit G to the Receivables Transfer Agreement.
"Authorized Signatory": any Person designated as such or as
"Authorized Representative" in the resolutions delivered to the Company
pursuant to subsection 3.1(b)(i) of the Receivables Sale Agreement.
"benefitted Participant": as defined in subsection 11.12 of the
Receivables Transfer Agreement.
"Board": the Board of Governors of the Federal Reserve System of the
United States of America.
"Business Day": any day that is not a Saturday, Sunday or other day
on which commercial banks in New York City, Pittsburgh, Pennsylvania,
Charlotte, North Carolina or Chicago, Illinois are authorized or required
by law to remain closed; provided, however, that, when used in connection
-------- -------
with the determination of any Adjusted LIBO Rate, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.
"Business Day Received": as defined in subsection 12.1(b)(vi) of the
Receivables Transfer Agreement.
"Capital Lease Obligations": of any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
GAAP and the amount of which at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents": deposit accounts, book-entry securities,
negotiable instruments or securities represented by instruments in bearer
or registered form which evidence:
4
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) federal funds, demand deposits, time deposits or certificates of
deposit of any depositary institution or trust company incorporated under
the laws of the United States of America or any State thereof (or any
domestic branch of a foreign bank) and subject to supervision and
examination by Federal or State banking or depositary institution
authorities; provided, that at the time of the investment or contractual
--------
commitment to invest therein, the commercial paper or other short-term
unsecured and uncollateralized debt obligations (other than such
obligations the rating of which is based upon the credit of a Person other
than such depository institution or trust company) thereof shall have a
credit rating from each of the Rating Agencies in one of the two highest
investment categories granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating in one of the two
highest rating categories by each of the Rating Agencies rating such
commercial paper;
(d) investments in money market funds (including funds for which the
Administrative Agent or any of its Affiliates is investment manager or
adviser) having a rating from each of the Rating Agencies rating such money
market fund in one of the two highest investment categories granted
thereby;
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above; or
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in
either case entered into with a depositary institution or trust company
(acting as principal) described in clause (b) above.
"Category A Seller": any Seller designated as a "Category A Seller"
on Schedule 1 to the Receivables Sale Agreement.
"Category B Seller": any Seller designated as a "Category B Seller"
on Schedule 1 to the Receivables Sale Agreement.
"Category C Seller": any Seller designated as a "Category C Seller"
on Schedule 1 to the Receivables Sale Agreement.
"Change in Control": (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any "person" or
5
"group" (within the meaning of the Securities Exchange Act of 1934, as
amended, and the rules of the SEC thereunder as in effect on the date
hereof), of shares representing more than 20% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of
WMI; (b) occupation of a majority of the seats (other than vacant seats) on
the board of directors of WMI by Persons who were neither (i) nominated by
the board of directors of WMI nor (ii) appointed by directors so nominated;
or (c) the failure of WMNA at any time to be wholly owned, either directly
or indirectly, by WMI.
"Change in Law": (a) the adoption of any law, rule or regulation after
the date of the Receivables Transfer Agreement, (b) any change in any law,
rule or regulation or in the interpretation or application thereof by any
Governmental Authority after the date of the Receivables Transfer Agreement
or (c) compliance by any Participant (or, for purposes of subsection 3.2(b)
of the Receivables Transfer Agreement, by any lending office of such
Participant or by such Participant's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of the Receivables
Transfer Agreement.
"CWM": Chemical Waste Management, Inc., a Delaware corporation.
"CIMS System": the Customer Information Management System maintained
by WMNA in Oak Brook, Illinois.
"Closing Date": as defined in subsection 2.3(b) of the Receivables
Transfer Agreement.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collection Account": as defined in subsection 2.7(a)(i) of the
Receivables Transfer Agreement.
"Collections": all collections and all amounts received in respect of
the Receivables, including Recoveries, Seller Repurchase Payments, Seller
Adjustment Payments and Servicer Transfer Payments and, together with all
collections and amounts received in respect of the Related Property in the
form of cash, checks, wire transfers or any other form of cash payment, and
all proceeds of Receivables and collections thereof (including, without
limitation, collections constituting an account or general intangible or
evidenced by a note, instrument, security, contract, security agreement,
chattel paper or other evidence of indebtedness or security, whatever is
received upon the sale, exchange, collection or other disposition of, or
any indemnity, warranty or guaranty payable in respect of, the foregoing
and all "proceeds," as defined in Section 9-306 of the UCC
6
as in effect in the State of New York, of the foregoing) and any Investment
Earnings.
"Commencement Date": as defined in subsection 6.1 of the Receivables
Transfer Agreement.
"Commitment": of each Participant, the amount set forth opposite the
name of such Participant on Schedule 1 to the Receivables Transfer
Agreement, as such amount may be changed pursuant to subsection 2.10 or
11.4 of the Receivables Transfer Agreement.
"Commitment Fee": as defined in subsection 2.4 of the Receivables
Transfer Agreement.
"Commitment Percentage": as to any Participant, (a) on or prior to the
termination of the Commitments, the percentage equivalent of a fraction the
numerator of which is the Commitment of such Participant and the
denominator of which is the Maximum Commitment and (b) thereafter, the
percentage equivalent of a fraction the numerator of which is the
Commitment of such Participant immediately prior to such termination and
the denominator of which is the Maximum Commitment immediately prior to
such termination.
"Commitment Period": the period from and including the Commencement
Date, up to but not including the first to occur of (a) the Scheduled
Termination Date, (b) any termination of the Commitments pursuant to
Article IX of the Receivables Transfer Agreement and (c) termination (but
not reduction) of the Commitments pursuant to subsection 2.10 of the
Receivables Transfer Agreement.
"Company": Waste Management Financing Corporation, a Delaware
corporation.
"Company Policies": the written policies of the Company with respect
to Defaulted Receivables.
"Complete Servicing Transfer": as defined in subsection 12.2(d) of
the Receivables Transfer Agreement.
"Concentration Account": as defined in subsection 12.1(b)(ii) of the
Receivables Transfer Agreement.
"Conduit Party": in the case of any Participant which is a special-
purpose securitization conduit or similar entity, each bank or financial
institution which from time to time provides liquidity and/or credit
facilities to or for the account of such Participant to fund such
Participant's obligations under the Receivables Transfer Agreement or to
7
support the securities (if any) issued by such Participant to fund such
obligations.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control": the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or
otherwise; "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Credit Facility": the $250,000,000 Revolving Credit Facility under
the Credit Agreement dated December 29, 1997 among WMI, the Lenders party
thereto and the Chase Manhattan Bank, as Administrative Agent as amended,
supplemented or otherwise modified from time to time.
"Daily Report": as defined in subsection 12.5(a) of the Receivables
Transfer Agreement.
"Defaulted Receivable": all Receivables (or portions thereof) which,
in accordance with the Policies and Company Policies, have or should have
been written off as uncollectible, including without limitation the
Receivables of any Obligor which becomes the subject of any voluntary or
involuntary bankruptcy proceeding.
"Designated Account": as defined in subsection 12.1(b)(i) of the
Receivables Transfer Agreement.
"Designated Bank": each bank identified on the Commencement Date at
which any Designated Account, the Concentration Account and the SPC
Collection Account is held, and any replacements therefor or additions
thereto agreed to in writing by the Administrative Agent.
"Disclosed Matters": with respect to the Master Servicer, any
Servicer and any Seller, the matters described in the Master Servicer's
Annual Report on Form 10-K for the year ended December 31, 1997, and
Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and
September 30, 1997.
"Discounted Percentage": as defined in Schedule 3 to the Receivables
Sale Agreement.
"Documents": as defined in subsection 2.1(f)(iii) of the Receivables
Sale Agreement.
8
"Dollars," "U.S. Dollars" and "$": dollars in lawful currency of the
United States of America.
"Early Termination": as defined in Article VII of the Receivables
Sale Agreement.
"Effective Date": as defined in subsection 2.1(a) of the Receivables
Sale Agreement.
"Eligible Obligor": as of any date of determination, each Obligor in
respect of a Receivable that satisfies the following eligibility criteria:
(a) it is a resident of the United States, its territories or
possessions;
(b) it is not a Seller or an Affiliate of a Seller; and
(c) it is not the subject of any voluntary or involuntary
bankruptcy proceeding;
"Eligible Receivable": as of any date of determination, each
Receivable owing by an Eligible Obligor in existence as of such date that
is not subject to a Repurchase Event and that as of such date satisfies
each of the following eligibility criteria:
(a) it constitutes either (i) an account within the meaning of
Section 9-106 of the UCC of the State the law of which governs the
perfection of the interest granted in it, or (ii) a general intangible
(to the extent that such Receivable includes interest, finance
charges, returned check or late charges on sales or similar taxes)
within the meaning of Section 9-106 of such UCC;
(b) it is not an Aged Receivable;
(c)(i) the goods related to it shall have been shipped or the
services related to it shall have been performed or (ii) it shall have
been billed to the Obligor and it is a Receivables arising from waste
disposal services for single family dwellings and relates to services
to be performed no later than 105 days after the invoice date of such
Receivable or a Receivables arising from scheduled, periodic, fixed
waste disposal services for commercial customers and multi-unit
residential dwellings and relates to services to be performed no later
than 45 days after the invoice date of such Receivable;
(d) it shall have been recorded in the CIMS System or other
computer information management systems maintained by WMI, WMNA, CWM,
or any other Seller;
9
(e) it is denominated and payable only in U.S. Dollars in the
United States;
(f) it arose in the ordinary course of business from the sale of
goods, products or services of the relevant Seller and in accordance
with the Policies of such Seller and, at such date of determination,
no Early Termination has occurred with respect to such Seller;
(g) (i) it does not contravene any applicable law, rule or
regulation and the applicable Seller is not in violation of any law,
rule or regulation in connection with it, in each case which would in
any way render such Receivable unenforceable or would otherwise impair
in any material respect the collectibility of such Receivable and (ii)
it is not subject to any investigation or proceeding known by such
Seller that would reasonably be expected to adversely affect its
payment or enforceability;
(h) it is an account receivable representing all or part of the
sales price of merchandise, insurance or services within the meaning
of Section 3(c)(5) of the Investment Company Act of 1940, as amended;
(i) it is not a Receivable for which the applicable Seller has
established an offsetting specific reserve; provided, that a
--------
Receivable subject only in part to the foregoing shall be an Eligible
Receivable to the extent not so subject;
(j) it is not a Receivable with original payment terms in excess
of 60 days from its original invoice date, or in respect of which the
applicable Seller has (i) altered the basis of the aging from the
initial due date for payment such that the final due date extends to a
date more than 60 days from its original invoice date or (ii)
otherwise made any modification except in the ordinary course of
business and consistent with the Policies of such Seller;
(k) all required consents, approvals or authorizations necessary
for the creation and enforceability of it and the effective assignment
and sale thereof by the applicable Seller to the Company and by the
Company to the Participants shall have been obtained with respect to
such Receivable; provided, that with respect to Receivables owing by
--------
Government Obligors, such Receivables shall constitute Eligible
Receivables notwithstanding the failure of such Receivables to satisfy
this clause (k) except to the extent such failure adversely affects
the collectibility of such Receivables by the Company or the
Participants;
10
(l) the applicable Seller is not in default in any material
respect under the terms of the contract, if any, from which such
Receivable arose;
(m) all right, title and interest in it has been validly sold to
the Company by the applicable Seller pursuant to the Receivables Sale
Agreement;
(n) the Company or the Participants will have legal and
beneficial ownership therein free and clear of all Liens other than
Permitted Liens and such Receivable has been the subject of either a
valid transfer from the Company to the Participants or, alternatively,
the grant of a first priority perfected security interest therein to
the Participants free and clear of all Liens other than Permitted
Liens;
(o) it is not subject to any dispute in whole or in part or to
any offset, counterclaim, defense, rescission, recoupment or
subordination; provided, that a Receivable subject only in part to any
--------
of the foregoing shall be an Eligible Receivable to the extent not so
subject;
(p) it is at all times the legal, valid and binding obligation
of the Obligor thereon, enforceable against such Obligor to pay the
full Principal Amount thereof in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or law);
(q) as of the related Payment Date, neither the Company nor the
applicable Seller has (i) taken any action that would impair the
rights of the Administrative Agent or the Participants or (ii) failed
to take any action that was necessary to avoid impairing the rights
therein of the Administrative Agent or the Participants;
(r) each of the representations and warranties made in the
Receivables Sale Agreement by the applicable Seller with respect to
such Receivable is true and correct in all material respects; and
(s) at the time such Receivable was sold by the applicable
Seller to the Company under the Receivables Sale Agreement, no event
described in paragraph (e) of Article VII of the Receivables Sale
Agreement (without giving effect to any requirement as to the passage
of time) had occurred with respect to such Seller.
11
"Environmental Laws": all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental
Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the management, release or threatened
release of any Hazardous Material or to health and safety matters.
"Environmental Liability": of any Person, any liability, contingent
or otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of such Person or any
Subsidiary thereof directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened
release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which
liability is assumed or imposed with respect to any of the foregoing.
"Equipment": as defined in subsection 2.1(c)(i) of the Receivables
Transfer Agreement.
"ERISA": the Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time.
"ERISA Affiliate": with respect to any Person, any trade or business
(whether or not incorporated) that is a member of a group of which such
Person is a member and which is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA
and Section 412 of the Code, is treated as a single employer under Section
414 of the Code.
"ERISA Event": for any Person, (a) any "reportable event," as defined
in Section 4043 of ERISA or the regulations issued thereunder with respect
to a Plan (other than an event for which the 30-day notice period is
waived); (b) the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section 302
of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d)
of the Code or Section 303(d) of ERISA of an application for a waiver of
the minimum funding standard with respect to any Plan; (d) the incurrence
by such Person or any of its ERISA Affiliates of any liability under Title
IV of ERISA with respect to the termination of any Plan; (e) the receipt by
such Person or any ERISA Affiliate from the PBGC or a plan administrator of
any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by such Person
or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
(g) the receipt by such Person or any ERISA Affiliate of any notice, or the
receipt by any
12
Multiemployer Plan from such Person or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA.
"Eurodollar Participating Interest": with respect to any Participant,
that portion of its Participating Interest in the Receivables with respect
to which the Purchase Discount Amount is determined by reference to the
Adjusted LIBO Rate.
"Excess Amount": at any time, with respect to any Obligor, the excess
(if any) of (a) the aggregate outstanding Principal Amount of the Eligible
Receivables owing by such Obligor as of the most recent Settlement Period
End Date over (b) the Applicable Obligor Percentage of the aggregate
----
outstanding Principal Amount as of such Settlement Period End Date of all
Eligible Receivables, in each case originated by Sellers as to which the
Effective Date has occurred, which amount shall be recalculated, as of such
Settlement Period End Date, in the event the Effective Date occurs with
respect to any Seller after such date and prior to the next Settlement
Period End Date.
"Excess Application Amount": as defined in subsection 2.12(c) of the
Receivables Transfer Agreement.
"Excluded Taxes": with respect to the Administrative Agent and any
Participant or any other recipient of any payment to be made by or on
account of any obligation of the Company, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of America,
or by the jurisdiction under the laws of which such recipient is organized
or in which its principal office is located or, in the case of any
Participant, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America and (c) in the
case of a Foreign Participant (other than an assignee pursuant to a request
by the Company under subsection 3.5 of the Receivables Transfer Agreement),
any withholding tax that is imposed on amounts payable to such Foreign
Participant at the time such Foreign Participant becomes a party to the
Receivables Transfer Agreement or is attributable to such Foreign
Participant's failure or inability to comply with subsection 3.4(e) of the
Receivables Transfer Agreement), except (i) to the extent that such Foreign
Participant's assignor (if any) was entitled, at the time of assignment, to
receive additional amounts from the Company with respect to such
withholding tax pursuant to subsection 3.4(a) of the Receivables Transfer
Agreement or (ii) such withholding taxes are imposed as a result of the
Participating Interests being characterized as anything other than
indebtedness for United States federal income tax purposes.
13
"Federal Funds Effective Rate": for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next
succeeding 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 (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for the day of such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by
it.
"Financial Officer": of any corporation, the chief financial officer,
principal accounting officer, treasurer, assistant treasurer or controller
of such corporation.
"Fixed Tranche": a portion of the Net Investment on which the rate at
which the Purchase Discount Amount accrues is based upon the Adjusted LIBO
Rate.
"Floating Tranche": that portion of the Net Investment not allocated
to a Fixed Tranche and the Purchase Discount Amount in respect of which is
based upon the ABR.
"Force Majeure Delay": with respect to any Servicer or the Master
Servicer, any cause or event which is beyond the control and not due to the
negligence of such Servicer or the Master Servicer, as the case may be,
which delays, prevents or prohibits such Person's delivery of Daily Reports
and/or Settlement Statements, as the case may be, including, without
limitation, computer, electrical and mechanical failures, acts of God or
the elements and fire; provided, that no such cause or event shall be
--------
deemed to be a Force Majeure Delay unless the affected Servicer or Master
Servicer shall have given the Company and the Administrative Agent written
notice thereof as soon as possible after the beginning of such delay.
"Foreign Participant": any Participant or Administrative Agent that
is organized under the laws of a jurisdiction other than that in which the
Company is located. For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction.
"GAAP": generally accepted accounting principles in the United States
of America.
"Governmental Authority": the government of the United States of
America, any other nation or any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive,
14
legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Government Obligor": the United States government or any state or
local government or any subdivision thereof, or any agency, department or
instrumentality thereof.
"Guarantee": of or by any Person (the "guarantor") any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or
indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to
purchase (or to advance or supply funds for the purchase of) any security
for the payment thereof, (b) to purchase or lease property, securities or
services for the purpose of assuring the owner of such Indebtedness or
other obligation of the payment thereof, (c) to maintain working capital,
equity capital or any other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of
any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term "Guarantee" shall not
--------
include endorsements for collection or deposit in the ordinary course of
business.
"Hazardous Materials": all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement": any interest rate protection agreement, foreign-
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Incipient Purchase Termination Event": any condition or act
specified in Article VII of the Receivables Sale Agreement that, with the
giving of notice or the lapse of time or both, would become a Purchase
Termination Event.
"Increase in Net Investment": for any applicable Closing Date, the
Dollar amount by which the Net Investment of the Participants is being
increased on such Closing Date.
15
"Indebtedness": of any Person, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits
or advances of any kind, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of
such Person upon which interest charges are customarily paid, (d) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property owned or acquired by
such Person, whether or not the Indebtedness secured thereby has been
assumed, (g) all Guarantees by such Person of Indebtedness of others, (h)
all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Indemnified Liabilities": as defined in subsection 9.3 of the
Receivables Sale Agreement.
"Indemnified Taxes": Taxes other than Excluded Taxes.
"Indemnitee": as defined in subsection 11.3(b) of the Receivables
Transfer Agreement.
"Initial Acquisition Date": as defined in subsection 12.1(b)(ii) of
the Receivables Transfer Agreement.
"Initial Deposit Account": as defined in subsection 12.1(b)(i) of the
Receivables Transfer Agreement.
"Initial Sellers": the Sellers with an applicable Effective Date of
the Commencement Date.
"Insolvency Event": the occurrence of any event of the type described
in paragraph (e) of Article VII of the Receivables Sale Agreement.
"Invested Percentage": a fraction the numerator of which is Net
Investment and the denominator of which is Aggregate Eligible Receivables.
16
"Investment Earnings": as defined in subsection 2.7(a)(iii) of the
Receivables Transfer Agreement.
"LIBO Rate": with respect to a Fixed Tranche for any Transfer Period,
the rate appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations
of interest rates applicable to Dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Transfer Period, at the rate for Dollar
deposits with a maturity comparable to such Transfer Period. In the event
that such rate is not available at such time for any reason, then the "LIBO
----
Rate" with respect to a Fixed Tranche for any Transfer Period shall be the
----
rate at which Dollar deposits of $5,000,000, and for a period comparable to
the applicable Transfer Period are offered by the principal London office
of the Administrative Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Transfer Period.
"Lien": with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities,
any purchase option, call or similar right of a third party with respect to
such securities.
"Margin Stock": as defined in Regulation U.
"Master Servicer": WMI, in its capacity as master servicer under the
Receivables Transfer Agreement.
"Material Adverse Effect": (i) a materially adverse effect on the
business, operations, property or condition (financial or otherwise) of WMI
and its Subsidiaries taken as a whole or on the Company, (ii) a material
impairment of the ability of the Company, the Master Servicer, any
Servicer, or the Sellers, taken as a whole, to perform their obligations
under the Transaction Documents, (iii) a material impairment of the
validity or enforceability of any of the Transaction Documents against any
such Person, (iv) a material impairment of the collectibility of the
Receivables taken as a whole or (v) a material impairment of the interests,
rights or remedies of the Administrative Agent or the Participants under or
with respect to the Receivables or the Transaction Documents.
17
"Material Indebtedness": for any Person, Indebtedness of, commitments
providing for the incurrence of Indebtedness by, or obligations in respect
of one or more Hedging Agreements, of any one or more of such Person and
its Subsidiaries in a principal amount exceeding, individually or in the
aggregate, $100,000,000; for purposes of determining Material Indebtedness,
the "principal amount" of the obligations of such Person or any Subsidiary
in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that such Person
or such Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
"Maximum Commitment": $550,000,000, as such amount may be reduced
pursuant to subsection 2.10 of the Receivables Transfer Agreement.
"Maximum Invested Percentage": at a particular date, 100% minus the
-----
sum of (a) 18% and (b) following the occurrence of each Reserve Event, an
additional 1% for each Reserve Event.
"Maximum Transfer Amount": at a particular date, the lesser of (a)
the Maximum Commitment at such date and (b) the product of (i) the Maximum
Invested Percentage at such date and (ii) Aggregate Eligible Receivables as
of the close of business on the Business Day preceding such date.
"Minimum Equity Amount": $150,000,000.
"Monthly Servicing Fee": for each Settlement Period, the product of
(a) the number of days in such period, (b) 1% and (c) the average daily
principal balance of Purchased Receivables during such period divided by
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365.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Multiemployer Plan": with respect to any Person, a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Investment": at any time, (i) when used with respect to all
Participants, the excess, if any, of (a) the aggregate of the amounts paid
by the Participants pursuant to subsection 2.3 of the Receivables Transfer
Agreement over (b) the aggregate amount of Receivable Proceeds distributed
----
to the Participants in payment of the Net Investment pursuant to the
Receivables Transfer Agreement and (ii) when used with respect to a
Participant, the excess, if any, of (a) the aggregate of the amounts paid
by such Participant pursuant to subsection 2.3 of the Receivables Transfer
Agreement over (b) the aggregate amount of Receivable Proceeds distributed
----
to such Participant in payment of the Net Investment pursuant to the
Receivables Transfer Agreement.
18
"Obligor": with respect to any Receivable, the Person or Persons
obligated to make payments with respect to such Receivable, including any
guarantor thereof.
"Other Taxes": (i) any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
arising from any payment made under the Receivables Transfer Agreement or
from the execution, delivery or enforcement of, or otherwise with respect
to, the Transaction Documents or (ii) any and all Taxes imposed directly or
indirectly on any Participant as a result of the Participating Interests
being characterized as anything other than indebtedness for United States
federal income tax purposes (including, without limitation, any taxes on
any entity deemed to have been created pursuant to the Receivables Transfer
Agreement).
"Partial Servicing Transfer": as defined in subsection 12.2(d) of the
Receivables Transfer Agreement.
"Participant": the Persons listed on Schedule 1 to the Receivables
Transfer Agreement and any other Person that shall have become a party to
the Receivables Transfer Agreement pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party thereto
pursuant to an Assignment and Acceptance.
"Participating Interest": as defined in subsection 2.2 of the
Receivables Transfer Agreement.
"Payment Date": as defined in subsection 2.3(a) of the Receivables
Sale Agreement.
"PBGC": the Pension Benefit Guaranty Corporation, referred to and
defined in ERISA, and any successor entity performing similar functions.
"Permitted Liens": Liens created pursuant to the Receivables Transfer
Agreement or the Receivables Sale Agreement and any other Liens securing
obligations not in excess of $100,000 in the aggregate (with respect to all
Receivables) at any time outstanding.
"Person": any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan": with respect to any Person, any employee pension benefit plan
(other than a Multiemployer Plan) subject to the provisions of Title IV of
ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of
which the Person or any ERISA Affiliate is (or, if such plan were
terminated,
19
would under Section 4069 of ERISA be deemed to be) an "employer" as defined
in Section 3(5) of ERISA.
"Policies": with respect to any Seller which has set forth its credit
and collection policies in writing, such written credit and collection
policies as they have been applied by such Seller in the ordinary course of
its business prior to the Commencement Date and, with respect to any Seller
which has not set forth its credit and collection policies in writing, its
credit and collection policies as in effect and applied by such Seller in
the ordinary course of its business prior to the Commencement Date, in each
case as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the Receivables Transfer Agreement and the
Receivables Sale Agreement.
"Pooled Property": as defined in subsection 2.1(a) of the Receivables
Transfer Agreement.
"Potential Termination Event": any Termination Event and any event or
condition that upon notice, lapse of time or both would constitute a
Termination Event.
"Prime Rate": the rate of interest per annum publicly announced from
time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as
being effective.
"Principal Amount": with respect to any Receivable, the amount due
thereunder (expressed in Dollars), net of any available prompt payment
discount, volume discount or other promotional discount or rebate.
"Purchase Discount Amount": a purchase discount which (a) accrues to
the Participants in respect of the Participating Interest on the
outstanding amount of the Net Investment; (b) is payable in arrears on each
Purchase Discount Amount Payment Date (both prior to and after the
commencement of the Amortization Period) occurring during the period
commencing on the date of the first transfer and assignment of the
Participating Interest in Receivables and Related Property pursuant to
subsection 2.3(a) of the Receivables Transfer Agreement and ending on the
date on which the Net Investment is equal to zero and the Commitments of
the Participants have terminated; and (c) is calculated at a rate per annum
equal to: (i) in respect of that portion of the Net Investment allocated
to any Fixed Tranche, the sum of the Adjusted LIBO Rate with respect
thereto plus the Applicable Eurodollar Margin and (ii) in respect of that
----
portion of the Net Investment not allocated to any Fixed Tranche, ABR in
effect from time to time during the period for which payment is made.
20
"Purchase Discount Amount Payment Date": (a) as to the Floating
Tranche, each Settlement Date, (b) as to any Fixed Tranche having a
Transfer Period of one, two or three months, the last day of such Transfer
Period and (c) as to any Tranche, any date on which the principal portion
of the Net Investment represented thereby is paid, prepaid or is otherwise
due (by mandatory prepayment, acceleration or otherwise).
"Purchased Receivables Collections": as defined in subsection
12.1(b)(i) of the Receivables Transfer Agreement.
"Purchase Price": as defined in subsection 2.2 of the Receivables
Sale Agreement.
"Purchase Termination Event": as defined in Article VII of the
Receivables Sale Agreement.
"Purchased Receivable": any Receivable sold transferred, assigned or
conveyed or purported to be sold, transferred, assigned or conveyed to the
Company by any Seller pursuant to, and in accordance with the terms of, the
Receivables Sale Agreement and not resold to such Seller pursuant to
subsection 2.1(b) or 2.6 thereof.
"Rating Agencies": Moody's and S&P.
"Receivables": the indebtedness and payment obligations of any Person
to a Seller (including, without limitation, obligations constituting an
account or general intangible or evidenced by a note, instrument, contract,
security agreement, chattel paper or other evidence of indebtedness or
security) arising from a sale of merchandise or the provision of services
by a Seller, including, without limitation, any right to payment for goods
sold or for services rendered, whether or not it has been earned by
performance, and including the right to payment of any interest, sales
taxes, finance charges, returned check or late charges and other
obligations of such Person with respect thereto.
"Receivable Assets": as defined in subsection 2.1(a) of the
Receivables Sale Agreement.
"Receivable Proceeds": as defined in subsection 2.7(b) of the
Receivables Transfer Agreement.
"Receivables Property": as defined in subsection 2.1(a) of the
Receivables Transfer Agreement.
"Receivables Sale Agreement": the Receivables Sale Agreement, dated
as of December 29, 1997, among the Sellers, the Master Servicer and the
21
Company, as buyer, as amended, supplemented or otherwise modified from time
to time.
"Receivables Sale Agreement Guarantee": the Seller Guarantee, dated
as of December 29, 1997, executed by the Seller Guarantors party thereto in
favor of the Company, as amended, supplemented or otherwise modified from
time to time.
"Receivables Transfer Agreement": the Receivables Transfer and
Servicing Agreement, dated as of December 29, 1997, among the Company, as
seller, the Master Servicer, the Servicers, the Participants and the
Administrative Agent, as amended, supplemented or otherwise modified from
time to time.
"Recoveries": amounts collected (net of out-of-pocket costs of
collection) in respect of Defaulted Receivables.
"Reduction Date": as defined in subsection 2.11(b) of the Receivables
Transfer Agreement.
"Register": as defined in subsection 11.4(c) of the Receivables
Transfer Agreement.
"Regulation G, T, U or X": Regulation G, T, U or X, respectively, of
the Board as from time to time in effect and all official rulings and
interpretations thereunder or thereof.
"Related Property":
(A) all goods (including returned goods), if any, relating to
the sale which gave rise to any Receivable;
(B) all other security interests or Liens and property subject
thereto from time to time purporting to secure payment of any
Receivable, whether pursuant to the contract related to such
Receivable or otherwise or pursuant to any obligations evidenced by a
note, instrument, contract, security agreement, chattel paper or other
evidence of indebtedness or security and the proceeds thereof,
together with all financing statements or similar instruments signed
by an Obligor describing any collateral securing such Receivable; and
(C) all guarantees, insurance and other agreements or
arrangements of whatever character from time to time supporting or
securing payment of any Receivable whether pursuant to the contract
related to such Receivable or otherwise or pursuant to any obligations
evidenced by a note, instrument, contract, security
22
agreement, chattel paper or other evidence of indebtedness or security
and the proceeds thereof.
"Replacement Facility": as defined in subsection 12.6(g) of the
Receivables Transfer Agreement.
"Reportable Event": any reportable event as defined in Section
4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate which is
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code).
"Reporting Day": as defined in subsection 12.5(a) of the Receivables
Transfer Agreement.
"Repurchase Amount": as defined in subsection 2.6 of the Receivables
Sale Agreement.
"Repurchase Event": as defined in subsection 2.6 of the Receivables
Sale Agreement.
"Request for Transfer and Assignment": as defined in subsection
2.3(b) of the Receivables Transfer Agreement.
"Required Participants": Participants having Commitment Percentages
the sum of which, in the aggregate, equals at least 51%.
"Requirement of Law": as to any Person, for any Person, the
certificate or articles of incorporation 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 a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
"Reserve Amount": for any Business Day in any Settlement Period which
occurs prior to the Settlement Date occurring in such Settlement Period,
the product of (x) the lesser of (i) the number of Business Days (including
such Business Day) which have occurred in such Settlement Period and (ii)
10 and (y) one-tenth of the sum of the amount payable pursuant to clause
(i), (ii) and (iii)(x) of subsection 2.7(b) of the Receivables Transfer
Agreement on the Settlement Date and/or Purchase Discount Payment Dates
occurring during such Settlement Period (which amount shall be adjusted for
any increases and decreases in the Net Investment, including any such
increases and decreases which occur after the tenth Business Day of such
Settlement Period).
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"Reserve Event": any event specified on Exhibit B to the Receivables
Transfer Agreement.
"Responsible Officer": with respect to any Person, the Chairman or
Vice Chairman of the Board, President, Chief Financial Officer, any
Controller, Principal Accounting Officer, Treasurer, Assistant Treasurer,
Secretary or Authorized Signatory of such Person.
"Restricted Payments": as defined in subsection 8.7 of the
Receivables Transfer Agreement.
"Retransfer Payment": as defined in subsection 5.3(b) of the
Receivables Transfer Agreement.
"S&P": Standard & Poor's Ratings Services and its successors.
"Sale Transactions": the execution, delivery and performance by each
of the Sellers of the Receivables Sale Agreement and each of the other
Transaction Documents to which it is a party, the sale of Receivables by
each Seller thereunder and the consummation of the other transactions
contemplated by any of the foregoing.
"Scheduled Termination Date": June 30, 1998.
"SEC": means the Securities and Exchange Commission.
"Seller Addition Date": as defined in subsection 3.4 of the
Receivables Sale Agreement.
"Seller Adjustment Payment": as defined in subsection 2.5 of the
Receivables Sale Agreement.
"Seller Guarantors": WMI and WMNA.
"Seller Repurchase Payment": as defined in subsection 2.6 of the
Receivables Sale Agreement.
"Sellers": the collective reference to WMI, in its capacity as a
Seller under the Receivables Sale Agreement, the Subsidiaries of WMI listed
as Sellers on Schedule 1 to the Receivables Sale Agreement and any
Subsidiaries of WMI which have been added as Sellers in accordance with the
provisions of the Receivables Sale Agreement and the other Transaction
Documents, all of the foregoing in their capacities as Sellers under the
Receivables Sale Agreement; each, individually, a "Seller".
24
"Servicer Default": any Servicer Event of Default and any event or
condition that upon notice, lapse of time or both would constitute a
Servicer Event of Default.
"Servicer Event of Default": as defined in subsection 12.11 of the
Receivables Transfer Agreement.
"Servicer Transfer Payment": as defined in subsection 12.7(b) of the
Receivables Transfer Agreement.
"Servicers": initially each of WMI and WMNA in its capacity as a
servicer together with any other Person which has been added as a Servicer
in accordance with the provisions of the Receivables Transfer Agreement, in
their capacities as servicers under the Receivables Transfer Agreement.
"Servicing Transactions": the execution, delivery and performance by
the Master Servicer or any Servicer of each of the Transaction Documents to
which the Master Servicer or any Servicer is a party and the servicing and
collection of the Receivables under the Receivables Transfer Agreement and
the consummation of the other transactions contemplated by any of the
foregoing.
"Settlement Date": with respect to any calendar month, the day that
is 20 calendar days following the last day of such calendar month (or, if
such 20th calendar day is not a Business Day, the next succeeding Business
Day).
"Settlement Period": each fiscal month of the Master Servicer
(including fiscal months occurring prior to the Commencement Date).
"Settlement Period End Date": at any time, the last day of the most
recent Settlement Period for which a Settlement Statement has been
delivered (or until the first Settlement Statement is delivered, as of the
last day of November).
"Settlement Statement": as defined in subsection 12.5(b) of the
Receivables Transfer Agreement.
"Settlement Statement Date": with respect to any calendar month for
which a Settlement Statement is required to be prepared, the day that is 15
calendar days following the last day of such calendar month (or, if such
15th calendar day is not a Business Day, the next succeeding Business Day).
"SPC Collection Account": as defined in subsection 12.1(b)(iii) of
the Receivables Transfer Agreement.
25
"Specified Bankruptcy Opinion Provisions": the provisions contained
in the legal opinion delivered pursuant to subsection 6.1(b)(i) of the
Receivables Transfer Agreement relating to the non-substantive
consolidation of the Master Servicer and its Affiliates and the Company
under the heading "Assumptions of Fact".
"Statutory Reserve Rate": a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages
-----
(including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative
Agent is subject for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Fixed Tranches shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets which may be available from time to time
to any Participant under such Regulation D or any comparable regulation.
The Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Subordinated Note": as defined in subsection 8.1 of the Receivables
Sale Agreement.
"subsection 11.3(b)(1) Indemnified Liabilities": as defined in
subsection 11.3(b)(i) of the Receivables Transfer Agreement.
"Subsequent Deposit Account": as defined in subsection 12.1(b)(i) of
the Receivables Transfer Agreement.
"Subsidiary": with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well
as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of
the general partnership interests are, as of such date, owned, controlled
or held, or (b) that is, as of such date, otherwise Controlled, by the
parent or one or more subsidiaries of the parent.
"Substitute Servicer": as defined in subsection 12.2(d) of the
Receivables Transfer Agreement.
26
"Tax Indemnifying Party": as defined in subsection 3.4(a) of the
Receivables Transfer Agreement.
"Taxes": any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Termination Event": as defined in Article IX of the Receivables
Transfer Agreement.
"Tranches": the collective reference to the Floating Tranche and the
Fixed Tranches.
"Transaction Documents": the Receivables Transfer Agreement, the
Receivables Sale Agreement, the Receivables Sale Agreement Guarantee and
the Subordinated Note.
"Transaction Parties": the Company, the Master Servicer, the Sellers,
the Seller Guarantors and the Servicers.
"Transactions": the execution, delivery and performance by the
Company of each of the Transaction Documents to which the Company is a
party, the assignment transfer of the Participating Interests thereunder
and the consummation of the other transactions contemplated by any of the
foregoing.
"Transfer Notice": as defined in subsection 12.2(d) of the
Receivables Transfer Agreement.
"Transfer Period": with respect to any portion of the Net Investment
allocated to a Fixed Tranche:
(a) initially, the period commencing on the Closing Date or
conversion date, as the case may be, with respect to such Fixed
Tranche and ending one, two or three months thereafter (or such
shorter period which is less than one month as the Administrative
Agent in its sole discretion may agree), as selected by the Company in
its notice of Closing Date or notice of conversion, as the case may
be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the
next preceding Transfer Period applicable to such Fixed Tranche and
ending one, two or three months thereafter (or such shorter period
which is less than one month as the Administrative Agent in its sole
discretion may agree), as selected by the Company by irrevocable
notice to the Administrative Agent not less than three Business Days
27
prior to the last day of the then current Transfer Period with respect
thereto;
provided, that all of the foregoing provisions relating to Transfer Periods
--------
are subject to the following:
(1) if any Transfer Period would otherwise end on a day that is
not a Business Day, such Transfer Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Transfer Period into another calendar month, in which
event such Transfer Period shall end on the next preceding Business
Day;
(2) any Transfer Period that would otherwise extend beyond the
Scheduled Termination Date shall end on the Scheduled Termination
Date; and
(3) any Transfer Period that commences on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Transfer
Period) shall end on the last Business Day of the calendar month of
such Transfer Period.
"Transferred Agreements": as defined in subsection 2.1(b) of the
Receivables Transfer Agreement.
"Transferring Servicer": as defined in subsection 12.2(d) of the
Receivables Transfer Agreement.
"Withdrawal Liability": liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
"WMI": Waste Management, Inc., a Delaware corporation.
"WMI Collections": as defined in subsection 12.1(b)(i) of the
Receivables Transfer Agreement.
"WMNA": Waste Management of North America, Inc., an Illinois
corporation.
